CLEVELAND v. UNITED STATES

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12 OCTOBER TERM, 2000
Syllabus
CLEVELAND v. UNITED STATES
certiorari to the united states court of appeals for
the fifth circuit
No. 99–804. Argued October 10, 2000—Decided November 7, 2000
Louisiana law authorizes the State to award nontransferable, annually re-
newable licenses to operate video poker machines. License applicants
must meet suitability requirements designed to ensure that they have
good character and fiscal integrity. The State itself does not run any
video poker machinery. In 1992, Fred Goodson and his family formed
a limited partnership, Truck Stop Gaming, Ltd. (TSG), to participate in
the video poker business in Louisiana. Petitioner Carl W. Cleveland, a
lawyer, assisted Goodson in preparing TSG’s initial and subsequent
video poker license applications, each of which identified Goodson’s
children as the sole beneficial owners of the partnership. The State
approved the initial application, and TSG successfully renewed its li-
cense in 1993, 1994, and 1995. In 1996, Cleveland and Goodson were
charged with money laundering under 18 U. S. C. § 1957 and racketeer-
ing and conspiracy under § 1962 in connection with a scheme to bribe
state legislators to vote in a manner favorable to the video poker indus-
try. Among the predicate acts supporting these charges were four
counts of violating the mail fraud statute, § 1341, which proscribes use
of the mails in furtherance of “any scheme or artifice to defraud, or for
obtaining . . . property by means of . . . fraudulent . . . representations.”
The indictment alleged that, because Cleveland and Goodson had tax
and financial problems that could have undermined their suitability to
receive a video poker license, they fraudulently concealed that they
were the true owners of TSG in the license applications they had mailed
to the State. Before trial, Cleveland moved to dismiss the mail fraud
counts on the ground that the alleged fraud did not deprive the State of
“property” under § 1341. The District Court denied the motion, con-
cluding that licenses constitute property even before they are issued.
A jury found Cleveland guilty on two mail fraud counts and on other
counts predicated on the mail fraud. The Fifth Circuit affirmed the
conviction, considering itself bound by an earlier decision holding that
Louisiana video poker licenses constitute “property” in the State’s
hands.
Held: State and municipal licenses in general, and Louisiana’s video poker
licenses in particular, do not rank as “property,” for purposes of § 1341,
in the hands of the official licensor. Pp. 18–27.

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Syllabus
(a) Section 1341 is largely limited to the protection of money and
property. McNally v. United States, 483 U. S. 350, 360; Carpenter v.
United States, 484 U. S. 19, 25. The only nonproperty right protected
by § 1341 is “the intangible right of honest services,” § 1346, a right not
implicated by this case. Pp. 18–20.
(b) Section 1341 does not reach fraud in obtaining a state or municipal
license of the kind here involved, for such a license is not “property”
in the government regulator’s hands. Whatever interests Louisiana
might be said to have in its video poker licenses, the statute itself shows
that the State’s core concern is regulatory: It licenses, subject to certain
conditions, engagement in pursuits that private actors may not under-
take without official authorization. The Government offers two reasons
why the State also has a property interest in its video poker licenses.
The Court rejects both because they stray from traditional concepts
of property. First, the Government stresses that the State receives a
substantial sum of money in exchange for each license and continues to
receive payments from the licensee as long as the license remains in
effect. However, Louisiana receives the lion’s share of its expected rev-
enue not while the licenses remain in its own hands, but only after they
have been issued to licensees. Licenses pre-issuance merely entitle the
State to collect a processing fee from applicants. Were such an entitle-
ment sufficient to establish a state property right, then States would
have property rights in drivers’ licenses, medical licenses, and other
licenses requiring an upfront fee—licenses that the Government con-
cedes are purely regulatory. Tellingly, the Government does not allege
that Cleveland defrauded Louisiana of any money to which it was enti-
tled by law. If Cleveland defrauded the State of “property,” the nature
of that property cannot be economic. The Government’s second asser-
tion—that the State has significant control over the issuance, renewal,
suspension, and revocation of licenses—is also unavailing. Far from
composing an interest that “has long been recognized as property,” Car-
penter, 484 U. S., at 26, these intangible rights of allocation, exclusion,
and control amount to no more and no less than paradigmatic exercises
of the State’s traditional police powers. Pp. 20–23.
(c) Comparison of the State’s interest in video poker licenses to a
patent holder’s interest in an unlicensed patent does not aid the Govern-
ment. Although both involve the right to exclude others, Louisiana
does not conduct gaming operations itself and does not hold video poker
licenses to reserve that prerogative. And while a patent holder may
sell her patent, the State may not sell its licensing authority. Compari-
son of the State’s licensing power to a franchisor’s right to select its
franchisees fares no better. While the latter right typically derives
from a franchisor’s ownership of some product that it may trade or sell

