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Guidelines for the Operation of a Raffle
A “Game of chance” is a game, contest, scheme or device in which:
- A person stakes or risks something of value for the opportunity to win something of value;
- The rules of operation or play require an event the result of which is determined by chance, outside the control of the contestant or participant; and,
- Chance enters as an element that influences the outcome in a manner that cannot be eliminated through the application of skill.
A ”Raffle” is a game of chance in which:
- A person pays or agrees to pay something of value for a chance, represented and differentiated by a number, to win a prize;
- One or more of the chances is to be designated the winning chance; and
- The winning chance is to be determined as a result of a drawing from a container holding numbers representative of all chances sold.
A bona fide, non-profit organization that is either charitable, educational, political, civic, recreational, fraternal, patriotic or religious, any auxiliary of such organization, or a class or organization of a post-secondary educational institution operated or accredited by the State does not need a license to conduct or operate a raffle, as defined above, in which the holder of the winning chance receives something of value worth no more than $10,000.00. This exception to the license requirement does not apply to any raffle of livestock, regardless of value.
The raffle must be conducted only for the exclusive benefit of that organization or class, and it must be conducted only by duly authorized members of that organization or class.
In all other circumstances, no one can operate a raffle within the State of Maine without obtaining a license from the Chief of the State Police. Licensed raffles are subject to additional requirements not covered by these guidelines.
Persons under 18 years of age may not take part in a raffle, and a person under 18 years of age may not sell chances, except in relation to recognized youth associations.
Those who conduct games of chance may not be paid for such services. Proceeds of a raffle may not be used to provide salaries, wages or other remuneration to members, officers, or employees of any organization authorized to conduct raffles. Proceeds may not be used to purchase alcohol or to defray expenses associated with events where alcohol is served. Proceeds may not be paid directly to organization members, except to defray the expenses for a serious illness, injury or casualty loss of a member when done pursuant to a special application approved by the State Police.
The organization conducting the raffle is required to keep records of all financial transactions involving the raffle. The records shall include an exact account of all income from the raffle, a list of all expenses, including, but not limited to, the cost of prizes, printing, licenses and administration, and shall include an exact account of the disposition of all other proceeds for the raffle including, but not limited to, all gifts, grants and payments to any person, firm, corporation, association or organization for any purpose whatsoever. All records of financial transactions involving the raffle shall be separate and distinguishable from all other financial records of the organization. These records shall be maintained for three years on the premises where the raffle was conducted or at the primary business office of the organization. The Chief of the Maine State Police shall have access to these records and may require whatever reports deemed necessary for the purpose of administering and enforcing the law. The organization shall permit the Chief of the Maine State Police or the chief’s authorized representative to inspect any equipment, prizes, records or items and materials used or to be used in the conduct or operation of the raffle.
The organization should be aware that there are laws regulating the printing of raffle tickets. Whoever is doing the printing of the raffle tickets that will be used must comply with those laws and regulations.
Violation of the laws regarding raffles and games of chance is a criminal offense.
Although Maine law does not prohibit a raffle’s sponsor’s members from participating in the raffle, this practice could produce the appearance of a conflict of interest and could produce a perception of impropriety. Any rules restricting participation must be clear and well publicized. Sponsors of the raffle should prominently display any rules restricting participation in clear terms and at the locations where raffle tickets are sold.
Raffle proceeds cannot be treated as donations by the ticket purchasers and should therefore not be considered tax deductible gifts. Purchasers of raffle tickets should be notified right on their ticket that the price of the ticket is not tax deductible.