Can Arizona REALTORS® Hold Games of Chance at Open Houses?

Members of the Central Arizona Association of REALTORS® have recently raised questions about holding raffles, giveaways, or contests at open houses. Specifically, inquiries have surfaced about a “$100 giveaway” incentive offered to agents who bring buyers to a remote open house in Rim Country. This article will clarify whether such games of chance are permissible under Arizona law and REALTOR® policies. We will review relevant Arizona statutes, differences (if any) between public and agent-only events, and guidance from the Arizona Department of Real Estate (AZDRE), the Arizona Association of REALTORS® (AAR), and the National Association of REALTORS® (NAR). We will also suggest legal alternatives to these promotions. The goal is to provide an informative, professional overview grounded in current legal and ethical frameworks.

Arizona Gambling Laws and “Games of Chance”

Under Arizona law, most forms of gambling are illegal unless expressly exempted. Gambling is defined broadly in the criminal code. Arizona Revised Statutes §13-3301(4) defines gambling, in part, as “the act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill.” In other words, if participants must give something of value (money, personal information, effort, etc.) for a chance to win a prize, it may be considered gambling.

A raffle, where entrants get a chance at a prize by luck of the draw, is a classic example of a game of chance. Arizona law imposes strict limits on who can conduct raffles. Under A.R.S. §13-3302, only certain qualifying nonprofit and charitable organizations (and a few other narrow groups like state fair groups or historical societies) may hold raffles, and even then only under specific conditions. For instance, a 501(c) charitable organization that has been in existence at least one year may hold a raffle if no one profits and the proceeds go to charity. All other raffles by individuals or businesses are illegal gambling in Arizona. This means a typical real estate brokerage or agent cannot legally conduct a raffle for a prize (such as a gift card, cash, or iPad) at an open house if participants give any form of consideration (even something as simple as filling out a survey or attending an event) for a chance to win.

Importantly, “consideration” in gambling law isn’t limited to paying money for a ticket. It can include any action or thing of value the participant gives up in exchange for the chance to win. The Arizona REALTORS® legal counsel has noted that even requiring someone to complete a survey or questionnaire to enter a prize drawing constitutes consideration, thereby making the promotion an illegal raffle if the prize winner is selected by chance. Simply put, if an attendee must do anything above and beyond a no-strings-attached free entry to get a shot at a reward, you are likely crossing into gambling territory in Arizona.

Real Estate License Law Restrictions (ARS §32-2153)

Aside from criminal gambling laws, Arizona real estate license law also restricts promotional games of chance in real estate marketing. A.R.S. §32-2153(A)(13) provides that a real estate license can be suspended or revoked if a licensee has “solicited… prospects for the sale, lease or use of real property… through a promotion of a speculative nature involving a game of chance or risk, or through conducting lotteries or contests not specifically authorized” by law. In plain terms, the state law that governs our real estate licenses forbids using gambling-style promotions (games of chance, lotteries, or unauthorized contests) to drum up real estate business.

The Arizona Department of Real Estate (ADRE) has issued guidance confirming this prohibition. In an ADRE FAQ, the question was asked: “Can I conduct a raffle to attract potential buyers and/or their agents to my open house?” The ADRE’s answer was No, a raffle is considered a game of chance or risk and, in that scenario, it is being used to solicit prospects for the sale or lease of real property. In other words, holding a drawing or giveaway at an open house, even if well-intentioned as a marketing gimmick, directly violates the license law if it’s used to lure people for a sales opportunity.

It’s worth noting that ADRE acknowledges one narrow exception: certain developer promotions that are expressly permitted elsewhere in the law. For example, Arizona’s subdivision and timeshare laws allow a licensed developer to hold a drawing or contest to promote a development only if they meet stringent requirements and registrations. Those developer-specific promotions are tightly regulated and do not apply to individual REALTORS® marketing an ordinary listing. Unless you are operating under such a developer program (which would be unusual for a typical resale open house), you should assume games of chance at open houses are off-limits.

Furthermore, ADRE warns that even if a particular promotion somehow skirted the real estate license law, it could still run afoul of criminal law. In the same FAQ, ADRE advises that “if [you are] concerned with running afoul of Arizona’s Criminal Code [Title 13, Chapter 33 on gambling], it is recommended that licensees consult independent legal counsel.” This is a reminder that compliance requires satisfying both sets of laws: our real estate licensing rules and the general gambling statutes.

What Counts as a “Game of Chance” in Real Estate?

It’s important for REALTORS® to understand what types of promotions would be considered a prohibited game of chance. Raffles (random drawings for prizes) are the most obvious example. If you invite open house visitors to drop their business card in a hat for a lottery drawing, that’s a raffle. Even if no money exchanges hands, Arizona may view the act of attending or providing contact info as the “price” of entry, thus constituting consideration. Contests can also be problematic, especially if they involve any element of luck or random selection of winners. The law (ARS §32-2153(A)(13)) explicitly mentions contests not authorized by law, which implies that any contest used to solicit real estate prospects is suspect unless a specific law permits it.

What about contests of skill? Some agents consider promotions like trivia quizzes, scavenger hunts, or “guess the home’s list price” contests. Be cautious here. Arizona’s gambling definition includes games or contests of chance or skill if they involve risking something of value for a potential reward. If participants must “give something of value”, whether money, effort, or information, for the chance to win a prize, it doesn’t matter if the winner is determined by skill or luck; it could still be considered gambling. For example, requiring open house attendees to complete a challenging puzzle or answer real estate questions for a prize might avoid the element of pure chance, but you’ve still made them give time/effort (consideration) for a possible reward. That scenario is risky under the law.

The safest interpretation is that any promotion where only some attendees win a prize and others do not, due to either chance or competition, is viewed as a “speculative” inducement. This triggers both the gambling laws and the real estate license prohibition. The ADRE specifically noted that a raffle or game where you collect people’s contact info and later use it to solicit business is clearly a violation. Even if you swore not to use the info for marketing and only use it to notify the winner, ADRE cautions you are “possibly” still in violation, particularly if the game is held in connection with promoting a specific property. In essence, if the contest is part of your strategy to sell a listing (which an open house raffle inherently is), it’s not allowed.

Public Open House vs. Agent-Only Events: Does It Matter?

Some members have asked if the rules are different when an open house promotion is open to the general public (potential buyers) versus when it’s limited to licensed agents (a broker’s open or agent tour). In practice, it makes little difference, games of chance are problematic in both cases.

From a gambling law standpoint, Arizona does not distinguish between participants who are real estate licensees and those who aren’t. A raffle is a raffle, and if it’s not run by a qualified charity or exempt group, it’s illegal, regardless of who the players are. So an agents-only drawing for a prize at an open house would still violate ARS §13-3302 (no unlicensed raffles), just as a public raffle would.

From the real estate license law side, ADRE has clearly included “agents” in its guidance. The FAQ mentioned above specifically asked about attracting “potential buyers and/or their agents” with a raffle, and ADRE’s answer was still no. The key issue under ARS §32-2153(A)(13) is soliciting prospects for a property through a speculative game. Even if the immediate participants in the game are fellow licensees, the ultimate goal is to drum up a sale of real property (by enticing those agents to bring or send their buyers). The spirit of the rule – preventing lottery-like schemes in real estate – applies equally to an agents’ open house promotion.

Consider also our ethical duties: Offering a prize to agents for showing up or bringing clients can create conflicts of interest and unfairness. An agent’s buyer-client might not know their agent has an added incentive (beyond the normal cooperative commission) to steer them to a particular open house. Receiving any compensation or inducement from another agent or seller must be disclosed to clients to comply with the REALTOR® Code of Ethics (Article 7 and 8 deal with accepting compensation from more than one party, and Article 3 deals with informed consent on broker bonuses). A secret $100 perk could put an agent at odds with those ethical requirements. While this is more of an ethical issue than a legal one, it reinforces why the practice is frowned upon.

In summary, you cannot evade the prohibition on games of chance by limiting a contest to licensees. Both legally and ethically, an agent-only raffle at an open house is essentially just as impermissible as a public one.

