February 8, 2022 RAVEN5
Just found out that running a charity raffle in Canada is not exactly legal? Join the club! Many Canadian brands and their agencies are in the same situation as you. They are unaware that running a raffle without a license in Canada carries legal ramifications. We have put together a series of blogs to help you better understand Canadian charity raffles.
A raffle is a lottery scheme in which ticket buyers buy tickets for a chance to win a prize in a draw. In most cases, organizations hold raffles to generate funds to support their cause.
When thinking about raffles, one thing to keep in mind is that they are gambling. Yes, we have all been gambling and had not realized it. Think about it. You spend money on a ticket in the hope of winning something big in the end. I mean, I probably spent $40 on one raffle by purchasing multiple tickets in the hopes of winning, but sadly, I did not. But that is just me; I am not that lucky. But no need to panic. We are not serious gamblers.
Lotteries have three significant elements that are present in a raffle. They are as follows:
Because of these three elements, raffles are prohibited in Canada. As a result, organizations must adhere to strict guidelines to run a raffle.
Three organizations in Canada handle raffle laws: the Criminal Code of Canada, local municipalities, and the Competition Bureau of Canada.
According to Section 206 of the Criminal Code, it is illegal to hold any game of chance or a combination of luck and skill in Canada. If caught, the penalty is up to two years in prison (but not more than two years).
Local municipalities handle raffle qualifications. Each municipality, however, has its own set of rules for determining license qualifications. In Ontario, for example, the Alcohol and Gaming Commission (AGCO) determines whether a raffle is eligible for a license based on whether the total prize value is over or under $50,000. AVR less than $50,000 requires a municipal license. AVR of more than $50,000 requires a provincial license. The Gaming Policy and Enforcement Branch (GPEB) in British Columbia divide raffle license eligibility into three categories:
It is critical to research these credentials to determine the minimum requirements in your province.
In addition to the Criminal Code and municipal regulations, the Competition Bureau of Canada has established rules for raffles in Canada. They ensure no deceptive practices and disclose all contest content under Section 74.06 of the Competition Act. If an organization neglects this section, the Competition Bureau of Canada may warn the organization not to engage in such conduct, publish a corrections notice, or pay an administrative penalty of up to $10,000,000 (by a corporation).
There is a narrow exception to the prohibition against gambling in Canada that may allow your organization to run a raffle in Canada. As mentioned, the Criminal Code of Canada, the Competition Bureau of Canada, and local municipalities have granted organizations the ability to run legal raffles in Canada, accompanied by a raffle license. The requirement is that they are a charity or religious organization (or a corporation, organization, association, or partnership created primarily for a charitable object or purpose) that has been active within their community for a minimum of one year. They must have a charitable object or purpose to relieve poverty, promote education, advance religion, or any other purpose beneficial to the community. Turning an illegal raffle into a legal charity raffle, where 100% of the proceeds raised will go directly to the charitable or religious cause. Check out our next blog, Planning a Charity Raffle, Eh? to learn about the process of running a charity raffle.
We know that looking into these legal limitations can take time away from planning a successful program, which is why we have dedicated our services to assist. Here at RAVEN5, we will take care of all the legalities to ensure you run a successful legal charity raffle. Want to learn more? Check out our dedicated page, Raffle5, or feel free to contact us at any time.
Want learn more about Charity Raffles! Check out Planning A Charity Raffle, Eh? and Thank Us Later – Top Three Online Charity Raffle Idea to Raise Funds for Your Charity organization
Naa Mensah, Oakville, ON, February 2022