Disclaimer: This article offers general information and is not intended as legal or professional advice. You should consult with legal counsel regarding your specific situation. While the information presented is believed to be factual and current as of January 20, 2022, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subject discussed.
One of the biggest growth areas in fundraising in recent years is charitable gaming and raffles. Given its potential and fast-paced adoption, it is vital to understand the local regulations that govern how such raffles and charitable games must be constituted. Organizations looking to take advantage of this fundraising trend must carefully adhere to legal restrictions at both local and federal levels, or potentially face costly fines or sanctions
Charitable gaming and raffles regulatory guidance for Massachusetts
How does Massachusetts define charitable gaming?
Massachusetts state law defines a raffle as "an arrangement for raising money by the sale of tickets, certain among which, as determined by chance after the sale, entitle the holders to prizes." In addition, all raffle proceeds must be used for educational, charitable, religious, fraternal, or civic purposes or for veterans' benefits.
Overview of regulatory guidance for online charitable gaming-based fundraisers in Massachusetts
Are charitable on-site electronic and online raffles legal in Massachusetts?
The state of Massachusetts allows qualified nonprofit organizations to operate charitable raffles on-site. Currently, Massachusetts has no law that allows raffle ticket sales over the internet. Organizations intending to hold online raffles should consult an attorney who can provide guidance on all legal requirements before conducting an online raffle.
What types of lottery programs can be run in Massachusetts?
A nonprofit organization may hold a raffle to award various prizes that are announced in advance, such as a vehicle, trip, or television. Games that offer a cash prize or a portion of the ticket sales (such as a 50/50 raffle) may violate the state law on pooling.
Can raffle/lottery tickets be sold online for charitable fundraisers in Massachusetts?
No. Massachusetts does not allow raffle ticket sales over the internet. Both the raffle ticket seller and purchaser must sign the raffle ticket. In addition, raffle activity conducted online may implicate both federal and state laws and some states expressly prohibit it. Organizations wishing to hold online raffles should consult an attorney who can provide guidance on all legal requirements before conducting an online raffle.
Who can conduct charitable gaming-based raffle events in Massachusetts?
The state of Massachusetts allows for nonprofit organizations (whether incorporated or not) that have been organized and actively functioning in the state for at least two years. If the nonprofit is registered out-of-state but does business in Massachusetts, they can register as a foreign entity and apply for a raffle permit. However, the two-year clause would still apply. The public charity must also be in possession of a Certificate of Solicitation.
Additionally, the organization that wishes to operate a charitable raffle must be one of the following:
- Veterans' organization chartered by Congress;
- Church or religious organization;
- Fraternal or fraternal benefit society, such as an Elks Club or union;
- Educational or charitable organization;
- Civic or service club; OR
- Any other club or organization operated exclusively for nonprofit purposes.
Licensing and registration requirements for online charitable raffles in Massachusetts
Do you need a license to run a charitable raffle in Massachusetts?
Yes. A license from the city or town clerk is required to operate a charity raffle in Massachusetts. Additionally, any raffle license must be approved by the municipality’s police chief.
Types of charitable raffle license
There is only a single type of license. It is valid for one year and covers any number of events held by the organization.
How to apply for a charitable raffle license in Massachusetts?
Here’s an overview of the process to apply for a charitable raffle license in Massachusetts:
- The permit application is submitted and reviewed by the City or Town Clerk.
- It then goes to the Chief of Police who decides whether or not to endorse it.
- If endorsed by the Police Chief, it is returned to the Clerk who issues the permit.
- The Clerk issues a permit valid for one calendar year and sends a copy to the Commissioner of Public Safety and to the Lottery Commission.
- The Lottery Commission sends a financial form for the organization to complete within 10 days after the raffle is completed.
- If the application is not endorsed by the Chief of Police or not approved by the Clerk within 30 days of applying, the organization may seek judicial review in the District Court.
How much does a charitable raffle license cost in Massachusetts?
Each municipality may set its own fee for applications. The largest municipality, Boston, charges $30 for the application fee.
What is the validity of a charitable raffle license in Massachusetts?
A charitable raffle license is valid for one year from the date of issue. It is valid only within the municipality that granted it and covers any number of online or in-person raffles in that period.
How long does it take to get a charitable raffle license in Massachusetts?
The city or town clerk and the police chief have 30 days to approve or deny any application for a charitable raffle license.
Can Ascend assist with running an online raffle-based fundraiser in Massachusetts?
Yes, Ascend can assist nonprofits and charitable organizations with running an online raffle-based fundraiser in Massachusetts.