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Can I offer contests that involve cash prizes in Kansas? What are the requirements?

Here are the requirements for offering contests with cash prizes in Kansas:

Requirements for Offering Contests with Cash Prizes in Kansas

Kansas law allows for lotteries and raffles, but it is unclear whether contests with cash prizes are legal. Therefore, it is recommended that you consult with a legal professional before offering such contests in Kansas.

If you decide to proceed with offering contests with cash prizes, you should ensure that the contests comply with the following requirements:

  1. No person under 18 years of age shall be eligible to claim a lottery prize [1.1].
  2. The right of a person to a prize drawn or awarded is not assignable [1.1].
  3. All prizes awarded shall be taxed as Kansas source income and shall be subject to all state and federal income tax laws and rules and regulations [1.1].
  4. Unclaimed prize money not payable directly by lottery retailers shall be retained for the period established by rules and regulations and if no claim is made within such period, then such unclaimed prize money shall be added to the prize pools of subsequent lottery games [1.1].
  5. Each applicant expecting to conduct charitable raffles with annual gross receipts exceeding $25,000 shall apply to the department for a charitable raffle license at least 30 days before any raffle tickets may be sold [2.3].
  6. Each application for a charitable raffle license or the renewal of a charitable raffle license shall be submitted on a form prescribed by the department and be accompanied by the applicable fees prescribed in K.S.A. 2015 Supp. 75-5175, and amendments thereto [2.3].
  7. Each licensee shall maintain current information on its license. The licensee shall inform the department within 30 days of any changes in the information supplied in its most recent application filed with the department [2.3].
  8. Charitable raffle licenses shall not be transferred or assigned to another nonprofit religious organization, nonprofit charitable organization, nonprofit fraternal organization, nonprofit educational organization, or nonprofit veterans’ organization [2.3].
  9. Only one nonprofit organization may be licensed for each charitable raffle [2.3].

In addition to the above requirements, if you are conducting a charitable raffle, you must comply with the following requirements:

  1. Each raffle ticket shall contain specific information printed in a clear and legible manner, including the name of the licensee, the licensee’s Kansas charitable raffle license number, the word “raffle,” the date, time, and location of the raffle drawing, the price of the raffle ticket, a statement specifying whether a participant must be present to win, a unique sequential identification number on the raffle ticket and ticket stub that is different from any other number found on a ticket sold for that particular raffle activity, and any other information that the administrator requests [2.1].
  2. Each raffle ticket shall be offered for the same price as that for every other raffle ticket being sold for the same charitable raffle. Any licensee may offer a discount for the purchase of two or more raffle tickets if the discount is offered to all persons wanting to participate in the charitable raffle [2.1].
  3. Each raffle ticket to participate in a charitable raffle shall be paid for in advance by cash, check, or credit card. The extension of credit shall be prohibited. The issuance of free raffle tickets shall not be prohibited; however, the value of all free raffle tickets shall be included in the gross receipts derived from the charitable raffle [2.1].
  4. All charitable raffle prizes shall be awarded. Each licensee shall make a diligent effort to locate the winners of all prizes. A prize shall not be forfeited to the licensee. Each prize that is not claimed or for which the winner cannot be located within 30 days from the date of the drawing shall be awarded by conducting another drawing using the original pool of raffle tickets [2.2].

Conclusion

It is recommended that you consult with a legal professional before offering contests with cash prizes in Kansas. If you decide to proceed, ensure that the contests comply with the requirements listed above. If you are conducting a charitable raffle, you must also comply with the additional requirements listed above.

Source(s):
Jurisdiction

Kansas