Skip to content
BOL Conferences
Page 1 of 2 1 2
Thread Options Tools
#2182690 - 06/21/18 08:57 PM Raffle for Organization
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
We have an employee who is a member of the local Rotary Club. She has sent an email to all employees at the bank that she is currently selling raffle tickets for nightly prizes with a grand prize of $10,000.00 drawn on July 4th. I have not talked with her, but I assume there is a possibility that she is also selling to customers during the work day. I am not totally understanding of the rules for "lotteries & raffles" and was wondering if this could be in violation of any rules set forth by FDIC or anyone else?

Thanks!

Return to Top
General Discussion
#2182694 - 06/21/18 09:09 PM Re: Raffle for Organization Bankwoman1
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,721
Illinois
Here's the OCC rules:
12 U.S. Code § 25a - Participation by national banks in lotteries and related activities

(a)Prohibited activities: A national bank may not—

(1)deal inlottery tickets;
(2)deal in bets used as a means or substitute for participation in a lottery;
(3)announce, advertise, or publicize the existence of any lottery; [1]
(4)announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.
(b)Use of banking premises prohibited A national bank may not permit—
(1)the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a), or
(2)direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a).
_

And the state bank equivalent:

§339. Participation by State member banks in lotteries and related activities
(a) Prohibited activities
A State member bank may not-
(1) deal in lottery tickets;
(2) deal in bets used as a means or substitute for participation in a lottery;
(3) announce, advertise, or publicize the existence of any lottery; 1
(4) announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.
(b) Use of banking premises prohibited
A State member bank may not permit-
(1) the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a), or
(2) direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a).

Last edited by BrianC; 06/21/18 09:13 PM. Reason: added state citation
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2182718 - 06/22/18 11:36 AM Re: Raffle for Organization Bankwoman1
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
And from the FDIC:

SEC. 20. PARTICIPATION BY STATE NONMEMBER INSURED BANKS IN LOTTERIES AND RELATED ACTIVITIES.--

(a) PROHIBITED ACTIVITIES.--A State nonmember insured bank may not--

(1) deal in lottery tickets;

(2) deal in bets used as a means or substitute for participation in a lottery;

(3) announce, advertise, or publicize the existence of any lottery;
or

(4) announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.

(b) USE OF BANKING PREMISES PROHIBITED.--A State nonmember insured bank may not permit--

(1) the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a)
,

(c) Definitions

As used in this section--

(1) The term "deal in" includes making, taking, buying, selling, redeeming, or collecting.

(2) The term "lottery" includes any arrangement, other than a savings promotion raffle, whereby three or more persons (the "participants") advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the "winners") will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes--

(A) a random selection;

(B) a game, race, or contest; or

(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.


The full FDIC rules can be found here: https://www.fdic.gov/regulations/laws/rules/1000-2200.html
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2182743 - 06/22/18 02:34 PM Re: Raffle for Organization Bankwoman1
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
The violations started with the "all hands" email promoting the lottery and things are probably going downhill from there.

Your employee manual should include a prohibition on running raffles or selling raffle tickets on the premises, and that should include posters, notices and, yes, emails, promoting raffles -- even for charitable organizations and even if the raffle and ticket sales take place off premises.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2182744 - 06/22/18 02:36 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
Thank you both for this information! This is very helpful. It sounds to me like we need some kind of policy in place. How do other banks handle this type of thing, such as employees selling raffle tickets for kids and grandkids organizations? I don't want to be a hard case....however I do want to be consistent in what is allowed and not allowed.

Return to Top
#2182745 - 06/22/18 02:39 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
John....we must have been typing at the same time!! Thank you for the information!

Return to Top
#2182747 - 06/22/18 02:46 PM Re: Raffle for Organization Bankwoman1
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Honestly, I think that sort of personal selling of raffle tickets goes on (in the break room and hallways, parking lot, whatever) under the nose of management all the time. Some banks play hardball, insisting on strict adherence to the rules. Others look upon such personal activities between employees as harmless and low-risk, looking the other way, if you will. I also think that enforcement of the prohibition is a fairly low priority for most examiners.

