Laws to having a contest with cash prize?

[Brian2by2]

Does anyone know if there are laws behind having a contest with cash prizes?? Do you need any permission? Licensing? Taxes?

Any idea how to go about this? I have an idea for a contest but I want it to be completely legal


Thanks in advance

 

[lemansnsx]

This will vary too much state to state and maybe even locale by locale for you to get much accurate advice here. As an example, a former associate of mine ran a raffle years ago that did very well here in his home state so he decided to take his show on the road hitting at least 3 other states. He was arrested in one of them and his raffle proceeds and grand prize seized. Be careful!

 

[RSO 34]

If it is a raffle-type situation, most states will prohibit it unless it is a recognized/licensed charitable organization. Depending upon the type of "contest," it might also be construed as gambling. If there is any money to be made by the organizer of the "contest," at a minimum there will be tax requirements that have to be met.

Because laws vary from jurisdiction to jurisdiction, you should consult with a local attorney for an opinion on your venue.

USUAL DISCLAIMER: Any comments made in this post are merely for general background informational purposes and are not intended as legal advice either recommending or suggesting a specific course of action other than the advice to consult with a licensed, local attorney.

 

[ss_md]

You may be required to obtain a warranty bond for any prizes you are giving away to insure the raffle is not a scam. As stated contact your local and state government for exact rules and regulations. Never assume anything. Good luck.

 

[Brian2by2]

It's a physical and intellectual contest held in the state of florida. No raffle, no gambling, cash prize.

Thanks for the help already...i don't want to get arrested I know the winner has to file it on a 1099 because its income. half of the income generated by the contest is going to charity and the other half to a non-charity cause (me )

 

[lemansnsx]

It's a physical and intellectual contest held in the state of florida. No raffle, no gambling, cash prize.

There's a coincidence: the arrest that I mentioned took place in Florida.

 

[Brian2by2]

There's a coincidence: the arrest that I mentioned took place in Florida.

Ouch!

From the research that I have been able to do, it seems that a raffle and a contest such as the one im proposing aren't the same. Raffle's can be classified as lotteries, which have really tight rules apparently.

 

[Mr.Wolf]

One of my men can run the contest for you for a minimal fee with zero legal matters. But no selling tickets to pigs.