This chapter contains explanations of policy on the following subjects:
In simple terms, a lottery scheme may be defined as any scheme that has the following three components:
Therefore, a lottery scheme exists if money is paid or some other consideration is given for a chance to win a prize.
There are many types of lottery schemes for which licences are not available. The licensing authority will confirm whether or not a licence is available for a proposed lottery scheme. If the proposed event is one for which a lottery licence is available, the organization must apply for a lottery licence. The organization is responsible for ensuring that all its schemes are operated legally.
Licences are available for certain types of games of chance and games of mixed chance and skill.
Games of chance, sometimes called “mechanical games,” do not involve any element of skill. Games of chance are the most popular form of gambling. There are hundreds of these games, including raffles, bingo, wheels of fortune and break open tickets.
In games of skill, the element of chance is virtually non-existent. Checkers, chess, bowling, tennis, golf and all sports contests are examples of games of skill.
Games of “mixed chance and skill” combine both elements and include most games played with cards. Blackjack is an example of a game of mixed chance and skill.
Organizations may conduct contests resembling lottery schemes to promote their products and increase sales. Although there is no formal definition of a contest, contests are often operated by commercial for- profit organizations or their representatives. These organizations cannot be licensed to operate a lottery because they are not charitable. Therefore, the company must ensure that the contest does not fall within the definition of a lottery scheme.
Prior to conducting a contest, organizations may first wish to: