Lotteries. It is unlawful in North Carolina for anyone to operate or promote a lottery except as allowed in connection with the official North Carolina Education Lottery established in 2005 and operated under the jurisdiction of the N.C. State Lottery Commission.[156] Except for advertising authorized by the commission for the official state lottery (and meeting extensive guidelines for these advertisements),[157] the general statutes otherwise prohibit advertising a lottery or publishing “an account of a lottery” regardless of whether the lottery is held in North Carolina or not.[158] Violating the advertising and publishing ban for lotteries is a Class 2 misdemeanor.[159] However, the statutes include an exemption for published content “in connection with a lawful activity of [a] news medium.”[160] The statutes define a “news medium” as “[a]ny entity regularly engaged in the business of publication or distribution of news via print, broadcast, or other electronic means accessible to the general public.”[161]
Bingo games. Only licensed tax-exempt organizations in North Carolina may lawfully conduct and advertise bingo games and offer prizes.[162] As examples of exempt organizations, the statutes list “bona fide nonprofit charitable, civic, religious, fraternal, patriotic [and] veterans’ organization[s],” “nonprofit volunteer fire department[s],” and “nonprofit volunteer rescue squad[s].”[163] These groups are limited to offering prizes – cash or merchandise – worth no more than $500 per game and $1,500 per bingo session.[164] However, a group that offers only one bingo session per week can offer prizes totaling $2,500 per weekly session.[165] The state allows “beach bingo,” which is defined as bingo games with prizes of cash or merchandise worth $10 or less per game.[166] However, beach bingo games may not be advertised or promoted in connection with other lawful bingo games under the statutes and also may not be used as a promotion to obtain anything of value in excess of the $10 limit.[167]
Raffles. Nonprofit organizations recognized by the N.C. Department of Revenue as tax-exempt may lawfully conduct and advertise a “raffle.” [168] The statutes define a “raffle” as any “game in which the prize is won by random drawing of the name or number of one or more persons purchasing chances.”[169] Under the statutes, these organizations may hold up to two raffles offering up to $125,000 in prizes of cash or merchandise per calendar year.[170] However, the statutes allow these organizations to offer up to $500,000 worth of real estate per year as raffle prizes.[171]
Prize give-aways. When a commercial business advertises the chance for consumers to win a prize in a contest or promotion in connection with selling or leasing goods or services, the advertisement must clearly identify the sponsoring business along with “all material conditions” that participants must meet to be eligible.[172] In addition, “immediately adjacent to the description of the item or prize” being given away, the advertisement must “clearly and prominently” disclose the actual retail value of the item or prize, the actual total number of each of the items or prizes that will be given away and the “odds of receiving each item or prize.”[173] The disclosure requirements do not apply to broadcast radio, broadcast television or cable television advertisements so long as the required disclosure information is made available for free to anyone who requests it.[174] Media outlets are not liable for publishing or disseminating advertisements for unlawful prize giveaways sponsored by commercial businesses unless the publisher, owner, agent or an employee of the outlet had actual knowledge that the giveaway was illegal.[175]
[156] N.C. Gen. Stat. § 14-290. The state-operated lottery was established by the North Carolina State Lottery Act of 2005, N.C. Gen. Stat. §§ 18C-101 et seq.
[157] The commission has statutory authority to authorize advertising for the state lottery, but the statutes require state lottery advertising to “include resources for responsible gaming information.” State statutes also prohibit any state lottery advertising that “intentionally target[s] specific groups or economic classes,” that is “misleading, deceptive, or present[s] any lottery game as a means of relieving any person’s financial or personal difficulties;” or that has “the primary purpose of inducing persons to participate in the Lottery.” N.C. Gen. Stat. § 18C-114(a)(2)a-d. In addition, by statute, advertising for the state lottery must be “tastefully designed and presented in a manner to minimize the appeal of the lottery games to minors” and may not include “cartoon characters” or “false, misleading, or deceptive information.” N.C. Gen. Stat. § 18C-130(e). State lottery advertising must include the “actual or estimated overall odds of winning the game.” Id.
[158] N.C. Gen. Stat. § 14-289. The prohibited promotional details of a lottery include “stating how, when or where [the lottery] is to be or has been drawn, or what are the prizes . . . , or the price of a ticket or any share or interest therein, or where or how it may be obtained.” Id.
[159] Id.
[160] Id.
[161] N.C. Gen. Stat. § 8-53.11(a)(3).
[162] N.C. Gen. Stat. § 14-309.5(a)-(b). Under the statutes, a “bingo game” is defined as “a specific game of chance played with individual cards having numbered squares ranging from one to 75, in which prizes are awarded on the basis of designated numbers on such cards conforming to a predetermined pattern of numbers.” N.C. Gen. Stat. § 14-309.6(2). A “bingo game” under the statutes does not include “instant bingo,” meaning “a game of chance played by the selection of one or more prepackaged cards, with winners determined by the appearance of a preselected designation on the card.” Id.
[163] N.C. Gen. Stat. § 14-309.6(1).
[164] N.C. Gen. Stat. § 14.309.9(a).
[165] Id.
[166] N.C. Gen. Stat. §§ 14.309.6(6), 14.309.14(1).
[167] N.C. Gen. Stat. § 14-309.14(2).
[168] N.C. Gen. Stat. § 14-309.15(a).
[169] Id. at (b).
[170] Id. at (c)-(d).
[171] Id. at (g).
[172] N.C. Gen. Stat. § 75-33(a). None of these requirements applies to prize giveaways in which entrants only need to “complete and mail, or deposit at a local retail establishment, an entry blank obtainable locally or by mail, or call in their entry by telephone,” and are not at any time “asked to listen to a sales presentation.” Id. at (b).
[173] Id. at (a)(1)-(3).
[174] Id. at (c).
[175] Id. at (d).
