communication department

Volume XIX Number 10

Ask the Office: Can My Chapter Hold a Raffle?

Q: Our chapter is thinking about holding a raffle with door prizes and the proceeds being donated to a local charity. What are STC chapters legally allowed to do when holding raffles or lotteries?

A: The following information is provided by Jacqueline Henson, STC's legal counsel.

Holding a Raffle without Registration

The U.S. government and local and state jurisdictions are concerned about "games of chance" involving money (whether or not the money is used to benefit a charity). Under legal definitions, a lottery has three elements: a prize, the element of "chance" to win, and consideration. Consideration is the legal term for a fee to participate. Charging any amount, even a nominal fee like $2 or $3, is not OK and automatically turns a raffle into a lottery, thus making it fall under gaming rules and regulations.

However, a raffle is not a lottery if everyone can participate for free. Therefore, you could allow anyone who attends the chapter event to fill out a form—without purchasing a ticket—and put that into the raffle.

Registering Your Chapter's Lottery

Lotteries must be registered in the local jurisdiction where the event is to be held, where the tickets are sold, and where the prize will be given. Chapters that have members in multiple states should not sell tickets online, as this would require registration in each of the jurisdictions in question. Ideally, the tickets should be sold the same day and at the event where the raffle is being held, and the prize awarded during the event in question.

If an STC chapter wishes to move forward with the raffle as a lottery, it may wish to contact STC's attorney to help with registering the event. (Please contact the STC office for this information.) The chapter would then be liable for the legal fees involved since this would solely benefit that particular chapter and would not be applicable to other chapters.

Chapters should feel free to conduct these events, as long as they intend to register them with their local jurisdiction and follow the appropriate rules and regulations.

Chapters may also donate their proceeds from a registered raffle to charity. Note, however, that no funds should be funneled through the chapter bank account to the separate charity. Instead, they should be donated directly to the charity. The charity should be registered as a legitimate charity.