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Would this be illegal?

by GeorgR.
10 replies
Let's say i create something like a lottery site where people can purchase "tickets" for $1 a pop.

After 1000 tickets are sold, winners are drawn, say 1st prize $500 and 2nd prize $250.

Someone gets $500 and someone else wins $250, and my own profit is $250. If it's illegal, why?

G.
#illegal
  • Profile picture of the author getsmartt
    Depending upon your local/state and federal regulations you would likely need some sort of raffle/gambling license
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  • Profile picture of the author Michael Oksa
    It's not illegal in and of itself.

    But...

    It is HEAVILY regulated, as it's a game of chance.

    It would be best to get advice from a qualified attorney.

    Also, what happens if you only sell 250 tickets? You still have to pay out $750 and you LOSE $500.

    All the best,
    Michael
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    • Profile picture of the author Kay King
      In many places it is illegal and considered a form of gambling.

      Ask an attorney - not a forum.
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  • Profile picture of the author Len Bailey
    Sounds like you're talking about an online version of a raffle. So it's probably not illegal -- but may be strictly regulated. Like Getsmartt said, you may need a license. I'm with Michael -- You should to talk to an attorney familiar with your local, state, and federal laws & regulations.
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  • Profile picture of the author R Hagel
    I agree with the above -- it's heavily regulated. Plus, what you're allowed to do online and what you do in your own city may differ. And since you're asking a legal question, ask a legal expert (rather than a bunch of unqualified strangers on a forum).

    Cheers,
    Becky
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  • Profile picture of the author Sheila Atwood
    Raffles are illegal in the state of Utah, let alone online raffles. California has very strict laws that point to only non profit companies as eligible to run online raffles.

    You may want to Google "Are Online Raffles Legal"
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  • Profile picture of the author tj
    Originally Posted by GeorgR. View Post

    Let's say i create something like a lottery site where people can purchase "tickets" for $1 a pop.

    After 1000 tickets are sold, winners are drawn, say 1st prize $500 and 2nd prize $250.

    Someone gets $500 and someone else wins $250, and my own profit is $250. If it's illegal, why?

    G.
    It needs to be licensed by your states lottery division and will be also regulated through them - and this area is heavily taxed.

    Timo
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  • Profile picture of the author majidmaskat
    wow u just gave me a great idea, not illegal by the way. yeah so check with your local laws and regulation. Also i believe that you would need some sort of a liscence, becasue after all , it is gambling
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    • Profile picture of the author Kay King
      There was a fellow who tried to "raffle" a house with a money making online "buy a ticket" lottery a couple years ago. He got into hot water with the law pretty fast.

      Raffle is usually what a non-profit does (and gets permits for) - lottery is usually for profit and tightly regulated/taxed.
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  • Profile picture of the author Don Schenk
    George, of course I am not an attorney. A few years ago I attended a seminar about legal issues in business. They spent a fair amount of time talking about how we could legally use contests and sweepstakes.

    As I recall, with contests there had to be some demonstratable skill and judges. With sweepstakes there had to be "no purchase necessary."

    The system you are talking about is a lottery. And we were told it is illegal. Charities can use it to generate money, but businesses can't. You are a business. I hope.

    Now that said, here in Ohio I see a lot of Bingo advertised. Apparently workers can be paid, but the profits go to a charity.

    :-Don
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