Ticket Raffles are Illegal

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Ticket Raffles are Illegal

Postby BBadger » Sun Dec 30, 2012 6:49 pm

A ticket raffle has three important attributes:

  1. Prize(s) -- The object of value given to winners (e.g. Burning Man ticket)
  2. Chance -- A selection of winners (e.g. raffle entrants)
  3. Consideration -- Some kind of cost (monetary or otherwise) to participate (e.g. purchased raffle tickets)

Consequently, these three attributes classify this form of "prize promotion" as a lottery under FTC guidelines -- especially the pay-to-play, consideration attribute. Under the FTC Federal Criminal Lottery Act (18 U.S.C. §§1301), lotteries are illegal unless explicitly authorized by the states, as lotteries are considered a form of gambling.

A "non-profit" status (fundraising, etc.) does not exempt a lottery from the above regulations. Some states, such as California, may authorize non-profit raffles for certified charitable purposes with specific requirements (Penal Code section 320.5 on Charitable Raffles). Legal lotteries must, however, be legal in all jurisdictions that allow participants. Therefore, tickets would only be purchasable in California (requiring ticket stubs too), and subject to regulations forbidding proceeds from being used outside the state.

What does this mean for ePlaya?

According to the FCC, legal lotteries may be advertised in any jurisdiction, as long as all terms are accurately disclosed. In the case of ePlaya, however, most -- if not all -- raffles advertised on ePlaya are considered illegal lotteries by US federal and state laws. Allowing or posting notices for illegal lotteries would make ePlaya complicit in providing or condoning promotional broadcasting services for such illegal lotteries.

The Burning Man 2012 ticket lottery distributions scheme, despite its "lottery" name, would not be considered a real "lottery" as it did not have a consideration requirement.

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Re: Ticket Raffles are Illegal

Postby trilobyte » Sun Dec 30, 2012 7:07 pm

Burning Man's ticket sales (in 2012, as well as other years) have been conducted in accordance with federal/state/local laws. If you believe otherwise, I recommend you reach out to either Burning Man's legal team or the appropriate authorities with your concerns.

As for tickets offered on ePlaya by third parties, it is our belief that posters are acting in accordance with the laws that would apply to their organization. If we receive credible information to indicate that any ticket offered on the site may not be, it is pulled immediately and investigated.

We have not yet made any determinations as to if or how third parties may list or offer tickets on ePlaya for the 2013 event.
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