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 Washington? What are the requirements?

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

Requirements for offering contests with cash prizes in Washington

Washington State has specific requirements for organizations that offer contests with cash prizes. These requirements are outlined in the Washington Administrative Code (WAC) 230-11-065 and WARC 19.170.040.

  1. Organizations must own the prizes offered to winners before the date of the drawing. However, if the winner has an option to receive a cash prize instead of the merchandise, the organization may enter into a contract to purchase the merchandise prize after the winner chooses his or her option. The organization must have the funds to make the purchase on account before the date of the drawing. [1.1]
  2. At the time and date of any raffle drawing, the organization must have on deposit an unencumbered amount of money that is equal to or greater than all cash prizes being offered in the raffle. The organization must have these funds deposited in the gambling receipts account, if required, or in a recognized Washington state depository authorized to receive funds. The organization must not reduce the balance of funds available from this account below the required amount before awarding the prize(s). [1.1]
  3. Raffle prizes must not exceed forty thousand dollars per prize or three hundred thousand dollars in total raffle prizes in a license year, except as authorized in WAC 230-11-067. [1.1]
  4. Before a demonstration, seminar, or sales presentation begins, the promoter shall inform the person of the prize, if any, the person will receive. [2.1]
  5. A prize or a voucher, certificate, or other evidence of obligation given instead of a prize shall be given to a person at the time the person is informed of the prize, if any, the person will receive. [2.1]
  6. A copy of the offer shall be returned to the person receiving the prize at the time the prize is awarded. [2.1]
  7. It is a violation of this chapter for a promoter or sponsor to include a prize in an offer when the promoter or sponsor knows or has reason to know that the prize will not be available in a sufficient quantity based upon the reasonably anticipated response to the offer. [2.1]
  8. If the prize is not available for immediate delivery to the recipient, the recipient shall be given, at the promoter or sponsor’s option, a rain check for the prize, the verifiable retail value of the prize in cash, or a substitute item of equal or greater verifiable retail value. [2.1]
  9. A sponsor shall fulfill the rain check within thirty days if the person named as being responsible fails to honor it. [2.1]
  10. The offer shall contain the following clear and conspicuous statement of recipients’ rights printed in type at least as large as the typeface used in the standard text of the offer: “If you receive a rain check in lieu of the prize, you are entitled by law to receive the prize, an item of equal or greater value, or the cash equivalent of the offered prize within thirty days of the date on which you claimed the prize.” [2.1]
  11. The director may designate claim centers for the filing of prize claims, and the location of such centers shall be publicized from time to time by the director. [3.2]
  12. A claim shall be entered in the name of one claimant, which shall be either a natural person, association, corporation, general or limited partnership, club, trust, estate, society, company, joint stock company, receiver, trustee, or another acting in a fiduciary or representative capacity whether appointed by a court or otherwise. [3.2]
  13. A claim which includes one or more tickets with an address label or stamp on the back of the ticket shall be deemed to have been entered in the name of one claimant. [3.2]
  14. The claimant must submit his or her Social Security number (SSN) or the federal employer’s identification number (FEIN) when claiming any prize exceeding six hundred dollars. [3.2]
  15. A claim may be entered in the name of a claimant other than a natural person only if the claimant is a legal entity and possesses a federal employer’s identification number (FEIN) as issued by the Internal Revenue Service. [3.2]
  16. The terms governing a claimant other than a natural person shall be submitted to the director for approval. [3.2]
  17. Unless otherwise provided in the rules for a specific type of game, a claimant shall sign the back of the ticket and/or complete and sign a claim form approved by the director. [3.2]
  18. A prize must be claimed within the time limits prescribed by the director in the instructions for the conduct of a specific game, but in no case shall a prize be claimed later than one hundred eighty days, except a shared game lottery, after the official end of that instant game or draw game drawing for which that draw game ticket was purchased. [3.2]

Based on the above requirements, it is possible to offer contests with cash prizes in Washington, but organizations must comply with the regulations outlined in the WAC and WARC. Additionally, if the raffle prize exceeds forty thousand dollars per prize or three hundred thousand dollars in total raffle prizes in a license year, the licensee must submit a raffle plan to the commission for approval [1.2]. Credit unions must also follow specific requirements when conducting a raffle [1.4]. Finally, independent audits are required for enhanced raffles [1.3].

Source(s):
Jurisdiction

Washington