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#743079 - 05/31/07 02:04 PM Contest? Lottery?? Help please asap
Heidi's Mom Offline
Member
Joined: Feb 2004
Posts: 55
Minnesota
My bank wants to hold a contest at a local park for children. "Slam Dunk into Savings" Basketball hoop and 5 chances to make a basket. For each basket you make you will get a certificate to have a $5 deposit made to your new savings account that is opened with the winnings. Each child whether they dunk a basket or not will receive a $10 certificate to use to open their new account. Parent must accompany you to open your account. Is there a problem or a concern in doing this type of promotion? They want to do this tomorrow. I love short notice marketing ideas, help please.

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#743440 - 05/31/07 04:49 PM Re: Contest? Lottery?? Help please asap Heidi's Mom
8675309 Offline
Diamond Poster
Joined: Jun 2004
Posts: 1,115
Where the wind comes sweeping ...
Games of chance are lotteries and banks are prohibited by Federal law from participating in them. May also be a problem under your state laws for under age 18 gambling.

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#752615 - 06/13/07 08:04 PM Re: Contest? Lottery?? Help please asap 8675309
Eagle Eye Offline
New Poster
Joined: May 2006
Posts: 8
Didn't spot this in time, but just in case you want to do something similar in the future, there are three requirements for an activity to be considered a lottery: (1) a prize; (2) an element of chance; and (3) consideration from entrants.

You meet the first requirement with the various deposits to be given as prizes.

I'm not an attorney so I'm not sure whether you could argue that dunking is a skill rather than a chance. If your counsel feels that it is a skill (and that may depend on the ages of kids!), then you would have taken this out of the realm of lotteries. If not, then you have a least two out of the three requirements.

The third requirement is kind of tricky for your situation. I assume that neither the kids (nor their parents) would be charged for their chance to shoot the baskets, which MIGHT mean that there is no "consideration", and thus no lottery. However, I've heard that in some states the collection of contact information (which you would need to obtain and record when opening the accounts) has been judged to be a thing of value and, therefore, is "consideration" for purposes of determining whether an activity is a lottery. If you're in one of these states (sorry, I don't have a list), then you've met the third requirement. If, however, your state does not consider such information to be "consideration", then you MIGHT not have a lottery.

Since lotteries, contests, drawings, raffles, and their ilk are in the legal, rather than the regulatory, world, you should always consult your bank's counsel before becoming involved in any way. If your counsel confirms that your activity is not a lottery, you may wish her/him to additionally confirm that there are no other restrictions arising because of the ages of the participants.

Good luck!

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#752720 - 06/13/07 09:11 PM Re: Contest? Lottery?? Help please asap 8675309
Sound Tactic Offline
Power Poster
Sound Tactic
Joined: Feb 2005
Posts: 5,349
Originally Posted By: 8675309
Games of chance are lotteries and banks are prohibited by Federal law from participating in them. May also be a problem under your state laws for under age 18 gambling.


This is true and it is defined as a game of chance. Technically this is illegal.
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#1167206 - 04/21/09 04:22 PM Re: Contest? Lottery?? Help please asap Sound Tactic
Linda S Jones Offline
Junior Member
Joined: Jun 2004
Posts: 37
Oregon
could someone lead me in the direction of where to find that law as I have to quote it to stop a game of chance in an anniversary celebration...

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#1167541 - 04/21/09 08:04 PM Re: Contest? Lottery?? Help please asap Linda S Jones
8675309 Offline
Diamond Poster
Joined: Jun 2004
Posts: 1,115
Where the wind comes sweeping ...
From ABA Daily Newsbytes, June 30, 2008

OCC Issues Updated Publication on Permissible Activities
The Office of the Comptroller of the Currency on Friday issued an updated version of Activities Permissible for a National Bank, 2007, a publication that provides the latest interpretations and decisions authorizing activities for national banks and their operating subsidiaries. Read the publication. .

In the publication, I found this:
Donation of Fundraising Item. National bank may donate an item for a community fundraising raffle without violating the lottery prohibition of 12 USC 25a if the bank was identified as the donor of the item in publicity issued by the raffle sponsors, if the publicity was not displayed on bank premises.
OCC Interpretive Letter 900 (June 19, 2000)
http://www.occ.treas.gov/interp/jan01/int900.pdf

The interpretive letter contains more details on what you can and cannot do.

Your state laws are going to have additional rules on lotteries and may prohibit it as well. You could always talk to your local DA's office.

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