That doesn't mean that I would ever recommend that a bank knowingly allow such activities on its premises, any more than I would advocate always driving up to 5 mph over the speed limit on highways.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

Return to Top
#2182758 - 06/22/18 03:14 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
John - I agree. I know for sure that the selling of raffle tickets go on and don't really feel like I should enforce something that is being done between co-workers/friends face to face. I mean kids and grandkids are always selling something - and what better place to help sell these tickets then at work to all of your co-workers!! lol

However - I do believe we should have something in place so that we are not sending emails around to "All Employees" announcing the selling of these items. Especially an Officer of the bank for a community organization.

Thanks for your input!

Return to Top
#2182765 - 06/22/18 03:37 PM Re: Raffle for Organization Bankwoman1
Rocky P Offline
Power Poster
Joined: Jun 2003
Posts: 7,658
Florida
It needs to start with showing your HR department the applicable regs as outlined by Brian, Adam and John. Be prepared to be considered the bad gal.

I had a similar issue - visiting a bank we just bought in a rural isolated community. In the bank lobby was one of the most beautiful hand made wooden canoes I've ever seen, with a notice that it was ". . .being raffled by the Town's Optimist Club, and to see any employee for tickets. . ."

They were suddenly not happy about the acquisition, especially after they looked at their employee handbook (apparently for the first time). There was also an OCC exam scheduled for the following week, with an onsite visitation by one of the examiners, which was the reason for the hammer treatment.
_________________________
Integrity. With it, nothing else matters. Without it, nothing else matters.

Return to Top
#2182801 - 06/22/18 05:56 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
Rocky........I'm starting to get used to being considered the "bad guy"..... I will take my concerns to my supervisor and from there to HR. Thank you so much for your input and sharing your experience!
Last edited by Bankwoman1; 06/22/18 05:57 PM.
Return to Top
#2182808 - 06/22/18 06:14 PM Re: Raffle for Organization Bankwoman1
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
If you haven't become the "bad guy" yet, wait until you bring up March Madness brackets... eek
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

Return to Top
#2182812 - 06/22/18 06:30 PM Re: Raffle for Organization Bankwoman1
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,721
Illinois
That'll cause a stir. You can bet on it! …. or maybe you can't, that's the point!

Have a great weekend BOLers.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2182833 - 06/22/18 07:40 PM Re: Raffle for Organization Bankwoman1
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,180
Toano, VA
There are two ways to look at this:
A. Without exception, practices of this kind violate federal laws that have been on the books longer than the employees have been alive.
or
B. Employees who are running or participating in lotteries are not working.

Never will you find a clearer cut case (take your pick) for a zero-tolerance policy.
_________________________
...gone fishing.

Return to Top
#2183032 - 06/25/18 07:31 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
So....what about this situation:

A bingo game played among the employees of the bank. It costs $5.00 per bingo card and a new game is played each week for a 4 week period. Prizes include: leave early one day (week 1), $50.00 gift card to a restaurant (week 2), $50.00 gift card to a restaurant (week 3) and a paid day off work (week 4). All funds raised are donated to a local organization. This is one of many ways we raise money for this organization.

Would this be considered a "lottery" under these rules?? I sooooo will be considered the bad guy if so......

Return to Top
#2183035 - 06/25/18 07:38 PM Re: Raffle for Organization Bankwoman1
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,721
Illinois
$5.00 = consideration.
Chance to win a prize based on providing consideration = raffle or lottery.

This is why many institutions partner with the local United Way or if they want to raise extra funds will allow staff to "buy" a dress down day so it is open to all and everyone that participates receives something, hence no lottery.

Reread John's post and then decide how your want to proceed.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#2183050 - 06/25/18 07:58 PM Re: Raffle for Organization Bankwoman1
Bankwoman1 Offline
Diamond Poster
Joined: Dec 2015
Posts: 1,064
Midwest
Thank you Brian.

Return to Top
#2191311 - 08/30/18 08:13 PM Re: Raffle for Organization Adam Witmer
DunningKroger Offline
New Poster
Joined: Jul 2014
Posts: 14
So participating in March Madness brackets between employees is considered a lottery?

