Section 316-35-402 - PRIZES402.01 At least 65 percent of the gross proceeds of any lottery or raffle shall be used for the awarding of prizes, except that if a licensed organization conducts a lottery or raffle under a special permit as provided in Regulation 35-405, less than 65 percent of the gross proceeds may be used for the awarding of prizes.402.02 The aggregate cost of all prizes to be awarded in a single lottery or raffle shall not exceed the gross proceeds realized from the sale of the tickets except in those circumstances where the prizes to be awarded are donated and received without cost to the licensed organization.402.03 An organization conducting a lottery or raffle in which real or personal property prizes are to be awarded shall have paid for in full or otherwise become the owner without lien or interest of others of all the real or personal property to be awarded as prizes prior to the date on which winners will be determined.402.04 Prizes awarded in a raffle must be at least 80 percent merchandise, to be valued at their fair market value. Fair market value means the price one would normally pay for an item in an arm's length transaction with a retail business. A merchandise prize may be any item which can be legally owned or possessed, but which is not directly or indirectly redeemable for cash by the licensed organization or any agent thereof. For purposes of this regulation, real estate and savings bonds are not considered to be merchandise prizes. Merchant gift certificates are to be considered as a merchandise prize and shall be assessed at their face value. 402.04A For purposes of this regulation, to determine if the prizes meet the 80 percent merchandise requirement in order for the activity to qualify as a raffle, the total fair market value of the merchandise prizes compared to the total value of all prizes to be awarded shall be the determining factor, and not simply the number of merchandise prizes.402.05 Prizes awarded in a lottery may include cash, merchandise, or anything of value which may be legally owned and possessed. If prizes other than cash are offered in a lottery, the fair market value of all merchandise prizes must be less than 80 percent of the total value of all prizes awarded. For purposes of this regulation, real estate and savings bonds are considered to be cash prizes and shall be assessed at their purchase price value.402.06 Items donated to an organization to be awarded as prizes in a lottery or raffle may be any items which can be legally owned and possessed, and must be valued at their fair market value. The value of the donated prizes must be included in the determination of whether at least 65 percent of the actual gross proceeds are awarded as prizes.402.07 Pickle cards shall not be awarded as a prize in a lottery or raffle.316 Neb. Admin. Code, 35, § 402