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Can I offer contests that involve merchandise prizes in Illinois? What are the requirements?

Yes, you can offer contests that involve merchandise prizes in Illinois, but there are certain requirements that must be met.

Requirements for Offering Contests with Merchandise Prizes in Illinois

  1. The organization offering the contest must be a bona fide not-for-profit organization that operates without profit to its members and has been in existence continuously for a period of 5 years immediately before making application for a license to operate a raffle or a poker run [3.3].
  2. The organization must obtain a license to operate a raffle or a poker run from the governing body of the municipality with jurisdiction over the key location or, if no municipality has jurisdiction over the key location, then from the governing body of the county with jurisdiction over the key location [3.3].
  3. The licensing system shall provide for limitations upon (1) the aggregate retail value of all prizes or merchandise awarded by a licensee in a single raffle, if any, (2) the maximum retail value of each prize awarded by a licensee in a single raffle, if any, (3) the maximum price which may be charged for each raffle chance issued or sold, if any, and (4) the maximum number of days during which chances may be issued or sold, if any [3.3].
  4. The entire net proceeds from charitable games must be exclusively devoted to the lawful purposes of the organization permitted to conduct that game [4.1].
  5. No person except a bona fide member or employee of the sponsoring organization, or a volunteer recruited by the sponsoring organization, may participate in the management or operation of the game [4.1].
  6. No person may receive any remuneration or compensation either directly or indirectly from any source for participating in the management or operation of the game [4.1].

Additionally, the Illinois Raffles and Poker Runs Act exempts certain types of contests from its provisions, including those conducted by a membership group or club regulated by the Federal Trade Commission, sales by a catalog seller, and the Illinois State Lottery [2.1].

Conclusion

To offer contests that involve merchandise prizes in Illinois, you must be a bona fide not-for-profit organization that operates without profit to its members and has been in existence continuously for a period of 5 years immediately before making application for a license to operate a raffle or a poker run. You must also obtain a license to operate a raffle or a poker run from the governing body of the municipality with jurisdiction over the key location or, if no municipality has jurisdiction over the key location, then from the governing body of the county with jurisdiction over the key location. Additionally, there are limitations on the aggregate retail value of all prizes or merchandise awarded, the maximum retail value of each prize awarded, the maximum price which may be charged for each raffle chance issued or sold, and the maximum number of days during which chances may be issued or sold. The entire net proceeds from charitable games must be exclusively devoted to the lawful purposes of the organization permitted to conduct that game, and no person may participate in the management or operation of the game or receive any remuneration or compensation either directly or indirectly from any source for participating in the management or operation of the game. Certain types of contests are exempt from the Illinois Raffles and Poker Runs Act, including those conducted by a membership group or club regulated by the Federal Trade Commission, sales by a catalog seller, and the Illinois State Lottery [2.1].

Source(s):
Jurisdiction

Illinois