# Is it illegal for churches to hold contests in which they give away cash prizes? **URL:** \ **Category:** Factual Questions\ **Created:** [December 13, 2007, 4:30pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873 "2007-12-13T16:30:27Z")\ **Posts on this page:** 7\ **Page:** 1
**Author:** ![Duck\_Duck\_Goose](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@Duck\_Duck\_Goose](https://boards.straightdope.com/u/Duck_Duck_Goose)\ **Post date:** [December 13, 2007, 4:30pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/1 "2007-12-13T16:30:27Z")
The Better Half is pastoring a tiny country church (current attendance: 9, or 15 if all the kids to come and the old lady who’s in a nursing home checks in), and he wants to hold a contest to (he hopes) boost attendance, first prize to be $100. And I said the IRS might have issues with churches holding contests in which they give away cash prizes, the least of which would be the possibility of money-laundering or something similar. I’ve heard of churches having door prizes and raffles and bingo and assorted fish-fry and garage-sale and bake-sale fundraisers, but never simply cash prizes for a straight-out contest. So before we shell out a hundred bucks to a lawyer to find out what’s what, I thought I’d see if there even was an issue in the first place. No point paying a lawyer to tell you blankly, “I’ve never even heard of it being a problem.” ETA: And if we were going to consult a lawyer, what kind of lawyer would it be? Tax lawyer? I have no idea what branch of the legal profession would handle that kind of question. ---
**Author:** ![cher3](https://avatars.discourse-cdn.com/v4/letter/c/da6949/32.png) [@cher3](https://boards.straightdope.com/u/cher3)\ **Post date:** [December 13, 2007, 5:19pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/2 "2007-12-13T17:19:14Z")
Don’t know about churches, but my kids’ elementary school does a “draw down” raffle thing every year in which the winner comes away with a big chunk of cash–usually at least a couple of thousand. I know we have a number of lawyers among the parents at the school, so I guess it’s not a problem. ---
**Author:** ![jackelope](https://avatars.discourse-cdn.com/v4/letter/j/a6a055/32.png) [@jackelope](https://boards.straightdope.com/u/jackelope)\ **Post date:** [December 13, 2007, 5:32pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/3 "2007-12-13T17:32:20Z")
IANA Illinois lawyer, but it looks like he’ll need to get a license from the city/county, and satisfy a few other requirements like having been in operation for five years. [The Illinois “Raffles Act”](http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1400&ChapAct=230%26nbsp%3BILCS%26nbsp%3B15%2F&ChapterID=25&ChapterName=GAMING&ActName=Raffles+Act%2E) seems to be the relevant statute: > [@](#): > > The governing body of any county or municipality within this State may establish a system for the licensing of organizations to operate raffles… > > Licenses shall be issued only to bona fide religious, charitable, labor, business, fraternal, educational or veterans’ organizations that operate without profit to their members and which have been in existence continuously for a period of 5 years immediately before making application for a license and which have had during that entire 5 year period a bona fide membership engaged in carrying out their objects… The phrase about “operating without profit to their members” comes up in nonprofits law a lot; it usually means the orgaization can’t have shareholders. I’d say he should call the city or county goverment and ask them what to do. It’s possible that your jurisdiction doesn’t permit raffles. ETA: This all assumes you’re in Illinois, as your location says. ---
**Author:** ![Duck\_Duck\_Goose](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@Duck\_Duck\_Goose](https://boards.straightdope.com/u/Duck_Duck_Goose)\ **Post date:** [December 13, 2007, 7:27pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/4 "2007-12-13T19:27:12Z")
Thanks for the link, but…it’s not a raffle. It’s a straight contest. A raffle is different in that you’re basically buying a chance to win the prize. That’s not what he has in mind. So I was asking about contests, like when you send in boxtops and a 25-word essay on “Why I like Cheerios”. Those kinds of contests always have massive disclaimers in tiny, tiny print at the bottom; I wondered if there was some sort of legal issue with having a tax-exempt organization run one. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [December 13, 2007, 7:53pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/5 "2007-12-13T19:53:20Z")
Here is a good resource on Illinois gambling laws: > **[Illinois Charitable Gaming](http://www.gambling-law-us.com/Charitable-Gaming/Illinois/)** > > text of charity gaming law in Illinois ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [December 13, 2007, 8:02pm UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/6 "2007-12-13T20:02:18Z")
It would depend on what you mean by a contest. If no gambling is involved (i.e., the winner is determined by a test of skill), then gambling laws shouldn’t apply. Writers of the Future, for instance, runs a writing contest with cash prizes. They can do this nationwide without any regulation since the winners are chosen on the basis of skill by an independent panel of judges (WotF is run by Scientology, which is considered a church). There are organizations that give college scholarships – real money – to the winner of an essay contest. If there are no entry fees, then I can’t imagine a skill-based contest being illegal. Even when things were tighter with gambling, the U.S. Open tennis tournament and other golf tournaments were perfectly legal (and some had entry fees). ---
**Author:** ![Duck\_Duck\_Goose](https://avatars.discourse-cdn.com/v4/letter/d/50afbb/32.png) [@Duck\_Duck\_Goose](https://boards.straightdope.com/u/Duck_Duck_Goose)\ **Post date:** [December 14, 2007, 12:17am UTC](https://boards.straightdope.com/t/is-it-illegal-for-churches-to-hold-contests-in-which-they-give-away-cash-prizes/429873/7 "2007-12-14T00:17:08Z")
The contest, as envisioned, would be, “Submit your favorite Christian Youtube video.” No skill involved at all. Purely to help publicize the church. Winner to be decided by, apparently, the Better Half as pastor and most likely a few other church members. On the face of it, it sounds ridiculously simple–get a bunch of local teens to submit their favorite Youtube videos, give the kid who submits the one that, basically, their parents like the best a hundred bucks. Hope that the lucky winner and his friends and relatives all start coming to church. But I am vaguely uneasy about the whole idea, and I suspect the IRS might have issues with it, as it’s not even remotely “skill-based”.