(A) Except for fifty-fifty raffles, no less than ninety percent of the net receipts of a raffle authorized pursuant to this chapter must be used for the charitable purpose of the nonprofit organization.

(B) No receipts of a raffle shall be used for any expenditure or activity which would subject an organization exempt from taxation under Internal Revenue Code Section 501(c)(3) or its managers to revocation of its tax-exempt status or excise taxes under the Internal Revenue Code, including directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office or engaging in an excess benefit transaction with a person who would be a disqualified person if the nonprofit organization were exempt from taxation under Internal Revenue Code Section 501(c)(3).

(C) A nonprofit organization shall not enter into a contract with any person to have that person operate raffles on behalf of the nonprofit organization.

(D)(1) A nonprofit organization shall not lend its name nor allow its identity to be used by any person in the operating or advertising of a raffle in which the nonprofit organization is not directly and solely operating the raffle.

(2) No person shall purchase or lease the name of a nonprofit organization for the purpose of conducting a raffle.

(3) Nothing in this section, however, shall prohibit two or more qualified nonprofit organizations from participating together to conduct a raffle.

(E) A nonprofit organization conducting a raffle may advertise the event. An advertisement, in whatever form, for a raffle must name, within the advertisement, the nonprofit organization sponsoring the event, the charitable purposes for which the net receipts shall be used, and a statement of the proportion of the gross receipts of all raffles conducted by the nonprofit organization in the most recent two years in which the nonprofit organization conducted raffles which were not applied to charitable purposes.

(F)(1) A raffle shall be conducted only by a qualified and authorized nonprofit organization through its directors, bona fide employees, and unpaid volunteers none of whom shall receive compensation for their services in conducting the raffle, except that bona fide employees of a nonprofit organization may receive their regular and ordinary compensation.

(2) Except as otherwise provided in this chapter, no member, director, officer, employee, or agent of a nonprofit organization, a member of the family of any of those persons, or an entity in which a person described in the previous two categories holds a thirty-five percent ownership interest is allowed to receive any direct or indirect economic benefit from the operation of the raffle other than being able to participate in the raffle on a basis equal to all other participants, except that bona fide employees may receive reasonable compensation for services rendered in furthering the charitable purposes of the nonprofit organization from raffle proceeds.

(3) Food and beverages served to and consumed by volunteers or staff of the sponsoring organization during a raffle are not compensation.

(4) Bona fide employees, for purposes of this section, do not include an employee whose compensation is based, in whole or in part, on the amount raised in gross or net receipts from a raffle operated by the nonprofit organization or whose job duties are significantly related to the conduct of raffles.

(G) A nonprofit organization shall not conduct raffles through any agent or third party, and shall not pay anything of value to any person for any services performed in relation to operating or conducting a nonprofit raffle except the usual and regular compensation of bona fide employees. Rental of raffle equipment from a third party and the hiring of a person to operate equipment, so long as the expense is reasonable, are not considered conducting a raffle by a third party.

(H) Noncash prizes shall not be redeemed for money from the nonprofit organization or from any other entity that redeems noncash prizes awarded by raffles for money in the ordinary course of business.

(I) No raffle drawing event shall be held on Christmas Day.

(J) Raffle drawings must be conducted in accordance with local building and fire code regulations.

(K) The provisions of this chapter are not intended and shall not be construed to allow the operation or play of raffles through electronic gambling devices, or machines, slot machines, video poker or similar electronic play devices and do not amend or alter in any manner the prohibitions on video poker or similar electronic play devices in Chapter 21, Title 12 or Chapter 19, Title 16.

(L) An individual prize awarded to each winner in a raffle shall not exceed a maximum fair market value of forty thousand dollars. No real property shall be offered as a prize in a raffle. For each raffle event, the total fair market value of all prizes offered by any nonprofit organization shall not exceed two hundred fifty thousand dollars.

(M) The purchase price for a raffle ticket may not exceed three hundred dollars.

HISTORY: 2013 Act No. 11, Section 1, eff April 4, 2015; 2018 Act No. 192 (S.812), Section 2, eff May 15, 2018.

Editor's Note

2013 Act No. 11, Section 5, provides as follows:

"SECTION 5. The provisions of this act become effective thirty days after ratification of an amendment to Section 7, Article XVII of the Constitution of this State allowing its terms as proposed to the qualified electors of this State at the 2014 General Election."

2015 Act No. 3, Section 1, eff March 5, 2015, provides in part as follows:

"SECTION 1. The amendment to Article XVII of the Constitution of South Carolina, 1895, prepared under the terms of Joint Resolution 102 of 2013, having been submitted to the qualified electors at the General Election of 2014 as prescribed in Section 1, Article XVI of the Constitution of South Carolina, 1895, and a favorable vote having been received on the amendment, is ratified and declared to be a part of the Constitution so that Section 7 of Article XVII is amended to read: [text of amendment follows]."

Effect of Amendment

2018 Act No. 192, Section 2, in (M), substituted "three hundred dollars" for "one hundred dollars".