questionsso...i'm thinking about starting my own lottery…

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Sorry, but I see this ending badly..... :)

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You might want to run this by a lawyer. But I can save you a consultation fee and tell you it's a bad idea and/or illegal. You could always open a casino on the other hand. That's easy to do right?

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- Do you know of any of the legal hurdles?
Lotteries are illegal. There's only two legal options - state lottery systems and ones where ALL the money goes to charity.

And any sweepstakes you see by any business where buying something enters you in a chance to win, you'll find terms and conditions. Within that, there's the legally required "No Purchase Necessary" option for free entry.

I can't seem to find the right parts of the law, but there is some of it here:
http://codes.lp.findlaw.com/uscode/18/I/61/1301

I'm pretty sure it's a federal law.

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Lottery : a tax for people who are bad at math.

Ambrose Bierce, the Devil's Dictionary

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You don't want to do that - competing against the government never works out in your favor.

Just saying.

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If you can crack that nut, well, you can have my woot handle. I have been toying with lottery/raffle ideas for nearly a decade. Too much legal issues and too easy for someone to call foul and have the whole thing explode in your face. Best of luck though.

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Thanks for the responses.

There would definitely be consultations with lawyers if it ever got that far.

@omnichad: Thanks for the link. That site may lead to some other useful info too. I'll look closer later.

Hey everybody, I'm just kicking around an idea. I figured I'd ask "the crowd" and see what came out of it. On the one hand people put on raffles and such all the time. True usually for fundraisers for a cause but maybe that would have to be folded into the concept. And then there's the big lotteries like Powerball. Perhaps I can't do it but they can. They even cross state lines which has to add a level of legal complexity to it all.

Like I said, I just think I have a pretty innovative idea. Everything that was ever anything started that way. ;o)

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@phillystyle: There are some unscrupulous groups that have raffles for charities and earn $$$ as the administrators/management/facilitators/consultants/what have you. They of course get paid out of the pot the organization gets.
Kinda crummy if you ask me. Fool people that the money goes to charity and the charity gets maybe 10% or so.
Somehow they do it legally.The charities don't want to complain cause they are too happy to get any amount of money these days. If you are that kind of person you can do something like that. I hope you are not.

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@ceagee: No! There's definitely no plan of deception or trickery of any kind.

Hmmmm. Maybe that's where there's some confusion (and downvotes) about what I'm asking you guys. I wasn't thinking a charity/fund raiser real or otherwise.

I was thinking a for-profit lottery. That's what I thought Powerball was, but it turns out that's not quite what it is exactly. Now, I've done some more research and it looks like almost anything that even remotely tries to be a lottery, shares those funds to some degree. I'm not against that mind you. I just didn't think that was something that would have to be in the business plan. :o)

The concept I've got is so different that even if a lottery isn't the avenue, maybe I can find another application for it. For now I'm thinking lottery because I think it would lend itself nicely to that.

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(cont'd) I would just love to see what would happen if someone unleashed this idea into the world. Would it spread like wildfire? Would it just fizzle out? I guess eveybody feels that way about their super-genius, earth-shattering, mind-blowing, ideas that will change the world as we know it. LOL

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@phillystyle: This idea isn't new. Not even a tiny bit, kiddo. It is illegal in most countries, against federal law, and plenty of states have additional laws, also forbidding it. Sovereign states reserve this right to themselves, where it's actually permitted, but even then, it's not really a lottery, or at least not of the type you're probably thinking of.

A betting pool for a sporting event is a lottery of sorts (and illegal in most states, enforced more in some than others). Auctions might even be considered lotteries. I love auctions, and will buy things I don't need, and have no use for, when caught up in the competition for an item. Oops. Segue. Sorry.

Irish Sweepstakes used to be the type of lottery that you're thinking of. Here's some fun reading, if you're curious:

http://en.wikipedia.org/wiki/Irish_Hospitals%27_Sweepstake

Useful, but buried on that page: "The United States Congress had outlawed the use of the US Postal Service for lottery purposes in 1890."

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@phillystyle: Actually, here's some even better reading:

http://en.wikipedia.org/wiki/Lotteries_in_the_United_States

BTW, I found this by using the search terms "are lotteries legal" (I find things like this endlessly fascinating; lucky you).

