Razzing, Razzes, Raffles — what they are and why you should avoid them
Gambling has been a mainstay in society, so it should be no surprise that it has made its way into several hobbies as a new method of selling items. The rise of raffles, often called a razz, has been expedited by the ability to create private groups on platforms like Facebook to secretly sell off items without much intervention. So how exactly do they work? Speaking as a memorabilia dealer, I can provide the perspective of how this underground gambling systems works with items such as autographs and cards. Although I cannot confirm that practices in the memorabilia hobby are the same throughout other hobbies for these raffles, I think it is fair to assume that they are likely to be similar.
Raffles begin with a person or group creating a secret group (i.e. not visible to the public) typically on Facebook. Because of their status as a secret group, they can pick and choose who is able to join with any non-member not being able to see any of the posts or information listed within the group. Once a large enough grouping of hobbyists (both buyers and sellers) are put together, raffles begin being advertised within the group.
Although there are variations to raffles (typically consisting of smaller raffles with winners being able to participate in the larger, main raffle), the standard raffle format is rather simple. An organizer will list an item that they would like to sell off, a total they are expecting for the item and then divide that up against spots that are available to buy. For example, an organizer can list a common Mickey Mantle signed 8x10 photo that they want $400 for. They feel that they are most likely to sell spots in their raffle if a spot only costs $20, so they make 20 spots available to reach their $400 ask. Once this is advertised, an organizer waits for interested buyers to buy a $20 spot (multiple can be bought typically) and send them money. Once all 20 spots are claimed and paid for, another member in the group, acting as a “neutral” third party, will input the names into a lottery tool online and let it determine a winner. The winner will be sent the item and the other participants are left with nothing.
So, why is this a problem and something that you should avoid? In my opinion, there are three main reasons you should look to avoid all online raffles/razzes.
Ask any organizer of a raffle whether they have a gambling or raffle license with the state/province that they are in — I’m guessing the answer will be no, if they’re even willing to answer. That’s right, although seemingly harmless, raffles fall under gambling law and are outlawed in most states/provinces unless done for charitable causes or with the proper licensing to conduct. Because of this, by engaging in raffles whether as the organizer or participant, you are most likely breaking the law. If the popularity of such activity continues to grow, you can be sure that governing bodies will begin to take notice.
2) Heightened Risk of Scams
It may come as a surprise, but underground gambling raffles are unregulated! As a result, there is increased opportunity for fraudsters to take advantage of buyers who in some cases may unknowingly be scammed. Looking at our previous example on how these raffles work, you see several instances where a person may be able to scam unsuspecting buyers out of their money. When joining these raffle groups, typically any person can conduct a raffle (especially if they’re willing to kick back some money to the owner[s] of the page). In addition to this, many groups have idiotic policies that ask for payments of raffle spots be paid through payment methods with no recourse for buyers, such as PayPal family and friends payments. As a result, there are many instances of fraudsters joining these raffle groups, conducting raffles, and not shipping the item out to the winner as intended. Creating or buying fake profiles on platforms such as Facebook is easy enough that these scams can be repeated multiple times.
Another instance in which buyers can be unknowingly scammed is in the actual draw portion of the raffle. Because of the lack of regulation, there is no guarantee that the person conducting the draw and the organizer of the raffle are not conspiring together to make someone who they personally know “win” the raffle. Because of the history of such issues being discovered and the lack of safeguards in place to prevent them, these are additional reasons to avoid raffles.
3) Odds of Winning
If the fact that this activity is illegal and is open to scamming you does not dissuade you from not participating in it, then maybe realizing the lack of financial reward associated with it will.
Looking at a raffle in simple terms like the Mickey Mantle example brought up, you would have a 5% (1 in 20) of winning the item, but is that really the case? Let’s look at the price — if the item were worth $400, why would the seller choose to raffle it off and deal with the raffle process and 20+ individual parties rather than just sell it to a buyer for $400? The fact is that organizers run raffles because they are typically looking to get a price higher than the item is worth.
In the Mickey Mantle example, a common signed photograph is obtainable for about $200, thereby representing a 100% markup in the raffle pool of $400. Now, a 100% markup seems high but from observing this activity myself, it is not uncommon, especially among lower value items. In this case, does it even make any sense for you to participate in a raffle for such an overpriced item? If you wanted to have a 50% chance of winning the raffle you would need to purchase 10 spots for a total of… $200. Effectively, you would be paying 100% the value of the item for a 50% chance of obtaining it, does that make sense?
Come on, be smart. Statistically speaking it is extremely unlikely for you to “win” in terms of value in these underground gambling raffle scenarios. Save up and buy what you want rather than trying to get lucky and likely being a loser.
I hope this brief article served as a good eye opener on why these raffles should be avoided. My recommendation is to practice patience and stick to buying through traditional sales and auctions to avoid putting your hard-earned money in the hands of luck.
Mike Kaminski is the founder of the Authentic Memorabilia Company, which has quickly become one of Canada’s largest providers of authentic sports, entertainment and historical memorabilia. In addition to the retail side of memorabilia, Mike hopes to use his experience in the industry to educate newcomers and help solve existing problems that collectors face. Visitwww.authenticmemorabiliacompany.com to check out the Authentic Memorabilia Company’s latest offerings and to get in touch.