Raffles (SA) - Not-for-profit Law

Raffles (SA)

Legal information for South Australian community organisations

This fact sheet covers:
►    what is a raffle?
►    what laws are relevant and who regulates raffles in South Australia?
►    is a permit required?
►    collecting for charitable purposes
►    what are the requirements for holding a raffle?
►    what are the requirements for raffle prizes?
►    what are the requirements for the proceeds of a raffle?
►    what records must be kept?
►    how are ticket sales treated for tax purposes?

This information is for community organisations that want to know more about the legal
requirements for conducting raffles in South Australia.
A special legal regime applies to raffles held or promoted in South Australia.

          Note
          This fact sheet provides information on raffles in South Australia. This information is intended
          as a guide only and is not legal advice. If you or your organisation has a specific legal issue,
          you should seek legal advice before making a decision about what to do.
          Please refer to the full disclaimer that applies to this fact sheet.

Legal/75103877_4
   © 2021 Justice Connect. This information was last updated in July 2021 and is not legal advice; full disclaimer and copyright notice at www.nfplaw.org.au/disclaimer.

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What is a raffle? What laws are relevant and who regulates
raffles in South Australia?

       What is a raffle?
       A raffle is method of fundraising where entrants buy a ticket in return for the chance to win a
       prize. In South Australia, this type of game of chance is classified as a ‘lottery’.

In South Australia (SA) the rules about the conduct of raffles are found in the Lottery and Gaming Act 1936
(SA) (Lottery Act) and the Lottery and Gaming Regulations 2008 (SA) (Lottery Regulations).
Only 'associations' can hold raffles in SA. An association is defined in the Lottery Regulations to be any
association of persons, whether incorporated or not, that has:
•   at least 10 members
•   a management committee appointed or elected by the members of the association, and
•   a written constitution,
but does not include a registered corporation that returns profits to its members.

       Note
       If you don’t meet this definition, you can’t conduct a raffle in SA.

If a raffle is conducted to raise funds for a charitable purpose, the Collections for Charitable Purposes Act
1939 (SA) (Charitable Purposes Act) may also apply. Raffles are regulated by Consumer and Business
Services (CBS). In this fact sheet, unless otherwise stated, further detail of any CBS requirements referred
to can be found on the CBS website.
If your organisation wants to conduct a raffle in another state or territory (in addition to SA), then you must
also comply with the laws of that other state or territory.

       Related Not-for-profit Law resources
       This fact sheet covers raffles only. Please refer to our fundraising and trade promotions
       webpages for further information relating to those activities and requirements in South
       Australia.

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Is a permit required?

      What is a ‘lottery’
      Under the Lottery Act a ‘lottery’ (which includes a raffle), is defined as any scheme,
      competition or device where:
      •     participation depends on the payment of money or the purchase of a ticket, and
      •     the prize is determined by an element of chance

      Example
      For example, a raffle can be conducted by lot or drawing out of a box, by cards, tokens, coins,
      dice, ticket or envelope, or by a machine or device.

       Note
       A raffle falls into the ‘lottery’ definition as it involves the sale of tickets, in return for the chance
       to win a prize in a random draw.

There are both major lotteries (which require a permit) and minor lotteries (which do not require a
permit). The value of your prize pool will determine if a permit is required.

       Tip
       In some instances, it might be worth keeping below the prize threshold to avoid the paperwork
       attached to a permit.

Permits for major lotteries will specify the number of tickets that can be sold in the raffle.

Minor lotteries
A minor lottery is a lottery (which includes a raffle) where the total value of all the prizes is $5,000 or less. A
licence is not required if your organisation is holding a minor lottery.

          Caution
          Even though you may not require a licence to hold a minor lottery, if you are fundraising for
          charitable purposes you will need to hold a ‘Collections for Charitable Purposes’ licence. For
          information on collecting for a charitable purpose see below.

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Major lotteries
A major lottery (which includes a raffle) is where the total retail value of all the prizes is over $5,000. A
licence is required for all major lotteries, and must be granted before the lottery can begin or be advertised.
Details on how to apply for a major lottery licence can be found on CBS’ website. CBS requires that an
application for a licence be submitted to them at least 14 days before the opening of a lottery.

Collecting for charitable purposes
Funds raised through a raffle in SA can only be used for religious, educational, charitable or benevolent
purposes, (‘approved purposes’). For more information on this see ‘What are the requirements for the
proceeds of a raffle’ below.
If your organisation intends to hold a raffle to raise funds for a charitable purpose, you must hold a
Collections for Charitable Purpose Licence (CCP Licence).
Charitable purposes are outlined in the Charitable Purposes Act and include collecting for the:
•   provision, assistance or support of health services or research
•   relief, assistance or support to disabled, sick, poor, destitute, helpless or unemployed individuals or their
    dependents
•   relief of distress caused by war
•   relief, assistance or support to members and former members of the armed forces of Australia and their
    dependents, and
•   provision of animal welfare services

       Related Not-for-profit Law resources
       For more information on collecting for a charitable purpose and whether you need a CCP
       Licence see our guide to fundraising in South Australia.

