legality of a raffle

[ScottHaneda]

Hello, I would like to start a website that is a raffle. Essentially, you buy raffle tickets, and a random winner will be picked to win the prize. I will make it so that there are more raffle tickets needing to be purchased than the actual value of the prize, this is how I would make money.

Before I even go to a legal person to ask about all this, I want to ask all of you first. I found one thread on the matter that makes me think I can not do it

In most states, raffles constitute illegal lotteries, and raffles sponsored by private individuals or companies are prohibited. Generally, a raffle is defined as paying money for a chance to win a prize; for example, when an individual buys a ticket from a pool of tickets and there is a drawing to determine the winner(s). Many people identify sweepstakes as raffles, but there is a distinction between them. A legal sweepstakes is offering a chance to win a prize, but not requiring entrants to pay any consideration, whether monetary or non-monetary. Gambling is defined as paying money for a chance to win a prize. Because a raffle is technically gambling, it is most likely subject to state gambling statutes. Most states allow raffles only if conducted by a nonprofit or civic organization for a charitable purpose.

Your client’s proposed raffle plans to charge entrants money for a chance to win a vehicle through random drawing – fitting the illegal gambling definition posited above. It is difficult to conceive of a way to legally structure your client’s proposed raffle. Moreover, there are legal consideration issues associated with awarding coupons towards purchase as prizes, and with requiring a minimum number of entrants to award a prize. Your client is advised to be very cautious about proceeding without consulting an attorney schooled in this area of law.

However, that is in direct conflict with this site www.macraffle.com so I do noy understand how they are able to get away with this.

I also remember numerous raffles at school as well, and my parents certainly payed money to get ino the raffle, and they certainly won a prize as well.

Any cites and links would be of help before I dump a few grand on a lawyer just to tell me no way in hell.

Oops, after further reading the faq on the site, I can sort of see what macraffle is up to, they are being pretty sneaky IMO, however, any comments on this will still be appreciated.

[pravnik]

Generally raffles are gambling and subject to heavy, heavy regulation with a few exceptions here and there for charity purposes, just like the website said.

Here in Texas there is an exception carved out for charity events, but if you just plain plan on making money from the deal, better take it over to Louisiana and get licensed as a casino. Prepare to pay.

[pravnik]

Sorry, like the thread said, not the websiate.

[pravnik]

grrr…website

[scm1001]

My feeling on Mcraffle is that they stay low key so haven’t been caught yet. They say they donate some to charity but that won’t make them legit necessarily. I notice that they are incorporating a separate company offshore to do internet raffling to avoid US gaming laws.

My advice to you is do the same

[Whack-a-Mole]

*Originally posted by scm1001 *
**My feeling on Mcraffle is that they stay low key so haven’t been caught yet. **

The answer to this is right on the MacRaffle website. You’ll note that most contests run by companies have a “No Purchase Necessary” clause written in. E.g. You don’t have to buy a bag of Fritos to be enrolled in their million dollar giveaway.

So to with MacRaffle. From this page is the following:

12. No Purchase Necessary:
No purchase is necessary to participate in a MacRaffle raffle. All “no purchase” entries are entered as one entry into the specified raffle. If a “no purchase necessary” entry is drawn as the winner, a final winner is randomly selected from the entire no purchase entries entrants for the specific MacRaffle drawn. Send a self-addressed stamped envelope to: Monophase L.L.C. c/o MacRaffle.com, 221 Margaret Place, Perrysburg, Ohio 43551. Please remember to include the following: (1) Raffle you are entering in; (2) your full name; (3) address; (4) telephone number; (5) birth date; (6) and a photocopy of your valid driver’s license. By sending a no purchase entry you are stating that you agree and are bound to the terms and conditions posted at MacRaffle.com You also recognize that the odds of winning as a no purchase entrant are not the same as an entrant that made a purchase. You may only enter one specific MacRaffle per self-addressed stamped envelope. Only one entry per household for a specific MacRaffle.

They further cover themselves with this bit:

8. Local Law:
The player is responsible for determining the legality of Internet gambling in the player’s place of residence or location from where the player is accessing the website and abiding by those laws. Monophase L.L.C. and its management will not be held liable if the laws of your locale prohibit this type of activity.

It would seem that the internet changes things a bit and the laws regarding online lotteries are vague at best.

As already mentioned, you had better get an attorney if you want to avoid prosecution for doing your own lottery.