Residents in the Garden State have enjoyed legal online gaming since 2013. However, buying raffle tickets online in an effort to support local charities has always been prohibited until now. Just recently, the NJ Governor signed a bill permitting charities to sell raffle tickets on the internet as we’ve covered here.
Nonprofit organizations and other charitable bodies often organize raffles as a way of raising funds. Conducting a raffle, however, is considered a form of gambling in NJ and is as such governed by statute. The law in NJ allows non-profit groups to organize raffles and other such like gaming events but they must first obtain a license from the municipality hosting the raffle.
Nonprofit organizations wanting to boost their fundraising dollars by incorporating an online element to annual raffles have always been unable to do so because the state commissions that regulated charity gambling has prevented it from happening.
Based on the information supplied by the New Jersey Division of Consumer Affairs, the Legalized Games of Chance Control Commission prohibited charities from selling online owing to the increased potential to infringe existing raffle regulations.
For instance, not all municipalities in the state permit raffles, and since state law also prevents sales to minors, the commission would have had a harder time controlling minors from making online purchases. Examples of states in the Garden State that do not permit raffles or any form of bingo include Ocean City, Cumberland County townships such as Greenwich and Shiloh Borough, and more. Upper Deerfield has always permitted raffles but bingo is not allowed.
This law has been outdated and confusing for area charities as raffle regulations do not explicitly prohibit online sales. Now that the antiquated law has been done away with, charities in NJ should expect to enjoy new sources of revenue. The commission has never actively sought charities offering online raffles.
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However, whenever the commission would become aware of online raffles, it would promptly notify the sponsor and force them to stop online promotion or risk forfeiting their raffle license. The only thing nonprofit groups could do before this new Bill was signed was to promote their raffles online, but not sell them.
For years, the rules had put a damper on sales and with many organizations experiencing funding cuts, online raffles can help to keep NGOs alive rather than hurt them. All over the state, the Legalized Games of Chance Control Commission has been charged with the mandate to oversee and enforce the operation of raffles and bingo games by more than 15,000 registered non-profit groups, and amusement park games.
Having charities sell raffles online will be a great and modern way for them to expand their fundraising efforts, which has never been more important during this period of the pandemic. The entire framework has indeed been in dire need of a shakeup that will help to usher the system into the betting requirements of the 21st century.
As the state welcomes the sale of raffles online, there is also hope that other players, specifically payment and withdrawal systems will come on board. As things are currently, most charities use their websites to advertise the sale of tickets.
But because the support of payment systems such as PayPal is needed to enable transactions and many payment systems including PayPal has rules in place that prevent selling tickets for games of chance, most charities typically find themselves unable to sell raffles online as a result.
When charities in the Garden State attempt to bypass the precious licensing laws or regulations, they would get fined as much as $7,500 if it was a first-time offense and not more than $15,000 for each subsequent offense. The offending charities would also be required to repay all participants in the raffle once the rules have been violated. But thanks to this bill, this will no longer happen.
The law has always been tough on charities wanting to sell raffles online
Although most charities depend on raffles to raise much-needed funds, it isn’t always a smooth experience for them. Even before the charities and NGOs can obtain a license from the Legalized Games of Chance Control Commission which is responsible for administering raffles by non-profit bodies in the state, they must go through several hoops.
For instance, an organization has to demonstrate that it is first and foremost qualified to run a raffle within the confines of the raffles licensing regulations. The Commission is what determines whether the charitable body meets the criteria and if an organization is successful, it is issued with an ID number that expires in 2 years.
Once an ID number is issued, the organization then proceeds to apply for a municipal license from the municipality hosting or operating the raffle. If the municipality discovers that the members of the organization have prior criminal convictions, the chances of them receiving approval become slim. The licensing process from municipality to municipality also takes too long with the licensing period lasting weeks or even months in some areas.
There are also restrictions as to the prizes and rewards that can be conferred at any one event. Charitable organizations cannot award any prizes that have a retail value exceeding $100,000. After the raffle event has been held successfully, the organization that was in charge of the raffle must then file a comprehensive report with the Legalized Games of Chance Control Commission during the calendar month after the raffle date.
In the report, the organization is supposed to detail every expense, gross receipts, as well as the total profit acquired from the proceedings. It must also provide correct details as to which profits have been applied and the list of all prizes awarded during the event.
If an organization fails to comply with any of the statutory rules, the Chance Control Commission is free to impose fines on it. With such restrictive rules, it is no wonder that organizations in the state hold any raffles at all.
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