Legal Question in Business Law in Pennsylvania

Re: Is online raffling considered gambling?

Raffles are a form of gambling. It would have to be registered and approved in every jurisdiction in which you seek to do business (get customers, sell chances, etc.).

In many cases there is a charitable exemption for games of chance, though this is not universal. The exemptions I am aware of do not allow for profits to be distributed. Profits must go to the charity.

There are many unscrupulous enterprises that condict raffles and other enterprises nominally benefitting charities. But these bad actors donate a miniscule fraction of the proceeds to charity siphoning off the funds as fees and expenses. Sometimes the charity is something non-existent or silly.

I've recently read about a web-site that is selling chances to buy an item at a reduced fixed price. Pay one dollar and you can make a bid. The highest unique bid closest to the fixed price "wins" the oppoortunity to buy the item for the amount bid. This site is based in Canada and seems to be in agreement with the current law there. But it is unlikely that this scheme would be legal throughout all jurisdictions in the U.S. or even any. It's a new site and hasn't been challenged yet.

So, my answer would be I don't know. If you have the funds to start up the business and do the research I'd be happy to prepare a survey that delineates the requirements of every jurisdiction in which you wish to do business.

Regards,

Roger Traversa

email: [email protected]