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14 CLEVELAND v. UNITED STATES
Syllabus
in the open market, Louisiana’s authority to select video poker licensees
rests on no similar asset. It rests upon the State’s sovereign right to
exclude applicants deemed unsuitable to run video poker operations.
Pp. 23–24.
(d) The Government’s reading of § 1341 invites the Court to approve
a sweeping expansion of federal criminal jurisdiction in the absence of
a clear statement by Congress. Equating issuance of licenses or per-
mits with deprivation of property would subject to federal mail fraud
prosecution a wide range of conduct traditionally regulated by state
and local authorities. Unless Congress conveys its purpose clearly, the
Court will not read a statute to have significantly changed the federal-
state balance in the prosecution of crimes. E. g., Jones v. United States,
529 U. S. 848, 858. Pp. 24–25.
(e) Finally, the Government argues that § 1341 defines two independ-
ent offenses: (1) “any scheme or artifice to defraud” and (2) “any scheme
or artifice . . . for obtaining . . . property by means of false . . . represen-
tations.” Proceeding from that argument, the Government asserts that
a video poker license is property in the hands of the licensee, hence
Cleveland “obtain[ed] . . . property” and thereby committed the second
offense even if the license is not property in the State’s hands. But
McNally refused to construe the two phrases identifying the proscribed
schemes independently. 483 U. S., at 358. Indeed, McNally explained
that § 1341 had its origin in the desire to protect individual property
rights and that any benefit the Government derives from the statute
must be limited to the Government’s interests as property holder. Id.,
at 359, n. 8. Pp. 25–26.
182 F. 3d 296, reversed and remanded.
Ginsburg, J., delivered the opinion for a unanimous Court.
Paul Mogin argued the cause for petitioner. With him on
the briefs were Robert B. Barnett and Joseph G. Petrosinelli.
Deputy Solicitor General Dreeben argued the cause for
the United States. With him on the brief were Solicitor
General Waxman, Assistant Attorney General Robinson,
Barbara McDowell, and Joel M. Gershowitz.*
*Lisa Kemler and Ellen S. Podgor filed a brief for the National Associa-
tion of Criminal Defense Lawyers as amicus curiae urging reversal.
Briefs of amici curiae were filed for the Chamber of Commerce of the
United States by Robin S. Conrad, Carter G. Phillips, Richard D. Bern-
stein, and Joseph S. Miller; and for Samsung Electronics Co. by Richard
L. Stanley, Cecilia H. Gonzalez, David J. Healey, and Lisa S. McCalmont.

