Charitable Raffles and Art Unions: Fundraising Essentials
Raffles (also known as ‘Art Unions’) can be powerful fundraising tools for community and charitable organisations. However, before an organisation begins, it is critical that it understands the legal requirements applying to the conduct of its proposed raffle.
Authors: Kieran Goodall & Julian Hoskins
What is a Raffle/Art Union?
In general terms, a raffle is a type of lottery where participants purchase tickets in return for a chance to win prizes.
To be considered a lawful raffle in Australia, the activity must be conducted by a charitable or community organisation for approved purposes (for example, under the Charities Act 2013 (Cth), including advancing health, education or social welfare). This is why they are often referred to as ‘Charitable Raffles’.
Why are permits required to conduct Charitable Raffles?
Raffles and art unions are subject to licensing requirements to ensure transparency, fairness, and proper fund allocation. Licensing requirements help protect participants and ensure that proceeds from ticket sales are used for legitimate purposes.
Charitable Raffles are highly regulated in the Australian states and territories, and each jurisdiction has its own unique set of requirements. Depending on where your raffle is being conducted, there may be laws which (amongst other things) limit prize values, limit ticket sales and restrict how proceeds can be distributed.
When do you need a permit?
The need for a permit varies based on two general factors:
1. The location where the Charitable Raffle is being ‘conducted’
If a Charitable Raffle is being ‘conducted’ within a particular state or territory, then the laws of that state or territory will apply.
For legal purposes, identifying the location(s) of a raffle can be a difficult question to determine, particularly where residents across multiple states and territories can purchase tickets. For example, a raffle may be conducted using a ticketing and draw system located in Queensland, an online platform hosted in Victoria and for the benefit of a charitable organisation based in New South Wales.
The location of where a raffle is being ‘conducted’ also hasn’t been subject to any recent court judgments, nor do the relevant legislative provisions provide any clear guidance.
The key factors in determining the location of a raffle are therefore the following:
the location of the operators’ head office, drawing system and ticketing system. This is particularly important in light of the various ‘Electronic Transactions Acts’ enacted in the states and territories;
whether promotions and advertisements are directed at residents of that particular state or territory (including whether geo-blocking steps have been taken to exclude residents of the other states or territories);
whether residents of a particular state or territory are eligible to purchase tickets in the raffle and win prizes; and
whether the costs of transferring or delivering a prize to a resident of that particular state or territory is the responsibility of the operator (i.e. eroding the practical effect of state and territory borders) or the prize winner.
It is strongly recommended that any organiser of a Charitable Raffle seeks legal advice before offering tickets in the raffle to ensure that it is meeting all relevant legal requirements that may apply. This is particularly the case where the organiser intends to offer tickets to residents across multiple Australian states or territories.
2. The total value of tickets for sale or prizes to be won
Depending on where the raffle is being conducted, the need for a permit will then depend on the total value of tickets or prizes on offer. In addition, certain jurisdictions also have legislation which requires approvals to conduct ‘fundraising’ activities in general.
Below is a table providing an overview of the different thresholds for permits in each jurisdiction:
It is important to note that certain requirements may still apply to a raffle even if a permit is not required for its conduct. For example, in New South Wales, raffles with prize pools under $30,000 (i.e. which do not require a permit) still need to meet minimum conditions regarding rules, record keeping and the distribution of prizes.
Rules applicable to Charitable Raffles in all states and territories
Most Australian states and territories have minimum legislative requirements applying to the conduct of raffles including but not limited to the following:
specific advertising restrictions;
eligibility of customers;
ticketing requirements and game rules;
prize pools and the disposition of prizes (including mandatory processes for dealing with unclaimed prizes);
the drawing of prizes and publication of the results;
record keeping and auditing requirements; and
distribution of proceeds from ticket sales.
Whilst the general character of the minimum requirements is relatively consistent between the states and territories, there are slight nuances in each jurisdiction which organisers ought to be aware of to ensure best practice and minimise regulatory risk. This is particularly the case if the organiser is being assisted by any third party to conduct the raffle (or is being charged a commercial fee by a third party in return for assistance with a raffle). For example, such a third party may be required to obtain a ‘commercial raffle organiser’ licence if the raffle is being conducted in the state of Victoria.
Any person who conducts a raffle without the necessary permit(s) or in breach of applicable regulations may be subject to significant fines, legal actions and/or reputation damage. This makes compliance integral to maintaining trust with the community, donors, participants and other stakeholders.
Need guidance? We are here to help you
Navigating the detailed web of regulations applying to raffles and art unions can be complex.
If you’re uncertain about whether you need a permit or how to apply, please don’t hesitate to contact one of our experts. Our lawyers offer tailored guidance and advice to help simplify the process for your organisation and ensure it remains compliant. We assist a range of charitable organisations conducting fundraising events, as well as third party contractors who provide services assisting with the conduct of raffles.
Get started today and ensure your next fundraiser is both successful and risk-free!
