Purpose

Prohibits the use of mechanical, electromechanical or electronic devices in raffles conducted by nonprofit organizations.

Background

The regulation of gambling in Arizona is generally under the jurisdiction of the Arizona Department of Gaming (Department). Raffles conducted by nonprofit organizations are currently authorized under state gaming laws. One popular type of raffle is a “casino night” raffle that allows the nonprofit to conduct gambling-type games for the purpose of raising money. Two separate Attorney General opinions have ratified this type of gambling as being legal and not subject to the general regulatory prohibitions and restrictions on gambling (1987 Ariz. Op. Atty. Gen. 161 and 1990 Ariz. Op. Atty. Gen. 57).

Some manufacturers of gambling devices have recently developed devices that look nearly identical to slot machines but are promoted as “electronically formatted” raffles. These types of gambling devices are not specifically prohibited under current state law as it pertains to raffles conducted by nonprofit groups. The use of these devices in nonprofit organization raffles and for charitable bingo have cropped up in other areas of the country as well as here in Arizona. In the State of Ohio, the State Supreme Court ruled in 1997 that liquor establishments could sell instant bingo tickets for nonprofit organizations. As a result, a number of charity-sponsored gambling facilities have begun offering video bingo across the state.

The issue of gambling device use in nonprofit raffles came up in Arizona when a Phoenix restaurant owner installed six pull-tab style slot machines for the purpose of conducting a raffle for a nonprofit organization early in 2000. This incident, coupled with the experience in Ohio, has elevated concern for the uncontrolled and unlimited use of these devices in Arizona.

The proposed strike everything amendment to S.B. 1296 proposes to prohibit the use of mechanical, electromechanical or electronic devices in raffles conducted by nonprofit organizations.

There is no anticipated fiscal impact to the state general fund.

Provisions

1. Prohibits the use of mechanical, electromechanical or electronic devices in a raffle conducted by a nonprofit organization. This prohibition does not apply to a mechanical rotating cage or drum utilized for the purpose of selecting paper stubs as counterparts to tickets sold as part of a raffle.

2. Defines a raffle to mean gambling in which a participant buys a paper ticket entitling the participant to be eligible to win a prize determined by a random drawing.

3. Provides for a general effective date.

SA/jas