Need to Know

What is “charitable gaming” and how is it regulated?

“Charitable gaming” refers to lottery schemes permitted by a licence under the Criminal Code of Canada. Typically these may include bingos, raffles, break open tickets, and bazaar gaming events held by charitable and religious organizations.

Charitable organizations are regulated by licensing policies and the terms and conditions of the licences issued by the province or municipalities under authority of an Order-in Council. The commercial sector of the charitable gaming industry is regulated by the Gaming Control Act, 1992 and accompanying Regulations.

What is a “lottery scheme”?

A “lottery scheme” may be defined as any scheme that has the following three components:

• a prize;
• a chance to win the prize; and
• a consideration or fee.

Therefore, if money is paid or other consideration is given for a chance to win the prize then it is considered to be a lottery scheme.

However, there are many types of lottery schemes for which licences are not available. Promotional contests that are carried out by companies to promote products and increase sales cannot be licensed to operate a lottery because they are not charitable. For that reason, a company must ensure that the contest does not fall within the definition of a lottery scheme.

Below you will find answers to frequently asked questions including the types of organizations eligible for a lottery license, what events are provincially licenced, what events are municipally licensed, and how the licencing process works.

Who can get a license to conduct a lottery event?

Canada’s Criminal Code permits charitable and religious organizations to conduct a lottery scheme to raise funds once a license is issued. Organizations must have a demonstrated charitable or religious mandate to qualify. Charitable refers to organizations which provide programs for:

• relief of poverty;
• advancement of education;
• advancement of religion; and
• other charitable purposes beneficial to the community.

To be considered eligible for a lottery license, each organization must:

• Have been in existence for at least one (1) year before being considered eligible for lottery licenses;
• Have provided charitable community services consistent with the primary objectives and purposes of the organization for at least one (1) year;
• Have a place of business in Ontario;
• Demonstrate that is established to provide charitable services in Ontario and use proceeds for objects or purposes which benefit Ontario residents; and
• Assume full responsibility for the conduct and management of its lottery events.

The primary purposes of an organization are determined by considering:

• The mandate of the organization as set out in its incorporation documents or documents stating the organization’s objects;
• The objects of the organization as described in the license application; and
• The services which have actually been provided by the organization to the community.

What is considered ineligible use of proceeds?

Proceeds from lottery licenses may not be used for the following:

• Academic and sports awards and trophies;
• Volunteer recognition
• Fundraising activities, including wages for fundraiser and the cost of promotional materials;
• The provision of services for which the organization receives government funding or which the organization is required by law to provide;
• Legal Fees/costs incurred by the organization;
• Accounting fees, except as provided for by the terms and conditions of the lottery license;
• Out of pocket expense for volunteers to participate in the licensed lottery event, except as provided for by the terms and conditions of the lottery license.

The above list is not intended to be exhaustive but to simply provide some examples of ineligible use of proceeds.

What lottery schemes do municipalities license?

A municipality may issue licenses to conduct the following lottery events:

• Bingo events with prize boards $5,500 and under;
• Media bingo events;
• Ticket raffle lotteries for total prized $50,000 and under;
• All break open ticket lotteries not licensed by the provincial office; and
• Bazaar Gaming Events.

How does my organization apply for a lottery license?

Determine what type of lottery scheme your organization intends to conduct, and:

• Application for Lottery Licensing First Time Questionnaire
• Obtain the appropriate application form from the municipal office
• Complete the form according to the instructions on the form and the policies or guide as set out for the lottery event.