Misunderstanding on raffles can be fixed

info@islandpacket.comMay 15, 2013 

Confusion about raffles and their legal status is understandable given the unevenness of enforcement in South Carolina.

That's not a criticism of law enforcement, but rather a recognition of the disconnect between the law and reality. Many groups hold raffles to raise money. Some are stopped; many are not.

But raffles are illegal, no matter the purpose and no matter what they are called, according to the state attorney general, if they meet a three-part test under the law: Someone buys a chance to win something.

The issue came to the fore locally after the Greater Bluffton Republican Club announced its plans to give away an AR-15 rifle in a fundraiser. The club was seeking $10 "contributions" in exchange for a chance to win the rifle. It has suspended the fundraiser while club officials try to determine how to stay within the confines of the law.

The only legal lottery (and that's what a raffle is by definition) is the S.C. Education Lottery. It was put in place in 2002 after voters approved a constitutional change.

With a bill signed into law April 23, voters will be asked in November 2014 whether they want to change the constitution to make raffles legal as a nonprofit fundraising option.

If voters say yes and the law goes into effect as planned in 2015, people need to pay attention. There will be many rules to follow, definitions to know and meet.

Raffles could only be held to raise money for charitable purposes, which the legislature has defined as "religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involves the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals."

Nonprofit organizations must be recognized by the S.C. Department of Revenue and the Internal Revenue Service. An organization would have to register with the state to hold a raffle unless it is specifically exempted under the law.

A nonprofit group couldn't lend its name to another entity to use for a raffle. It couldn't hire an outside person or group to run a raffle. No more than four raffles a year could be held. A drawing couldn't take place between midnight and 10 a.m. No drawings could be held on Christmas Day. Raffle tickets couldn't cost more than $100 each. Detailed reports about each raffle would have to be filed with the state.

There's more, but you get the idea.

There would be fines for conducting a raffle without properly registering or qualifying for an exemption and for providing false or misleading information about a group when registering.

If voters say "yes" to the constitutional change, nonprofit groups that fit the bill under the law will need to know and follow the new rules.

Meanwhile, raffles are illegal.

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