How to Keep Your Non-profit Organization’s Fundraising Legal

The Pasco Sheriff’s Office is often asked about fundraising and how it relates to the state’s gambling laws.  Some fundraising falls into the category of gambling, much like the Florida Lottery, which raises money for education.  Florida law, however, is very specific about how such funds can be raised.  Our position on these penny-ante games is first and foremost education.  The main focus of our Vice and Narcotics Section relates to gangs, drugs and organized crime.  We do, however, believe it is important to educate those non-profit organizations that want to stay within the letter of the law.  Below is a synopsis that will allow organizations to maintain compliance with state law.

Some gambling is legal under certain conditions, like the Florida Lottery, bingo and drawings by chance.  Unfortunately many of the more creative fundraising activities are illegal.  First, we must define gambling.  Then, if we determine it is gambling, is it legal or illegal? 

 Gambling has three critical elements: Consideration, Chance, and Prize.

 v     Consideration:  This simply means that you have to pay (anything of value) to play.

 v     Chance:  Are odds involved in winning?  If so, it is a game of chance.  If some skill is required to better your chances in a game, it can still be a game of chance.  If, for example, a game involves 60 percent chance and 40 percent skill, it is a game of chance.

 v     Prize: The prize element does not have to be money.  If you are playing for any item or promise of something of value, it is a prize. 

 Now let’s examine some activities:

Casino or Monte Carlo Nights

                                                                A charitable organization rents gambling equipment such as roulette wheels, black jack tables, slot machines, or other games of chance, and sets up a mock Las Vegas casino.  They typically charge participants to attend the event or to play these games  (consideration).  Even if they do not charge to play but charge a cover this is still consideration. Inevitably there will be prize(s) awarded for winning.  Some times these prizes are split between the participant and the charity.  Other times the entire amount goes to charity. 

 Problem:

This activity, if all three elements are present, is illegal gambling in violation of F.S. 849.  To further aggravate the issue is the fact that the apparatus (wheels, tables, slot machines) are illegal to simply possess in this venue, section 849.231 Florida Statutes.

50/50 Drawing

 This one is not really complicated.  An organization sells a ticket with a number printed upon it.  The money (consideration) from the ticket sales goes into a pot and the winning number is drawn.  The winner then splits the pot with whatever non-profit organization is hosting the drawing.

 Problem: 

Consideration, chance, and prize are unequivocally present if you require participants to pay to enter.   However, if you allow people to play without paying, taking only suggested donations, it is not illegal.  This must be stated on the ticket!   There are more legal requirements for such drawings.  For more information, non-profit organizations can refer to section 849.0935 Florida Statutes regarding how to legally conduct a “drawing by chance.” 

Texas Hold-em Events

  These events have quickly grown in popularity probably due to televised championships.  Quite simply put, this is a poker game.  Cards are a game of chance.  The consideration is the cost of entering.  These are often held in lounges or Bars and sometimes the card game is free after you pay a cover charge (consideration).  Some events do not pay an immediate prize but the winner advances to the next round of competition at a future date. Ultimately, if you continue winning, there will be a prize at some final championship.

 Problem: 

If the game has consideration, chance, and prize, the card game is illegal. 

Conclusion

 Remember the Lottery and BINGO test.  Even though these two activities are regulated and legal, they are good examples of the C, C and P elements (consideration, chance and prize).  Keep in mind that if you remove one of the elements (C,C and P), your game is usually legal.  It is also important to point out that it is not our intent to make your fundraising efforts more difficult and we do not have the resources to actively seek out and investigate these violations.  If they are brought to our attention, however, we must remind the operators of the law.

 We hope that this has been helpful to you and your organization.  If you have any specific questions regarding gambling related activities, please contact our Vice and Narcotics section at 1-800-854-2862.