No, we do not believe the drawing you described would constitute an illegal lottery under Illinois or federal law.

Under federal law, banks are generally prohibited from dealing in lottery-related activities where participants advance money or credit in exchange for the possibility of winning more than the amounts advanced. The Illinois Criminal Code also prohibits lotteries, which the Illinois Supreme Court has held consists of three elements: (1) chance, (2) consideration, and (3) a prize. Additionally, the Illinois Criminal Code exempts drawings for money or prizes from the general lottery prohibition where no payment or purchase is required for entry.

In the drawing you described, your customers are required only to enroll in e-statements for a chance to win the prize and would not be advancing money or credit to participate. While the participants would have to be bank customers (presumably by depositing money with your bank), the IBA has confirmed in conversations with the FDIC’s Chicago Regional Office and the Illinois Department of Financial and Professional Regulation that limiting a contest to customers, with no additional fees required for entry, does not violate federal law.

For resources related to our guidance, please see:

• Federal Deposit Insurance Act, 12 USC 1829a (“A State nonmember insured bank may not—

(1) deal in lottery tickets;

(2) deal in bets used as a means or substitute for participation in a lottery;

(3) announce, advertise, or publicize the existence of any lottery; or

(4) announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.”)

• Federal Deposit Insurance Act, 12 USC 1829a(c)(2) (“The term ‘lottery’ includes any arrangement, other than a savings promotion raffle, 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.”)

• Federal Reserve Act, 12 USC 339 (Lottery prohibition for state member banks.)

• National Bank Act, 12 USC 25a (Lottery prohibition for national banks.)
   
• Illinois Criminal Code, 720 ILCS 5/28-1(a) (“A person commits gambling when he or she: . . . (7) knowingly sets up or promotes any lottery or sells, offers to sell or transfers any ticket or share for any lottery.”)

• Illinois Criminal Code, 720 ILCS 5/28-2(b) (“A ‘lottery’ is any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win such prizes, whether such scheme or procedure is called a lottery, raffle, gift, sale or some other name, excluding savings promotion raffles. . . .”)

• People v. Eagle Food Centers, Inc., 31 Ill. 2d 535, 538 (1964) (“[T]here are three elements essential to the existence of a lottery, viz., chance, consideration and a prize; and . . . there is no lottery if any one of these elements or ingredients is missing.”)

• Illinois Criminal Code, 720 ILCS 5/28-1(b)(13) (“Participants in any of the following activities shall not be convicted of gambling: . . . Games of skill or chance where money or other things of value can be won but no payment or purchase is required to participate.”)