Lotteries Law & Legal Definition


According to the Federal Lottery Law, it is illegal to operate a lottery through the mail or over the telephone. A lottery exists when you must pay for a chance to win a prize. The prize could range from money to jewelry or a new car. The chance means an opportunity to win, such as a drawing or a matching lucky number. Consideration means some sort of payment by you. If all three elements of payment, chance, and prize are present, it's a lottery. Federal statutes prohibit, among other things, the mailing or transportation in interstate or foreign commerce of promotions for lotteries or the sending of lottery tickets themselves.

States enact their own laws regulating lotteries, which are usually delegated to a special lottery board or commission to administer. Such lottery divisions will select and license retailers, train employees of retailers to use lottery terminals, sell tickets, and redeem winning tickets, assist retailers in promoting lottery games, pay high-tier prizes to players, and ensure that retailers and players comply with the lottery law and rules. Each state has its own laws govening exemptions, such as lotteries by charitable, non-profit and church organizations.

The Federal Trade Commission's (FTC) Telemarketing Sales Rule requires telemarketers to make certain disclosures and prohibits misrepresentations. It gives you the power to stop unwanted telemarketing calls and gives state law enforcement officers the authority to prosecute fraudulent telemarketers who operate across state lines.

The rule covers most types of telemarketing calls to consumers, including calls to pitch goods, services, "sweepstakes," prize promotions and investment opportunities. It also applies to calls consumers make in response to postcards or other materials received in the mail.

The following is an example of a Federal Statute defining Lottery:

According to 12 USCS § 25a , “lottery" includes any arrangement whereby three or more persons (the "participants") advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the "winners") will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes--

(A) a random selection;

(B) a game, race, or contest; or

(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.