Sports administrators, or any persons assisting in the organising of raffles and other similar fundraising schemes, need to have a basic understanding of laws relating to fundraising. These laws may differ from nation to nation, state to state, and municipality to municipality.
However there are some commonalities and these are discussed here. Some of the examples are from the state of Queensland in Australia and you should check with the laws in your own area.
Whether it is necessary to obtain a permit often depends on the size (gross proceeds) of the raffle and how tickets are sold.
For small in-house raffles (private raffles), the type conducted on a single day and involving only the patrons of an event, there is usually no need to obtain a permit. The gross proceeds of these types of raffles is usually less than $500.
However, if you are planning the type of raffle that takes several weeks (if not months) and involves selling raffle tickets to members of the public i.e. door-knocking, then you may need a permit. You should check with local or state governments and find out the rules that apply.
Once you cross the threshold from a private raffle to a public raffle there are many rules you must obey. These rules will be about the printing and selling of tickets, what you can and cannot offer as prizes, how winning tickets are drawn and what financial records you must keep.
For small private raffles, the type of tickets commonly available at the newsagent is all you need. But if your raffle is going to involve the public then tickets should be properly printed so that:
Raffle tickets must be fully account for. This means that the organiser of the raffle needs to very carefully make a log of the ticket numbers given to each seller, and then ensure that all tickets are accounted for, whether sold or unsold.
There are usually rules about what you can and cannot offer as prizes. Typically you cannot offer firearms or tobacco products as prizes, and there may also be restrictions in regard to alcohol products. Furthermore there are often restrictions about offering 'cash' as a prize.
You should also check the rules relating to the total value of prizes as a proportion of gross proceeds. It is often the case that the value of prizes must be at least 20% but this may be 40% in some jurisdictions.
These restrictions differ depending on the legal jurisdiction you are in and it is very necessary to make checks in your area. If finding the right government agency becomes a problem, you could try asking a sports administrator in another organisation.
It is absolutely mandatory that the organisation accounts for every ticket before the drawing of winners takes place.
It is often the case that rules requires the 1st prize to be drawn first. This gives every person in the draw a fair chance of winning that prize. Then the 2nd prize is drawn and so on until the smallest in value prize is drawn.
The names and contact details of the winner should be on the ticket stub. However, it may be that the winner has moved address, changed telephone number or even gone overseas. In these circumstances, the organisation must make reasonable attempts to find the winner. However, after a period of time in which it has been impossible to contact the winner, the prize must be drawn again. The period of time may be 3 months but you should check the rules in your law jurisdiction.
For private raffles there is usually no requirement to keep records other than the normal accounting records that organisations must keep for auditing purposes i.e. cash collected, amount of expenditure on prizes, etc.
For larger/public raffles, your organisation may be subjected to an audit by the regulatory authority. If this happens you will be required to demonstrate that all printed tickets have been accounted for. You will need a log that shows every book of tickets printed and issued to sellers has been returned. Furthermore you will need to show accounting source documents (invoices, receipts, etc) and accounting records (e.g. cash book, bankings, expenditure accounts) that prove the total of tickets sales and the total of all expenses incurred in regard to the raffle. In circumstances where your organisation is required to pay tax on the proceeds of the raffle, you will need to have audited financial statements of the raffle separately.