What are the requirements to hold a raffle?
Who can enter a raffle?
A raffle must be open for anyone who wishes to enter (subject to the terms and conditions of the raffle).
The association running the raffle is unable to enter itself, but individual committee members may be able to
enter if the association’s rules allow it.

Tickets
All tickets must have an equal chance of winning the raffle.
All tickets must be sold for the same price, except in the case of bonus or free tickets. If bonus tickets are
offered, the Lottery Regulations require them to be offered throughout the entire ticket selling period.
CBS requires that all tickets must include the following information:
•   the licence number (if there is a licence)
•   the ticket number, the price and the total number of tickets, and the number of any bonus of free tickets
•   the name of the association holding the lottery and the association benefiting from the raised funds
•   the prizes and their values
•   the terms and conditions of the lottery
•   the date, time and venue of the lottery draw, and
•   the details of where and when the results of the lottery will be published

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In addition:
•   raffle tickets for major lotteries must not be given or posted to a person without their consent, and
•   ticket sellers for major lotteries must be provided with clear instructions on the ticket book cover
    regarding the conduct of ticket sales for the raffle

       Note
       When children under the age of 15 sell raffle tickets, they must be accompanied and
       supervised by an adult.

       Tip
       There is no legal time limit for selling raffle tickets, however, CBS recommend a sale period of
       no longer than four months.

Advertising the raffle
Any advertising or promotion for a raffle must:
•   state when the raffle ends, and
•   provide enough information for reasonable people to understand the chances of winning and how often
    a prize or prizes can be won
Advertising or promoting any raffle must not:
•   be aimed at people aged under 18 years old or show them gambling
•   suggest that the raffle can fix personal or financial problems or to cover expenses
•   imply that the raffle can increase social, sexual or employment opportunities
•   exaggerate the prizes or suggest the chance of winning is better that it is
•   suggest that someone's skill means a better chance of winning
•   link the raffle to excessive drinking, or
•   exaggerate the connection between the raffle and how the proceeds will be used

       Note
       An advertisement for a major lottery must state the lottery licence number.

Finally, there are restrictions on when minor or instant lotteries can be advertised on television and radio.
A minor lottery must not be advertised or promoted:
•   on the radio on a weekday between the hours of 6:00 am and 8:30 am, or
•   on the television on a weekday between the hours of 4:00pm and 7:30pm

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Drawing the prizes
Raffles must be drawn on the day, time and place stated it would be drawn. In the case of a major lottery, it
must also be drawn:
•   under the supervision of the association
•   in front of any ticket holders who want to be there, and
•   in front of an independent scrutineer
If the winner of a minor or major lottery is not present when the raffle is drawn, you must notify them in
writing within four days of the draw and tell them how the prize can be collected or delivered.
For a major lottery, if the prize is over $250 the details of the winning ticket must be published a state-wide
newspaper within seven days of the draw.

       Related resource
       To see who is eligible to be a scrutineer, see CBS’s website.

What are the requirements for raffle prizes?
Raffle prizes must consist of cash, goods or services.
There are a number of prohibited prizes, including:
•   tobacco products, firearms, ammunition or other prohibited weapons
•   cosmetic surgery or other similar medical or surgical procedures where the main purpose is to improve
    physical appearance, and
•   any goods or services that are illegal to sell in SA
The total value of all prizes in a raffle must not be less than 20% of the total sale value of all the tickets in
the raffle.
If a prize in a major lottery has conditions attached, full details of the conditions must be provided. For
example:
•   travel prizes must include:
    – details of the number of persons entitled to use the prize
    – destination details
    – additional components (such as accommodation and air fares)
    – prize value
    – restrictions (such as off-peak periods and expiry periods), and
    – whether the prize is redeemable for cash
•   house or land prizes must include details of costs and taxes, such as conveyancing and transfer costs
    and land tax
•   motor vehicle prizes must include:
    – details of make and model of vehicle
    – accessories, and
    – registration and on-road costs
•   mobile phone prizes must include details of any included costs such as a mobile phone plan to which the
    winner must commit

