Raffles

LOTTERIES

by William Mouat Bolt, Executive Officer, Gaming Branch, Department of Internal Affairs, Wellington.

Raffles

Until 1949 the issue of licences to organisations to conduct raffles was rigidly controlled and comparatively few licences were granted. The scope of prizes was confined to works of art, mineral specimens, and mechanical models. Further, the value of the prizes was, as a matter of policy, restricted, the average value permitted being approximately £25. Only in a few special cases were prize lists of £50 or 100 permitted.

This somewhat repressive policy had the following effects:

  1. It caused normally law-abiding organisations, who desired to raise funds for charitable, philanthropic or sporting purposes, to embark on illegal raffles.

  2. It brought the lottery legislation into disrepute and contempt. The majority of New Zealanders undoubtedly regard raffles as innocuous.

The upshot was that eventually New Zealand became inundated with all kinds of illegal raffles operating with various devices and subterfuges all designed to one end – to defeat the legislation. The most common method of evasion adopted by organisers was to issue tickets merely bearing the word “donation” together with a consecutive number. In effect, the public were invited to donate 6d. or 1s. to the particular purpose or objective, and in return were afforded the opportunity, by means of the consecutive number, to win a prize. Despite the opportunities for fraudulent practices on the part of the organisers, the general public did not hesitate to support these illegal raffles. Attempts were made by the Police to pursue a vigorous policy of law enforcement of the legislation prohibiting illegal raffles, but this was not particularly successful, mainly because participants were unwilling to come forward and provide the necessary evidence.

Following on the report of a Royal Commission on Gaming and Racing in 1947–48, the Government decided on a change of policy in respect of gambling generally. It came to the conclusion that repressive measures were ineffective and, consequently, it would be better to bring gambling out into the open where its volume and effect could be gauged and where steps could be taken for its guidance and control. Accordingly, the Gaming Amendment Act of 1949 was passed. Sections 16 and 17 of that Act were designed to widen the scope of prizes and to facilitate the issue of licences. It was considered that these relaxations would encourage organisations to operate raffles legally; thus the public would be afforded protection against fraudulent practices. That this liberal policy is effective is clearly shown by the fact that 1,625 raffle licences were issued in 1954, as against 507 in 1948. Further, it can be stated with confidence that illegal raffles have almost been eliminated in New Zealand. There is little doubt that organisations prefer to conduct raffles legally rather than illegally. The more liberal policy has also greatly eased the burden of law enforcement in respect of illegal raffles. With their gradual elimination, very little in the way of law enforcement is required and nowadays, when prosecutions are pursued, the offenders do not, as formerly, arouse public sympathy.

The present position is that small raffles in which no individual prize exceeds £10 in value and the total aggregate of prizes does not exceed £25 are licensed by the Police. In all other cases the licences are issued by the Department of Internal Affairs.

Prize limits in raffles are restricted, depending on whether the organisation concerned is local, provincial, or national. Selling areas are also restricted on the same basis. Up to a three months' selling period is permitted. Lottery duty of 10 per cent on gross sales is levied in all cases where the total prize list exceeds £500. The prohibited items in respect of prizes are motorcars (other than motor scooters or go-karts), houses or residential accommodation, firearms and ammunition, and intoxicating liquor. The raffling of land is permitted in certain circumstances.

Art Unions

The term “art union” is today used in a wider sense than the sense in which it is employed in the gaming legislation. The art union proper as defined in the Gaming Act exists only to a limited extent in New Zealand, and is confined to a few academies or societies of fine arts.

What has generally become known as the art union is the national lottery. The term “art union” is due to the fact that originally the prizes in the lottery were alluvial gold. These major art unions are now known as the Golden Kiwi lottery.

Golden Kiwi Lottery

The present Golden Kiwi lotteries (formerly art unions) came into existence more through a combination of circumstances than through any particular desire on the part of the Government at the time to raise funds for distribution to charitable or philanthropic purposes or objects.

The situation developed in 1929 from the visit to New Zealand of the late Sir Charles Kingsford Smith. His tour of New Zealand in the “Southern Cross” aroused widespread interest and enthusiasm. Those keenly interested in aviation seized on the opportunity and sought permission from the Government for £4,000 alluvial gold art unions, the profits to be devoted to the purchase of land for aerodromes. The Auckland Aero Club organised the first major art union and made a profit of £13,000. Other aero clubs followed and all made substantial profits.

Publicity given to the success of these efforts immediately aroused the interest of charitable and other organisations, and a number of these were also authorised to conduct art unions. All these efforts, which were granted three months of operation, were successful, the outcome being that the Government received a spate of applications from all kinds of organisations. Obviously, with a three months' selling period, all these applications could not be catered for and it was at this stage (in 1932) that the Government was forced to take an interest in the disposal of the profits of major art unions.

The Government then entered into an agreement with a private firm (Messrs Hammond and McArthur Ltd.), which was granted licences to conduct art unions for the purpose of raising funds for specific objects, the profits to be distributed by the Minister of Internal Affairs. This position continued until 1961. During the period 1932–61 the prize list was increased on several occasions, eventually reaching £10,000. Tickets were sold at 2s. 6d. each and ticket sales were unlimited. Until 1956 drawings took place at monthly intervals, thereafter at three-weekly intervals. The average annual profit for the period 1956–60 was approximately £220,000. In 1961 the Government decided to replace the art unions with the present Golden Kiwi lottery. This lottery has a total prize list of £30,000 (first prize £12,000) and is limited to 250,000 5s. tickets. The demand for tickets has exceeded all expectations. Each lottery is drawn when all tickets are sold. During the first 12 months of operation 76 lotteries have been drawn, and the profit was £1,360,000.

Publicity given to the profits immediately resulted in a spate of applications to the Minister of Internal Affairs for assistance from all kinds of organisations. As this placed too great a burden on the Minister, the Government decided to introduce legislation to provide for the distribution of profits and other matters relating to the operation of these lotteries. The Gaming Amendment Act of 1962 makes provision for a board of control to determine the overall policy in respect of the distribution of profits and also for the establishment of distribution committees. The Board of Control consists of the Minister of Internal Affairs as chairman, the Prime Minister, the Leader of the Official Opposition, and three persons appointed by the Governor-General.

Mammoth Golden Kiwi

In June 1964 the Minister of Internal Affairs announced the inauguration of a “Mammoth Golden Kiwi” lottery to be run on the lines of the Golden Kiwi. There would be 250,000 tickets at £1 each, with 2,886 prizes (£135,000 in all), the first prize being £60,000. Four of these “Mammoth” lotteries are planned for each year. Profits are to be devoted to national purposes and those from the first lottery will be used to develop projects dealing with the welfare of elderly people. Although certain church organisations made strong protests at this extension of gambling, the official attitude was that the “Mammoth” lottery would be a counter to those run overseas, with the added advantage that all profits would be retained within New Zealand.

The demand for these tickets has been so great that, on 27 May 1965, the Minister of Internal Affairs announced that Golden Kiwi Mammoth Lottery tickets would be continuously available to the public for a trial period. This step was taken because the Government felt that the relative infrequency of such lotteries tended to create an artificial demand for tickets.

by William Mouat Bolt, Executive Officer, Gaming Branch, Department of Internal Affairs, Wellington.

LOTTERIES 23-Apr-09 William Mouat Bolt, Executive Officer, Gaming Branch, Department of Internal Affairs, Wellington.