Ask Reggi Your Question Now

Reggi is the free generative AI assistance for regulatory compliance
Ask a Question

Can I offer contests that involve both skill and chance in North Dakota? What are the requirements?

Yes, you can offer contests that involve both skill and chance in North Dakota. However, there are specific requirements that must be followed.

Requirements for Contests in North Dakota

  1. Prizes must be an item that may be legally owned and possessed and have a value or a right to a free service. A winning player may not be required to first pay for or buy something to receive a prize. Cash or merchandise prizes may be awarded [1.1][2.1].
  2. The maximum cash prize limits of this section do not apply to a public-spirited organization that supports amateur collegiate athletics. The public-spirited organization’s primary purpose must include support of collegiate athletics [1.1][2.1].
  3. An organization shall own, have a contract to acquire, or be able to obtain a merchandise prize before offering a merchandise prize in a drawing [1.1].
  4. If an organization has not been able to recover the cost of the prize, it may cancel a raffle with approval from the attorney general and refund the gross proceeds [1.1].
  5. A prize winner shall be drawn or determined on the date and at the location indicated on a ticket unless a different date or location is requested in writing and approved by the attorney general before the date of the drawing [1.1][2.1].
  6. Within seven days of a raffle, an organization shall notify the winning player verbally or, if the value of the prize exceeds five hundred dollars, in writing, of the prize and arrange the pickup or delivery of the prize. If a prize remains unclaimed by a winning player for thirty days following the date of the written notification and an organization has made a good-faith effort to contact the winner to redeem the prize, the organization may retain the prize, have a second prize drawing, or award it in another raffle or game [1.1].
  7. An organization may not accept, and a recipient or potential recipient of net proceeds may not give or offer to give, a payment, gift, service, loan, personal or real property, or other thing of material value, for disbursing or receiving net proceeds [3.1].
  8. A disbursement of net proceeds must be specific as to recipient and use. After an organization disburses net proceeds, it may not interfere with a recipient’s control of the funds or attempt to own or influence the use or sale of personal or real property bought by or for a recipient of the funds [3.1].
  9. No private athletic, social, hobby, trade, business, professional, or similar clubs or associations may receive net proceeds, unless the use of the funds complies with subsection 2 of North Dakota Century Code section 53-06.1-11.1 or section 99-01.3-14-02. An expense related directly or indirectly with gaming is not an eligible use [3.1].
  10. An organization may not use net proceeds for a fundraising activity that relates directly to the conduct of gaming, including purchase of equipment or consumable goods for a cafe for a site or for direct or indirect expenses and capital costs for a business involving material unrelated business income [3.1].
  11. An organization may only use net proceeds for expenses related to fundraising activities if the gross receipts from the fundraising activity are deposited into the trust account and the net income of the fundraising activity is used for a specific recipient or purpose that qualifies as an eligible use of net proceeds [3.1].
  12. An organization may not disburse net proceeds to a recipient on the condition that the recipient hold a meal or banquet at the donor’s facility [3.1].
  13. No disbursement of net proceeds can be used for services or fees that do not qualify as an eligible use or for any gaming-related expense. No disbursement of net proceeds to a recipient can be designed to circumvent the allowable expense limit [3.1].

Additional Requirements for Raffles

  1. Prizes must only be cash and must be fifty percent or more of gross proceeds for each single event raffle. However, a single cash prize may not exceed twenty-five thousand dollars and the total cash prizes may not exceed twenty-five thousand dollars during a day. Prize payouts must be based on ticket sales and not on cash retained by sellers [2.1].
  2. A prize winner must be drawn on the date and at the location indicated on a bearer ticket. The winning draw number must be selected from all sold draw numbers from the current single event raffle drawing. The organization shall post or publish by a public means, the winning draw number and where the prize may be claimed. A winning player need not be present when a drawing is held but shall claim the prize within five business days. A statement of the time of the drawing and redemption period must be on all promotional material and be posted at a site. If a prize is not claimed due to time limitations, the organization shall contact the attorney general [2.1].
  3. Each raffle ticket is a separate and equal chance to win with all other tickets sold. A person may not be required to buy more than one ticket, or to pay for anything other than the ticket, to enter a raffle. An organization may sell several tickets or sell tickets in advance of a special event to a person at a discount. A discounted ticket must be specifically designated as a discounted ticket on the ticket and its stub. The number of discounted tickets must be predetermined and separately issued and accounted for when issued to a ticket seller [1.2].

Conclusion

To summarize, you can offer contests that involve both skill and chance in North Dakota, but you must follow the specific requirements set forth by the state. These requirements include restrictions on prizes, disbursement of net proceeds, and additional requirements for raffles. It is important to comply with these regulations to ensure compliance with the law.

Source(s):
Jurisdiction

North Dakota