Legislative Analysis
Phone: (517) 373-8080
ALLOW ONLINE CHARITABLE RAFFLE GAMES AND http://www.house.mi.gov/hfa
TRANSFER ADMINISTRATION OF RAFFLE GAMES
TO THE MICHIGAN GAMING CONTROL BOARD Analysis available at
http://www.legislature.mi.gov
House Bill 5862 (H-1) as reported from committee
Sponsor: Rep. Eric Leutheuser
1st Committee: Regulatory Reform
2nd Committee: Ways and Means
House Bill 6456 as reported from commitee
Sponsor: Rep. Triston Cole
Committee: Ways and Means
Complete to 12-5-20
SUMMARY:
House Bills 5862 and 6456 would amend the Traxler-McCauley-Law-Bowman Bingo Act
to allow charities to conduct a raffle through the internet and to move administrative
oversight of charitable raffle games (not just those held online) from the Bureau of State
Lottery to the Michigan Gaming Control Board (MGCB).
Charitable gaming is regulated by the Bingo Act and through administrative rules. Under
the act, a qualified organization may apply for an unlimited number of small (up to $500
in prizes) or large (more than $500 in prizes) raffle licenses. For small raffles, only one
license may be issued for a location each day. If a small raffle license is issued for more
than one date, all drawing locations must be the same.
Qualified organization means a bona fide religious, educational, service, senior
citizens, fraternal, or veterans’ organization that operates without profit to its
members and either has been in existence continuously as an organization for five
years or is a 501(c) nonprofit under federal tax laws. For purposes of conducting a
small or large raffle, the term also includes a component of the military or the
Michigan National Guard whose members are in active service or active state
service. The term does not include a candidate committee, political committee,
political party committee, ballot question committee, independent committee, or
any other committee organized under the Michigan Campaign Finance Act.
Raffle means an event for which raffle tickets are sold and at which a winner or
winners are determined, either by randomly selecting stubs from all the tickets sold
or by an alternative method approved in writing by the Bureau of State Lottery, and
a preannounced prize is awarded.
Location means a building, enclosure, part of a building or enclosure, or a portion
of real property used to conduct an event.
House Fiscal Agency Page 1 of 3
 House Bill 5862 would allow a qualified organization to conduct a small or large raffle via
the internet. The location where an internet raffle is conducted would be the internet raffle
platform, which would mean an integrated system of hardware, software, applications
(including mobile applications), and servers through which a qualified organization can
conduct a small or large raffle via the internet. The MGCB would have to promulgate rules
to implement the bill.
MCL 432.105d
House Bill 6456 would transfer enforcement and administration of the act’s provisions that
pertain to raffle games from the Bureau of State Lottery to the MGCB. For example, the
requirements for an applicant for a raffle license would be the same under the bill as they
are now, but the application would be prescribed by the executive director of the MGCB
(rather than the lottery commissioner) and submitted to the MGCB (rather than the Bureau
of State Lottery). The license fees for large and small raffles would be the same, but they
would be paid to the MGCB for licenses issued by the executive director. And so on. This
transfer of powers and duties would apply only to raffle games and would include such
things as rule-making authority, record-keeping responsibilities, the employment of
necessary personnel, auditing and record inspection functions, legislative reports, the
inspection of raffle locations, the power to impose license sanctions for violation of the act
or rules, the authority to issue licenses under extreme hardship conditions, the ability to
petition the circuit court for subpoenas, and (as in the definition of “raffle,” above) the
authority to approve alternative methods for determining raffle winners. None of these
powers and duties would change in substance compared to current law, but under the bill,
with regard to raffles, they would belong to the MGCB.
The bill is tie-barred to HB 5862, which means that it could not take effect unless HB 5862
were also enacted.
MCL 432.103 et seq.
FISCAL IMPACT:
The bills would increase costs for the MGCB by an unknown, but likely significant amount,
due to the requirement that the MGCB operate and administer an internet raffle platform,
which would necessitate purchasing or contracting for software, hardware, servers, and
application development. It is unlikely that revenues generated from licensing an online
internet raffle game would support financing for the internet raffle platform. Large raffle
licensees currently pay $50 per drawing date, and small raffle licensees pay $15 for the
first three drawing dates and $5 for each subsequent drawing date. Additionally, it is
unlikely that other charitable gaming net revenue could provide the financial support
necessary to operate and administer an online raffle. Net revenues from charitable gaming
are deposited in the general fund. For FY 2019-20, charitable gaming operated at a net loss
of approximately $648,000 due to reduced play, with no general fund deposit. In FY 2018-
19, net revenue for deposit in the general fund totaled $1.8 million. It is also possible that
House Fiscal Agency HBs 5862 (H-1) and 6456 as reported Page 2 of 3
 offering raffle online could lower state revenues from other similarly situated wagering,
but the overall impact would likely be small.
Raffle games are currently administered and operated by the Bureau of State Lottery.
POSITIONS:
Representatives of the following entities testified in support of HB 5862 (6-23-20):
• Hillsdale Domestic Harmony
• Ducks Unlimited (and indicated support for both bills 12-2-20)
• Michigan United Conservation Clubs (and indicated support for both bills 12-2-20)
The Congressional Sportsmen’s Foundation indicated support for the bills. (12-2-20)
The following entities indicated support for HB 5862 (6-23-20):
• Sturgeon for Tomorrow
• Michigan Bear Hunters Association
• Tomahawk Archers
• Cadillac Sportsmen’s Club
• Great Lakes Council of Fly Fishers
• Saginaw Field and Stream Club
• Michigan Gun Owners
• Quality Deer Management Deer Association
• Michigan Trappers and Predator Callers Association
• Straights Area Sportsmen’s Club
• Michigan Steelheaders Association
• Michigan Hunting Dog Federation
The Michigan Charitable Gaming Association indicated support for HB 5862 alone,
opposition to HB 6456 alone, and a neutral position on the bills taken together. (12-2-20)
The following entities indicated opposition to the bills (12-2-20):
• Bureau of State Lottery
• Michigan Gaming Control Board
Legislative Analysts: Rick Yuille
Susan Stutzky
Fiscal Analyst: Ben Gielczyk
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
House Fiscal Agency HBs 5862 (H-1) and 6456 as reported Page 3 of 3


Statutes affected:
House Introduced Bill: 432.103, 432.105