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Can I offer contests that involve entry fees in Georgia? What are the requirements?

Yes, you can offer contests that involve entry fees in Georgia as long as they conform with the qualifications of a lawful promotion specified in paragraph (16) of subsection (b) of Code Section 10-1-393 [1.1]. However, if the contest involves an element of chance in the distribution of prizes, gifts, awards, or other items which otherwise meet the definition of a “lottery” in this article, it shall be included within the definition of the term “lottery” for purposes of this article, unless specifically exempted by some other statute or law [1.1].

To operate a raffle, all requisite licenses must be obtained [1.2]. Additionally, any nonprofit, tax-exempt organization shall not be permitted to operate a raffle until the sheriff issues a license to the organization authorizing it to do so [1.2].

If you are planning to operate a beauty pageant, you must maintain a bond in the amount of $10,000.00 with a surety company duly authorized to do business in this state or post a cash bond in such amount, payable to the Governor of this state [3.1].

If you are planning to engage in the business of auctioning, you must be registered and maintain an active trust account [4.1]. However, a company owned by or employing one or more full-time auctioneers licensed by the commission may be exempt from the registration requirements, provided that such company is directly supervised by a licensed auctioneer [4.1].

It is important to note that prize proceeds of any lottery prize shall be subject to the Georgia state income tax [2.2]. Additionally, the corporation shall adopt regulations, policies, and procedures to establish a system of verifying the validity of tickets or shares claimed to win prizes and to effect payment of such prizes [2.2]. No prize, any portion of a prize, or any right of any person to a prize awarded shall be assignable [2.2]. Any prize or any portion of a prize remaining unpaid at the death of a prize winner shall be paid to the estate of the deceased prize winner or to the trustee of a trust established by the deceased prize winner as settlor if a copy of the trust document or instrument has been filed with the corporation along with a notarized letter of direction from the settlor and no written notice of revocation has been received by the corporation prior to the settlor’s death [2.2].

Source(s):
Jurisdiction

Georgia, Georgia