For raffles that have a ticket price of $10 or more or have a prize worth more than $10,000, 940 CMR 12 provides, among other items, that:
- Only people who are qualified members of the organization holding the raffle can participate in managing or otherwise assisting in the operation of the raffle. Those are people who: (1) were members of the organization for at least 3 months prior to the raffle; (2) paid any required fees or dues to the organization; and (3) have met all other conditions for being a member in good standing with the organization.
- The raffle tickets, or a written notice given to the purchaser prior to selling the ticket, must disclose: (1) the drawing date; (2) a full and fair description of the prize; (3) the appraised value of the prize (when purchased from a third party, the organization must have an independent appraisal by a licensed appraiser); (4) a date when the prize is available for inspection; (5) the amount of the ticket price that goes to charitable purposes; (6) the minimum or maximum number of tickets to be sold and what happens if the minimum is not reached; (7) that a prize is considered to be ordinary income by the Internal Revenue Service (IRS); (8) that no part of a raffle ticket purchase is considered a charitable contribution by the IRS; and (9) depositing the ticket or other material in connection with the raffle in the mail is a violation of federal law and may lead to criminal penalties.
- If there are any changes to the terms of the raffle (such as the nature or value of the prize or a postponement of the drawing date), the organization must notify all purchasers and give them a chance to rescind their purchase.
- If the prize is not awarded, the organization must notify ticket purchasers and return all of the money received within 30 days.
- No member or employee of the organization or their immediate family members may purchase tickets to the raffle or win the prize.
- No raffle tickets may be given away by the organization, its members, employees, or agents.
Under 940 CMR 12.04, the record keeper shall:
- have been a member of the organization for a minimum of two years prior to the raffle;
- maintain a list of members of the organization;
- maintain a list of those members authorized to sell raffle tickets or participate in any way in the promotion or operation of the raffle;
- maintain all documents concerning the prize or prizes to be raffled;
- maintain all permits, licenses, and other documents required for the raffle;
- keep a record of the raffle ticket purchaser's name and address and purchase date;
- keep the ticket stubs used to conduct the drawing; and
- be responsible for keeping and distributing raffle tickets, the safekeeping of ticket stubs and maintaining all records relating to the raffle, including bills of sale, agreements, appraisals, permits, licenses, ledger books, and any other documents required to show the proceeds and expenses of the raffle.