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Opinion of the Court
Justice Ginsburg delivered the opinion of the Court.
This case presents the question whether the federal mail
fraud statute, 18 U. S. C. § 1341, reaches false statements
made in an application for a state license. Section 1341 pro-
scribes use of the mails in furtherance of “any scheme or
artifice to defraud, or for obtaining money or property by
means of false or fraudulent pretenses, representations, or
promises.” Petitioner Carl W. Cleveland and others were
prosecuted under this federal measure for making false
statements in applying to the Louisiana State Police for per-
mission to operate video poker machines. We conclude that
permits or licenses of this order do not qualify as “property”
within § 1341’s compass. It does not suffice, we clarify, that
the object of the fraud may become property in the recipi-
ent’s hands; for purposes of the mail fraud statute, the thing
obtained must be property in the hands of the victim. State
and municipal licenses in general, and Louisiana’s video
poker licenses in particular, we hold, do not rank as “prop-
erty,” for purposes of § 1341, in the hands of the official
licensor.
I
Louisiana law allows certain businesses to operate video
poker machines. La. Rev. Stat. Ann. §§ 27:301 to 27:324
(West Supp. 2000). The State itself, however, does not run
such machinery. The law requires prospective owners of
video poker machines to apply for a license from the State.
§ 27:306. The licenses are not transferable, § 27:311(G), and
must be renewed annually, La. Admin. Code, tit. 42,
§ 2405(B)(3) (2000). To qualify for a license, an applicant
must meet suitability requirements designed to ensure that
licensees have good character and fiscal integrity. La. Rev.
Stat. Ann. § 27:310 (West Supp. 2000).
In 1992, Fred Goodson and his family formed a limited
partnership, Truck Stop Gaming, Ltd. (TSG), in order to par-
ticipate in the video poker business at their truck stop in
Slidell, Louisiana. Cleveland, a New Orleans lawyer, as-

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16 CLEVELAND v. UNITED STATES
Opinion of the Court
sisted Goodson in preparing TSG’s application for a video
poker license. The application required TSG to identify its
partners and to submit personal financial statements for all
partners. It also required TSG to affirm that the listed
partners were the sole beneficial owners of the business and
that no partner held an interest in the partnership merely
as an agent or nominee, or intended to transfer the interest
in the future.
TSG’s application identified Goodson’s adult children, Alex
and Maria, as the sole beneficial owners of the partnership.
It also showed that Goodson and Cleveland’s law firm had
loaned Alex and Maria all initial capital for the partnership
and that Goodson was TSG’s general manager. In May 1992,
the State approved the application and issued a license.
TSG successfully renewed the license in 1993, 1994, and 1995
pursuant to La. Admin. Code, tit. 42, § 2405(B)(3) (2000).
Each renewal application identified no ownership interests
other than those of Alex and Maria.
In 1996, the Federal Bureau of Investigation (FBI) dis-
covered evidence that Cleveland and Goodson had partici-
pated in a scheme to bribe state legislators to vote in a
manner favorable to the video poker industry. The Govern-
ment charged Cleveland and Goodson with multiple counts
of money laundering under 18 U. S. C. § 1957, as well as rack-
eteering and conspiracy under § 1962. Among the predicate
acts supporting these charges were four counts of mail fraud
under § 1341.1 The indictment alleged that Cleveland and
1 Title 18 U. S. C. § 1341 provides in relevant part: “Whoever, having
devised or intending to devise any scheme or artifice to defraud, or for
obtaining money or property by means of false or fraudulent pretenses,
representations, or promises, . . . for the purpose of executing such scheme
or artifice or attempting so to do, [uses the mails or causes them to be
used], shall be fined under this title or imprisoned not more than five
years, or both.” The Racketeer Influenced and Corrupt Organizations
Act (RICO) prohibits participation and conspiracy to participate in a pat-
tern of “racketeering activity,” 18 U. S. C. §§ 1962(c), (d), and defines “rack-
eteering activity” to include “any act which is indictable under . . . section

