Community E-ssentials

June 1, 2002 NUMBER 7   Volume 1 Issue 7  
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CONTENTS
CCIOA Amendments
Water Restrictions
Fines and Violation Hearings
Association-Sponsored Raffles
Covering Increasing Insurance Costs
CMCA Credit Available
Association-Sponsored Raffles
Many associations sponsor raffles as a means for raising funds or improving member turnout at meetings. What many communities are not aware of, however, is that the Colorado Bingo and Raffle Law (as contained in C.R.S. §12-9-101 et seq.) regulates organization-sponsored raffles, and failure to comply with the raffle law is a class 2 misdemeanor. (Note: this is not an April Fools Day joke!)
 
Any organization holding a raffle for the purposes of commercial advertisement, creation of goodwill, promotion of new products or collection of names, where the raffle tickets are given away free of charge and without obligation on the part of the person receiving it, is exempt from the requirements of the raffle law.
 
WHAT IS REQUIRED TO HOLD A RAFFLE?
 
Any organization in Colorado which operates without profit to its members may sponsor a raffle as long as it meets the following criteria:

•  The organization has been in existence continuously for five (5) years immediately prior to the license application.
•  The organization has had a membership engaged in carrying out the purposes of the organization during the entire five (5) year period.
•  The organization has at least one member who is or will be certified as a games manager.
 
Assuming an organization meets the criteria, it must apply for and obtain a raffle license from the Colorado Secretary of State Licensing Division. Organizations that do not meet the criteria will not be eligible for a raffle license and may not hold raffles.
 
THE APPLICATION PROCESS
 
An application packet may be requested from the Secretary of State Licensing Division by calling (303) 894-2680 x321 or faxing a request to (303) 894-7732. Additionally, an application for the license may be obtained online at: www.sos.state.co.us/pubs/bingo_raffles/bingoforms.html.

An organization applying for a raffle license must complete the application and enclose a license fee of $62.50. The applicant must also enclose proof of the organization’s continuous existence for the five (5) year period and its membership qualifications and purposes throughout that period. This may include dated and executed copies of articles, bylaws, declaration and/or rules of the organization showing membership qualifications and purposes. Additionally, the organization must attach dated items in the organization’s name, at least one from each of the past five years, to show organization continuity. Acceptable documentation includes: bank or audit statements, checks, corporate or other periodic reports, publications, tax returns or exemption certificates.
 
Once the application is complete, it must be submitted to the Licensing Division of the Secretary of State. Processing of the application typically takes approximately six (6) weeks. Licenses are awarded on an annual basis and expire at the end of the calendar year in which they were issued. Organizations wishing to renew a license need not resubmit proof of the organization’s continuous existence, but must complete another license application and pay the required license fee.
 
THE GAMES MANAGER
 
The games manager is a member of the organization who has overall supervision and management responsibilities for the raffle and is responsible for holding, operating, and conducting the raffle in accordance with the raffle law. A games manager must be trained and certified by the Secretary of State prior to taking on any such raffle management duties.
 
A schedule for the games manager certificate training may be obtained on line at: www.sos.stae.co.us/pubs/bingo_raffles/gamesmanager.html or by calling a compliance officer at (303) 894-2680.
 
LEGAL REQUIREMENTS DURING AND AFTER THE RAFFLE

 
After an organization is licensed to hold a raffle, it must nevertheless comply with all guidelines contained in the raffle law. Such guidelines require:

•  the organization to own the prize being offered prior to selling tickets.
•  tickets to be sold only by members of the sponsoring organization.
•  a voided raffle ticket be filed with the Secretary of State if the value of the prize exceeds $250.
•  receipts from raffles be placed in a separate bank account.
 
Upon completion of the raffle, the raffle law requires an organization to do the following:

•  report all receipts, expenses, net proceeds and uses for proceeds to the Secretary of State in the quarter of the year when the raffle drawing is held.
•  pay a fee on gross receipts at the time of filing the report.
•  if no raffle is held in a calendar quarter, a “no activity” report must be filed with the Secretary of State.
 
ADDITIONAL INFORMATION
 
Additional information may be obtained regarding the raffle law directly from the Secretary of State Licensing Division located at 1560 Broadway, Suite 200, Denver, Colorado 80202, or by calling (303) 894-2680 ext. 321.


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Published by Orten & Hindman, P.C.
Copyright © 2002 Orten & Hindman, P.C.. All rights reserved.
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