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How can I run an online raffle legally?

Discussion in 'Legal Issues' started by bobby9101, Jan 23, 2007.

  1. #1
    Hi,
    I am trying to run an online raffle where:
    Visitor buys something for $xx and he gets two tickets, visitor buys a ticket for $x and gets one ticket.
    That way visitors will be inclined to buy the product over the ticket.
    The problem is I know it is illegal in the US to run an online raffle.
    Is there anything I can do to make it legal?
    I know the big companies have "no purchase necessary", do I need to do that?
    Thanks for the help,
    Bobby
    SEMrush
     
    bobby9101, Jan 23, 2007 IP
    SEMrush
  2. k2hawaii

    k2hawaii Peon

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    #2
    Indeed, that's illegal, and i would not try your luck on that scheme. It's illegal in every state to hosting an online raffle that requires an entry fee to enter a draw or in any way. All raffle draws must be done in jurisdiction of that state obeying their laws. However, some things may be considered legal in different states. Here's a brief article that may help you begin in the right direction http://www.entrepreneur.com/article/0,4621,307794,00.html
     
    k2hawaii, Jan 24, 2007 IP
  3. bobby9101

    bobby9101 Peon

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    #3
    here is what I was thinking.
    Visitors can send a form via snail mail for free entry (thus the no purchase necessary) and then one of the freebies will randomly be entered into the pool of the good guys (the payees) that way even if someone tries for free, they ahve little chance
     
    bobby9101, Jan 24, 2007 IP
    GTech likes this.
  4. tenfourstudios

    tenfourstudios Peon

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    #4
    If thats how you plan on doing it, then it could possibly work. But before you do anything play it safe and consult a lawyer.
     
    tenfourstudios, Jan 24, 2007 IP
  5. bobby9101

    bobby9101 Peon

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    #5
    Hmm, ok I guess I will consult a lawyer, how much $$$ am I looking at?
    I read, that if it is charity based I would be above the law.
    But I was thinking.
    50% to the winner, 5% to second place, various prizes to other winers.
    and 7-10% to charity. even if I still need to consult with a lawyer, I would love to help out a local charity.
     
    bobby9101, Jan 25, 2007 IP
  6. Nonny

    Nonny Notable Member

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    #6
    Every state is different, of course, but in California 1) the organization running the lottery has to be a nonprofit and 2) 90% of the gross has to go to charity.
    http://www.gambling-law-us.com/State-Laws/California/
     
    Nonny, Jan 25, 2007 IP
  7. UnFunded

    UnFunded Peon

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    #7
    I know it's been a while - but for anyone interested; Instead of running a raffle (a rather hard thing to do, believe it or not - depending on your spread), instead do something kind of like amazon's 25+ = free shipping on * items.

    In this case (being universal as there isn't much to build an example on):

    1 - Buy product on or before XX/XX

    2 - receive golden ticket, trinket, whatever, that signifies eligibility for the prize

    3 - Each valued customer increases the pot by $XX.XX

    If there is any question of being allowed to give out a cash prize, or if you don't feel like dealing with it/are too busy, make it an item.

    That's better anyway because, say you run a gaming site and give out a PS3 to one of the people who have spent $xx.xx between xx/xx and xx/xx at your store, Now your maximum 'hit' is like 500 bucks (cause you want to include something like a game or some accessories, maybe skin one and brand it) for the ps3 with the potential to have far more people involved than it will take to cover its cost.

    But, of course, don't go through with this if you aren't absolutely sure you can cover the prize.

    This is actually an excellent method for selling gaming stuff online lol...

    I hope I've helped someone.
     
    UnFunded, Jun 4, 2008 IP
  8. speci4list

    speci4list Peon

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    #8
    what about stumpmonk.com?

    they have weekly questions. people send in their answers and pay $1.00 to enter the contest. at the end of the week the person with the correct answer wins a prize.

    they're based in the us.
     
    speci4list, Jun 6, 2008 IP
  9. xXKingdom_SEOXx

    xXKingdom_SEOXx Peon

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    #9
    Following up from the first post you could simply host your website on a foreign server. (if everything will be digital, online)
     
    xXKingdom_SEOXx, Jun 6, 2008 IP
  10. hiero

    hiero Peon

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    #10
    Is it illegal in any state to run a free online raffle? no entry fee needed
     
    hiero, May 3, 2009 IP
  11. MajorHart

    MajorHart Peon

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    #11
    I want to run a raffle just for getting website visitors. No entrance fee and the payout could be an ebook, software, hard goods or even cash.

    Since they don't pay anything to get in but just visit the website - it seems this would be totally legal. ?

    Thanks

    MajorHart
     
    MajorHart, Mar 7, 2010 IP
  12. yylover

    yylover Peon

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    #12
    Hi all,

    Very useful info here.

    I am actually thinking to host an online contest with entry fee. The winner will take portion of the cash pool. The contest involves contestants to submit their own work, and the online community members will vote for a winner.

    Since it's skilled based, it's not based on luck. Will that be illegal?