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Opinion of the Court
Goodson had violated § 1341 by fraudulently concealing that
they were the true owners of TSG in the initial license appli-
cation and three renewal applications mailed to the State.
They concealed their ownership interests, according to the
Government, because they had tax and financial problems
that could have undermined their suitability to receive a
video poker license. See La. Rev. Stat. Ann. § 27:310(B)(1)
(West Supp. 2000) (suitability requirements).
Before trial, Cleveland moved to dismiss the mail fraud
counts on the ground that the alleged fraud did not deprive
the State of “property” under § 1341. The District Court
denied the motion, concluding that “licenses constitute prop-
erty even before they are issued.” 951 F. Supp. 1249, 1261
(ED La. 1997). A jury found Cleveland guilty on two counts
of mail fraud (based on the 1994 and 1995 license renewals)
and on money laundering, racketeering, and conspiracy
counts predicated on the mail fraud. The District Court
sentenced Cleveland to 121 months in prison.
On appeal, Cleveland again argued that Louisiana had no
property interest in video poker licenses, relying on several
Court of Appeals decisions holding that the government does
not relinquish “property” for purposes of § 1341 when it is-
sues a permit or license. See United States v. Shotts, 145
F. 3d 1289, 1296 (CA11 1998) (license to operate a bail bonds
business); United States v. Schwartz, 924 F. 2d 410, 418 (CA2
1991) (arms export license); United States v. Granberry, 908
F. 2d 278, 280 (CA8 1990) (school bus operator’s permit);
Toulabi v. United States, 875 F. 2d 122, 125 (CA7 1989)
(chauffeur’s license); United States v. Dadanian, 856 F. 2d
1391, 1392 (CA9 1988) (gambling license); United States v.
1341,” § 1961(1). The money laundering statute prohibits various activi-
ties designed to conceal or promote “specified unlawful activity,” § 1956,
and defines “specified unlawful activity” to include (with an exception not
relevant here) “any act or activity constituting an offense listed in section
1961(1) of this title,” § 1956(c)(7)(A).

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18 CLEVELAND v. UNITED STATES
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Murphy, 836 F. 2d 248, 254 (CA6 1988) (license to conduct
charitable bingo games).
The Court of Appeals for the Fifth Circuit nevertheless
affirmed Cleveland’s conviction and sentence, United States
v. Bankston, 182 F. 3d 296, 309 (1999), considering itself
bound by its holding in United States v. Salvatore, 110 F. 3d
1131, 1138 (1997), that Louisiana video poker licenses consti-
tute “property” in the hands of the State. Two other Cir-
cuits have concluded that the issuing authority has a prop-
erty interest in unissued licenses under § 1341. United
States v. Bucuvalas, 970 F. 2d 937, 945 (CA1 1992) (entertain-
ment and liquor license); United States v. Martinez, 905 F. 2d
709, 715 (CA3 1990) (medical license).
We granted certiorari to resolve the conflict among the
Courts of Appeals, 529 U. S. 1017 (2000), and now reverse
the Fifth Circuit’s judgment.
II
In McNally v. United States, 483 U. S. 350, 360 (1987), this
Court held that the federal mail fraud statute is “limited in
scope to the protection of property rights.” McNally re-
versed the mail fraud convictions of two individuals charged
with participating in “a self-dealing patronage scheme” that
defrauded Kentucky citizens of “the right to have the Com-
monwealth’s affairs conducted honestly.” Id., at 352. At
the time McNally was decided, federal prosecutors had been
using § 1341 to attack various forms of corruption that de-
prived victims of “intangible rights” unrelated to money or
property. 2 Reviewing the history of § 1341, we concluded
that “the original impetus behind the mail fraud statute was
2 E. g., United States v. Clapps, 732 F. 2d 1148, 1153 (CA3 1984) (elec-
toral body’s right to fair elections); United States v. Bronston, 658 F. 2d
920, 927 (CA2 1981) (client’s right to attorney’s loyalty); United States v.
Bohonus, 628 F. 2d 1167, 1172 (CA9 1980) (right to honest services of an
agent or employee); United States v. Isaacs, 493 F. 2d 1124, 1150 (CA7
1974) (right to honest services of public official).

