Raffle vs Lottery

 

“In general, the term “lottery” embraces all schemes for the distribution of prizes by chance, such as policy playing, gift-exhibitions, prize-concerts, raffle at fairs, and various other forms of gambling.  Of course like all gambling, a lottery is composed of three elements: prize, consideration and chance.”

----Nelson Rose, Gaming Law in a Nutshell

By the above definition many games of chance which are not traditionally thought of as lottery, fall under the lottery umbrella….such as VLT’s.  This is better illustrated with the classic bingo dilemma. In most states, there is a constitutional prohibition on “lotteries” to be used as a charitable gaming enterprise.  So the most common fight is over whether bingo is a lottery.  Often this is resolved by amending the state constitution to expressly allow charities to operate a bingo.

“Raffles are legally a form of lottery.  They have been traditionally been smaller scale, in terms of the number of players participating, limited to paper tickets, and restricted to recognized charities.”

                                                                      ----Nelson Rose, Gaming Law in a Nutshell

First of all, I'd like to point out that raffles being limited to paper tickets is no longer the case, but it's moot for the purposes of this discussion.

I am going to refer to Canadian raffle terms and conditions rather than their American cousins as their charitable gaming terms and conditions are generally more evolved and somewhat less fragmented in their thoughts.  Raffles are described as lottery schemes.  This is consistent with Nelson Rose's definition of lottery.  All raffles are a form of lottery scheme.  Clear as mud?  To help us, we have to look at the elements that are common to both raffles and lotteries and compare how they differ:

Element Lottery Raffle
Run By State run Charity run and governed by regulatory body
Term Short-term Longer term, exception allowed for event based bearer raffles
Participation Requirement Bearer certificates (personal information not taken) Personal info required unless event based bearer raffle
Roll Over There may or may not be a winner for each draw Definite winner
Jackpot Distribution Jackpot is shared amongst winners Jackpot is not shared
Ticket Number Scheme Choose your ticket number or randomized ticket numbers available Randomized draw numbers only
Prize Pool Prize pool grows if there is no winner Prize pool does not accumulate past draw
Number of Tickets No restriction on the number of tickets sold Limits the amount of tickets sold
Duplicate Tickets Allows duplicate tickets Does not allow duplicate tickets

The two features under raffle that stick out as dominant characteristics of raffles is the requirement to take a player's contact information and requiring a definite winner.  However, there are raffle schemes that do not fit these criteria.

Possibly No Winner

A sports pool where one is gambling on the outcome of a sporting event, receiving a randomized combination of possible outcomes does not necessarily have a winner if all the tickets and thus all the possible combinations are not sold.

Picking Your Ticket Number

A typical event-based 50/50 (bearer raffle) does not need a player's personal contact information and most closely resembles a lottery except there is a definite winner.  That winner may not claim his/her prize but there is a winner.  One could argue that the tickets one receives with paper-based raffles allow some choice of the draw numbers one receives. Often a book is picked over in favour of another book, or series of tickets known as “peaking”. This too is considered harmless as it has no effect on the integrity of the raffle. Even with electronic systems that use sequential ticket sales, one can also influence their ticket numbers by purchasing early in an event or later in an event.

Honey Pots are raffles where one puts either their name or token into a jar for it to be later drawn. I can’t think of a more blatant example of choosing one’s own ticket than having their own name.   If there are two John Smith's however there could be a problem.

In Bingo people choose their cards and in Duck Derbies they choose their duck. The rationale clearly and rightly so is that the choosing of a bingo card, or a duck does not impact the integrity of the raffle.  If you are allowed some choice in games like Bingo or Duck Derbies and the integrity of the game is not impacted, then logic dictates that the ability to choose one’s raffle numbers should not be in violation either.

I would put forward that the reason raffles do not allow people to pick their numbers is because previously it was impossible to do so. Raffles can only have one winner; therefore each ticket has to be unique and distinct. The only way to achieve this with paper was to pre-print unique numbers, usually sequential numbers. You cannot choose your own raffle ticket number because two players may choose the same ticket numbers. Lotteries are not under this sort of guideline. Many people can have the same number or combination of numbers. As such it is an acceptable practice to allow people to choose their own ticket. Lotteries’ tickets do not have to be cross-referenced to make sure that it is a unique ticket.
With the advent of technology it is quite possible for players to choose their own ticket and make sure the ticket number they are choosing is unique. This is database query 101.
It is therefore my opinion that raffles did not allow the player to choose their own numbers because of the limitations of available technology.  Preprinting tickets, for convenience sake, required unique numbers on each ticket to ensure only one winner was possible, not because of any inherent definition of lottery versus raffle.

With the advent of database logic with electronic raffles, it is a matter of time before these lines are even more blurred.  Even the marketing of many charitable raffles call themselves lotteries or lottos.  Perhaps I haven't helped matters here.  As a rule of thumb I would follow if it's state run it's a lottery and if it's run by a charity then it's a raffle.  All other lines may be too blurry to decrypt.

 

2 Responses

  1. Hello website owner, do you allow guest posting ?
    Please let me know, i am interested :)

  2. Sorry, I hope you find the information on electronic raffles and charitable raffles useful, but at this time I am not interested in promoting any other form of online gambling.

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