May 31, 2021 Michael Bickerton
Giveaways, sweepstakes, and contests are popular ways for businesses to promote themselves. People who manage blogs or other small part-time companies are increasingly turning to these methods of promotion. They can be an effective tool to recruit new customers, advertise new products, and reward loyal consumers. While these methods are a terrific way to market your brand, it’s vital to remember that these activities are tightly regulated by state and federal regulations. If your promotion is deemed an illegal lottery, you may be subject to harsh civil and criminal consequences.
A raffle is a type of gambling in which participants pay money for tickets that give them a chance to win prizes. The winner is chosen at random from all of the entries, implying that the winner is chosen at random. If you use a raffle to raise money, you’re hosting a personal raffle, which is a raffle sponsored by an organisation rather than the government. Because raffles and lotteries are so similar, this is crucial.
Personal lotteries are illegal in several nations, including the United States. Lotteries can only be managed by the government, not people or private companies.
Raffles (as well as lotteries and other forms of gambling) are regulated in the United States by a mixture of state and federal laws. That means that depending on where you live, you may be eligible to hold a raffle and what you must do to guarantee that the lottery complies with all legal requirements.
Still thinking about running a raffle? We recommend doing these points before you do:
You can also check out Chance2Win for some of the legal information on online raffles in the United States. This is NOT legal advice, and you should always contact with an attorney about the restrictions that apply to your fundraiser. You may need to register your raffle ahead of time, depending on your state’s requirements. You can be limited by the type of company or organisation you work for. You can even be limited to a specific number of raffles per year.
Are you looking to read more about Raffles in Canada? Click here to read more!
Amy Chung, Oakville, Ontario, May 2021