Is it legal to give out a cash prize without some sort of license to do it?

What are the laws governing the giving away of a cash prize for a contest? Or rather, what are the laws governing having a contest at all?

Is it legal to give out a cash prize without some sort of license to do it?
1.) Taxes must be paid.





2.) Gambling (any contest that requires an initial payment to be considered to win the prize) is strictly controlled by the state.





3.) Large sums may not be given to children. Instead, the prize money is awarded to the parents or put in trust until the child becomes an adult.





4) Contests and give-aways must have the rules published somewhere accessible to everyone.





5.) Prizes described in a contest must be given. No substitutions of lesser value may be awarded in place of the prize described.





6.) Contests open to the public may not be restricted based upon race, religion, political affiliation, income level or sexual orientation. Minimum age requirements may be imposed.
Reply:I'm pretty sure it's illegal in California, but if it is a fundraiser for a legitimate charity or organization, then most municipalities will tend to look the other way. Things like 50/50 raffles.





If you set up a casino, they usually have a problem with that.
Reply:TAXES. A cash prize is a capital gain for the individual winning the cash. Either you pay the tax on the cash prize before giving it away or the winner has to claim the winnings. Anybody can hold a contest if they want to. Cash prize or a car, the taxes must be paid on the value of anything that is gained through the capitalism the country provides.