Lottery Licensing Training Session Thursday, October 13, 2011 NBP Office 1
Order-in-Council 1413/08 Order-in-Council 1413/08 provides the legal authority for the AGCO and municipalities to issue lottery licences in Ontario. Licences may be issued to eligible charitable groups if the proceeds are used for a charitable object providing there is a direct benefit to the residents of Ontario. Municipal Licensing Responsibilities - conducting eligibility reviews of applicants and maintaining current core eligibility files - reviewing lottery applications, reports and financial statements - ensuring that the proceeds applied for and raised are accounted for and used for the delivery of the licensee s charitable mandates - enforcing and ensuring compliance with any lottery licence that is issued - reporting any breaches of the Gaming Control Act or of Provincial licence to AGCO - Conducting periodical inspections of licensees and locations (break open ticket sellers and bingo halls) - municipalities may establish Terms and Conditions so long as they do not conflict with those established by the AGCO Provincial Enforcement and Compliance The AGCO Investigation Section has the responsibility to: - conduct investigations under the Gaming Control Act and the Criminal Code of Canada - assist municipalities/local enforcement agencies, as requested, in any investigation or audit of a licence - conduct audits of licensed organizations Eligibility - emphasis on public benefit to residents of Ontario - must be in existence and have a history of providing services for at least one year - must be legally, organizationally and financially separate from other organizations - provide constituting documents - provide previous financial statement and current budget - provide current listing of Board of Directors - documents must be updated on a regular basis by the organization - details of the proposed use of lottery proceeds - any other documentation that would assist in determining eligibility NOTE: These documents must be kept up to date by the licensees and provided to the municipalities and/or AGCO. 2
Eligible Uses of Lottery Proceeds - proceeds must be used for direct costs of programs and services that deliver the organization s charitable mandates to the residents of Ontario - proceeds must have a public benefit to Ontario residents Ineligible Organizations - profit making entities - does not have a charitable mandate - municipalities, their agencies or committees - are established for the purpose of adult recreation - are established for the purpose of tourism or other activities that are economic in nature - are a sub-group or auxiliary of an eligible organization that is already licensed - organizations established solely for the purpose of fundraising Lottery proceeds cannot be used for: Ineligible Uses - Administrative or operational costs that are not directly related to the carrying out of the organization s charitable mandate - Fundraising - Political activities - Core services and programs which are not charitable - Construction and renovation of buildings that do not serve a charitable purpose and that is not owned by a non-profit charitable organization - Donations to ineligible organizations - Providing a person benefit or gain - Supporting tourism or other purely economic benefits What is a raffle? A RAFFLE IS A LOTTERY SCHEME WHERE TICKETS ARE SOLD FOR A CHANCE TO WIN A PRIZE IN A DRAW. Permitted raffle lottery events: Stub draw Elimination draw Calendar draw Penny auctions Rubber duck race 50/50 draw Blanket raffle licence Meat spin/turkey roll Name the raffle lottery Bossy Bingo/Cow Patty Bingo Golf ball drop 3
Each type of licensed lottery is governed by a set of rules known as the Terms and Conditions. The Order-in-Council authorizes municipalities to issue licences permitting eligible organizations to conduct raffle lotteries where the total value of the prizes to be awarded, including any taxes and bonus prizes, is $50,000.00 or less. When over $50,000.00, AGCO issues the licence. Did you know? - raffle tickets must not be sold to anyone under the age of 18 nor shall anyone under the age of 18 sell raffle tickets - livestock must not be awarded as a prize - invoices, bills of sale, purchase and sale agreements must be provided for all prizes - only new and unused merchandise purchased from a reputed vendor may be offered as prizes - the retail market value of the prizes to be awarded must not be less than 20% of the anticipated gross proceeds of the event - For prizes totaling $10,000.00 or more, licensee must provide a letter of credit made payable to the licensing authority. The minimum expiry date shall be no less than forty-five (45) days after the date of the event - Raffle tickets sold under a licence issued in Ontario must be sold in Ontario - Licensees must award all prizes regardless of whether the raffle is profitable or not - All expenses must be deducted from the gross receipts - Licensing authorities may not issue raffle lottery licences for events to be conducted on any conveyance that moves or is capable of moving including boats, trains and planes Raffle Ticket Content - two part ticket - licence # and name of licensee - location, date and time of draw(s) - description and value of prize(s) to be awarded - price of each ticket including any discounts - total number of tickets printed 4
The stub (licensee s portion) shall contain: - number of the ticket - licence number and licensee s name - name, address and telephone number of the ticket purchaser Blanket Raffle Licence - Municipalities may issue blanket raffle licences permitting licensees to conduct numerous small raffles under a single licence within a fixed time period and capped prize amount - Maximum time period is six (6) months at one venue and for a total prize amount up to $5,000.00 - licence fee is based on the total prize value for all events in this licence Prohibited Raffle Events - sports pools - raffles by donation - scratch and win - jalopy dives - non-fixed value draws - throwing hockey puck/ball to a designated spot - guess number of items in a container - 6/49 - Licensing Fees - for raffle lottery, 3% of the total prize value to a maximum fee of $150.00 (no HST) Amendments to Raffle Licences - Licensing authority may issue an amendment to a licence if it is in the public interest to do so - Licensee must discuss the request with the licensing authority. He/she must receive prior written approval to extend the draw date - Licensee must contact all ticket purchasers informing them of the proposal to extend the draw date and receive signed and notarized disclaimers from all purchasers agreeing to the extension date before it may be approved 5
Charitable Organization To qualify as a charitable organization, the organization must have a demonstrated charitable or religious mandate. The Order-in-Council defines charitable object or purpose as any object or purpose relating to: i) relief of poverty ii) advancement of education iii) advancement of religion iv) other purpose beneficial to the community cultural and arts health and welfare amateur sport organizations enhancement of youth public safety programs community service organizations (service clubs) Books and Records - the licensee shall maintain books, records and other documentation in support of all financial reports or statements for no less than four (4) years - the licensee shall provide unencumbered access to its books, records and other documents related to its lottery activities to the licensing authority and to all peace officers for audit and investigation purposes The licensee shall maintain: Banking and Financial - a separate lottery trust account for each type of lottery event - accounts shall have a minimum of two (2) signing officers - all expenses and use of proceeds shall be paid by cheque - lottery proceeds must not be transferred to a general or operating account - Reporting Requirements - licensees shall submit lottery report within the specific time periods set out in the Terms and Conditions - reports shall show details of prizes, expenses, lottery trust account and use of proceeds - the certificate portion of the report must contain original signatures by authorized officers of the organization - verified deposit slips/bank statements shall accompany reports - any additional documentation shall be supplied as requested by the licensing authority 6
Financial Statements - licensees shall submit financial statements to the licensing authority within 180 days of its fiscal year end - these financial statements shall provide a summary of the revenue and expenses for each type of lottery activity conducted during the licensee s last fiscal year (bingos, raffles, break open tickets) - the financial statements shall provide a summary of the use of net lottery proceeds by the licensee - the financial statements shall be either a separate statement or an addendum to general financial statements - the statements must either be verified by the Board of Directors of the licensee or completed by a public accountant depending on the level of the total gross revenue ($250,000.00) - a report of the licensee s compliance with the terms and conditions of its licences must accompany the financial statements 7