The Illinois Raffle Act controls raffles in Illinois. The City of Woodstock recently modified its (local) raffle ordinance in the City Code. When Woodstock broadened its ordinance, did it do so legally?
The State law says,
"Raffle" means a form of lottery, as defined in Section 28-2 (b) of the "Criminal Code of 1961", conducted by an organization licensed ..." (emphasis added)
"Licensing. (a) The governing body of any county or municipality within this State may establish a system for the licensing of organizations to operate raffles." (emphasis added)
"Licenses shall be issued only to bona fide religious, charitable, labor, business, fraternal, educational or veterans' organizations that operate without profit to their members ..." (emphasis added)
"The entire net proceeds of any raffle must be exclusively devoted to the lawful purposes of the organization permitted to conduct that game." (emphasis added)
Need I go further?
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6 comments:
Yes, Gus, you ALWAYS need to go further than to cherry pick words and phrases from the statute that serve your argument. Tell the WHOLE story and let us read it. Let your readers make up their own minds rather than misleading them. Point them to:
Your slant on this appears to be that any organization applying for a raffle permit MUST not only be a charitable organization but must also be a 501(c)(3). Not true. A reading of the statute confirms this. American Community Bank is definitely not a 501(c)(3) but it appears that the statute would allow for Woodstock to permit them to run a raffle for a charitable purpose. The statute tries (and since we're talking to you, it's not always successful) to convey the spirit and intent behind the law and make it as easy as possible to conduct a raffle to aid somebody in need that the community chooses to get behind. You say that a raffle cannot benefit just one person? The statute says for the benefit of an indeterminate number. I take that to mean (and thus permit) a raffle for the benefit of one person, two persons, 200 persons.
Mike, under the statute American Community Bank could not conduct a raffle. Read all the words in the statute. It is not organized for that purpose. And I doubt that the Bank is a not-for-profit corporation.
Gus, any attorney worth his salt, when drafting articles of incorporation will adopt language that permits the corporation to do anything that is legal. Perhaps using the bank as an example is an extreme. Feel free to use any other incorporated business.
Again, read the statute there is no requirement that an organization be a non-profit 501(c)(3)
Thanks, Mike. I understand the difference between not-for-profit (State) and tax-exempt (Federal).
The question of tax-deductibility of donations has not been an issue here. Obviously, purchase of a raffle ticket is not a tax-deductible outlay.
Earlier I was thinking of the taxability of the winner of the motorcycle in the raffle. He'll have an ordinary-income item of the value of the motorcycle.
True enough with regard to the income. Not to put too fine a point on it but that income is offset by any gambling losses for the year
Good point, Mike. Thanks!
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