Answer:
Answer by Dan Persfull:No, national banks are not permitted to sponsor and/or hold raffles. You can donate items to the raffle, but you cannot promote or allow tickets to be sold on bank property. Read more here. In my view, simply noting on an advertisement that the bank has donated the item to be raffled would not constitute action by the bank to publicize the lottery, provided the bank has no involvement with the sponsoring or display of the advertisement. Read what the FDIC has to say on this issue here.
SEC. 20 (a) 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) 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), 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).
Answer:
Answer by Andy Zavoina:You can find OCC specific rules at 12 USC 25a. They are similar for all banks and states may be more restrictive on laws.
There is often no definitional difference between a lottery and a raffle. Here is how the OCC defines a lottery. You'll have to determine if your raffle fits this:The term “lottery” includes any arrangement whereby three or more persons (the “participants”) advance money or credit to another in exchange for the possibility or expection 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.
There have been some interpretations on games and contests. But generally, a customer is paying you a "thing of value" because they pay you fees. If they can "win" (such as by a drawing) then you have a lottery by definition.
The trick is to allow noncustomers to register to win as well. When you open this "to the world" you no longer have to pay to play, and no longer have a lottery.
First published on BankersOnline.com 11/10/08
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