Guidance from ADRE, AAR, and NAR

All of our industry institutions align on this issue, incentives or inducements that resemble gambling are not an acceptable business practice for REALTORS® in Arizona. Here’s a brief overview of guidance from key organizations:

• Arizona Department of Real Estate (ADRE): As discussed, ADRE explicitly warns against using raffles, lotteries or games of chance to market properties. They emphasize that a licensee who does so risks license suspension or revocation. ADRE also advises awareness of state gambling laws and suggests consulting legal counsel if you are unsure. In short, the regulator’s stance is: Don’t do it. The only exception ADRE notes is if the activity is one “specifically authorized” by law, which for most agents would not be the case.
• Arizona Association of REALTORS® (AAR): AAR’s legal hotline and publications have repeatedly addressed this topic. AAR echoes that participating in or promoting a raffle for a business purpose is illegal gambling unless you’re a qualified charity. One AAR “Legal Snippets” article gave an example of an agent wanting to do a prize drawing (Visa gift card) for people who respond to a survey about selling their home. AAR’s advice was that this constitutes an unlawful raffle because the survey response is consideration, and neither the agent nor brokerage is a permitted raffle sponsor.

Additionally, AAR’s Arizona REALTOR® magazine has cautioned about these “games of chance” in prospecting. One article notes that “giving business to an agent in exchange for entry into a drawing is likely considered ‘giving something of value for the opportunity to obtain a benefit.’” This is essentially a description of gambling. The article advises agents to refrain from offering new clients entry into a chance drawing in exchange for business. Instead, AAR suggests a better practice: offer a benefit that everyone can receive, with no element of chance. “If you’d like to offer a free Starbucks card at an open house, you should give a Starbucks card to everyone [who attends],” advises one broker, adding that giveaways must be “without condition and universal across the board.” In other words, a true gift (available to all) is acceptable, but a prize drawing is not.

The AAR article also reminds us about the REALTOR® Code of Ethics on advertising freebies. Article 12, Standard of Practice 12-1, allows use of the word “free” in advertising only if all the terms and conditions of the offer are clearly disclosed at the same time. This means if you ever do advertise a promotion (even a lawful one), you must be transparent about any limitations. For example, if you say “Free home warranty to buyers!” in an ad, you need to disclose all the details (who qualifies, what the timeframe is, etc.) to avoid misleading the public. This ethical rule complements the legal restrictions: it ensures honesty and clarity in any incentive we offer.

• National Association of REALTORS® (NAR): NAR’s core position is that REALTORS® must comply with the law and uphold high ethical standards. While NAR does not have a specific rule about “no raffles,” the Code of Ethics (which all REALTORS® must follow) reinforces the principles at play. We’ve mentioned Article 12 on truthful advertising. Also relevant is Article 11 (provide competent service and conform to the law in your real estate activities) and Article 1 (promote the interests of clients while treating all parties honestly). Engaging in an unauthorized lottery or contest could violate those articles by breaching the law and potentially not treating all parties fairly.

It’s also worth noting that NAR publications have highlighted creative marketing ideas that comply with the law. For instance, some agents hold contests like “guess the listing price” or social media challenges without requiring any purchase or client commitment, and give small prizes to winners. These are usually structured as sweepstakes (no purchase necessary, open to all, winners chosen fairly) or as skill-based contests that don’t ask participants to risk anything. Even so, any such promotion must be done carefully to not cross the line. NAR’s emphasis is that any incentive or inducement to attract business must be legal, transparent, and in the best interests of the consumer. When in doubt, err on the side of caution or consult counsel.

In summary, the collective guidance from ADRE, AAR, and NAR is to avoid lotteries, raffles, and chance giveaways in your real estate practice. These practices pose legal risks and conflict with the ethical and professional standards we uphold as REALTORS®.

What Can You Do? – Legal and Ethical Alternatives

All this may leave you wondering: “How can I creatively market an open house or incentivize attendance without breaking the law or rules?” The good news is you can still be innovative and offer value to attendees – you just have to do it in a non-random, non-gambling way. Here are some permissible alternatives:

