Information Bulletin No.81
(June 16, 2017)
Launching a Regulatory Framework for Electronic Raffles in Ontario’s Charitable Gaming Sector
Regulatory changes affect both electronic and paper raffles
June 16, 2017 - The Registrar of Alcohol, Gaming and Racing has put in place a new regulatory framework for electronic raffles, which permits the use of computers in the management and delivery of charitable raffles. Today marks the beginning of Phase 1 for the launch of the electronic raffle regulatory framework.
Effective immediately, eligible charitable or religious organizations may be licensed by the Alcohol and Gaming Commission of Ontario (AGCO) to conduct and manage electronic raffles under this new framework. This allows charities to use computers for the sale of raffle tickets, the selection of raffle winners and the distribution of raffle prizes in Ontario. The new framework is made possible by amendments made to the Criminal Code by the Government of Canada in 2014.
Building on an Interim Framework
In September 2016, the AGCO developed an interim regulatory framework to pilot the use of electronic raffles. A number of charitable foundations were permitted to conduct and manage electronic raffles. These organizations include: Maple Leaf Sports and Entertainment (MLSE), Ottawa Senators and Jays Care Foundations. The AGCO has also worked with a number of mega raffle foundations to allow their use of computers to conduct and manage electronic Mega Raffles. The new electronic raffle regulatory framework builds on the activities undertaken and lessons learned during this interim framework period.
The electronic raffle framework is expected to:
- Continue to ensure charitable raffles in Ontario are conducted and managed in accordance with the principles of honesty, integrity and in the broader public interest.
- Permit charitable raffle products in Ontario that employ the modern technology expected by Ontarians.
- Increase fundraising opportunities for eligible charitable objects and purposes.
- Streamline the administration of charitable raffles.
Phased Implementation of the Electronic Raffle Framework
The electronic raffle framework is being implemented in phases. This allows the AGCO to immediately begin supporting eligible charities that wish to conduct and manage electronic raffles, while also providing the opportunity to monitor and manage any regulatory risks associated with these types of events.
During the initial roll-out of the regulatory framework, eligible electronic raffles will align with existing paper-based raffles games currently permitted by the AGCO. Working collaboratively with the charitable gaming sector, the AGCO will look at further opportunities to expand the types of eligible raffle activities in future phases.
Phase 1 of Framework Implementation
Event-Specific Electronic 50/50 Raffles
Effective immediately, the AGCO will begin accepting applications from charities interested in conducting and managing electronic 50/50 raffles at their events. These could include charitable gala events, sporting, entertainment and other events. Charities may apply for a licence from the AGCO to conduct and manage event-specific electronic 50/50 raffles, regardless of the size of the expected prize board.
Fixed-Prize Electronic Raffles
Effective immediately, the AGCO will begin accepting applications from charities interested in conducting and managing fixed-prize electronic raffles with prize boards over $50,000 in value. Charities may use computers for one or more of the following elements of a raffle: the sale of tickets, the selection of a winner, and the distribution of prizes.
Phase 2 of Framework Implementation
Online Electronic 50/50 Raffles
Over the coming months, the Registrar will be considering plans to allow charities to conduct and manage online electronic 50/50 raffles. These 50/50 raffles could be created to run with a specific event or could be stand-alone online 50/50 fundraising raffles. More information on the implementation of this phase is anticipated to be shared starting in 2018.
During stakeholder consultations, the AGCO heard interest from some charities that wish to conduct and manage other types of electronic raffles, including electronic progressive raffle draws. The AGCO will evaluate the regulatory risks of these raffle categories and will work to expand this new framework to include other types of electronic raffles, as appropriate.
Highlights of the New Regulatory Framework for Electronic Raffles
The AGCO heard from charities interested in paying individuals to sell their raffle tickets. To better understand the potential regulatory risks associated with this request, the AGCO has approved the conditional use of paid sellers. Specifically, the use of paid sellers is permitted for electronic raffles, however sellers may not be paid based on the number of tickets they sell, and the money used to pay sellers must come from a general account.
