Raffles/ Lotteries

Forms of gambling such as Raffles and Lotteries are controlled by the state in most countries, and laws are reviewed on a regular basis to keep up to date with developments such a online gambling. It is essential for non-profits to be aware of how the law applies to their activities and to comply with the letter and spirit of such laws.

UK

The National Lottery Act in 1998 set up the National Lottery Commission, which granted Camelot Group plc licences to run the National Lottery and to promote The National Lottery Lotto Game. This Act has, however, been amended in various ways in subsequent years.
More pertinent for non-profits is usually the The Gambling Act 2005 which replaces legislation dating as far back as 1845 and governs nearly all forms of gambling. The legislation is intended to protect children and vulnerable people, reduce crime and make games fairer. The new laws are aimed at making gambling more socially responsible. it applies to gaming in arcades, betting, bingo, casinos, gambling in clubs and pubs, lotteries (except the National Lottery) and remote gambling.

Free draws and prize competitions are not within the legislation, but there are pertinent alterations of which non-profits meed to be aware, especially in rehard to the “skill” test that can change a legal competition into an illegal lottery.

SWEDEN

“The two main legal instruments governing gambling in Sweden, are, The Lotteries Act (1994)Lotterilagen and The Casinos Act (1999) Kasinolag. These Acts ensure that all gambling remains under the control of the Swedish state and its agencies.
The Gaming Board of Sweden (Lotteriinspektionen) hasGaming overall responsibility for licensing and supervision within the field of gambling. It is charged with issuing permits for: lotteries that are distributed by means of electromagnetic waves, lotteries that are to be arranged in more than one county, gaming machines and games of roulette, dice and card arranged pursuant to the Lotteries Act. The Gaming Board also monitors compliance with the Lotteries Act and the Casinos Act.”
Niall.A.O’Connor (2008) “Sweden’s gambling industry and the long road to liberalisation” (Bettingmarket.Com).

Raffles

Like their gentleman-burglar namesake, raffles (though run within the law – in this case the Lotteries and Amusements Act of 1976) are fun and make a huge profit.
They can take place perhaps twice a year when books of, say, twenty 50p raffle tickets are mailed to each member and, say, ten books to each local group and other amounts to significant support groups. For an organisation of 100,000 members these tickets typically cost around £16,000 and bring in some £100,000 each time. It is possible to become very sophisticated in allocating additional books of ticket to those keen on selling them, and so run additional raffles throughout the year, but you must make sure that the complexity of this does not outweigh the benfits. Some people object to recieving raffle tickets on the grounds of waste, or on religious or moral grounds. It should be possible to flag these people on your database and to refrain from sending them further tickets.

The tickets

Send a book of raffle tickets to each member. This is usually done with the newsletter to save postage. Tickets can be sold individually for 25p, 50p or more and a book often holds £5 or £10 worth of tickets. Many members will just buy the whole book, so it does not pay to have books with less than £5 worth of tickets in them. It is well worth testing the selling capacity of your local groups and other associated bodies by sending them several books of tickets.
All tickets should be the same, though of course the serial numbers will differ, and none should have a greater chance of winning than any other.
List the range of numbers that go to each segment of your supporter base to check response, though if you sell many tickets, this can be very time consuming.
It is a good idea to have an attractive cover on a book of tickets and link it to one of your campaigns. You should also give enthusiastic sellers the chance to order more books by putting a form on the back of the cover, but if you do so, be sure to fulfill the order promptly.

The draw

Do look for a meaningful date to hold the draw of winning tickets, and seek out a celebrity or interesting person to do the draw. If you have a lot of prizes, check that the celebrity has time to draw them all.
The tickets should be thoroughly mixed before the draw.
Make sure the celebrity cannot see the tickets, and draws them out one by one. Half a dozen drawn together are likely to have just one name on them.
Photograph the draw and publicise it in your newsletter and local paper, along with a list of the winners. Many people will be convinced that they are going to win, and quite surprised if they do not. Seeing the draw and list of names will help show the draw was fair.
Let the winners know immediately and post the prizes off straight away. You will have phone calls on the day of the draw from people sure they have won, and you should let them know who the real prize winners are.
Publicising the list of winners takes up newsletter space and time, but it is essential to raise the profile of the raffle, and such publicity also helps to show that it was operated fairly .

The rules on raffles

If you anticipate ticket sales of over £10,000, or the prizes are worth more than £2,000, you should register with the Gaming Board as well as your local authority, who can givr you advice about your legal position.
If your tickets’ value is under £10,000, and the prizes are worth no more than £2,000, you should register only with the Local Authority
Small lotteries, where prizes are less than £50 or have been donated during an event or entertainment, do not count as trading and do not need to be registered. Neither do private lotteries with tickets selling only to members of a club or society or people wotking together in the same place.
You need to retain all raffle stubs for a period of four years after the raffle, unless you are given special exemption. This is to ensure a traceable audit trail.
The name and address of your registered promoter must appear on the tickets.

The prizes

The key to successful raffles is their first prize. Often this is a holiday for two. For most people that is a problem. Who do I go with? Can I get time off work? Will my husband/wife really want to go there? Can I afford the air fare, or the hotel at the other end? Winners of holidays have an awkward habit of phoning up and demanding the cash equivalent as they are far too old, ill, or agaraphobic to take up the offer. You will find a cash first prize of, say, £1,000 works much better. It raises no problems in the buyer’s mind, as it can be used to fulfil various needs. Of course, the amount given in prizes must relate to the number of people likely to purchase tickets, and for some smaller organisations a £1,000 first prize would exceed the likely income.
The rest of the prizes should be as good as possible, though they are very much secondary items. These can be donated by friendly local firms or your suppliers, but it will take a personable and persistent individual a lot of time on the phone to obtain these goods. Your own trading goods can be used – but do not overvalue them. They are most likely going to people outside the organisation, so own-branded items will not have the appeal they do for your ardent supporters. Ten prizes are quite adequate, but some organisations like to have a hundred or more. The main problem with this is they take hours to draw – particularly when the celebrity insists on rummaging around to find tickets from the bottom of your huge tombola.

Recording names and addresses

It may seem a good idea to collect from your ticket stubs the names and addresses of all the people who bought raffle tickets, or have a computer bureau data-capture them (i.e. put all the names and addresses on a computer), and send them a letter asking them to join or donate. You would, however, be mailing people who like to buy raffle tickets, rather than people who like your organisation enough to join – though a test is well worth carrying out. Be most careful that you use a very sophisticated de-duplication system, because you will be mailing many of your existing members, and they will write their names and addresses in a different way on each of the tickets they buy.
Be prepared for some surprises. People buy tickets for babies, putting their name and address on the stub. One supporter bought a ticket for his dog. I asked the dog to join. He joined. He was asked for a further donation. He was a very generous dog. He even filled in a member-gets-member list of his friends: Rover, Princess, etc…