Attorney General's News Release

May 10, 2006

Nixon sues charity selling high-priced raffle tickets; says consumers are being deceived about drawing dates, prizes

St. Louis, Mo. — Attorney General Jay Nixon has gone to court to prevent a St. Louis-based charity from continuing to sell tickets to several high-profile raffles it sponsors, after the organization collected money for the tickets but failed to hold the drawings or delayed them for years. Nixon's lawsuit against Gateway to a Cure Inc. asks the St. Louis County Circuit Court to issue a temporary restraining order stopping the sales.

Gateway to a Cure advertises that it raises money for spinal cord research through the raffles of expensive homes, cars and other prizes. The charity solicits donations of as much $1,000 for each ticket, but doesn't immediately set dates for its raffle drawings and claims it will only hold certain raffles when a given number of tickets are sold.

Nixon says this minimum number of ticket sales to hold a raffle is not adequately disclosed to consumers and, as a result, raffles can be and have been pending for years without ever having a drawing. In several cases, Gateway also advertised prizes — including specific homes and luxury automobiles — that it did not purchase and could not offer as prizes.

“Consumers who donate their hard-earned money to charity, particularly in the amounts that were given for Gateway's raffles, will not be so willing to do so in the future if they have doubts about the legitimacy of the charity,” Nixon said. “Taking consumers' money for a raffle and then not holding the drawing for years, if ever, tends to create those doubts.”

Nixon's lawsuit cites five Gateway raffles, four of which are pending, that have followed a similar trend:

• The Grand Giveaway - Kansas City, which began soliciting donations of $1,000 each in October 2003. Gateway claimed it needed to sell 2,000 tickets before holding the drawing, which included a new home located at the National Golf Club in Kansas City and new Bentley valued at more than $1.5 million; a Maserati valued at $98,500 and a Harley Davidson Motorcycle valued at $24,000. The drawing was held on Feb. 14, 2006 after just 1,409 tickets were sold, with the winner claiming a cash prize instead of the new house.
• The Grand Giveaway - St. Louis, which began soliciting donations of $1,000 each in October 2003. The defendant claimed it needed to sell 1,000 tickets before holding the drawing, which included a grand prize of a new home in St. Charles and new Bentley, together valued at $880,000. To date, 162 tickets have been sold for the drawing, which has never been held. The new home is no longer under contract to Gateway to a Cure, despite wording to that effect still contained on the defendant's Web site.
• The 7th Annual Gateway to a Cure Great American Dream Home Giveaway, which began soliciting donations of $100 each in May 2005. The defendant claims it needs to sell 4,000 tickets before holding the drawing, which includes a new home in Illinois valued at $212,000 and a Jeep Grand Cherokee. To date,1,463 tickets have been sold for the drawing, which has never been held.
• The Dream Home National Raffle (Orlando), which began soliciting donations of $25 each in June 2005. The defendant claims it needs to sell 599,999 tickets before holding the drawing, with the grand prize being a $3.3 million dream home located on Lake Nona in Orlando, Fla. To date, 10,643 tickets have been sold for the drawing, which has never been held.
• The Scholarship Raffle, which began soliciting donations of $100 each in June 2003. Gateway claims it needs to sell 2,000 tickets before holding the raffle, which includes $120,000 in college scholarship money as a grand prize. To date, 247 tickets have been sold for the drawing, which has never been held.

Nixon's lawsuit alleges that the defendant's Web site failed to disclose consequences of insufficient ticket sales to consumers until several months or years into the raffle, so that entrants who donated their money were unaware of how long it would be before the drawing was actually held.

Nixon is asking the court to issue a temporary restraining order against Gateway to a Cure to prevent the organization from continuing to advertise and sell tickets to any of its pending raffles. The lawsuit asks the court to order the defendant to provide restitution and to pay appropriate civil penalties and costs to the state.

Consumers who want to file a complaint against Gateway to a Cure should file a complaint with supporting documents with the Attorney General's Office. Complaint forms can be obtained online at www.ago.mo.gov or by calling the Consumer Protection Hotline at 1-800-392-8222.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818