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to protect the people from schemes to deprive them of their
money or property.” Id., at 356.
As first enacted in 1872, § 1341 proscribed use of the mails
to further “ ‘any scheme or artifice to defraud.’ ” Ibid. In
1896, this Court held in Durland v. United States, 161 U. S.
306, 313, that the statute covered fraud not only by “repre-
sentations as to the past or present,” but also by “sugges-
tions and promises as to the future.” In 1909, Congress
amended § 1341 to add after “any scheme or artifice to de-
fraud” the phrase “or for obtaining money or property by
means of false or fraudulent pretenses, representations, or
promises.” McNally, 483 U. S., at 357. We explained in
McNally that the 1909 amendment “codified the holding of
Durland,” ibid., and “simply made it unmistakable that the
statute reached false promises and misrepresentations as to
the future as well as other frauds involving money or prop-
erty,” ibid. Rejecting the argument that “the money-or-
property requirement of the latter phrase does not limit
schemes to defraud to those aimed at causing deprivation of
money or property,” id., at 358, we concluded that the 1909
amendment signaled no intent by Congress to “depar[t] from
[the] common understanding” that “the words ‘to defraud’
commonly refer ‘to wronging one in his property rights,’ ”
id., at 358–359 (quoting Hammerschmidt v. United States,
265 U. S. 182, 188 (1924)).
Soon after McNally, in Carpenter v. United States, 484
U. S. 19, 25 (1987), we again stated that § 1341 protects prop-
erty rights only. Carpenter upheld convictions under § 1341
and the federal wire fraud statute, 18 U. S. C. § 1343, of
defendants who had defrauded the Wall Street Journal of
confidential business information. Citing decisions of this
Court as well as a corporate law treatise, we observed that
“[c]onfidential business information has long been recognized
as property.” 484 U. S., at 26.
The following year, Congress amended the law specifically
to cover one of the “intangible rights” that lower courts had

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20 CLEVELAND v. UNITED STATES
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protected under § 1341 prior to McNally: “the intangible
right of honest services.” Anti-Drug Abuse Act of 1988,
§ 7603(a), 18 U. S. C. § 1346. Significantly, Congress covered
only the intangible right of honest services even though fed-
eral courts, relying on McNally, had dismissed, for want of
monetary loss to any victim, prosecutions under § 1341 for
diverse forms of public corruption, including licensing fraud.3
III
In this case, there is no assertion that Louisiana’s video
poker licensing scheme implicates the intangible right of
honest services. The question presented is whether, for
purposes of the federal mail fraud statute, a government reg-
ulator parts with “property” when it issues a license. For
the reasons we now set out, we hold that § 1341 does not
reach fraud in obtaining a state or municipal license of the
kind here involved, for such a license is not “property” in the
government regulator’s hands. Again, as we said in Mc-
Nally, “[i]f Congress desires to go further, it must speak
more clearly than it has.” 483 U. S., at 360.
To begin with, we think it beyond genuine dispute that
whatever interests Louisiana might be said to have in its
video poker licenses, the State’s core concern is regulatory.
Louisiana recognizes the importance of “public confidence
and trust that gaming activities . . . are conducted honestly
3 For example, in United States v. Murphy, 836 F. 2d 248, 254 (CA6
1988), the court overturned the mail fraud conviction of a state official
charged with using false information to help a charitable organization ob-
tain a state bingo license. Acknowledging “the McNally limitations” on
§ 1341, the court said that the issue “distills to a consideration of whether
Tennessee’s ‘right to control or object’ with respect to the issuance of a
bingo permit to a charitable organization constitutes ‘property.’ ” Id., at
253. It then held that “the certificate of registration or the bingo license
may well be ‘property’ once issued, insofar as the charitable organization
is concerned, but certainly an unissued certificate of registration is not
property of the State of Tennessee and once issued, it is not the property
of the State of Tennessee.” Id., at 253–254.