Here's a really nice page from California. Those are some pretty stiff fines, if it even smells like a game of chance. Remember, Bingo (at least in CA) is only legal if it's for charity (all bets are off if you're on reservation land).

http://www.dca.ca.gov/publications/legal_guides/u-2.shtml

From our old friend, King James (Ecclesiastes 1:9):

"The thing that hath been, it is that which shall be; and that which is done, is that which shall be done; and there is no new thing under the sun."

As @jumbowoot used to say, "It is what it is" (I miss the old cuss, sometimes).

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@shrdlu: No of course the idea of a lottery isn't new - although perhaps to your point, we're not inundated with "private" lotteries and there might just be a reason for that. :oP

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I guess you've never heard of numbers rackets?

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@shrdlu: Hey, keep the info coming. I haven't taken the time to really dig in an search for myself in earnest yet.

Yeah @jumbowoot was good people.

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@k3nd0: Yes, I've heard of numbers rackets.

Just curious. We can argue about probability and morality or whatever til we're blue in the face but are legitimate lotteries considered "numbers rackets?" Or are numbers rackets (still) those off the radar backroom games that are shady and hit or miss?

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@phillystyle: There's basically three types of "numbers rackets" today. 1) Government lotteries. 2) Charitable raffles. 3) Illegal gambling operations. I would strongly recommend against option 3 unless you have ties to some ethnic mob and a vast clientele that don't speak English and tend to avoid cops. Option 1 is obviously off the table unless you're secretly a third world dictator. That leaves us with option 2. Believe it or not, you could actually make a lot of money this way if you are particularly lacking in scruples. People seem to think that "charities" are a bunch of do-gooders. The truth is that to qualify as a 501(c)3 organization you just need to not pay profits. That's pretty easy when you pocket all the dough from "raffles" as wages or bonuses to executives or employees of the organization. Basically it's a scam, just a legal one as far as the IRS is concerned. Your only problem is finding marks...

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@k3nd0: "The truth is that to qualify as a 501(c)3 organization you just need to not pay profits." I'm not sure what you mean by "pay profits," but 501(c)(3) status doesn't really have much to do with "profit" (there are rules that compensation to employees can't be based on the organization's earnings but an exempt organization can and should be profitable or it will eventually not have the funds to carry on). Instead, it is all about the organization's exempt purpose. See IRS Form 1023.

And, according to the IRS, wages or bonuses to exempt organization employees has to be based on reasonable compensation for the work they do. So, what you propose is specifically not allowed by the IRS. However, there are probably a lot of these that go undiscovered.

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@k3nd0: With all due respect, you're clearly hooked on the idea that because I mentioned the word "lottery" my goal is to steal people's money. You're clearly missing the point and I'm not sure I could convince you of otherwise.

And that's ok. I'm good enough, I'm smart enough, and doggone it, people like me.

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@benyust2: As I said before, there is probably a reason there aren't a million private lotteries. Thanks for that info. I'll look that up.

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@phillystyle: It doesn't really matter what your intentions are, the natural purpose and outcome of lotteries is to fleece stupid people that don't understand how odds work. That's why they're illegal, unless you're the government.

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I find the hostility to the discussion of a mere idea rather intriguing. That's probably been more interesting than the original questions themselves.

I just asked for some ideas from people who might know something about something I know nothing about. As I said, we could argue about our perspectives on the morality of lotteries til the cows come home. For me the exercise was about tossing a question out and see what came back. I have a good idea, I just need to figure out what could possibly be done with it, lottery or not, and then maybe try to move forward.

I appreciate the links and the constructive criticism. If anybody else has anything constructive - which BTW can mean additional reasons why something WON'T work - I'm open to hear it and appreciative to get it.

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@phillystyle: I think you're the only one who considers anything said here "hostile." At worst, it's some gentle ribbing towards someone with a naive idea.

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@benyust2: I was obviously being facetious. Maybe it wasn't obvious enough for you. There are plenty of "non-profits" that are scams, and the IRS does nothing about it. My point about "not paying profits" was simply that you can't run a 501(c)3 and pay yourself a dividend. You have to be a little creative about how you defund the organization. Obviously I'm not endorsing any of this and my entire post was supposed to be funny yet educational.