• Universal Giveaways: As mentioned, one safe approach is to give every visitor something of modest value (with no strings attached). This could be a gift card, a small gift item, a free swag bag, or even refreshments. For example, you might advertise, “Open House this Saturday – Free coffee gift card to all attendees!” As long as everyone who comes gets the gift (and you disclose any limits, like “one per family, while supplies last”), there’s no element of chance or lottery. It’s simply a promotional gift, which is legal. You should budget for these expenses and get your broker’s okay, but there is no prohibition on genuine gifts. Do not couple the gift with a requirement to sign a contract or make a purchase – that could invoke other laws (and of course, be sure your gift offer is honest and you honor it fully for all who come).
• Door Prizes without Chance: You might consider a first-come, first-served approach. For instance, “First 10 visitors receive a $20 gas card” or “First 5 families get a free home inspection voucher.” This isn’t a random drawing, it’s a time-based promotion. Those can be acceptable, but make sure it’s clear and fair (people will understand a limited-supply giveaway). Again, everyone who meets the clear criteria gets the item, which removes the chance element. Just be careful not to inadvertently discriminate (e.g., don’t require something that could exclude certain groups, keep it open to all on equal terms like a time/order of arrival basis).
• Skill Contests (with caution): If you want to incorporate a fun contest, ensure it is truly skill-based and that participants are not required to “risk” anything of value. For example, a guessing game where no purchase or client commitment is needed might be okay. Some agents do contests like “Guess the final sale price of this home, closest guess wins a prize.” In theory, that’s skill/knowledge (or at least educated guessing) and you’re not charging anything to enter. However, because only one person wins a prize, this still falls under a “contest” used for solicitation, which the license law could view as a violation if it’s part of promoting the property. The safest route if you attempt any contest is to keep the prize very small and don’t collect participants’ personal data to solicit them later. Make it just for engagement and fun. Even better, run such contests on social media or in a forum unrelated to a specific property listing (for instance, a Facebook trivia quiz about real estate tips, with a gift card drawing among respondents, but be sure to include “no purchase necessary” and offer an alternate way to enter so it’s a true sweepstakes). Always check with your broker and maybe legal counsel before launching a contest, the nuances can be tricky.
• Charitable Promotions: Another idea, instead of giving something to attendees by chance, is to tie your event to a charity in a way that doesn’t involve a drawing. For example, “For each person who visits my open house, I’ll donate $5 to XYZ Charity.” This type of pledge turns increased attendance into a charitable benefit, not a personal prize. There’s no lottery; attendees aren’t receiving a chance to win something. Be sure any such promises are fulfilled and don’t violate RESPA (if involving any affiliate services) or other laws, but generally, making a charitable donation per visitor is legally safe and can generate goodwill.

In essence, focus on rewards that are certain and open to all eligible parties, rather than a lucky draw. Not only does this keep you on the right side of the law, it’s also more transparent. Every prospect or cooperating agent knows exactly what, if anything, they will get for participating – eliminating misunderstandings or ethical gray areas. As an added benefit, it can actually enhance trust: consumers may be skeptical of gimmicky contests, but they’ll appreciate a straightforward gesture (like a free homebuyer guide, a small gift, or a charitable tie-in) that doesn’t require them to “gamble” their odds of winning.

The $100 Giveaway Scenario – Why It’s Problematic

Let’s return to the recent “$100 giveaway” situation that sparked discussion. In this case, an agent advertised a $100 incentive to agents who bring buyers to a remote open house. While the intention was no doubt to draw more traffic to a hard-to-sell listing, this practice raises multiple red flags:

• If the $100 was to be awarded by chance (e.g., a random drawing among all agents who attended with buyers): This squarely fits the definition of a raffle or lottery. The agents are effectively giving something of value (their time, effort, and the act of bringing a potential buyer) in exchange for a chance at a $100 prize. Only one (or a few) would “win” the money, based on luck. This is illegal gambling for all the reasons discussed. Neither the listing agent nor their brokerage is a charitable organization authorized to conduct such a raffle, so it violates ARS §13-3302. It also violates the real estate license law (ARS §32-2153(A)(13)) by using a game of chance to solicit prospects (here, indirectly soliciting a buyer for the property via their agent). Bottom line: a random $100 drawing at a brokers’ open is not allowed.
• If the $100 was to be given as a guaranteed reward to every agent who brought a buyer: In this variation, there’s no chance element (each agent who performs the task gets the money). While this might dodge the gambling law by removing “chance,” it still has issues. First, if multiple agents brought buyers, the listing agent would be paying out multiple $100 gifts – one to each. This essentially becomes a form of unearned fee or inducement. Under Arizona law, any compensation to a licensee for performing real estate activities (such as procuring a prospect) must go through that licensee’s broker and be disclosed. A $100 cash handshake in the foyer is not a compliant way to compensate a fellow licensee. It could be seen as a finder’s fee or bonus commission that wasn’t advertised in the MLS or paid through the brokerage. That, in turn, could violate both license law (ARS §32-2155) and MLS rules. Secondly, even though it’s guaranteed, such a payment presents a conflict of interest. The buyer’s agent is receiving a financial incentive that the buyer (client) might know nothing about. The REALTOR® Code of Ethics (Article 3, SOP 3-3) requires that if a listing broker is offering a bonus or compensation other than what’s published, the buyer’s agent must disclose this to their client. Imagine if a buyer found out later that their agent got a $100 bonus for taking them to that home – it could undermine the client’s trust (“Did my agent bring me here because it fit my needs, or just to get a gift card?”). In any event, a widespread practice of paying agents just to attend opens is not standard and could create a “pay-to-play” environment that is uncomfortable and unprofessional.
• MLS and advertising concerns: If this $100 giveaway was advertised in any public forum (flyers, emails, social media), it could catch the eye of regulators or other REALTORS® who know the rules. Both CAAR and ARMLS would not permit putting “$100 incentive to agents” in the MLS public remarks, and doing so could lead to a fine. If it was advertised only in private REALTOR® groups, it might slip by, but it still doesn’t make it right. We should remember that our actions reflect on the professionalism of the industry. A gimmick like this might seem harmless, but if it crosses legal lines, it puts your license at risk and could attract unwanted complaints.