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and are free from criminal and corruptive elements.” La.
Rev. Stat. Ann. § 27:306(A)(1) (West Supp. 2000). The video
poker licensing statute accordingly asserts the State’s “legit-
imate interest in providing strict regulation of all persons,
practices, associations, and activities related to the operation
of . . . establishments licensed to offer video draw poker de-
vices.” Ibid. The statute assigns the Office of State Police,
a part of the Department of Public Safety and Corrections,
the responsibility to promulgate rules and regulations con-
cerning the licensing process. § 27:308(A). It also author-
izes the State Police to deny, condition, suspend, or revoke
licenses, to levy fines of up to $1,000 per violation of any rule,
and to inspect all premises where video poker devices are
offered for play. §§ 27:308(B), (E)(1). In addition, the stat-
ute defines criminal penalties for unauthorized use of video
poker devices, § 27:309, and prescribes detailed suitability
requirements for licensees, § 27:310.
In short, the statute establishes a typical regulatory pro-
gram. It licenses, subject to certain conditions, engagement
in pursuits that private actors may not undertake without
official authorization. In this regard, it resembles other li-
censing schemes long characterized by this Court as exer-
cises of state police powers. E. g., Ziffrin, Inc. v. Reeves,
308 U. S. 132, 138 (1939) (license to transport alcoholic bev-
erages); Hall v. Geiger-Jones Co., 242 U. S. 539, 558 (1917)
(license to sell corporate stock); Fanning v. Gregoire, 16
How. 524, 534 (1854) (ferry license); License Cases, 5 How.
504, 589 (1847) (license to sell liquor) (opinion of McLean,
J.), overruled on other grounds, Leisy v. Hardin, 135 U. S.
100 (1890).
Acknowledging Louisiana’s regulatory interests, the Gov-
ernment offers two reasons why the State also has a prop-
erty interest in its video poker licenses. First, the State
receives a substantial sum of money in exchange for each
license and continues to receive payments from the licensee
as long as the license remains in effect. Second, the State

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22 CLEVELAND v. UNITED STATES
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has significant control over the issuance, renewal, suspen-
sion, and revocation of licenses.
Without doubt, Louisiana has a substantial economic stake
in the video poker industry. The State collects an upfront
“processing fee” for each new license application, La. Rev.
Stat. Ann. § 27:311(H)(2) (West Supp. 2000) ($10,000 for truck
stops), a separate “processing fee” for each renewal applica-
tion, § 27:311(H)(4) ($1,000 for truck stops), an “annual fee”
from each device owner, § 27:311(A)(4) ($2,000), an additional
“device operation” fee, § 27:311(A)(5)(c) ($1,000 for truck
stops), and, most importantly, a fixed percentage of net reve-
nue from each video poker device, § 27:311(D)(1)(b) (32.5% for
truck stops). It is hardly evident, however, why these tolls
should make video poker licenses “property” in the hands of
the State. The State receives the lion’s share of its ex-
pected revenue not while the licenses remain in its own
hands, but only after they have been issued to licensees. Li-
censes pre-issuance do not generate an ongoing stream of
revenue. At most, they entitle the State to collect a proc-
essing fee from applicants for new licenses. Were an enti-
tlement of this order sufficient to establish a state property
right, one could scarcely avoid the conclusion that States
have property rights in any license or permit requiring an
upfront fee, including drivers’ licenses, medical licenses, and
fishing and hunting licenses. Such licenses, as the Govern-
ment itself concedes, are “purely regulatory.” Tr. of Oral
Arg. 24–25.
Tellingly, as to the character of Louisiana’s stake in its
video poker licenses, the Government nowhere alleges that
Cleveland defrauded the State of any money to which the
State was entitled by law. Indeed, there is no dispute that
TSG paid the State of Louisiana its proper share of revenue,
which totaled more than $1.2 million, between 1993 and 1995.
If Cleveland defrauded the State of “property,” the nature
of that property cannot be economic.

