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  • Running a Raffle type contest... need input

    I am not advertising this but I honestly need some input on any legal obstacles I may face doing this.

    A member got an iPod Nano 2GB version from those referally links we have all come to love.

    Well he sent it to me to give away as a raffle on the my website.

    This is what I have so far http://www.mustangevolution.com/********/ (lol replace the stars with f-reeipod without the dash)

    I have never done this before so I need some constructive critizim and some advice on the best way to handle this.

    I planned to pick the winner by entering their userid into a program that randomly selects a number.

    Thanks!

  • #2
    Brent

    Why not try to get something back from your members in return for offering this as a prize...? You could do it in a fun way or more seriously. You could run prehaps a caption contest, or an article contest, a referral contest - which would in return get you more activity on your forum etc.

    Great prize to give away though...
    John

    Comment


    • #3
      Check out your local and state laws on that, before even thinking on setting up any lottery give aways.

      Well since it is you, I would not care about State/US laws and start this lottery right now, I am sure your local law enforcement would look the other way on this.

      Comment


      • #4
        Unless you're a licensed nonprofit org or licensed gambling establishment, selling raffle tickets is illegal. You can give them away but not sell them. I checked into this intensively last summer while I was setting up a raffle for our condominium complex for an air conditioner. Glad I caught it before I started selling.
        "I can't seem to bring myself to say, 'Well, I guess I'll be toddling along.'
        It isn't that I can't toddle. It's that I can't guess I'll toddle."

        --Robert Benchley (1889-1945)

        Comment


        • #5
          I noticed three typos on viewing the page:

          The title should be "Win an iPod Nano!"

          "Mustangevolution.com is not affiliated with Apple and Apple, iPod, and Nano are trademarks of Apple Corporation."
          should be:
          "Mustangevolution.com is not affiliated with Apple; Apple, iPod, and Nano are trademarks of Apple Corporation"

          "The iPod is guarenteed to work upon arrival."
          Should be guaranteed

          Chris

          Comment


          • #6
            Originally posted by welo
            Unless you're a licensed nonprofit org or licensed gambling establishment, selling raffle tickets is illegal. You can give them away but not sell them. I checked into this intensively last summer while I was setting up a raffle for our condominium complex for an air conditioner. Glad I caught it before I started selling.
            Actually, I think even giving it away in a raffle is still not legal in all or every State. You are giving something of value for trade.

            IRS like's to have their finger's in everything.

            Comment


            • #7
              True story. I got around that here by just automatically entering all condo residents into the raffle . That might be tough to do with a forum because someone could say you are inducing member signups by dangling a raffle.
              "I can't seem to bring myself to say, 'Well, I guess I'll be toddling along.'
              It isn't that I can't toddle. It's that I can't guess I'll toddle."

              --Robert Benchley (1889-1945)

              Comment


              • #8
                Brent,

                This answers your question...

                http://www.ago.state.al.us/contact_faqs.cfm

                (11) SOMETHING OF VALUE. Any money or property, any token, object or article exchangeable for money or property or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service entertainment or a privilege of playing at a game or scheme without charge.
                (12) UNLAWFUL. Not specifically authorized by law.
                (Acts 1977, No. 607, p. 812, ยง6101.)
                ARTICLE IV, SECTION 65, Constitution of Alabama
                Lotteries and gift enterprises prohibited. The legislature shall have no power to authorize lotteries or gift enterprises for any purposes, and shall pass laws to prohibit the sale in this state of lottery or gift enterprise tickets, or tickets in any scheme in the nature of a lottery; and all acts, or parts of acts heretofore passed by the legislature of this state, authorizing a lottery or lotteries, and all acts amendatory thereof, or supplemental thereto, are hereby avoided.
                It's against the law in Alabama.

                Chris
                "Anyone who conducts an argument by appealing to Authority
                is not using his intelligence, he is just using his memory."
                ~~~
                Leonardo da Vinci

                Comment


                • #9
                  BTW, if your forum is a non-profit, move to Georgia <-- raffles are legal here for non-profits and charities.

                  Chris
                  "Anyone who conducts an argument by appealing to Authority
                  is not using his intelligence, he is just using his memory."
                  ~~~
                  Leonardo da Vinci

                  Comment


                  • #10
                    Originally posted by ChrisLM2001
                    This answers your question...

                    http://www.ago.state.al.us/contact_faqs.cfm

                    It's against the law in Alabama.
                    I don't think so. Observe:
                    ========================
                    (6) LOTTERY or POLICY. An unlawful gambling scheme in which:

                    a. The players pay or agree to pay something of value for chances, represented and differentiated by numbers or by combinations of numbers or by some other medium, one or more of which chances are to be designated by the winning ones; and

                    b. The winning chances are to be determined by a drawing or by some other fortuitous method; and

                    c. The holders of the winning chances are to receive something of value.

                    ...

                    (9) PROFIT FROM GAMBLING ACTIVITY. A person "profits from gambling activity" if he accepts or receives money or other property pursuant to an agreement or understanding with any person whereby he shares or is to share in the proceeds of gambling activity.
                    ========================

                    All of those 'and's in clause 6 mean I'm sticking by my original presumption. As long as he's not somehow selling raffle chances, it's looking quite legal. Why do you think every Snickers bar and Coke can says "No purchase necessary to enter"?

                    Disclaimer: Nothing posted by welo constitutes professional legal advice.

                    One thing I find interesting though, is most states automatically declare a raffle exemption for schools (usually capping the max dollar amount a prize can be worth). Don't see anything there about that.
                    "I can't seem to bring myself to say, 'Well, I guess I'll be toddling along.'
                    It isn't that I can't toddle. It's that I can't guess I'll toddle."

