Ask Reggi Your Question Now

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

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

Based on the context documents, it is legal to offer contests that involve cash prizes in Michigan, but there are certain requirements that must be met.

Requirements for Offering Contests with Cash Prizes in Michigan

To offer contests with cash prizes in Michigan, the following requirements must be met:

  1. The contest must not be offered on, at, or from a kiosk or machine physically located in a retail business location, bar, restaurant, or other commercial establishment, a place of public accommodation, or a facility owned, operated, or occupied by a private club, association, or similar membership-based organization [2.2].
  2. The total retail value of all merchandise and cash prizes offered or awarded through the contest shall not exceed the limitations set by the act for the specific license type [1.1].
  3. All winners of prizes shall be determined by the method specified for the contest. Prizes shall not be awarded or split by any other method or means [1.1].
  4. A qualified organization applying for a raffle license shall meet the requirements of R 432.21204 [1.2].
  5. The bureau shall make payment of prizes as soon as reasonably possible after the claim has been filed, verified, and the claimant identified to the satisfaction of the commissioner [3.1].
  6. The commissioner shall designate claim centers for the contest program and advertise their locations. The processing of winning tickets must be in accordance with directives and instructions issued by the commissioner [3.2].
  7. All prizes shall be awarded. A winner need not be present to win except as provided by R 432.21511. The licensee shall make a diligent effort to locate the winners of all prizes. A prize shall not be forfeited to the licensee [1.4].

Additionally, if you are offering fantasy contests, you must obtain a fantasy contest operator license, unless you are offering the contests solely from your private residence, none of the contests are made available to the general public, each of the contests is limited to no more than 15 total fantasy contest players, and you collect no more than $10,000.00 in total entry fees for all fantasy contests offered in a calendar year, at least 95% of which entry fees are awarded to the fantasy contest players [2.1].

Raffle Ticket Requirements

If you are offering a raffle, all raffle tickets, except those used for in-house raffles, shall contain at a minimum the following information printed in a clear and legible manner: the name of the licensee, the license number, the word “raffle,” the date, time, and location of the drawing, the price of the raffle ticket, a unique sequential identification number on the raffle ticket and ticket stub, the top prize or other information as directed by the bureau, and the stub of the ticket retained by the licensee shall contain a space for the purchaser’s name, address, and phone number. The use of the terms “lotto” or “lottery” is prohibited on raffle tickets. A raffle ticket shall not be used that requires the removal of a covering material to determine if a ticket is a winner or is eligible to be a winner [1.3].

Raffle Ticket Sellers

If you are using raffle ticket sellers, they may be nonmembers of the licensee, but they must be 18 years of age or older. Raffle ticket sellers in a licensed raffle, other than an in-house raffle, shall not be entitled to and shall not receive anything of value for their services except as prescribed by R 432.21517. Raffle ticket sellers in a licensed in-house raffle shall not be entitled to and shall not receive anything of value for their services except as prescribed by R 432.21516 and R 432.21517 [1.5].

Conclusion

To offer contests with cash prizes in Michigan, the contest must not be offered on, at, or from certain locations, the total retail value of all merchandise and cash prizes must not exceed the limitations set by the act for the specific license type, and winners must be determined by the method specified for the contest. Additionally, there are specific requirements for raffle licenses, payment of prizes, claiming of prizes, and raffle ticket sellers. All prizes must be awarded, and a diligent effort must be made to locate the winners of all prizes. If you are offering fantasy contests, you must obtain a fantasy contest operator license, unless you meet certain criteria.

Source(s):
Jurisdiction

Michigan