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What are the requirements for the proceeds of a raffle?
Funds raised through a raffle in SA can only be used for religious, educational, charitable or benevolent
purposes, (‘approved purposes’).
At least 15% of gross proceeds from a minor lottery, and 35% of gross proceeds from a major lottery
need to be used for an approved purpose.
Approved purposes are outlined in the Lottery Regulations and are quite broad. They include:
•   religious, educational, charitable or benevolent purposes
•   promoting or encouraging literature, science or the arts
•   providing medical treatment or attention or promoting the interests of individuals who have a physical,
    mental or intellectual disability
•   establishing, carrying on or improving a community centre or promoting the interests of a local
    community or a particular section of that community
•   sport, recreation or amusement
•   promoting animal welfare
•   conserving resources or preserving any part of the environmental, historical or cultural heritage of SA
•   promoting the interests of students or staff of an educational institution
•   a political purpose, and
•   promoting the common interests of people who are engaged or interested in a particular business, trade
    or industry
If the proceeds don’t cover the cost of all of the prizes offered, the organisation must notify CBS in writing
and make up the difference.

       Caution
       Funds can’t be used by the organisation to benefit a specific member. They also can’t be
       raised to benefit a for-profit corporation.

What records must be kept?
CBS requires that raffle proceeds must be paid to a bank account or financial institution that is operated by
the organisation.

Minor lotteries
For minor lotteries, the organisation needs to keep records of the:
•   gross proceeds of the raffle
•   administrative costs of holding the raffle
•   prize winners and the distribution of prizes, and
•   unclaimed prizes and how they were dealt with
These records need to be kept for three months from the end of the raffle.

Major lotteries
For major lotteries, the organisation needs to keep records of:
•   the number of tickets issued for sale and whom they were issued to
•   the number of tickets sold and the number of tickets left unsold
•   prize winners and the distribution of prizes
•   unclaimed prizes and how they were dealt with, and

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•   all income and expenditure relating to the raffle
CBS recommends these records be kept for one year from the end of the raffle.

Financial statements
For all major lotteries, the organisation must provide a financial statement to CBS within one month of the
last time the lottery is drawn.
These financial statements need to be certified by an auditor. The financial statement template for major
lotteries can be found on the CBS website.

How are ticket sales treated for tax purposes?
Income tax
If your organisation is exempt from paying income tax it will be exempt from paying income tax on proceeds
it receives from a raffle.

       Related Not-for-profit Law resources
       For more information about whether your organisation is exempt from paying income tax
       see our webpages on getting started and tax.

       Related resources
       If the organisation is not exempt from income tax, raffle sales will generally be included as
       assessable income for the purposes of income tax, although there may be some
       deductions available. For more information, see the ATO's guide to gifts and fundraising or
       seek specific legal or accounting advice.

       Note
       The cost of buying a raffle ticket is not tax deductible for an individual, even if the organisation
       running the raffle is endorsed as a deductible gift recipient. Your community organisation
       should not issue tax deductible receipts or represent or imply that the cost of raffle tickets is
       tax deductible.

Goods and services tax (GST)
If your community organisation has been specifically endorsed by the ATO as a tax concession charity
(TCC) or a deductible gift recipient (DGR) it will not be required to pay GST on the price of the raffle tickets
sold. If your organisation is not endorsed as a TCC or DGR, GST requirements will depend on whether the
organisation is registered, or required to be registered, for GST. We recommend your organisation talk to a
specialist about GST and lotteries.

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Related Not-for-profit Law resources
For more information on TCC, DGR and GST see our webpage on tax.

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Resources

Related Not-for-profit Law resources
The Not-for-profit Law website contains many fact sheets on different topics. The following topics contain
relevant further information:

►   Fundraising and events
    This page contains resources on the main legal issues when fundraising

►   Communications and advertising
    This page offers information on advertising and promotions and social media, such as Facebook and
    Twitter.

►   Tax
    The tax page has information about different tax concessions available to charities and not-for-profits.

Other related resources
Consumer and Business Services (CBS) South Australia resources
► Fundraising for organisations: Lotteries

    CBS is the regulator for all lotteries in SA. This page contains information about lotteries and how to
    apply for a lottery licence.

    You can also access the CBS website for the following application forms:
►   Paper application for a major lottery licence
►   Paper application for an instant lottery licence

Australian Tax Office (ATO) resources
► Gifts and fundraising guide

    The ATO’s gifts and fundraising guide provides community organisations with information about the tax
    treatment of money raised through gifts and fundraising.
►   ATO summary of laws that regulate raffles in other jurisdictions
    This page in the ATO's site provides a summary of the laws relating to raffles and gaming in other State
    and Territory jurisdictions. Use the menu on the right hand side to select the jurisdiction.

Legislation
►   Lottery and Gaming Act 1936 (SA)
►   Lottery and Gaming Regulations 2008 (SA)
►   Collections for Charitable Purposes Act 1939 (SA)