Why is it illegal to hold online raffles in the US?

Also, is there any way to get around this law?

Asked on September 25, 2011 under Business Law, West Virginia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Each state in this country has its own laws as to whether or not a raffle let alone an online raffle is legal or illegal. The foundation to establish whether or not a raffle is legal or not is that the entity holding the raffle has to be a recognized tax exempt charitable organization under Internal Revenue Service guidelines and regulations (federal law).

If this is established, then is the charitable organization allowed to do business in a given state?In order to do so, the charitable entity (usually a corportation) must register with a given state's Secretary of State to do business and pay a yearly fee to do so.

Next, does the given state allow raffles and if so, does it allow online raflles. Pretty much all states that allow raffles mandate that the entity holding the raffle be a recognized charitable organization under federal law.

Not all states preclude online raffles. It is determined on a state by state basis.


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