Return to Top
#2191321 - 08/30/18 08:50 PM Re: Raffle for Organization Bankwoman1
LiveFunLife Offline
Member
Joined: Dec 2017
Posts: 91
I do believe that is true. It may not be one that everyone cracks down on but it is a form of lottery. Our institution does not allow money to be exchanged to participate in march madness or picking brackets or anything else of the sort.

Return to Top
#2191322 - 08/30/18 08:50 PM Re: Raffle for Organization Bankwoman1
JC (Darth HMDA) Offline
Diamond Poster
JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
If you pay money - yes

Do people at banks do it... yes

You could have the Bank itself give a giftcard for a free entry bracket. (otherwise it is "illegal") and a lottery.
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

Return to Top
#2191323 - 08/30/18 08:51 PM Re: Raffle for Organization Bankwoman1
JC (Darth HMDA) Offline
Diamond Poster
JC (Darth HMDA)
Joined: Dec 2013
Posts: 1,399
CA
Trust me, I tried to research and refute this several years for a football pick em - its the law (albeit an antiquated law from the great depression where tellers convinced customers to buy lottery tickets instead of making deposits).
_________________________
The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.

Return to Top
#2191326 - 08/30/18 09:30 PM Re: Raffle for Organization DunningKroger
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,180
Toano, VA
Originally Posted By bravobrk
March Madness...considered a lottery?
Yes.

Above, Adam provided the definition of the term "lottery" in Section 20(c)(2). Comparable provisions are found in Section 9 of the Federal Reserve Act and 12 USC Section 25a (national banks.) Clearly, pools tied to sporting events are lotteries.

Other state and federal laws deal with gambling, in general. Whether or not a person violates one of those laws by operating or participating in a pool is a separate matter.

The prohibition here deals with lotteries (legal, as well as illegal) on the premises of a federally-insured bank. If an insured institution is operating a lottery, it violates Section 20(a) (or one of the comparable provisions cited above.) If that institution allows someone else to operate the lottery on bank premises, it violates Section 20(b).

Although the answer to your question is clearly "yes," so what?

If it's a crime in your state for two or more adults to gamble, then a sports pool (gambling) is illegal. If individual gambling in the form of sports pools is legal, then the staff members are not violating the law.

Now, we turn our attention to the bank. What is the bank's role in the pool?

In the event that the board of directors or a bank officer has specifically acknowledged or is willfully blind to the existence of a pool and done nothing to stop it, then the bank has violated Section 20(b). Since officers of a corporation are empowered to act on behalf of the corporation, their tacit approval of or willful blindness to a pool means the bank can be cited under Section 20(b). Will that happen? Who knows?
_________________________
...gone fishing.

Return to Top
#2191328 - 08/30/18 09:41 PM Re: Raffle for Organization JC (Darth HMDA)
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,180
Toano, VA
Originally Posted By Darth HMDA, CRCM
an antiquated law from the great depression
That's right. It was there alongside the prohibition that banks could not sell common stocks to their customers . These laws were enacted (or reinforced) to shut down risky customer behavior that contributed to the 1933 "banking holidays" declared by all the states in order to stem runs on banks.
_________________________
...gone fishing.

Return to Top
#2191349 - 08/31/18 01:15 PM Re: Raffle for Organization Bankwoman1
Christy Goza Offline
100 Club
Joined: Jun 2010
Posts: 118
Cleveland, TN
A recommendation that may help: Our employees do not have the ability to send out mass emails to the staff. Only a designated few have that authority.
_________________________
Christy Griffith

Return to Top
#2191352 - 08/31/18 01:25 PM Re: Raffle for Organization Bankwoman1
HappyGilmore Offline
10K Club
Joined: Jun 2004
Posts: 19,855
Pulling people out of the ditc...
for what it's worth...former bank, had a football pool sitting on table in lunch room, OCC was in for their annual review, 2 of the OCC auditors each bought squares...one actually won a quarter...not a word was spoken about not being able to do this...

of course, my experience may differ greatly from another, all depends on the examiner
_________________________
Providing alternative truths since the invention of time

Return to Top
#2191425 - 08/31/18 04:34 PM Re: Raffle for Organization Bankwoman1
P*Q Offline

Power Poster
P*Q
Joined: May 2001
Posts: 8,458
Somewhere
laugh @Happy!

Return to Top
Page 1 of 2 1 2