50:50 eRaffles and the future of charitable gaming
By Troy Ross and Ron Baryoseph
In a great gesture of solidarity within the broader hockey community, many NHL teams donated the profits from their 50/50 raffles to help the Saskatchewan town of Humboldt earlier this spring. In just one example among many, the Winnipeg Jets’ 50/50 jackpot grew to $273,000, its largest to date. Four years ago, it would have been impossible to achieve these results. In fact, it would have been illegal, because at that time, charitable 50/50 raffles could not be conducted with the aid of a computer.
Prior to the passage of the federal Budget Implementation Act (Bill C-43) in 2014, the Criminal Code of Canada gave sole jurisdiction to operate lotteries and lottery schemes on or through a computer to the provinces. The prohibition against using computers had long been a challenge for the charitable gaming industry, which remained relegated to paper-based operations and were therefore limited in terms of scale, efficiencies and growth.
In 2013, a successful lobby campaign was undertaken to compel the federal government to clarify the intent of the Code. That lobby culminated in the 2014 C-43 amendment that changed the interpretation to allow the use of computer technology in charitable gaming. Specifically, it allowed for the sale of a raffle ticket, the selection of winners, and the awarding of a prize on or through a computer device. It was a significant and long overdue modernization which served to level the playing field for charitable gaming and open up the possibility of new partnerships and innovations in the sector. (It has been estimated that charitable organizations could save tens of millions per year in cost efficiencies, let alone benefit from the potential for new revenues.)
Over the past three and a half years, provincial regulators have been reviewing their frameworks in response to the amendment. Some are further down the track than others. In June of last year, the Alcohol and Gaming Commission of Ontario (AGCO) launched its Regulatory Framework for Electronic Raffles in Ontario’s Charitable Gaming Sector, after stakeholder consultations.
The Ontario framework presented a phased approach that began with electronic 50/50 raffles at sporting, charitable or gala events. It included allowing for 50/50 raffles currently operated by the OLG at major league sports events (on behalf of charities) to become a charitable event licensed by the AGCO, and permitted those events at properties beyond NHL or NBA stadiums.
The next phase is expected to permit online raffles, meaning the sale and distribution of tickets and prizes via the internet, in the summer or fall of this year. Future phases envisage other types of electronic raffles, including electronic progressive raffle draws, and permitting the sale of electronic raffle tickets at a broad range of locations, such as bingo halls.
The framework also requires charities to ensure that they are working with a provincially registered supplier and are using the current Registrar’s approved version of a supplier’s technical solution.
In B.C., the Gaming Policy & Enforcement Branch (GPEB) surveyed the industry back in 2015 to gather stakeholder input. It developed an internal report and subsequently introduced a range of new gaming and delivery options for charities for Class A and A+ licensees (events with revenue over $200,000). These included licensed raffle events online, online ordering and ticket distribution, and the use of random number generators.
GPEB has indicated it will consider other options in future including internet Chase the Ace events as well as progressive raffles, but no timetable has been set.
Saskatchewan’s Liquor and Gaming Authority (SLGA) also engaged in a broad consultation with the industry as it considered changes to the terms and conditions for licensing. It adopted a number of changes resulting from the passage of the BIA allowing charitable raffle licensees to use a computer in the sale of tickets, the selection of a winner(s) and the distribution of prizes.
For its part, the Manitoba Liquor and Gaming Authority did not engage in an external consultation process, but instead conducted an immediate internal review of its charitable licensing procedures. As a result, there are no restrictions on the type of raffle events that may be conducted in that province using a computer, including the use of random number generators. Licensees are permitted to sell and distribute tickets online, and applications are considered on a case-by-case basis. This allows for an open, unrestricted framework that provides maximum flexibility.
We anticipate that the change to the Code – allowing the use of computer technology with charitable events – will continue to drive regulatory changes across the country that each jurisdiction will implement according to their own timetable. These new licensing regimes will provide significant opportunity to introduce a range of new charitable gaming products across the country, as we have already seen.
“Allowing charitable organizations to use electronic raffle software enables them to add accountability, credibility and security to their raffle program,” says Bump 50:50 President Dan Tanenbaum. “Electronic raffle software allows charitable organizations to seamlessly deploy a raffle program while collecting data to properly analyze their successes, so they can maximize and optimize the program. They are able to grow their raffle program with the flick of a switch without having to pre-print tickets, and the data they collect will allow them to target new donors in the future.”
While Bump 50:50 provides a turn-key electronic raffle solution with onsite company operators, one of the challenges facing charitable organizations seeking to take advantage of the opportunities now available will be training their staff, volunteers, and other service providers in the use of the new gaming technologies, as well as reengineering their business processes.
Another challenge is sheer size. Many electronic gaming solutions are geared toward only the largest of charitable operators. Nicholas Van Zant, co-founder of the BC-based online raffle software solution provider Charit.ee, hopes to change that. “Access to technology like ours is not currently available to not-for-profits running raffles having projected revenue less than $20,000” he says. “At Charit.ee, we only charge when tickets are sold, because we’d like to make it easier for smaller not-for-profits to run fundraising raffles. Smaller not-for-profits have the ability to run their raffles with zero risk, since we do not charge setup fees.”
Charit.ee currently offers the ability to sell online, track their sales, manage their volunteers and export their data. Van Zant says the company will soon be introducing a fully automated platform which will include a certified random number generator. Like Tanenbaum, he notes that allowing online raffles into the charitable gaming sector creates opportunities for data analytics to improve performance, better donor targeting and retention, and eliminates the high costs associated with printing, mailing and labor-intensive manual processes.
Despite these obvious advantages, the adoption of electronic raffle technologies remains in its infancy in Canada. The market opportunity can only grow from here as provincial licensing regimes pursue their phased implementations, and new entrants develop innovative gaming products for the charitable sector.
About the authors:
Troy Ross is the founder of TRM Public Affairs. He has been involved in the public policy and regulatory environment of the gaming sector in Canada for over 20 years. He can be reached at [email protected].
Ron Baryoseph is a Canadian gaming industry veteran with over 25 years of experience. He is the owner of RBY Gaming. Ron can be reached at [email protected].
This article was originally published in the June 2018 issue of Canadian Gaming Business magazine.