Tag Archives: state law

Avoid hassles by knowing, and following, your state’s laws: part 2

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 Two: California, Florida and North Carolina Games of Chance Laws

California Raffle Drawing Regulations

Raffles and lotteries are highly regulated in California, where gambling is prohibited by the state constitution. However, under what is known as the “90/10 rule,” charities and certain other private nonprofit organizations are permitted to conduct raffles with the stipulation that at least 90% of the gross receipts go to beneficial or charitable purposes within the state.

Rules and Laws for Raffle Contests In California

In light of the 90/10 rule, 50/50 raffles – in which 50 percent of ticket-sale revenue is awarded as the prize and 50 percent of the revenue is retained by the organization conducting the raffle – are not permitted. The use of a gaming machine, apparatus or a device, such as a slot machine, is prohibited, as is operating or conducting a raffle over the Internet (but the organization conducting the raffle may advertise the event online).

Nonprofits must register with the attorney general’s Registry of Charitable Trusts prior to conducting the raffle. Registration is required if the tickets for a drawing are free of charge, solicitations of voluntary donations to the organization The raffle registration form needs to be filed at least 60 days before the raffle’s scheduled date to allow enough time for processing, and the registration process must be completed prior to conducting the raffle. The registration period runs from September 1 to August 31 every year.

Schools, hospitals and nonprofit religious organizations are exempt from the registration requirement.

After the raffle is held, a financial disclosure report must be filed. Called the “Nonprofit Raffle Report form,” the report provides the date and location of the raffle, the total funds received, the total expenses for conducting the raffle, the charitable or beneficial purpose for which raffle proceeds were used or the amount and organization to which proceeds were directed.

Florida “Drawings By Chance” Rules

Charitable nonprofit organizations are permitted to hold “drawings by chance” in Florida as a fund-raiser. To conduct a drawing, the following is required:

Rules and Laws for Raffle Contests In Florida

  1. The drawing’s rules of conduct and operation must be disclosed,
  2. The organization’s full name and principal place of business,
  3. The source of the funds used to award cash prizes or purchase prizes, and
  4. The date, hour, and place where the winner will be chosen and the prizes will be awarded (unless the drawing’s brochures, advertisements, notices, tickets, or entry blanks are offered to the public less than 3 days prior to the drawing).

Additionally, it’s against the law to require an entry fee, donation, substantial consideration, payment, proof of purchase, or contribution to enter the drawing or be selected to win a prize. However, an organization is permitted to suggest a minimum donation or state the suggested minimum donation on any printed promotional or other material in connection with the event.

North Carolina Raffle Laws and Regulations

North Carolina law permits a nonprofit organization to operate no more than two raffles per year. Limits are placed on the maximum cash prize that may be offered or paid for any one raffle ($125,000). If merchandise is used as a prize and is not redeemable for cash, the maximum fair market value of that prize is also $125,000.

In any calendar year, the total cash prizes offered or paid in a raffle may not exceed $125,000; the total fair market value of all prizes offered by a nonprofit organization or association, either in cash or in merchandise that is not redeemable for cash, is also limited to $125,000 per calendar year.Rules and Laws for Raffle Contests In North Carolina

A minimum of 90% of the net proceeds of a raffle must be used for charitable, religious, educational, civic, or other nonprofit purposes. None of the net proceeds of the raffle may be used to pay any person to conduct the raffle or to rent a building where the tickets are received or sold or the drawing is conducted.

Additionally, a raffle may not be conducted in conjunction with bingo. (Bingo requires a license from the Department of Crime Control and Public Safety, with an application fee currently set at $200.)

Real property may be offered as a prize in a raffle. The maximum appraised value of real property that may be offered for any one raffle is $500,000, and the total appraised value of all real estate prizes offered by any nonprofit organization or association may not exceed $500,000 in any calendar year.

For a complete list of raffle drawing regulations for each state and Canadian province, click here.

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Avoid hassles by knowing, and following, your state’s laws: part 1

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

New York State Raffle Drawing Regulations

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.

Rules and Laws for Raffle Contests In New York State

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

 

Ohio Raffle Contest Rules

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.

Rules and Laws for Raffle Contests In OhioA 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/

For a complete list of raffle drawing regulations for each state and Canadian province, click here.

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