Reality star and Playgirl model Ronnie Kroell hopes a chance to win “a trip to New York City” will be enough to entice you to donate at least $125 to the Human Rights Campaign. Too bad this means Kroell is not running a sweepstakes, but a lottery — and possibly an illegal one at that.
Although Kroell says on his website that he’s offering “contest packages,” he’s actually attempting to engage you in a sweepstakes. (Contests require skill; sweepstakes rely on luck.) But by requiring you to hand over money in order to “play,” Kroell is operating what most legal experts would deem a lottery. In order for a chance to win one of 50 prize packages — including the grand prize, which offers “round-trip airline ticket to NYC from anywhere in the 48 contiguous States (or a cash voucher towards a ticket from Hawaii, Alaska, or entries from countries outside the US), 2 night/3 day stay at a boutique NYC Hotel, AND a night out on the town to chill with yours truly!” — participants must hand HRC a donation of at least $125. Except replace the word “donation” with “entry fee.”
Lottery laws vary from state to state, and many might consider Kroell’s enterprise a “raffle.” But raffles too have their own set of rules and regulations, which also vary depending on the state. By running his lottery online, Kroell is arguably conducting business in all 50 U.S. states; the limited copy on his site does not exclude any states from participating. (Moreover, one thing that almost all states agree on is that explicit rules about any raffle or contest must be posted; none are listed on Kroell’s site.) While non-profits are legally approved to conduct raffles in some states, other states expressly outlaw them for any group; Arkansas, Hawaii (“Raffles are not legal if you must purchase tickets to participate”), and Kansas are among those banning them outright.
It’s unclear if Kroell is working in tandem with HRC, but the organization is the clear beneficiary of Kroell’s activity. Kroell’s language on the site suggests he’s not working directly with HRC, but you: “I have decided to team up with all of you to raise money for The Human Rights Campaign.” (The motivation for his fundraising efforts? Prop 8.)
And if Kroell is the one conducting the contest himself as an individual, and not a part of a 501(3)(c) non-profit like HRC, he’ll run afoul of many state laws — even those that legalize raffles for charities. Like Rhode Island: “The game must be conducted by a charitable organization. Only members of the organization can be involved in the control and management of the game. All proceeds, minus the expenses of the game, must be used for a charitable purpose. No one under the age of 18 is allowed to participate.” Moreover, many states require non-profits to file forms with the secretary of state notifying them they’re conducting a raffle. It’s unclear whether Kroell did this with any state government.
In California, it’s possible Kroell violated any number of state regulations. A contest must post “the date(s) upon which the contest will terminate, and upon which all prizes will be awarded.” Kroell did not. Failure to follow the rules could result in misdemeanor charges. In Texas, an “unlawful raffle could be considered illegal gambling, which may carry criminal penalties.” In Nebraska, a bi-annual $30 fee is required to run unlimited raffles for non-profits.
Will Kroell or HRC face any real criminal liability for running an illegal lottery or raffle? Doubtful. Most state law enforcement agencies don’t have the resources to go after small-time enterprises, and most would be further reluctant to go after any that, even indirectly, benefit a non-profit.
And while it’s a noble thing to do, offer trips and prizes in exchange for do-gooding, it’s an example of what not to do in trying to bundle money for the Human Rights Campaign. Or you could decide that giving money to an organization that helps anti-gay corporations defend their LGBT records isn’t the best investment to make anyhow, even for a “chance” to win a DVD set.