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The Mistake of a Business Owner/Nonprofit Regarding Charitable Gambling

Giving back to the community and doing good is an essential part of the human experience. However, in doing so, you must make certain that you are in compliance with applicable laws. This article will explore the topic of lawful charitable gambling, which is complicated. Violating charitable gambling laws is a crime.

First, for-profit businesses are not allowed to conduct lawful charitable gambling in Minnesota. The only organizations that can conduct lawful charitable gambling are registered nonprofit organizations (note: just because you are a nonprofit does not automatically mean your organization can conduct lawful charitable gambling). Second, there are only five types of lawful charitable gambling in Minnesota: bingo, paddlewheels, pull-tabs, raffles and tipboards. Third, if you do not have a license to conduct charitable gambling, then your organization either needs to obtain an exempt permit or an excluded permit. Your organization cannot conduct charitable gambling in a calendar year that requires an exempt permit and an excluded permit. So, your organization needs to decide now what type of lawful charitable gambling you will be doing for the calendar year so you not run afoul of this law. Fourth, charitable gambling under an exempt permit is limited to five days in a calendar year. Fifth, you need to also make certain that your charitable gambling activity is allowed under local ordinances. Local ordinances can, for example, prohibit charitable gambling, limit the hours of charitable gambling, prohibit liquor being awarded for charitable gambling, etc. In addition, local ordinances can require an additional permit and other requirements. Sixth, if you are serving liquor, you will need a liquor permit (most likely from the state and the local government). Seventh, while you can advertise a raffle online, it is not recommended as you could be in violation of other state’s laws if a resident from a different state purchases your raffle ticket from a state that prohibits lawful charitable gambling or has restrictions that make the purchase unlawful. Eighth, the value of prizes and the type of prizes allowed have restrictions under the law. Finally, when advertising an event with lawful gambling, there are advertising restrictions and requirements. Similarly, house rules need to be posted at the site, and those requirements are very specific.

The laws related to charitable gambling are strict, varied, and complex. It is easy to be in violation of the law – note: ignorance is not a valid defense.

Spangler and de Stefano, PLLP assists nonprofit organizations with lawful charitable gambling compliance.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.