New Jersey residents could begin gambling on the Internet this year. But they still won't be able to buy a raffle ticket online to support a local charity.
Nonprofit groups hoping to boost their fundraising dollars by adding an online component to annual raffles are being told by the state commission that regulates charity gambling that online ticket sales are illegal.
The notice came as a surprise to some area charities, because raffle regulations do not specifically prohibit online sales. A state organization that works with nonprofit groups said the current law is outdated and confusing, and should be revised, especially as nonprofits search for new sources of revenue.
Information provided by the New Jersey Division of Consumer Affairs said the Legalized Games of Chance Control Commission prohibits charities from selling raffle tickets online because of the potential to violate existing raffle regulations.
For example, not all municipalities or states allow raffles, and state law prohibits sales to minors, which would be hard to control online.
The commission does not actively search out online raffles, but if they are made aware of one will notify the sponsor that it must stop or risk forfeiting its raffle license. A licensed nonprofit group can promote a raffle online, but cannot sell tickets there.
The state recently contacted Big Brothers/Big Sisters of Atlantic and Cape May Counties, which is raffling a choice of several cars, including a BMW, as its biggest fund-raiser of the year. The online sales were helping the group, which still has about 200 of the $100 tickets to sell before the winner is chosen Sunday at the Smithville Irish Festival in Galloway Township. The website now refers potential ticket buyers to the group's phone number.
"It has really put a damper on sales," said Beatrix Jerkins, executive director of the local BBBS. "Every year, online sales had gone up. With other funding cuts, this raffle has been keeping us alive, and we were hoping for a sellout. It is hurting us."
If all 1,399 tickets are sold, the raffle could raise more than $80,000 for the organization, after buying the car. The BBBS has lost about $125,000 in grants since the recession.
Statewide, the Legalized Games of Chance Control Commission oversees and enforces the operation of raffles and bingo games by about 12,000 registered nonprofit groups, as well as amusement park games.
Charitable gambling is about an $85 million-a-year industry, according to the commission website. Much of that is raised one ticket at a time.
When the Arc of Atlantic County promoted its raffle as part of its September golf tournament, having online sales through the Arc website seemed a modern way to expand fund-raising efforts on behalf of the group's programs for adults with developmental disabilities.
This year, the group sold 40 of the 200 raffle tickets online at $50 each, raising $2,000 just from online sales, said Beth Ann Spiegel, fund development and communications associate at the Arc in Egg Harbor Township. She said they reviewed the regulations and did not see anything specific that prohibited online sales, so they thought it was OK.
"They should clarify that," she said of the state. "It really has helped (to sell online). I would like to find a way to do it."
Linda M. Czipo, executive director of the N.J. Center for Non-Profits in Mercerville, Mercer County, said they presented a proposal to the state Red Tape Review Commission in 2011 asking among other things that the state provide guidelines for the promotion and payment of raffles using online fundraising tools.
She said some regulations date to before the Internet and the laws are outdated and confusing.
"The whole framework needs to be updated," she said. "We need to bring the requirements into the 21st century."
She said the law is applied inconsistently. Every year, some groups suddenly get notified that something they may have been doing for years violates the law.
"Organizations could really use the money today," she said. "Arguably, there is a potential for abuse. But we really need some updated plain-language guidelines."
Some websites specifically host charity raffles and claim to be able to do so within the confines of each state's laws. Jerkins said she would be nervous about using one now that the state has told them online sales are prohibited. Czipo said she knows too little about them to say if they are reputable and reliable.
Atlantic Cape Community College has used its website to tell tickets to the Restaurant Gala and accept donations to its foundation. But because it uses PayPal to handle those transactions, and PayPal's rules prohibit selling tickets for games of chance, it has not sold tickets for the Gala raffle online.
Patricia Gentile, executive director of the Atlantic Cape Foundation, said the raffle tickets are promoted but not sold on the Gala website.
Some New Jersey towns still do not allow raffles or bingo at all. Among the 26 cities that have not adopted the provisions of the Bingo and Raffles Licensing Laws are Estell Manor, Ocean City and the Cumberland County townships of Greenwich, Lawrence and Stow Creek, and Shiloh Borough. Upper Deerfield Township allows raffles but not bingo.
Big Brothers/Big Sisters has put a notice on the website saying it no longer accepts online sales, though the tickets that have been sold are valid. Tickets can be purchased by calling Emily Gillespie at 609 573-5029, ext. 14.
Contact Diane D'Amico: