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Can I offer contests that involve free entry in South Carolina? What are the requirements?

Requirements for Offering Contests with Free Entry in South Carolina

Based on the context documents, it is possible to offer contests that involve free entry in South Carolina. However, the specific requirements for such contests may vary depending on the type of contest and the organization conducting it.

Savings Promotion Contest

To conduct a savings promotion contest, a financial institution authorized to do business in South Carolina under federal or state law may conduct a savings promotion contest in accordance with the provisions of SCCL 34-45-30. The purpose of the contest must be to encourage its depositors to maintain savings accounts and to increase personal savings. [1.1]

Raffle

To conduct a raffle, a nonprofit organization must be recognized by the South Carolina Department of Revenue and the United States Internal Revenue Service as exempt from federal and state income taxation pursuant to Internal Revenue Code Section 501(c)(3), 501(c)(4), 501(c)(6), 501(c)(7), 501(c)(8), 501(c)(10), 501(c)(19), or 501(d), or be a class, department, or organization of an educational institution, as defined in Chapter 56, Title 33. The organization must also be organized and operated for religious, charitable, scientific, literary, or educational purposes, or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals. The organization must be registered with the Secretary pursuant to the requirements of Chapter 56, Title 33, unless it is exempt from or not required to follow the registration requirements of Chapter 56, Title 33, or is a governmental unit or educational institution of this State. [3.1]

If the contest is a raffle, the nonprofit organization is allowed to operate up to four raffles per year. Each nonprofit raffle shall continue for not more than nine months from the date the first raffle ticket is sold. No raffle drawing shall be conducted between the hours of midnight and 10 a.m. [3.3]

For raffles authorized pursuant to SCCL 33-57-140, no less than ninety percent of the net receipts of a raffle must be used for the charitable purpose of the nonprofit organization. No receipts of a raffle shall be used for any expenditure or activity which would subject an organization exempt from taxation under Internal Revenue Code Section 501(c)(3) or its managers to revocation of its tax-exempt status or excise taxes under the Internal Revenue Code, including directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office or engaging in an excess benefit transaction with a person who would be a disqualified person if the nonprofit organization were exempt from taxation under Internal Revenue Code Section 501(c)(3). [3.4]

Multi-State Lottery Products

The South Carolina Lottery Commission may enter into a multi-state agreement for the sale of instant game tickets, online game tickets, and related multi-state lottery products including game shows and promotional products. Procedures for ticket sales and validation, prize redemption, and other details of the commission’s participation in the multi-state lottery games must be governed by the terms of the agreement entered into by the commission. For purposes of this provision, the lottery games that may be subject to a multi-state participation agreement by the commission are those defined in Section 59-150-20(7). Further, the multi-state tickets and products may be sold only through a licensed lottery retailer, pursuant to Section 59-150-150, or through the commission. [2.2]

Conclusion

Therefore, if the contest is a savings promotion contest, a financial institution authorized to do business in South Carolina may offer contests that involve free entry. If the contest is a raffle, a nonprofit organization may offer up to four raffles per year, and no less than ninety percent of the net receipts of a raffle must be used for the charitable purpose of the nonprofit organization. Multi-state lottery products may be sold through a licensed lottery retailer or through the South Carolina Lottery Commission.

Source(s):
Jurisdiction

South Carolina