Lottery Licensing
The Alcohol and Gaming Commission of Ontario (AGCO) is responsible for regulating and overseeing licensed lottery events conducted by eligible charitable and religious organizations to raise funds to support charitable purposes. As part of the AGCO's regulatory responsibilities in the charitable sector, the AGCO administers, in partnership with municipalities, the regulatory framework governing the issuance of charitable lottery licenses.
The AGCO authorizes the Municipality of Central Huron to issue licenses for some types of lottery and gaming events for eligible charitable, religious, and non-profit organizations. The Criminal Code of Canada defines what types of gaming activities are illegal in Canada, and the provinces are assigned responsibility to operate, license and regulate legal forms of gaming.
Lottery license applicants should note that raising funds through gaming contains a certain element of risk on the part of the charitable organization - lotteries should be viewed as a supplement or alternative to the organization's other fundraising ventures: lottery proceeds may not be the main source of fundraising for a charitable organization.
The Municipality of Central Huron has the authority to issue licenses for most lottery events conducted in Central Huron, including:
- Bingo events with prize boards of up to $5,500
- Media bingo events with prizes of up to $5,500
- Raffles with prizes of up to $50,000
- Break open ticket events that are not conducted in conjunction with another licensed gaming event, and where the tickets are sold within Central Huron
- Bazaar lotteries which include: wheel of fortune with a maximum individual bet of $2.00, raffles not exceeding $50,000 in prizes, and bingo events not exceeding $5,500 in prizes
Through the Clerk's department, the Municipality must ensure all legal requirements, including terms and conditions of the licenses, are met by lottery licensees and any gaming suppliers used by charities. Eligible organizations and their lottery licensing representative are responsible for understanding their role within the lottery licensing program and it is strongly advised to review the AGCO's Lottery Licensing Policy Manual and Central Huron's User's Guide to Lottery Licensing.
- What is a Lottery?
A lottery event is defined by three elements:
- A fee or consideration
- A chance to win
- A Prize
- Lottery Licenses that Central Huron can issue
- Bingo events
- Raffles
- Break Open Tickets
- Bazaar gaming events
- How does my organization apply for lottery licensing?
If you are interested in applying for a lottery license, please contact the Clerk's department.
- Lottery Licensing Process
As a lottery licensing authority, the Municipality of Central Huron has a responsibility to follow the lottery licensing process set out by the AGCO. This includes:
- Conducting eligibility reviews and maintaining current eligibility files;
- Reviewing and evaluating lottery applications and reports;
- Ensuring that proceeds are eligible and used in accordance with the licensee's charitable mandates;
- Ensuring compliance with any issued lottery license;
- Reporting any breaches to the AGCO
Once the applicant has (1) been deemed eligible, (2) opened a Lottery Trust Account, and (3) submitted a copy of the account information to the Clerk's department, an application to conduct a lottery may be completed.
- Lottery License Fees
The fee for each lottery license is equal to 3% of the total prize value. In Central Huron, lottery license fees are offset by a donation grant in which the fee is 3% of the total prize value and anything above $10.00 is offset by Central Huron donation (i.e. organizations only pay $10.00 per lottery scheme).
Lottery license fees must be paid by cheque made payable to the Municipality of Central Huron from your organization's lottery trust account.
Eligible Organizations
All lottery licenses issued through a municipality must have a charitable purpose. Only those organizations which can have a charitable mandate and use proceeds for charitable purposes can receive a lottery license.
- Eligibility Review Application
Eligibility review applications are to be completed every two (2) years to ensure that the information held by the Municipality is up-to-date and that your organization remains eligible to hold a license for lottery schemes.
An organization must have completed an Eligibility Application for Lottery Licensing.
Please note: eligibility reviews for new groups take approximately two weeks. Additional information may be requested. Please provide all necessary material in a timely manner. Annual eligibility updates of changed or amended documents, programs, or similar material are required by each active group once they are deemed eligible to conduct lotteries.
Once an organization has been deemed eligible by the Clerk's department, organizations should complete a Lottery License Organization Information form. This form can be submitted by organizations whenever there are changes to their general information not relating to their eligibility.
- Who is eligible to get a license to conduct a lottery event?
If your organization is interested in conducting a lottery license, please contact the Clerk's department to inquire about your organization's eligibility.
Charitable organizations may be permitted to conduct a lottery scheme to raise funds once a license is issued. Organizations must have demonstrated charitable or religious mandate to provide programs for:
- Relief of poverty
- Advancement of education
- Advancement of religion
- Or other charitable purposes beneficial to the community such as:
- Culture and the arts
- Health and welfare
- Amateur sports organizations
- Enhancement of public safety
- Community service organizations (i.e. Legion, Rotary, Lions, etc.)
In addition, an organization must also demonstrate the following in order to be deemed eligible:
- Have been in existence for at least one year;
- Provide charitable community services consistent with a primary objective and purpose of the organization for at least one year;
- Demonstrate that the organization is established to provide charitable services in the Municipality of Central Huron;
- Use proceeds for charitable purposes that benefit the Municipality of Central Huron and its residents;
- Assume full responsibility for the conduct and management of its lottery events; and
- Be deemed eligible to conduct lotteries and open a Lottery Trust Account.
The Municipality of Central Huron has the authority to only issue a lottery license to organizations that are operating within the municipal boundaries. If your organization will be operating a license outside of the municipal boundaries of the Municipality of Central Huron, please refer to the municipal office that your organization will be conducting a lottery within.
- What type of organizations are not eligible for lottery licensing?
Individuals are not eligible for a lottery license, nor are the following organizations:
- Social clubs
- Professional associations, unions, employee groups
- Government ministries, agents, or bodies
- Political lobby groups and those attempting to persuade the public to adopt a particular view on a political issue
- Political parties
- Adult hobby groups
- Private social clubs (i.e. golf, curling)
- Adult sports teams
- Individual youth sports teams
- Organizations established solely for the purpose of fundraising
Use of Proceeds
Eligible uses of proceeds must be:
- In themselves charitable and advance the charitable purposes or objects of the organization;
- Used for the direct delivery of the charitable purposes or objects of the organization; and
- Directed toward specific segments of the Ontario community or residents of Ontario with a common need.
Proceeds must be used to pay for direct expenses of charitable activities. Proceeds must be disbursed in a timely manner and cannot be accumulated, unless approved by the Municipality of Central Huron.
Lottery proceeds must only be used to benefit residents of Ontario. For example, proceeds cannot be donated to disaster relief for communities outside of Ontario.
- Donations to Other Organizations
Lottery proceeds may be donated to other charitable organizations, but the recipient organization must also be eligible for a lottery license themselves.
- Ineligible Expenses and Use of Proceeds
Ineligible expenses include:
- Provision of personal benefit or gain for members of the applicant organization;
- Supporting tourism or other purely economic benefits;
- Advancing a particular political issue;
- Enhancing lands and buildings owned and/or operated by a government;
- A responsibility traditionally fulfilled by a government; and
- Funding activities that do not fall within one of the four charitable classifications.
Ineligible Use of Proceeds
Eligible organizations may not use the proceeds from lottery licenses for:
- the cost of political lobbying and/or advocating a particular view on a political issue, including the cost of staffing, publication materials and advertising;
- fundraising activities, including wages for a fundraiser and the cost of promotional materials;
- administrative or other activities that are not integral to the direct provision of the organization's charitable mandate;
- 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 or its board;
- volunteer recognition;
- foreign aid, out-of-province aid, or aid to non-Ontario residents;
- accounting fees, except as provided by the terms and conditions of the lottery license;
- out-of-pocket expenses for volunteers to participate in a licensed lottery event, except as permitted under the terms and conditions of the lottery license;
- academic and sports awards and trophies;
- construction, renovation or improvement of buildings owned by or on land owned by the Government of Canada, the Province of Ontario, or municipalities; and
- any activity that does not fall into one of the four charitable classifications.
- Lottery Trust Accounts
All financial lottery activity must be conducted in a lottery trust account. This account must be used solely for lottery activity and cannot be used for other purposes, such as the proceeds from other types of fundraisers. The types of accounts may vary depending on the bank. For example, the account may be called a 'community organization account' or something similar.
Accounts must be set up to include monthly statements and images of cheques, which must be submitted to the Municipality with the lottery reports. An organization may use one account for all lottery activity or have separate accounts for each type of lottery held.
Lottery funds must be held separately to protect them, especially in the case of dissolution. For instance, lottery proceeds cannot be used to pay debts or creditors. A dissolution clause in the organization's constitution will ensure these funds are protected. Two signing officers, who are bona fide members or the organization, are required for the account. All withdrawals from the account must be made by cheque an no transfers are allowed.
For more information regarding lottery trust accounts, please refer to the AGCO's website.
Reporting
After the lottery event has ended, licensees are required to submit reports to the Municipality of Central Huron. The report forms are available from the AGCO. All reports must be filled out completely and must be signed by two bona fide members and match those members who signed the lottery application form. Future lottery licenses will not be issued if there are outstanding or incomplete reports. Reports must be submitted within:
- Bingo - 15 days after each event has ended
- Break Open Ticket - 30 days after the license ends or the last ticket is sold (whichever comes first)
- Raffle - 30 days after the event has ended
- Supporting Documentation for Reporting
Documentation is required which supports the contents of the lottery report. These items will include:
- Receipts for expenses;
- Name and address of winner(s);
- A copy of a ticket used (for raffle lotteries);
- Funds disbursement information;
- Bank statements for the lottery trust account; and
- Cheque images for payments made from the lottery trust account.
It is important to keep track of the financial particulars over the course of the license, especially when the lottery extends for a significant time period.
Please include and complete a Central Huron Lottery Report Checklist with your lottery report submission to the Municipality of Central Huron.
