Mar. 9, 2020 – As part of the AGCO’s ongoing commitment to modernize the charitable gaming sector, charities in Ontario now have the option to seed or guarantee prizes for electronic and paper-based Catch the Ace progressive raffles. Seeding and prize guarantees were previously only available for 50/50 and fixed prize raffles.
Seeding and prize guarantees are now permitted for licences issued by the AGCO, municipalities and First Nations, and will provide flexibility for charities and increased fundraising opportunities for eligible charitable objects and purposes.
What does it mean to seed prizes?
Licensed charities are now permitted to contribute to or “seed” the prize pool with fixed cash amounts or merchandise to start the prize at a certain value that will be potentially increased through ticket sales. Charities are also permitted to accept sponsorship for a Catch the Ace progressive raffle in the form of fixed cash or merchandise prizes, but must clearly communicate any sponsorships to customers as outlined in the Raffle Licence Terms and Conditions.
Example
The following is an example to help illustrate how a seeded progressive raffle works.
| a. Seeding of progressive prize | $1,000 (raised through sponsorships, for example) |
| b. Sales of raffle tickets | $3,000 (20% to event winner; 30% to progressive prize) |
| c. Total progressive prize value* | $1,900 (a + 30% of b) |
| d. Charity gross revenue | $1,500 (50% of b before expenses) |
*The licence fee for charities is calculated on the total prize value awarded which includes the seeded amount.
What does it mean to Guarantee Prizes?
Guaranteed prizes are an option where a licensed charity provides assurance or “guarantees” that the Catch the Ace progressive raffle prize will pay out, at minimum, a certain monetary value. Charites must clearly communicate guaranteed prize values to customers.
If the total amount raised through raffle ticket sales does not meet or exceed the amount needed to award the guaranteed prize amount, charities will have to cover the remaining amount in order to award the guaranteed amount.
In addition, please note the guarantee is for the minimum prize amount only. If ticket sales exceed the amount needed to award the guaranteed prize amount, charities must award prizes based on the total ticket sales.
Lastly, an irrevocable standby letter of credit from charities is required for raffles with guaranteed prizes valued over $10,000. This requirement currently exists for fixed prize raffles. For other raffle types, licensing authorities may require a financial guarantee for prizes. See the Lottery Licensing Policy Manual under Financial Guarantees (section 3.6.7) for additional information.
Example
The following is an example to help illustrate how a guaranteed progressive prize works.
| a. Guarantee of progressive prize | $1,000 (Charity guarantees at minimum, the prize will be this amount) |
| b. Sales of raffle tickets | $4,000 (20% to event winner; 30% to progressive prize) |
| c. Total progressive Prize Value* | $1,200 (30% of b if greater than a) |
| d. Charity gross revenue | $2,000 (50% of b before expenses) |
*The licence fee for charities is calculated on the total prize value awarded which includes the guaranteed amount.
Additional Information
Charities with existing Catch the Ace progressive raffle licences issued by the AGCO, municipalities or First Nations licensing authorities are not eligible to request an amendment to existing licences but may choose this option when applying for a new licence.
For more information on how to obtain a Catch the Ace progressive raffle licence, please see Catch the Ace Progressive Raffle.
You can also submit your questions online within iAGCO or call AGCO at 416-326-8700 or toll free 1-800-522-2876.
For services to help with problem gambling in Ontario, visit www.connexontario.ca or call ConnexOntario at 1-866-531-2600.