The rules for operating a raffle differ from state to state. Some states highly regulate raffles, while other states’ rules are comparatively relaxed. What does it take to operate a raffle?
A quick look at a few states’ regulations can help get you started.
Part One: New York and Ohio Games of Chance Laws
In New York State, a raffle is defined as a game of chance in which a participant pays money in return for a ticket or other receipt. Players buy tickets with a number, color or symbol on them with the hopes of that particular number, color or symbol being drawn by chance so that they may be awarded a prize. 50/50 and split-pot drawings fall under this category.
Organizations that are “authorized” to hold a raffle include, in part, bona fide religious or charitable organizations, bona fide educational, fraternal or service organizations, or bona fide organizations of veterans or volunteer firefighters that operate without profit to their members.
Individuals and commercial businesses are prohibited from obtaining a games of chance identification number and are, in fact, restricted by law from conducting any type of raffle.
Being an “authorized” organization is not enough, however. The organization must also be based (“domiciled”) in a municipality that has passed a local games of chance law.
Having met the criteria, an organization may apply at no cost for a games of chance identification number by completing a 1A application and submitting it to the Racing and Wagering Board. The application will require a copy of the organization’s constitution and bylaws and/or incorporation papers.
Once an organization has been issued a games of chance identification number, it must submit to the municipal clerk and to the Racing and Wagering Board a completed “verified statement” (known as Form GCVS-1) that lists the scheduled drawing dates.
For forms and more information, go tohttp://www.racing.state.ny.us/charitable_forms.php#raffles
In Ohio, charitable organizations; public, chartered nonpublic and community schools; and veteran’s, fraternal and sporting organizations are permitted to conduct a raffle to raise money for that organization or school. They are not required to obtain a license to conduct a raffle drawing that is not for profit. However, they must be exempt from federal income taxation under subsection 501(a) and must be described in subsection 501(c)(3), 501(c)(4), 501(c)(7), 501(c)(8), 501(c)(10), or 501(c)(19) of the Internal Revenue Code.
A chamber of commerce may conduct no more than one raffle per year to raise money for that chamber. And no individual person (with the exception of a representative of the above mentioned charitable organizations, schools and chambers of commerce) is allowed to conduct a raffle drawing, whether for profit or not for profit.
Bingo is a different matter. Only a charitable organization that has obtained a license pursuant to section 2915.08 of the Revised Code, is permitted to conduct or advertise bingo.
To conduct bingo, instant bingo at a bingo session or instant bingo other than at a bingo session, a charitable organization is required to apply to the state attorney general for a license to conduct any of these types of bingo. The application must be completed and submitted prior to Jan. 1.
The license fee to conduct bingo is $200, while the license fee for a charitable organization that has not previously been licensed to conduct instant bingo is $500. A charitable organization that has previously been licensed to conduct instant bingo will find that its license fee to again conduct those bingo games will vary, based on the gross profits it received from operating instant bingo during the one-year period ending on the 31st day of October of the year immediately preceding the year for which the new license is sought. The attorney general may establish lower licensing fees under certain circumstances, such as organizations that run bingo for fewer than 26 weeks, etc.
Along with the license application, an applicant will need to include a statement indicating whether the organization has ever had any previous application refused, whether it previously has had a license revoked or suspended, and the reason stated by the attorney general for the refusal, revocation or suspension. Also required is a statement of the charitable purposes for which the net profit derived from bingo (other than instant bingo) will be used, and a statement of how the net profit derived from instant bingo will be distributed.
For more information, check out http://www.gambling-law-us.com/Charitable-Gaming/Ohio/