I have been thinking about setting up a web page to raffle off my
truck in order to sell it. This web page would be simple with a bunch
of pictures of the truck, a FAQ section, etc etc. The raffle tickets
would cost $5 each and I would sell a fixed amount that would cover
the cost of the truck plus any shipping charges. The money side would
be handled through paypal. For every $5 "ticket" you buy, you get one
# in return. When the total amount of tickets have sold, I would then
pick a number randomly (through some sort of program) and the winner
gets the truck shipped to them with full ownership. I did a quick
search online and found no relevant sites like what I mentioned above.
I also thought this might be a great idea for a business but a quick
search at the patent office came up with this:
http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=/netahtml/PTO/search-bool.html&r=2&f=G&l=50&co1=AND&d=PG01&s1=online&s2=raffle&OS=online+AND+raffle&RS=online+AND+raffle

My question is that simply does this sound like something that might
work? What would the legal and tax implications be? How would I want
to protect myself? Any other suggestions you can make regarding this
matter? Thanks!

Hello and thank you for your question.

Unfortunately you will find yourself in violation of law in any of the
50 states [if you are planning the raffle outside the US the answer is
probably the same].

For example, "the Santa Clara County District Attorney's Consumer
Protection Unit issued a public service alert to remind organizations
they could be penalized for holding illegal lotteries, punishable by a
$1,000 fine or six months in jail."
SCS strictly complies with DA's guidelines for its annual fundraiser 
http://www.svcn.com/archives/sunnyvalesun/09.02.98/Raffle.html

[If you read the above article you'll see that SCS is making the
tickets 'free' in exchange for a 'voluntary' contribution--I wonder
how the DA will feel about that!]

And again,

"The collapse of a projected $150,000 luxury car raffle could force
USS Forrestal board members to put their money where their hearts are.
The group canceled plans to give away a 2000 Jaguar S-Type worth
$45,000 Tuesday after the attorney general's office advised them the
giveaway was illegal."
Forrestal's supporters drop illegal car raffle 
http://tampabayonline.net/reports/carrier/raffle2.htm

Here's how Attorney Fox answered a similar question:

"Raffles are regulated on a state-by-state basis. As you might already
know, an illegal lottery is comprised of the following elements:
prize, chance and consideration. Because, in a raffle, all three
elements are present, raffles typically fall under state illegal
lottery law.

Many states allow raffles to proceed if they are sponsored by a
nonprofit organization. Because all states laws differ, it would be
important to analyze your states' lottery and raffle laws. However,
generally speaking, [an individual's] raffle would probably violate
state illegal lottery laws."
Arent Fox Attorneys at Law
http://www.arentfox.com/post/forum/csmessages/341.html

Sorry to be the bringer of bad news, but that's the law.

Google Search Terms Used:
car illegal raffle

Sincerely,
richard-ga

---

Request for Answer Clarification by intendedacceleration-ga on 01 Oct 2002 09:56 PDT

I did a little more research and found that in my state that raffles
are indeed legal but you must purchase a permit to do so.

http://www.house.leg.state.mn.us/hrd/pubs/charitgb.pdf

But how does this apply to the internet? Meaning, would the person
buying the ticket have to be in Minnesota also, or just me? Also would
the web server have to be physically located in Minnesota? I still
think this is doable with the correct permit. For example, someone
from out of state can come into Minnesota to buy a pull-tab. How is
this any different than someone logging on to a web site?

---

Clarification of Answer by richard-ga on 01 Oct 2002 11:19 PDT

Hello again:

Please take another look at the Minnesota information that you
provided in your clarification request.  As I read page 4, you cannot
obtain a permit unless you are a fraternal, religious, veterans or
other nonprofit organization, and you can only use the proceeds for
one of the lawful [charitable] purposes listed there.

My reading is consistent with the excluded raffle application, which I
found at
http://www.gcb.state.mn.us/PDF_Files/lg240r.pdf
This form is for raffles under $750, but the rule is the same for
larger prizes.

Do you agree?
-R

You would need to be extremely careful.  Many countries (I'm not sure
about the US, though) have stringent rules about raffles, sometimes to
protect a State Lottery.  At the very least you should restrict to US
residents only, even assuming it is legal there.  The lack of existing
sites might suggest it is not.

As richard noted, a raffle probably isn't a possibility. You could
possibly go the "essay question" route that several inn owners have
used to successfully unload, ah that is "sell" :-) their property. See
links at...

://www.google.com/search?sourceid=navclient&q=inn+essay

for examples. Whether such a strategy would work for you, the legality
of it in your specific jurisdiction, would all still be open
questions.

regards,

rico

Even if this were legal, it might be difficult to find people who
would send $5 to a stranger for the chance to win a car.

The Internet is, unfortunately, crawling with scam artists, and I
doubt that many people would trust a raffle of this type, unless it
were associated with a known individual or organization. It would, I
think, be difficult to overcome people's suspicions, since proving
one's trustworthiness on the Internet (while maintaining some vestige
of privacy) is not an easy task.