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Addressing this concern, the Government argues that
Cleveland frustrated the State’s right to control the issuance,
renewal, and revocation of video poker licenses under La.
Rev. Stat. Ann. §§ 27:306, 27:308 (West Supp. 2000). The
Fifth Circuit has characterized the protected interest as
“Louisiana’s right to choose the persons to whom it issues
video poker licenses.” Salvatore, 110 F. 3d, at 1140. But
far from composing an interest that “has long been recog-
nized as property,” Carpenter, 484 U. S., at 26, these intangi-
ble rights of allocation, exclusion, and control amount to no
more and no less than Louisiana’s sovereign power to regu-
late. Notably, the Government overlooks the fact that these
rights include the distinctively sovereign authority to impose
criminal penalties for violations of the licensing scheme, La.
Rev. Stat. Ann. § 27:309 (West Supp. 2000), including making
false statements in a license application, § 27:309(A). Even
when tied to an expected stream of revenue, the State’s right
of control does not create a property interest any more than
a law licensing liquor sales in a State that levies a sales tax
on liquor. Such regulations are paradigmatic exercises of
the States’ traditional police powers.
The Government compares the State’s interest in video
poker licenses to a patent holder’s interest in a patent that
she has not yet licensed. Although it is true that both in-
volve the right to exclude, we think the congruence ends
there. Louisiana does not conduct gaming operations itself,
it does not hold video poker licenses to reserve that preroga-
tive, and it does not “sell” video poker licenses in the ordi-
nary commercial sense. Furthermore, while a patent holder
may sell her patent, see 35 U. S. C. § 261 (“patents shall have
the attributes of personal property”), the State may not sell
its licensing authority. Instead of a patent holder’s interest
in an unlicensed patent, the better analogy is to the Federal
Government’s interest in an unissued patent. That interest,
like the State’s interest in licensing video poker operations,

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24 CLEVELAND v. UNITED STATES
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surely implicates the Government’s role as sovereign, not as
property holder. See U. S. Const., Art. I, § 8, cl. 8.
The Government also compares the State’s licensing power
to a franchisor’s right to select its franchisees. On this view,
Louisiana’s video poker licensing scheme represents the
State’s venture into the video poker business. Although the
State could have chosen to run the business itself, the Gov-
ernment says, it decided to franchise private entities to carry
out the operations instead. However, a franchisor’s right to
select its franchisees typically derives from its ownership of
a trademark, brand name, business strategy, or other prod-
uct that it may trade or sell in the open market. Louisiana’s
authority to select video poker licensees rests on no similar
asset. It rests instead upon the State’s sovereign right to
exclude applicants deemed unsuitable to run video poker op-
erations. A right to exclude in that governing capacity is
not one appropriately labeled “property.” See Tr. of Oral
Arg. 25. Moreover, unlike an entrepreneur or business
partner who shares both losses and gains arising from a busi-
ness venture, Louisiana cannot be said to have put its labor
or capital at risk through its fee-laden licensing scheme. In
short, the State did not decide to venture into the video
poker business; it decided typically to permit, regulate, and
tax private operators of the games.
We reject the Government’s theories of property rights
not simply because they stray from traditional concepts of
property. We resist the Government’s reading of § 1341 as
well because it invites us to approve a sweeping expansion
of federal criminal jurisdiction in the absence of a clear state-
ment by Congress. Equating issuance of licenses or permits
with deprivation of property would subject to federal mail
fraud prosecution a wide range of conduct traditionally regu-
lated by state and local authorities. We note in this regard
that Louisiana’s video poker statute typically and unambigu-
ously imposes criminal penalties for making false statements
on license applications. La. Rev. Stat. Ann. § 27:309(A)

