Charities and Gambling

Charities and Gambling

Mar 2, 2015

Most gambling is illegal in Virginia. Seeking creative means to raise money for laudable purposes, legitimate Virginia charities sometimes venture into dangerous waters in the belief that their philanthropic goals insulate them from liability under the Virginia criminal code. They do not.

The scenario typically arises when a charitable organization, seeking to drive increased fund-raising, suggests a game of chance, whereby participants contribute money in return for the opportunity to share in the winnings. This might be as simple as cutting cards to see who wins the organization’s weekly 50-50, or as complex as a sophisticated betting pool on the Super Bowl. Everybody does it, organizers conclude, and since at least half of the pot will usually go to charitable purposes, what could possibly go wrong?

It could be a crime. In the vast majority of cases, engaging in gambling exposes the participant to the risk of prosecution for a Class 3 (or, in some cases, Class 1) misdemeanor.

Code of Virginia § 18.2-325 defines “illegal gambling” as “the making, placing or receipt of any bet or wager in the Commonwealth of money or other thing of value, made in exchange for a chance to win a prize, stake or other consideration or thing of value, dependent upon the result of any game, contest or any other event the outcome of which is uncertain or a matter of chance, whether such game, contest or event occurs or is to occur inside or outside the limits of the Commonwealth.” Contrary to many people’s expectations, there is no exception for charities.

Additionally, the characterization of an activity as gambling is not dependent on money changing hands. Because the definition turns on the exchange of a “thing of value,” proving the winner with a gift bag – even a gift bag containing donated items – would not immunize the participant.

18.2-334 contains a narrow exception: It reads: “Nothing in this article shall be construed to make it illegal to participate in a game of chance conducted in a private residence, provided such a private residence is not commonly used for such games of chance and there is no operator as defined in Subsection 4 of 18.2-325.” “Operator” is defined in the referenced section as “any person, firm or association of persons, who conducts, finances, manages, supervises, directs or owns all or part of an illegal gambling enterprise, activity or operation.”

Gambling to raise charitable funds may be permissible at a private residence, provided it is not repeated habitually or regularly and provided it’s not conducted by an “operator.” Otherwise charities should take care not to put themselves or their members and donors in a false position.