Benefits and Opportunities for Charities

The Issue

The AGCO’s goal is to maintain an effective regulatory framework for charitable gaming that maximizes the honesty and integrity of electronic raffles, while at the same time allowing for flexibility, innovation, and growth.

We want to ensure that the key risks for electronic raffles are managed, and that rules are clear, concise, do not impose too many administrative steps, and are not overly rigid. We understand that charities want to minimize their raffle expenses to maximize the proceeds going to charitable causes. Overly expensive electronic solutions or equipment may prevent these causes from benefiting from electronic raffles.

In building Ontario’s electronic raffle framework, the AGCO envisions an environment that is transparent, efficient, and accessible.

What We Heard

Types of products and potential benefits

Features:

The use of computers could allow for many different options in how charities deliver raffles. Participants noted several specific features that could enhance a consumer’s experience, including:

• A mobile transactional system that is automated and scalable to allow for more efficient sales, ticketing, and communication about the draw.
• A completely internet-based, self-serve system that accepts online payments, sends ticket purchase confirmation and tickets electronically, and notifies players of raffle results electronically. The system could be accessed through mobile devices with charity-specific apps, personal computers, manned point-of-sale terminals, or unmanned automatic ticket dispensers.
• Streaming draws online, particularly for progressive raffle draws, so that the draw can be held in a smaller location, rather than having a public draw which requires the charity to incur additional costs for a large venue and security.
• Electronic money transfers for cash prizes.
• Electronic messaging to notify players of their wins.

 

Potential Benefits for Charities:

Participants generally agreed that the use of computers for charitable raffles is a logical development in the modernization of the way charities fundraise. Some of the specific benefits discussed were:

• Benefit charities by reducing operating costs and administrative workload, and increasing accountability, security and integrity.
  • Charities feel they will be able to spend more time fundraising and less time on administration, and ultimately bring in more revenue to positively impact the community.
  • Immediate cost savings on printing and postage.
  • Reduction or elimination of spoiled tickets, or the need to do a second draw to find a winner.
  • Easier prize claim process.
  • Heightened consumer confidence and satisfaction.
• Level the playing field for charities of all sizes.
• Improve speed and convenience of consumer experience.
• Attract a broader audience by providing more raffle options.
• Faster turnaround between sales deadlines, draws, and winner notification.
• Facilitate easier adherence to regulations with an increase in reporting transparency and accountability enabled by traceable, real-time reporting.

Opportunities for increased flexibility

Participants raised a number of opportunities for the AGCO to build a regulatory framework that is flexible enough to facilitate innovation and to enable charities to run raffles in a way that suits their specific circumstances and maximizes the potential benefits while maintaining honesty and integrity standards. Some participants noted that the Criminal Code amendment opens up the possibility to fundamentally change how charitable gaming is delivered in Ontario. There may be an opportunity to examine the potential scope of games that are considered “raffles” to expand the options that charities have in the games they offer to Ontarians. Other specific opportunities for increased flexibility in­clude:

• Allow pooled electronic raffles (e.g., across municipalities or charities).
• Provide greater flexibility in how 50/50 raffles can be conducted, for example, allowing raffle tickets to be sold prior to an event to promote the event through the raffle.
• Allow the electronic raffle to run over the course of several days to align with multiple-day events.
• Continue to allow corporate partnerships or local businesses to advertise on electronic raffle tickets.
• Provide charities with the option to conduct raffles electronically or paper-based, depending on their circumstances.
• Allow electronic payment, cash payment, or a combination of both electronic and cash payments to be made for raffle tickets and prizes.
• Allow suppliers to do some of the administrative work of charities as an optional service, which could reduce some of the risks of using electronic solutions.
• Allow suppliers to charge a percentage fee instead of a flat rate to charities.
• Be as flexible as is possible approving alternative sales channels (i.e., mobile, online) as this provides more opportunity to maximize charitable revenues while minimizing administrative costs.
• Consider allowing unclaimed prizes to be used to seed jackpots and reducing the amount of time a charity is required to keep an unclaimed prize.
• Framework should separate the “sale of a ticket” component from the rest (specifically “selection of a winner”) so that smaller charities can choose to just sell tickets online but not have to use an electronic random number generator to select the winning ticket.

Strategies to ensure charities can benefit

There are many potential benefits for charities with the use of computers for raffles. The AGCO wants to develop the regulatory framework in a way that makes electronic raffles as accessible and as beneficial to charities as possible, including finding ways to reduce administrative burden on charities and suppliers.

General Comments from Participants

• More options of registered suppliers with approved solutions could lead to more competitive fees and more choices for charities, making it more feasible for charities to use electronic raffles and also see the most benefit from them.
• There is concern about charities’ ability to recover the costs associated with electronic raffles.
• A portion of the industry may not be interested in holding electronic raffles if it is difficult to implement the electronic solution, or if the cost, complexity, or training requirements will be prohibitive.
• The AGCO could collect and make available electronic raffle data such as initial sales, administrative expenses, and/or net revenues to help charities make decisions around the use of electronic raffles.

Reducing Administrative Burden

• There should be as much consistency as possible between both traditional and electronic raffle regulatory frameworks.
• Minimize manual reporting processes to the AGCO.
• The AGCO could make available a list of registered suppliers with approved electronic raffle solutions so that charities can educate themselves on what is available in the market.
• Current terms and conditions are complicated and confusing – increased clarity around regulatory expectations would help charities to ensure that they are following the rules. There may also be opportunities to update and streamline the Lottery Licensing Policy Manual.
• The AGCO could consider a risk-based licensing structure where lower risk charities have a more streamlined application process, and higher risk charities need to clear more checks and balances before being issued a licence.
• There is inconsistency among municipalities and the AGCO in the cost of licensing fees and in how they are administered. Having a more consistent approach across the province could reduce confusion.
• Each province has a different regulatory approach, which can be difficult for national charities or suppliers to navigate. There could be more inter-provincial cooperation to streamline some of the rules, or align their licensing and registration processes.

Providing Information to AGCO:

• Move to an online/electronic application system for licensing that is standardized and contains non-defeatable mandatory fields, to help minimize errors and incomplete applications.
• An online application system would help reduce administrative burden.
• Streamline the existing one-time / per-event forms, or offer an online form that gets sent directly to AGCO.
• AGCO should consider a real-time reporting process for the supplier working with the charity. Rather than monthly reporting being done manually, it could be done in real-time and sent to the AGCO.
• Review and streamline the letter of credit process. Consider allowing banks to send these letters directly to the AGCO, or consider alternatives to the letter of credit.

Streamlining Costs

• Ensure that the new framework does not make electronic raffles so cost prohibitive that smaller charities cannot participate.
• AGCO should not be overly prescriptive on how suppliers develop their fee structures. It was felt that this will allow suppliers to charge a more reasonable rate to deliver their service, and therefore, deliver more net dollars to the charity.
• Costs associated with cybersecurity and IT risk mitigation may offset potential savings from reduced paper and postage.
• Consider having the winner incur a portion of the expense costs for 50/50 draws, by taking out expenses before splitting the pot, instead of having all of the expenses coming out of the charity’s 50% share.
• Consider allowing paid staff (i.e., ticket sellers) compensation based on or tied to their ticket sales.