As far as "employees" not being payed based off of revenues for a non-profit, I take it you've never met a professional grant writer.

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I just wish we could shut down the local church cake raffle. You pay for a ticket for a chance to win a cake that probably has old people hair in it. The money raised doesn't go to charity, it's used by the church! Illegal gambling at its worst!

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@bsmith1: "Old people hair" LOL Too funny and so right. ;o)

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@k3nd0: No worries. A little hostility from someone like you was expected. It's the nature of the internet. Ask a question about something that's got a drop of morality coloring it and [poof!] “The Judgementalists” will appear.

I'm sure there's a story behind it. Maybe you were dropped on a lottery ticket when you were a baby.

And unlike you I don't feel like asking questions is naive. Now, if I’d come in and posted “Guess what folks. I'm gonna be rich - WIF ME OWN LOTT'TRY!” Maybe that would have been naive - maybe just a l'il bit.

I guess you've never heard the expression "run it up the flagpole."

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@phillystyle: You're getting pretty worked up over what I said apparently. I don't know why you feel the need to attack me personally. I humorously asked if you've ever heard of numbers rackets. You said yes and asked how that was relevant to today. I, again humorously, explained the kind of rackets that exist today and how they work. You got offended that I somehow implied you were a grifter. I explained I'm not interested in what your intentions are because you can't change the fundamental nature of a "racket" no matter how altruistic you may be. Since we're using antiquated idioms now, what you're trying to do is "polish a turd." I'm sorry you can't take a joke, but after the way you've reacted I think chalking it up to naivety is being generous.

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@k3nd0: No worries sir or madam. I've got a notion you'd love it, but I'm not the least bit "worked up." Your responses - while not exactly as "constructive" as they purport to be - are interesting. I have a feeling we're both enjoying it. It's fine.

You're a bit of a sniper. You "hide in the bushes" and make your snide comments to people "...towards someone with a naive idea" or "@benyust2: I was obviously being facetious. Maybe it wasn't obvious enough for you" or "... I take it you've never met a professional grant writer." and then say Then, [antiquated idiom alert] like butter wouldn't melt in your mouth, you say "Oh, I was just being "funny yet educational." Because YOU'RE the smartest one in the room, yeah? I assure you I wasn't offended by any of it - but that doesn't mean I don't see it.

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@k3nd0: It's all in good fun as far as I'm concerned. We don't know each other. We could wind up liking each other, who knows?

I use these boards for asking questions and getting advice. I like to see what other people think about this or that. I just asked for feedback on an idea I openly admitted was like 15 minutes old. I was able to [antiquated idiom] separate the wheat from the chaff. No naiveté here m’friend. :o)

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@phillystyle: I doubt we'd become friends. You seem to think I'm pretentious and judgmental, which is ironic considering your last few posts.

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@k3nd0: I'm not saying we WILL become friends. I'm just a guy who believes in unknown possibilities. Who what the future holds? Seriously - no BS - I wouldn't be shocked if you and I got along swimmingly. Haven't you ever thought someone at work "wasn't so great" and later you found commonality and maybe even got to point where you laughed and ate lunch together? People have relationships and get along great then hit bumps somewhere in the middle and then get past it. Who says bumps in the beginning can't be overcome?

Regarding your being "pretentious & judgemental," I would not call you pretentious or judgemental. I don't know enough about you. I was merely pointing out in the face of your statement about your posts meaning to be "funny yet educational," that they were snarky and potentially a little bit mean too. I don't see anything inherently wrong with that BTW. Virtually any joke that's funny is at someone's expense. Just own it, was all I was saying.

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@k3nd0: Maybe we just got off on the wrong foot with the definition of "rackets" and the notion that (seemingly) no lottery could possibly be anything but trickery. We seem to disagree about whether a lottery can be a positive thing or at least a non-destructive thing. But that's OK.

Like I keep saying, I was merely asking for input. To me your responses seemed to be focused on intentions I do not have. I apologize if I came off as attacking you. I really felt like it was jousting I s'pose. I enjoy verbal combat (yes this is typing) but it wasn't meant to be Mortal Kombat.