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25 Cite as: 531 U. S. 12 (2000)
Opinion of the Court
(West Supp. 2000). As we reiterated last Term, “ ‘unless
Congress conveys its purpose clearly, it will not be deemed
to have significantly changed the federal-state balance’ in the
prosecution of crimes.” Jones v. United States, 529 U. S.
848, 858 (2000) (quoting United States v. Bass, 404 U. S. 336,
349 (1971)).
Moreover, to the extent that the word “property” is ambig-
uous as placed in § 1341, we have instructed that “ambiguity
concerning the ambit of criminal statutes should be resolved
in favor of lenity.” Rewis v. United States, 401 U. S. 808,
812 (1971). This interpretive guide is especially appropriate
in construing § 1341 because, as this case demonstrates, mail
fraud is a predicate offense under RICO, 18 U. S. C. § 1961(1)
(1994 ed., Supp. IV), and the money laundering statute,
§ 1956(c)(7)(A). In deciding what is “property” under § 1341,
we think “it is appropriate, before we choose the harsher
alternative, to require that Congress should have spoken in
language that is clear and definite.” United States v. Uni-
versal C. I. T. Credit Corp., 344 U. S. 218, 222 (1952).
Finally, in an argument not raised below but urged as an
alternate ground for affirmance, the Government contends
that § 1341, as amended in 1909, defines two independent of-
fenses: (1) “any scheme or artifice to defraud” and (2) “any
scheme or artifice . . . for obtaining money or property by
means of false or fraudulent pretenses, representations, or
promises.” Because a video poker license is property in the
hands of the licensee, the Government says, Cleveland “ob-
tain[ed] . . . property” and thereby committed the second
offense even if the license is not property in the hands of
the State.
Although we do not here question that video poker licens-
ees may have property interests in their licenses,4 we never-
4 Notwithstanding the State’s declaration that “[a]ny license issued or
renewed . . . is not property or a protected interest under the constitutions
of either the United States or the state of Louisiana,” La. Rev. Stat. Ann.
§ 27:301(D) (West Supp. 2000), “[t]he question whether a state-law right

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26 CLEVELAND v. UNITED STATES
Opinion of the Court
theless disagree with the Government’s reading of § 1341.
In McNally, we recognized that “[b]ecause the two phrases
identifying the proscribed schemes appear in the disjunctive,
it is arguable that they are to be construed independently.”
483 U. S., at 358. But we rejected that construction of the
statute, instead concluding that the second phrase simply
modifies the first by “ma[king] it unmistakable that the stat-
ute reached false promises and misrepresentations as to the
future as well as other frauds involving money or property.”
Id., at 359. Indeed, directly contradicting the Government’s
view, we said that “the mail fraud statute . . . had its origin
in the desire to protect individual property rights, and any
benefit which the Government derives from the statute must
be limited to the Government’s interests as property holder.”
Id., at 359, n. 8 (emphasis added). We reaffirm our reading
of § 1341 in McNally. See Hilton v. South Carolina Public
Railways Comm’n, 502 U. S. 197, 205 (1991) (“stare decisis
is most compelling” where “a pure question of statutory con-
struction” is involved). Were the Government correct that
the second phrase of § 1341 defines a separate offense, the
statute would appear to arm federal prosecutors with power
to police false statements in an enormous range of submis-
sions to state and local authorities. For reasons already
stated, see supra, at 24–25, we decline to attribute to § 1341
a purpose so encompassing where Congress has not made
such a design clear.
IV
We conclude that § 1341 requires the object of the fraud to
be “property” in the victim’s hands and that a Louisiana
constitutes ‘property’ or ‘rights to property’ is a matter of federal law,”
Drye v. United States, 528 U. S. 49, 58 (1999) (citing United States v. Na-
tional Bank of Commerce, 472 U. S. 713, 727 (1985)). In some contexts,
we have held that individuals have constitutionally protected property
interests in state-issued licenses essential to pursuing an occupation or
livelihood. See, e. g., Bell v. Burson, 402 U. S. 535, 539 (1971) (driver’s
license).

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Opinion of the Court
video poker license in the State’s hands is not “property”
under § 1341. Absent clear statement by Congress, we will
not read the mail fraud statute to place under federal super-
intendence a vast array of conduct traditionally policed by
the States. Our holding means that Cleveland’s § 1341 con-
viction must be vacated. Accordingly, the judgment of the
United States Court of Appeals for the Fifth Circuit is re-
versed, and the case is remanded for further proceedings
consistent with this opinion.
It is so ordered.