- Most states have strict laws regarding a charity or non-profit organization's fund raising solicitation, including raffles and drawings. The reason being, whenever cash is changing hands and gambling is involved, there is the possibility of wrong doing either intentionally or by error.
- In Florida for instance, raffles or lotteries are highly regulated since the state wants to protect its citizens from illegal unregulated gambling, and not incidentally to not allow too much competition for its own Florida lottery, which has its own set of highly intricate rules and brings in millions of dollars daily.
- The laws about raffles and charity drawings in general usually are found in two places in the state's statutes: regulations about soliciations in general by non-profit or charitable organizations, and secondly "gambling" statutes which generally say raffles are illegal by individuals, but exceptions are provided to certain non-profit corporations raising money for a good cause.
- What you need to know: The secret is that most all lotteries, drawings, and raffles are being done illegally. Yes, you might think that the local school raising money for it's football team is doing everything legally, and the administration will in fact tell you "they've had fund raisers just like this for years." They say "We wouldn't be doing this if anything was wrong." But they are wrong. You can count on nearly all raffles as being entirely illegal or at the least breaking most of the state's gambling laws.
- So, knowing that the school, civic league, church, football team, chamber of commerce, and other community organizations are not following the rules, gives you an advantage because you are going to learn the rules and use them to your advantage.
- Here are the secret raffle, lottery, or drawing rules that most people don't know and most all fund raisers ignore intentionally or unintentionally.
(Photo) A typical fund raising raffle prize, a new car, in this case raising money for a local elementary school. 500 tickets were to be sold, and a school board member's family owns the auto dealership where the car was to be purchased. Yes, purchased. Most high stake raffle prizes are not donated to the charity!
Using Florida laws as an example (which will mostly apply to other states as well, but check your local laws to see how they differ), here is what you should know:
There is no requirement that you actually pay anything for a raffle ticket. That's because the government does not want people gambling or playing games of chance for money with anyone unless it's entirely the player's option to donate and how much to donate. The law says the tickets may be printed "Suggested Donation $XX.XX" but the rules say that every raffle or drawing in Florida must state that no consideration is needed to obtain a raffle ticket. So you can donate nothing if you wish or $1.00, whatever you wish.
There is no limit how many tickets you can get for your "donation." The law says if there is a limit, of say one raffle ticket per person, or one per day, this must be stated in the rules of the drawing and on all printed material related to the raffle. Most fund raising groups don't bother to limit how many you can get because of ignorance of the law or a failure to put any rules into play for the raffle.
The raffle sponsors cannot cancel the drawing or refuse to give out all of the prizes advertised. And the date, time, and place of the drawing must be on all tickets and other printed material advertising the raffle. And they must notify the winners even if they are not in attendance at the drawing.
Other things to be aware of before laying down any of your hard earned cash include checking to make sure the raffle is even legal under the state or local laws. In Florida, the department of education, in what seems be an ambiguous rule, says "raffles and other activities of chance shall not be conducted for school connected activities." But schools have lots of raffles.
A raffle sponsor may write into its rules that they can discontinue the drawing or cancel it if they don't sell enough tickets. Although illegal, it's done all the time. Buying a Chamber of Commerce raffle ticket? That's illegal in Florida, too. The reason being that although the chamber is not for profit, they are in fact organized to help local businesses, and not for doing "good" stuff for the community. So watch out, you might invest in a raffle and find the law or the event sponsor preventing you from collecting any prize at all!
Also, be aware that when you read the sponsor's raffle rules you will most likely find something that is illegal, so it's your money that may be lost if they mess up or intentionally or by mistake make an error in running the raffle. Another huge item to watch for: According to the Florida Attorney General, the sponsor must already own the prizes before selling tickets, or presumably have the money available to buy them.
He says they may not use ticket sales to get the money to then later buy the prizes. You may find that some raffles, especially high stakes drawings for homes, cars, boats, vacations, etc. will have sponsors that just don't have the money up front to buy the prizes, in which the fund raisers are gambling themselves that they will sell enough raffle tickets. That the fund raisers are purchasing prizes may be a shock to many raffle players. We always thought the prizes were donated because it's for charity! In some cases, prizea may be donated, but for larger prizes, they usually have to be purchased.
Trivia question: What three states do not allow any type of gambling whatsoever? (The answer at the bottom of the page!)
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The answer to what states have no gambling? Tennessee, Utah, Hawaii