    Thanks for your opinions!
     
    yylover, Apr 1, 2010 IP
  13. SwimFinn

    SwimFinn Peon

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    #13
    Because the laws for free raffles are different in every state, you should check every state. I recently ran one in my state and the rules were easy to find on the net. You only need to check 53 or so (50 states, D.C., US possessions). Because of some ambiguity in the phrasing, I actually printed every entered number on pieces of paper and we manually drew a piece of paper.
     
    SwimFinn, Apr 5, 2010 IP
  14. wergeni

    wergeni Peon

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    #14
    If you want to run charity raffles in UK contact Rogavi and they will help you out.
     
    wergeni, Apr 23, 2010 IP
  15. krata

    krata Peon

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    #15
    Yes you can run Raffles legally, but you may have to introduce skill into the game.
     
    krata, Aug 5, 2010 IP
  16. healingoasis

    healingoasis Peon

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    #16
    So, I have done a bit of research and red this thread. I am going to be releasing (Free) Gift. (this allows a lot of leway as long as you don't call it a raffle). If my customers buy a product on or before said date, they will be entered to win a free laptop loaded with design and marketing programs, files and features. Once they purchase they're name and email are entered into this giveaway. 10 days after said date, the winner will be chosen at random. This is completely legal from what I have read as it is not a "Raffle" only a giveaway. As long as you specify the difference and word everything right you will be covered.

    Oh, n btw lol you cannot run a "Raffle" online it is illegal. If you make sure to word things properly however, it can be legal to give something away...

    Hope this helps ;)

    Regards,
    H.
     
    healingoasis, Dec 2, 2011 IP
  17. MattW76

    MattW76 Peon

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    #17
    Online raffles are possible. However, no matter whether it’s online or not, a raffle is generally considered gambling and therefore is subject to federal, state, and local gambling laws. US federal law permits each state to set its own gambling laws. Most state laws confine fundraising with gambling events such as bingo and raffles to nonprofits and state entities, while some states, such as Utah, forbid gambling altogether. Therefore, to hold a raffle it’s a good idea to learn what’s involved.

    Before a raffle is held, most states require organizations to obtain a charitable gaming license or permit. As with gambling laws, gambling permit and licensing requirements differ from state to state. As an example, Connecticut has six classifications of raffle permits based on factors such as the duration of the raffle and the total value of the prizes. After the raffle, many states require detailed documentation of tickets sold, funds collected, the value of the prizes, and the names of the prize winners for regulatory and tax purposes. Legal compliance is one of many reasons why organized record keeping will be important to the success of your raffle.

    You will also want to contact your state attorney general or secretary of state for an accurate understanding of what it takes to conduct your raffle fundraiser. Use these questions as a guideline for what to ask the raffle/gambling specialist at the relevant state office.

    1. Are raffles legal in my state?
    If the answer to this is No, then clearly there is no need to ask the remaining questions
    2. Can raffles be advertised outside of my state?
    3. Can we advertise our raffle on the Internet?
    4. Can we sell tickets online?
    5. Can we mail tickets, ticket receipts, or ticket certificates?
    6. Do I need a license or permit to hold my raffle? What official documents do I need? Is
    there a fee?
    7. What is the prize amount limit I can have for my raffle?
    8. Can we raffle a service/house/car/boat/TV/cash prize?
    9. Where can I find written documentation of the laws for later reference?
    10.Who should I contact in my city/county/township to find out my local raffle laws?

    Closer to home, many states allow counties, cities, and other localities to add their own gambling
    laws to those established by the state. While a locality cannot revise state laws to permit things
    the state does not allow, it may be free to create and enforce stricter regulations—or even forbid
    gambling entirely—within its borders.

    This summer Sandra Sims and Jim Berigan (Step by Step Fundraising) published a comprehensive guide to raffles called Raffle Secrets. It's available as an ebook.
     
    MattW76, Jan 17, 2012 IP
  18. browntwn

    browntwn Illustrious Member

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    #18
    Here is an example of a LEGAL raffle taking place in California right now. It happens to be one of my favorites since you can win a 2,000,000 house.

    You can read their legal section and also see that they are licensed with the state of California

    Anyway, this is an example of a charity running a legal raffle, not the usual crap people around here seem to ask about. Just figured since the thread was bumped I'd post this link for people's edification.

    http://socalraffle.com
     
    browntwn, Jan 17, 2012 IP
  19. President Arlano

    President Arlano Greenhorn

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    #19
    I have an idea... a "Giveaway" where entry is for a $Price but the $Price will be designated as a FLAT FEE FOR SHIPPING????
     
    President Arlano, Jul 15, 2015 IP
  20. dscurlock

    dscurlock Notable Member

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    #20
    Guess on what is right or wrong can end up costing you, even more so if you
    live in the US, regardless if your server is overseas, as they do not need your
    server if they can easily pick you up. consult an atty. If you have to ask how
    much they cost, then you are not serious or have the money anyways...If you end
    up violating state law, then you could just as easily be violating fed law too....
     
    dscurlock, Jul 22, 2015 IP