Enhanced Requirements Concerning Problem Gambling
Carried forward from the interim framework, all electronic raffles are required to provide clear communications on resources available to support problem gambling. Ticket materials must provide contact information for the Ontario Problem Gambling Helpline. Additionally, electronic raffle personnel must be able to direct players to the Ontario Problem Gambling Help Line and website.
Sponsorships and Seeding Jackpots
Under the electronic raffle framework, licensed charities are permitted to continue accepting sponsorship for their raffles in the form of fixed cash or merchandise prizes. Charities must also ensure that sponsorships are clearly communicated to customers. As the amounts received from sponsors become part of the prize board, licensing fees, which are set at one per cent of the prize board, are calculated to include any sponsorship funds.
In order to assist charities that wish to conduct electronic raffles, the AGCO will publish a list of registered suppliers and their technical solutions. As part of their conduct and management responsibilities, it will be up to charities to ensure that they are working with a registered supplier, and using the current Registrar’s approved version of a supplier’s technical solution.
Licensing Authority – Additional Consultations with Municipalities and First Nations Licensing Authorities
In response to input received from municipalities during stakeholder consultations, the AGCO will be assuming sole responsibility for licensing electronic raffles in the initial implementation phases of this framework. However, the AGCO recognizes that at some point it may be appropriate for municipalities and First Nations licensing authorities to license charities to conduct and manage electronic raffles. To support licensing authorities, the AGCO will look to engage stakeholders through additional consultations and develop additional support that could assist licensing authorities in licensing electronic raffles in the future.
Changes Impacting both Electronic and Paper-based Raffles
Letter of Credit Requirements
Prior to the implementation of this new regulatory framework, a letter of credit was required for raffles to receive a licence. The AGCO heard significant concerns from the charitable gaming sector, regarding the administrative costs associated with obtaining a letter of credit to ensure that the prizes offered in a raffle would be awarded to winners.
For raffles with a fixed prize board of $10,000 or more, a letter of credit will continue to be required to cover the full amount of the prize board. However, for electronic and paper 50/50 draws, a letter of credit will no longer be mandatory. Licensing authorities will have the authority to require security for prizes when deemed appropriate.
Multiple Raffle Licences
The AGCO is also revising its policy that charities may only hold one raffle licence at a time. Effective immediately, licensing authorities may issue concurrent raffle licences to charities, based on their evaluation of the charity’s capacity to successfully conduct and manage multiple events at one time. The AGCO will provide additional information to municipalities to support these evaluations.
The AGCO is amending the prize claim policy for all raffles. Charities are now only required to hold unclaimed raffle prizes for six months instead of 12 months. They must still make all reasonable attempts to contact the prize winner. After six months, unclaimed prizes must be donated to an eligible charity, which has been approved in advance by the AGCO. Unclaimed prizes may not be used to seed future prizes.
Credit and Debit Card Payments
All charities licensed to conduct and manage raffles may now accept credit and/or debit card payments for raffle tickets, whether online or at in-person point-of-sale terminals. Charities interested in accepting credit card and/or debit card payments are expected to outline their process for doing so in their licence application and must absorb the cost of these electronic transactions.
Electronic Raffles: Stakeholder Consultation Findings Report
Throughout this information bulletin, reference has been made to the consultations the AGCO undertook with the charitable gaming sector to help inform its new regulatory framework. The AGCO has released the Electronic Raffles Findings Report, which details the input received from the charitable gaming sector through responses to a consultation paper: Developing a Regulatory Framework for Electronic Raffles in Ontario and roundtable discussions.
The AGCO would like to acknowledge and thank the many representatives of Ontario’s charitable gaming sector for their participation in these consultations. The information and insights shared have informed and strengthened the new electronic raffle framework.
Electronic Raffles Webpage
As part of a broader refresh of the AGCO website, a new one-stop web page has been developed to centralize all relevant information about electronic raffles.