Hold Legal Raffles – Know the Laws in Canada
The raffle law in Canada has at least one rule which is common in all the provinces, that being that only charitable organizations are eligible to apply for raffle licensing, and that all profits from raffles must go toward serving the community in some way. This is also true in the Province of Prince Edward Island. If an organization wishes to hold a raffle (or any gaming event where someone can pay for a chance to win a prize greater than the cost to play), licensing is required. Eligible applicants must be from organizations that are non profit and charitable in nature, and the proceeds must be used to benefit the community.
In Prince Edward Island, Consumer Services operates under the Lottery Schemes Order, the guide from which raffle licences are issued. Depending on how much total retail value the prizes to be awarded have, there may be a review period for the application and a higher fee to pay for the licence itself. If the total prize value is under $250, then the licence fee is $5 and can be obtained at any Access Centre. However, if the total value is over $250, then the licence fee is 2% of the total value of the prizes (maximum $2,000) and an application must be submitted to Consumer Services for review.
Organizations in Prince Edward Island seeking a raffle licence are asked to apply at least 2 weeks in advance of the event. Commercial operations or individuals are not eligible for a raffle licence. For an organization to plan a legal raffle, they must be registered with the CRA as a Canadian Charity, or be approved by the Attorney General. The most important thing to remember is that it is unlawful anywhere in Canada to hold a raffle without a licence.
Important Items to Note
- The Minister may require an audit of any license
- Profits must be dispersed as is stated in the licence application
- Raffle profits should be kept separate from all other funds
- Consumer Services advises that all raffle tickets should include the licence number
- Keep the receipts from raffle proceeds, as they may be requested to verify the dispersal
- Those who purchase tickets should be advised of all rules of the game, either by printing them directly on the tickets or some other way
- All financial documents regarding the raffle must be kept at least 3 months after the raffle takes place