                    --Robert Benchley (1889-1945)

                    Comment


                    • #11
                      or involving extension of a service entertainment or a privilege of playing at a game or scheme without charge.
                      (12) UNLAWFUL. Not specifically authorized by law.
                      That makes it's quite clear that it's illegal.

                      All Brent has to do is to live in GA for 6 months (rent an apartment, or live with someone out in Atlanta), and if his forum is non-profit, he can legally hold the raffle to his own heart's content. Heck, even hold a bingo tournament as well (and one that pays cash too).

                      Chris
                      "Anyone who conducts an argument by appealing to Authority
                      is not using his intelligence, he is just using his memory."
                      ~~~
                      Leonardo da Vinci

                      Comment


                      • #12
                        Originally posted by ChrisLM2001
                        That makes it's quite clear that it's illegal.
                        Also might mean you're operating out of context. The entirety of clause 11 states:
                        (11) SOMETHING OF VALUE. Any money or property, any token, object or article exchangeable for money or property or any form of credit or promise directly or indirectly contemplating transfer of money or property or of any interest therein, or involving extension of a service entertainment or a privilege of playing at a game or scheme without charge.

                        ...while 'something of value' shows up in:
                        • Clause 4 (twice), which specifically states the person playing must stake something of value for the rest of the clause to be effective
                        • Clause 6, which I've already mentioned, becoming effective once someone pays for a raffle chance.
                        • Clause 10 pertaining specifically to slot machines.


                        Or in other words, there's nothing in there saying a person cannot receive something of value from a raffle, provided they aren't risking anything first. I still contend if you're not selling raffle chances there's nothing to worry about, although the obvious thing to do is call someone in the city or state government and ask.
                        "I can't seem to bring myself to say, 'Well, I guess I'll be toddling along.'
                        It isn't that I can't toddle. It's that I can't guess I'll toddle."

                        --Robert Benchley (1889-1945)

                        Comment


                        • #13
                          Brent is the one giving it away, and he lives in a state that makes it illegal. If someone ratted him out, Brent wouldn't have to worry about a forum -- he'd be looking at trying to pay the fine and wondering how to make friends with people who'd treat him as .... well, this is a family forum.

                          Just isn't worth that type of hassle. No one obeys the rules 100% of the time, but if they want their forum to make money, or even exist, they need to be above board. Because someone out there will rat (and the IRS isn't that bad, try fending off your own state tax assessor bent on but $20 back taxes!).

                          Chris
                          "Anyone who conducts an argument by appealing to Authority
                          is not using his intelligence, he is just using his memory."
                          ~~~
                          Leonardo da Vinci

                          Comment


                          • #14
                            I ran a raffel at my tanning salon to give away a free signed & numbered Bret Hull UpperDeck limited Edtion hockey card, then the police officer who was a client ask if I obtain a lottery licence to run a raffle? I said " The ticket's are free?", but then he told me that I would still need to purchase the $200.00 Lic. to run the raffle for one year period or less. It does not seem right, cause you can sell it, but you can not give it away? Clue

                            Why do not just sell it to the person who gets the most refferal's or member's that stay active on your board for 30 days? I know that selling for membership is legal? well legal here.

                            Comment


                            • #15
                              Originally posted by ChrisLM2001
                              That makes it's quite clear that it's illegal.

                              All Brent has to do is to live in GA for 6 months (rent an apartment, or live with someone out in Atlanta), and if his forum is non-profit, he can legally hold the raffle to his own heart's content. Heck, even hold a bingo tournament as well (and one that pays cash too).

                              Chris
                              Just an FYI to those that might be considering doing a Raffle (and I see them all the time). Simply living in a state that "allows" (make sure to check your state laws) raffling to go on, does not mean that you can hold a raffle and not be held accountable by other state's whose laws are against it.

                              For example, if you/your business are based in GA, but you have people that buy tickets for your raffle online (through your forum website) that live in AL, the state of AL can pursue litigation against you. Not that they would, but they can.

                              There are 3 types of internet business contacts:
                              1-substantial business conducted over the internet
                              2-some interactivity through a website
                              3-passive advertising

                              Jurisdiction can apply to #1. For a court to compel a defendant to come before it, there must be "minimum contacts."

                              Here are some bits and pieces from similar cases:

                              Next, Dot Com argues that its forum-related activities are not numerous or significant enough to create a "substantial connection" with Pennsylvania. Defendant points to the fact that only two percent of its subscribers are Pennsylvania residents. However, the Supreme Court has made clear that even a single contact can be sufficient. McGee, 355 U.S. at 223. The test has always focused on the "nature and quality" of the contacts with the forum and not the quantity of those contacts. International Shoe, 326 U.S. at 320. The Sixth Circuit also rejected a similar argument in Compuserve when it wrote that the contacts were "deliberate and repeated even if they yielded little revenue." Compuserve, 89 F.2d at 1265.
                              Dot Com repeatedly and consciously chose to process Pennsylvania residents' applications and to assign them passwords. Dot Com knew that the result of these contracts would be the transmission of electronic messages into Pennsylvania. The transmission of these files was entirely within its control. Dot Com cannot maintain that these contracts are "fortuitous" or "coincidental" within the meaning of World Wide Volkswagen. When a defendant makes a conscious choice to conduct business with the residents of a forum state, "it has clear notice that it is subject to suit there."
                              If you are bored, you can read the whole thing here: http://www.gigalaw.com/library/zippo...997-01-16.html

                              All I'm saying is that you have to watch yourself. Could you conduct 50 raffle's and never have an issue? Probably, but it would be better to be safe than sorry. Just because you are online doesn't mean you are exempt from the long arm statute.
                              www.clubracer.net

                              Skin design by: www.vbskinworks.com

                              Comment

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