In order to safeguard the interests of both the public and the licensee, and to ensure that all prizes can be awarded, regardless of any extenuating circumstances, the licensing authority may request that an eligible organization present a financial guarantee covering the total value of the prizes. The licensing authority must require a financial guarantee for all fixed-prize raffle licences with a total prize value of $10,000 or greater, including taxes. The licensing authority may also require a financial guarantee when it determines it is appropriate, including for a prize amount less than $10,000 amount or where the prize is a percentage of the gross ticket sales.
When the total prize value of a fixed-prize raffle licence is $10,000 or greater, the licensing authority requires an irrevocable standby letter of credit as the form of financial guarantee.
For 50/50 draws, a letter of credit is not mandatory unless the licensing authority otherwise directs; however, where a letter of credit is not required by licensing authorities, another form of financial guarantee for prizes may be required when deemed appropriate.