We do not know of any prohibition against a bank offering a certificate of deposit as the prize in a drawing open to the public. The Illinois Prizes and Gifts Act governs the promotion of prizes that are used to induce people to conduct business or contact a business in Illinois. It provides that the winner of the promotion must be given the prize without obligation. The fact that the prize in question is a certificate of deposit held by the bank does not mean that the winner is obligated to the bank. Nothing additional is being required of the winner, and he or she could possibly withdraw the funds early from the certificate of deposit. Note, some counties and municipalities have ordinances regarding raffles or “games of chance” that require consideration.

Also keep in mind that federal law prohibits any financial institution from participating in a lottery. See 12 USC 25a (OCC banks); 12 USC 339 (FRB banks); 12 USC 1829a (FDIC banks); 12 USC 1463(e) (savings associations). A lottery is defined under the law as an arrangement whereby three or more persons advance money or credit to another in exchange for the possibility or expectation that one or more of the participants will receive by reason of their advances more than the amounts they advanced. As long as the drawing is open to the public and participants are not required to advance any money or credit, then the drawing would not be deemed a lottery. It is important to keep the lottery requirements in mind when formulating promotional drawing.