Running a 50/50 draw in Ontario: licences, prize rules and electronic raffles

Why a raffle needs a licence at all

A 50/50 draw is a lottery scheme in the sense of the Criminal Code, and the Code allows only a short list of people to run one. Under section 207(1)(b), a charitable or religious organization may conduct and manage a lottery scheme in a province under a licence issued by the province, if the proceeds are used for a charitable or religious object or purpose. Section 207(1)(a) is the separate route under which a provincial government itself conducts lotteries and gaming.

So the question for a hockey club, a school council or a service group is not only how to sell tickets, but whose name goes on the licence. In Ontario the answers are set out by the Alcohol and Gaming Commission of Ontario (AGCO) in its application guidance and in Chapter 5 of the Lottery Licensing Policy Manual.

Who is eligible

The AGCO's raffle licence page lists the basic conditions. The organization must be non-profit, located in Ontario and doing charitable activities for at least a year, and its services in Ontario must relieve poverty, advance education, advance religion or benefit the community. Before it can hold an AGCO charitable gaming licence, a charity or religious group needs charitable gaming eligibility (a CGE number), which can be applied for together with the licence.

The same page lists groups that do not qualify because they support only their own members: adult recreation or sports groups, individual sport teams, unions or employee groups, social clubs, professional associations, and political, government, lobby or advocacy groups. In practice, a team or club fundraiser usually runs through an eligible organization that holds the licence, not through the team itself.

Municipality or AGCO: the $50,000 line

Who issues the licence depends on two things: the total prize value and whether any part of the raffle is electronic. Section 5.1.1 of the Lottery Licensing Policy Manual, Chapter 5: Raffles splits it this way.

A municipal licence covers only that municipality's boundaries. On timing, the AGCO asks for applications at least 30 days before the event from previous applicants and at least 45 days before from new ones, and says most decisions take about 45 days for new applicants and about 30 days for those who already have a CGE number. Advertising and ticket sales may start only once the licence has been issued.

Fees are a percentage of prizes. The AGCO lists 3% of prizes for AGCO-licensed raffles and 1% of the prize board for stand-alone raffle licences issued by the Registrar. Municipal fees may not exceed the maximum set by the Registrar, and for 50/50 draws the fee is based on the maximum prize board.

How the 50/50 prize is capped

Under section 5.2.1(F), a paper-based 50/50 draw is a raffle in which the total prize is one half of the value of all tickets sold during the event or a defined period. The licence application must state a maximum prize, and that maximum must not exceed half the revenue that would be raised if every ticket authorized by the licence were sold.

A worked example. A licence authorizes 1,000 tickets at $5. Maximum revenue is $5,000, so the maximum prize is $2,500. On the night, 640 tickets sell for $3,200, and the winner receives $1,600. If the draw also offers a fixed early-bird prize of $100, the manual says fixed prizes must be paid from the charity's half of ticket sales, so the charity's share becomes $1,500, from which its own costs are paid.

Other rules in the same section shape the evening itself:

• Paper 50/50 tickets may be sold only during scheduled time periods, such as sporting events.
• If the winning ticket holder is not present at the draw, the rules may provide for another ticket to be drawn, and this must be stated in the rules of play and the advertising.
• Tickets must not be sold to anyone under 18, or under 19 if alcohol is part of the prize (section 5.1.2).
• Goods and services must be bought only from registered suppliers.
• All money goes into the designated lottery trust account.

Since September 20, 2024, a 50/50 licensee may also run the draw as Split the Pot. The AGCO's update lets charities split the 50% prize pot between several winners, provided they declare it on the application and the rules of play show players how the pot is divided.

Electronic 50/50 raffles are a different licence

The large stadium and hospital-foundation 50/50s sold through phones and tablets are electronic raffles, and the manual treats them separately in section 5.3.1. An electronic raffle uses computers, including handheld devices, to sell tickets, select winners or distribute prizes in Ontario. Only eligible charitable or religious organizations may apply, and only the AGCO Registrar licenses them, regardless of prize amount. Three types are permitted: electronic 50/50 raffles (including Split the Pot), electronic Catch the Ace progressive raffles, and fixed-prize electronic raffles.

Several conditions follow. No minimum prize board is required. Tickets may be sold over multiple days, in person and online. Ticket orders may not be solicited or accepted from outside Ontario, although visitors may buy while they are in the province, and subscribers must be located in Ontario when they opt in. Sellers may not be paid by the number of tickets sold, and a licensee may run no more than four online raffles at the same time.

None of this makes an online raffle similar to an online casino. Ontario's internet casinos operate under the AGCO's separate Registrar's Standards for Internet Gaming as lottery schemes conducted and managed by OLG or iGaming Ontario, the provincial route rather than the charity one. How regulated casino brands are assessed is covered in the Ontario casino guide.

After the draw: unclaimed prizes and reports

If a winner does not come forward, section 5.17.1 requires the licensee to make every reasonable effort to reach them, including advertising within 120 days after the draw. The unclaimed prize must be held in trust for at least six months from the award, and after that the amount, with any interest, is added to the lottery's gross proceeds.

Licensees also file financial reports under the terms of the licence, and first-time applicants supply verified financial statements. Organizers who sell tickets at bars or events can find guidance on keeping play in proportion on the responsible gaming page.

This is a summary of published AGCO policy, not legal advice. For a specific event, check with your municipality's lottery licensing office or the AGCO.