Israel Eases Rules for Small Business and Charity Raffles
Translated & summarized from Calcalist by baba
Israel's Ministry of Finance is easing regulations for small business and charity raffles, effective January 2027. Small businesses can conduct limited raffles without a supervisor, and eligible charities can fundraise via raffles without individual permits. The new rules simplify processes but include restrictions on prize values and types, with specific exemptions for educational charities and further limitations for small businesses.
The story in 6 lines · by baba
- Small businesses and charities in Israel will see relaxed rules for conducting raffles starting January 2027.
- Eligible charities can now fundraise through raffles without needing individual permits from the Ministry of Finance.
- Small businesses with annual turnover under NIS 10 million can hold two raffles yearly without a supervisor.
- New regulations limit individual prizes to NIS 200,000 and total prizes to NIS 2 million in the general commercial track.
- Cash, alcohol, and tobacco are prohibited as prizes under the updated permit.
- Supervisors for raffles must now be licensed lawyers not employed by the organizer.
Starting in January 2027, small businesses in Israel will be able to conduct limited raffles without requiring a supervisor, following a new permit issued by the Ministry of Finance. Additionally, eligible charitable organizations will be able to raise funds through raffles without needing to apply for individual permits. The new regulations, signed by Ministry of Finance Director General Israel Malachi, aim to simplify processes while maintaining certain restrictions on prize values and types.
Under the previous regulations from 2010, even a simple raffle for an iPhone among Facebook followers was prohibited and could lead to severe penalties. Businesses and charities had to meet stringent requirements, including appointing a supervisor who was a lawyer or accountant, publishing regulations, and reporting to the Ministry of Finance. Charities were particularly restricted, needing special approval for each fundraising raffle.
The updated permit expands the general track to include raffles for fundraising. Charities that meet specific criteria, such as having proper management approval and deriving at least half their income from non-governmental sources, can sell raffle tickets for their causes without individual permits. However, they must still appoint a supervisor and report on the raffle. There are also limitations on the salary of the highest earner within the organization, capped at the salary of a government ministry director-general. Educational institutions are exempt from this track.
For small businesses not part of a chain, with an annual turnover not exceeding NIS 10 million and total prizes under NIS 10,000, the new rules allow up to two raffles per fiscal year without a supervisor or the usual reporting. Participation can be conditional on purchasing a product or service, provided the price is not inflated for the raffle. However, minors are prohibited from participating, and advertising must not target them.
Restrictions for the general commercial track include a maximum prize value of NIS 200,000 per prize and NIS 2 million for all prizes in a campaign. Cash, alcohol, and tobacco are banned as prizes. The new permit also tightens requirements for supervisors, demanding a licensed lawyer not employed by the raffle organizer. The waiting period between raffles in the general track is reduced to 90 days from 120 days previously.