Nonprofits hope to benefit from Kansas raffle amendment

A state that owns Las Vegas-style casinos used to make it illegal for a charity to raffle off a fruit basket.

That ended Tuesday when voters approved a constitutional amendment making raffles for nonprofits legal in Kansas. South Carolina voters passed a similar measure on Tuesday.

Churches, schools and fraternal, educational and veterans organizations often looked to raise a few dollars with a raffle. But they had to cancel those events abruptly when they learned raffles were illegal, or hold them anyway and hope the state didn’t notice.

“We’re excited that it passed,” said Kevin Fish, executive director of the Arc of Sedgwick County, which serves people with physical and intellectual disabilities. “All nonprofits are always looking at additional ways to raise revenue.”

Charity walks and golf events can get old, he said.

A few years ago, the organization held a drawing for a car, Fish said. Problems arose when the winner tried to get tags for it.

“We talked to an attorney and had to write a letter,” Fish said. “It took a little doing, but he ended up getting it tagged.”

Patrick Hanrahan, president of United Way of the Plains, said the amendment could eliminate the gray areas nonprofits find themselves in when trying to come up with a fundraiser. United Way has had to call lawyers and spend a lot of time making sure some of its events were proper, he said.

“We’ve done a few things that were pretty innocent, but when you looked at the law, they were not in sync,” he said. “This eliminates that problem.”

Questions about regulations and costs remain. Lawmakers will write rules governing raffles in the next session, which begins in January.

According to the Kansas Department of Revenue, which will regulate raffles, lawmakers will be considering items such as whether the nonprofits will now need a license, how much those licenses would cost, how often a group can conduct raffles, whether raffle sales will be taxed, whether organizations need a raffle license if the prize value is minimal, and whether organizations will be able to make their own raffle tickets or must purchase them from a licensed distributor.

The new regulations likely would take effect in July 2015, according to the department.

The amendment defined a raffle as a game of chance in which each participant buys a ticket or tickets from a nonprofit organization, with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing.

The amendment prohibited the use of electronic gaming machines or vending machines to sell tickets and banned organizations from contracting with a professional raffle or other lottery vendor to manage, operate or conduct raffles.

Voters passed it by an overwhelming 75 percent.

“The public has spoken, and I think it’s sensible,” said Tim Witsman, executive director of the Non Profit Chamber of Service in Wichita. “I don’t think we’ll see the fall of Western civilization if people at a church buy a raffle ticket. It’s not gaming in the sense of what gaming is all about.”

“People have fundraisers all the time, and yeah, it’s a big boost,” he said. “Around here, people are pretty good about putting their money out to support things like that.”

Witsman said he’s often had to explain to an organization that it couldn’t hold the raffle it had planned because it would be illegal.

“They can’t figure the logic of it,” he said.

The Kansas constitution once prohibited all forms of lotteries. Voters previously approved three amendments allowing exceptions for bingo, betting on horse and dog racing and a state-owned and operated lottery. The Legislature in 2007 passed a law authorizing the lottery to also own and operate four casinos.

Last year, Gov. Sam Brownback vetoed a bill that would have allowed limited expansion of charity raffles because he determined it violated the state constitution. But he supported the bill’s goal, and he encouraged the Legislature to consider a constitutional amendment to make it happen. The amendment passed the House and Senate almost unanimously this spring. All constitutional amendments also require approval of voters.

Hanrahan said he hopes lawmakers don’t create regulations that are too costly for nonprofits.

Two days before the election, Libertarian gubernatorial candidate Keen Umbehr warned voters to keep an eye on their legislators “to make sure that what seems to be a simple law is implemented in a manner that is fair and not overly burdensome to the charitable groups we are trying to help when we cast our vote for this amendment.”

Some organizations that could benefit from the amendment aren’t saying much about it until the new rules are determined.

Wichita school administrators will discuss the ramifications of the amendment and provide guidance to schools, depending on what legislators do, said Susan Arensman, Wichita schools spokeswoman.

“We’re going to wait and see,” she said.

Reach Fred Mann at 316-268-6310 or fmann@wichitaeagle.com.