Given these points, the advisory conclusion is that the $100 giveaway idea should be abandoned. It’s far safer to find another way to incentivize showings or attendance. For example, the listing agent could have hosted a brokers’ open house luncheon, providing food and perhaps a useful handout (like a detailed info packet about the property and the area). A nice lunch and professional networking opportunity can attract agents to a remote property legitimately, without dangling a cash prize. Or, if the seller authorized it, the agent could offer a bonus commission to whoever brings an accepted offer (this would be disclosed in MLS and paid through closing, a common and legal practice). Those alternatives achieve the goal (more exposure for the listing) without stepping into a legal gray area.

Conclusion

As REALTORS®, we are expected to market creatively but also responsibly. Arizona’s laws and our professional guidelines draw a clear line: games of chance, lotteries, raffles, or similar “lucky draw” promotions are not allowed in real estate advertising. The differences between an enticing promotion and an illegal inducement can be nuanced, but ignorance is not a defense if a scheme goes awry. The safest course is to steer clear of any contest where only some people win a prize, especially if it’s linked to attending an open house or doing business with you.

Thankfully, we have many positive, legal ways to generate interest in our listings. By offering unconditional perks (available to all) or adding genuine value (information, education, charitable goodwill), we can attract clients and cooperate with fellow agents without risking violations. Remember that transparency and fairness are key. If you do advertise any incentive (a gift, a discount, a bonus), disclose all conditions clearly in your advertising and make sure it complies with state law, ADRE rules, and the Code of Ethics. When in doubt, consult your broker or legal counsel before proceeding.

In the end, our reputation as real estate professionals in Arizona rests on doing the right thing. By avoiding games of chance and instead focusing on service, expertise, and ethical promotions, we uphold the trust of our clients and the public. No prize or gimmick is worth the risk to your license or reputation. Let’s continue to find creative yet compliant ways to market properties and thank those who support our business. As your CAAR President, I encourage all of us to stay informed, play by the rules, and promote our listings in a manner that reflects the high standards of the REALTOR® community in Arizona.

Sources:

• Arizona Revised Statutes §13-3301(4) (definition of gambling); §13-3302 (raffle restrictions).
• Arizona Revised Statutes §32-2153(A)(13) (real estate license law on games of chance).
• Arizona Department of Real Estate – Games of Chance FAQ (Q&A on raffles at open houses).
• Arizona REALTORS® Legal Hotline Q&As – Prospecting via Raffles and related guidance.
• Arizona REALTOR® Magazine – “Prospecting? Avoid These Danger Zones” (advice on giveaways vs. gambling).
• ARMLS Rules – Inappropriate Language Policy (no open house/incentive info in public remarks) and MLS Rule 12.1 (no compensation offers in listings).
• NAR Code of Ethics, Articles 12 & 3 (truth in advertising “free” offers and disclosure of incentives to clients).
• AAR Legal Q&A (2008) – confirmation that even a property seller cannot legally raffle real estate to the public.