Charities are hunting for new income sources due to the fierce competition for donor dollars. Government funding, door-to-door and telephone canvassing, and direct-mail solicitation are losing their punch.
Many charities have taken advantage of the opportunity to build their revenues by participating in one or more of the charitable gaming vehicles. These have been made available to them as a result of legislative changes to the Criminal Code introduced by the government since 1970. Charities are relying more on raffle lottery schemes, Monte Carlo events, break-open tickets and bingo lotteries.
Charities held responsible
Unfortunately, it has escaped the notice of some charities that charitable gaming is regulated by the provincial government. Ontario’s Gaming Control Commission has the legislated mandate to ensure that all terms and conditions governing charitable gaming lottery schemes are adhered to by the licensee (the charity). Although the charity may delegate responsibility for running a gaming operation, the charity will ultimately be held responsible for adherence to all of the terms and conditions of the license.
Infractions of the rules can lead to a violation of the Criminal Code, which makes it an indictable offense to participate in a lottery scheme in any manner. One section of the code provides an exemption for charitable and religious organizations to conduct lottery schemes, provided they are issued a license by the appropriate provincial authority.
The current terms and conditions (the set of rules a charity must follow once a license has been issued) have as their foundation the Gaming Services Act (GSA) proclaimed in Ontario on February 1, 1993. In addition, a new Order-In-Council defines the roles of municipal councils and the province, the terms and conditions applicable to the conduct of lotteries, and the policies for the administration of events.
Board members accountable
To a much greater degree than other methods of fundraising, charitable gaming can have serious consequence if the rules are broken. Its activities are licensed and most often the person(s) responsible for signing the license application are senior officers of the organization. Board members are always held accountable for all licenses and, in Ontario, the Ministry’s Lottery Licensing Policy Manual states clearly that applicants and licensees failing to satisfy processing, operating or regulatory requirements could be penalized.
According to the manual, “the severity of any sanctions should reflect the severity of the breach. Possible sanctions include warnings, suspensions, cancellations, refusal to issue licenses and criminal charges.” Clearly, infractions of the “rules” could lead to the immediate cancellation of a license and/or criminal charges against the officers of the charity.
To avoid problems, all charities entering the gaming arena should ensure that they have a thorough understanding of the terms and conditions governing the licensing of the event or lottery scheme. The charity should accept full responsibility for the activity, and not delegate this responsibility to outsiders who have been contracted to run or help with the event. By keeping control, the charity will avoid trouble.
