A lottery occurs when someone offers the opportunity to purchase a chance to win a prize; if all three elements – purchase, chance and prize – are present, it’s considered a lottery. It’s important to understand what kind of actions may make something that seems like a fun game into an illegal type of lottery. It’s also important to understand the expectations around playing in a state-run lottery.
Lottery Types in the United States
It’s first important to distinguish between types of lotteries in the United States. A set of lotteries are approved and managed by official administrations set up by individual state governments, including big lottery entities like Mega Millions, which operate in multiple states.
Most state-controlled lotteries, like those in California, exist to provide proceeds that go to support the state itself, such as public education or infrastructure. These are legal, and laws regarding fraud, forgery and theft apply.
We’ve all seen companies that will, for instance, allow customers to submit a business card and do a random draw to provide winners with a prize. In some cases, even this can be considered a lottery, and could be illegal in the United States. It’s important to understand the lottery laws in your state, and in any state you might visit and purchase a ticket.
Federal Lottery Laws
Federal laws apply in California, as well. They do not allow a lottery to operate over the telephone or through the mail. This prohibits lottery tickets, as well as related promotions or advertisements, from being involved across state or national lines. It also prohibits having someone in one state purchase a lottery ticket for someone in another state for a fee, although in some states, it can be done for free.
Online gambling is popular, but the legality of it is still in question in many instances. In some ways, online lotteries can be considered legal because tickets are not shipped across state lines; on the other hand, tickets may be purchased by individuals outside the state. It’s likely to depend on the home state of the lottery, the state or states the participants live in, and how their lottery laws may interact.
California Lottery Laws
For the most part, lottery laws are created by state governments. California has its own lottery, as well as rules that govern the way people can participate. Lotteries other than those officially run or sanctioned by the state are illegal, and anyone found to be participating in an unofficial lottery can be found guilty of a misdemeanor charge.
California state lottery laws include:
- Anyone participating in a lottery has to be over the age of 18; this includes everything from scratch-off tickets to the statewide lottery.
- Any type of lottery ticket tampering or fraud is illegal. This includes forgery of tickets or of a signature, tampering with a ticket or otherwise trying to create a winning ticket out of a losing one. This also involves trying to cheat the system by attempting to figure out which tickets are winners and which are not; for example, an employee at a business selling lottery tickets using a system to pre-scratch the ticket and choosing to keep the winning tickets for himself.
- The name of any lottery winner, as well as the name and address of the establishment that sold the winning ticket, are public record and can be disclosed to the public. The lottery winner’s other personal information remains private.
- All winning lottery ticket claims must be made within 180 days of the draw or the end of the game. The only exception to this is the Mega Millions lottery, a multi-state lottery effort, for which claims must be made within a year. Barring that particular lottery, any lottery winnings that are not claimed within 180 days are added back into the portion of revenues that go to public schools.
California Laws Surrounding the Lottery’s Purpose
California’s other lottery laws focus on the purpose of the lottery. For instance, only 13 percent of lottery revenues are to be used to cover the expenses of administering the lottery itself. The remaining 87 percent go back to the public. From that remainder, 50 percent of the proceeds can be used for paying out prizes to the public, and the last 37 percent of revenues goes directly to California public schools.
Any money the lottery raises for public schools is theirs in addition to their normal budget – the lottery proceeds are not a replacement for existing public education funds. The lottery provides a way for individuals to support public schools outside of taxes, as well as the chance to win cash.
California Laws Regarding Ticket Purchase and Payout
In California, residents of any state or country can play the lottery, but the tickets can only be purchased at lottery retailers in California itself and must be submitted to the California lottery claim office. Prizes of up to $599 can be collected at any lottery retailers; prizes $600 and over in winnings are collected using a claim form from lottery district offices.
The California lottery has not changed any of the laws or rules regarding participation or payout in the last few years. Individual games may have seen small changes, however, so it’s important to read the rules on lottery tickets and understand what to do if you end up with a winning ticket.
The U.S. federal lottery code prohibits using the mail to send or deliver lottery tickets; penalties can include a fine and jail time of up to two years. Similar penalties are assigned to importing or transporting a lottery ticket. Exceptions are made for the state-run lotteries, which construct their own laws and penalties.
California Lottery Penalties
In California, anyone found to be a participant or an assistant in an illegal type of lottery can be charged with a misdemeanor. Charges can include up to $2,500 in fines and, for some types of illegal lottery, can come with incarceration in a county jail. Illegal lotteries can include raffles, random business card pulls, sweepstakes, and other types of events companies may run or offer without even knowing they’re committing a crime.
It’s important to read through the law’s definition of a lottery – the option to purchase a chance to win a prize – to determine whether or not any laws forbid whatever idea you’re considering. Keep in mind that California does make exceptions for charity bingo games or raffles, but even these exceptions are particular, so it’s best to do some research and/or check with a lawyer.
Lottery Fraud Charges in California
Lottery ticket fraud charges can be brought in several ways depending on the extent of the fraud. If the ticket or prize is worth more than $950, the crime can be charged as grand theft in the courts; if determined to be a felony, this can include 16 months to three years in prison on top of fines. Fraud can also be charged under California’s forgery laws, which include modifications to documents, like lottery tickets, as well as forgery of false documents. If charged as a felony, this can lead to up to three years in prison as well as the relevant fines.