Winning a Prize for Attending an Open House

QUESTION: My firm has a listing that has not received much traffic. I plan to host an open house this weekend and want to encourage attendance by placing a bowl for agents and prospective buyers to drop their business cards. I’ll also include a note that states, “Drop your business card here for a chance to win a $50 gift card to Harris Teeter.” I believe this will help generate foot traffic. Is this a good strategy? I think it’s a great prize!

ANSWER: In North Carolina, it is illegal to conduct or advertise most forms of lotteries, with two exceptions: the North Carolina State Lottery and raffles organized by tax-exempt nonprofit organizations. Local associations qualify under the second exception pursuant to N.C.G.S. § 14-309.15, which you can find here.

There is a debate about whether drawing a card, like one at an open house, constitutes a lottery. A lottery is defined as the payment of valuable consideration in exchange for a chance to win a prize. One might argue that submitting a business card could be considered valuable consideration, as the information could be used to build a client database. Additionally, one could argue that simply attending the open house might also represent consideration, as attendees are investing their time.

However, the interpretation of what constitutes “valuable consideration” is somewhat ambiguous, and an advisory opinion from the NC Attorney General’s Office suggests it could be broadly interpreted—not limited to cash.

As a precaution, our advice is to avoid running such a drawing in exchange for a prize. If you’re still unsure, it would be wise to consult with your firm’s attorney for further guidance on this matter.

Release Date: 02/27/2025

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