MBCA RAFFLE

[John Betsch - "SADIE"]

Not sure if this is appropriate, or that this is the correct section, but thought members would enjoy the attached raffle flyer of the Mercedes-Benz Club of America


https://raffle.mbca.org/sites/default/files/MBCA_RaffleFall2020_Flyer_FNL.pdf

raffle states Pagoda: $150,000!

[doitwright]

One of the contest rules is somewhat peculiar. Rule 13 says the winner will be awarded $150,000 (if at least 6000 tickets are sold) less 24% for taxes. Then then winner may go out and purchase a Pagoda with the help of Ed Owen. Since I am sure tax would have to be paid again on the purchase of the car, it is certainly not the same as winning a Pagoda and being responsible for the taxes. Or is it? Perhaps even if you won the car outright, you would be responsible for paying taxes on the value of the car. It also seems there is no obligation on the part of the winner to use the money to buy a Pagoda. You are basically wagering $50 for a 1 in 6000 chance of winning $114,000. That is certainly enough to pay for a very nice Pagoda but given that much money would you spend even 100K on a car?

[mdsalemi]

Yes, this is a good one.

Let me tell you first hand about the MBCA raffles. They are held by a LOCAL CHAPTER (Section) of the MBCA, the International Stars Section from the SE Lower Michigan (Detroit) area. The President of that section is the ONLY person who has the responsibility, legally, for the raffle. I know this for I was the local section president for about 10 years, and only my signature was on the license application, and then the RFS (raffle financial statement) that had to be filed at the conclusion of each raffle. There are a select few things that the states like to keep a tight reign on: guns, alcohol, tobacco, women (houses of prostitution where so allowed) and gambling.

By Michigan law, all the details of the raffle must be spelled out in advance. When a raffle has a minimum ticket sale threshold, it must be so stated and IF the minimum is not met, the raffle reverts to a 50/50. For those unfamiliar a 50/50 is where 50% of the raffle ticket sale proceeds become the prize, and 50% retained by the sponsor. An agreement between the local chapter and the national organization ensures that all net raffle proceeds are turned over to the national organization. In common parlance, it's a fundraiser pure and simple.

There is no Pagoda being raffled; only the image of one. The club does not have one to raffle, though they may have located a few of them and have them "on tap" in case the sales threshold is met.

I should note that the raffles are a good fundraiser for the MBCA. However, rarely has a car ever been given away, as the thresholds for sales are rarely met. From a business standpoint it's a whole lot easier to give away cash than a car!

[JamesL]

So they may as well "raffle" a Gullwing

[mdsalemi]

So they may as well "raffle" a Gullwing

Precisely. Though, there IS a bit more of a chance of getting, say, a target of $300,000 in ticket sales to reap a good fundraising goal AND buy a nice Pagoda, then say, $2,000,000 in ticket sales leaving a cool million to find a gullwing.

Like that would ever happen...

[mdsalemi]

One of the contest rules is somewhat peculiar. Rule 13 says the winner will be awarded $150,000 (if at least 6000 tickets are sold) less 24% for taxes. Then then winner may go out and purchase a Pagoda with the help of Ed Owen. Since I am sure tax would have to be paid again on the purchase of the car, it is certainly not the same as winning a Pagoda and being responsible for the taxes. Or is it? Perhaps even if you won the car outright, you would be responsible for paying taxes on the value of the car. It also seems there is no obligation on the part of the winner to use the money to buy a Pagoda. You are basically wagering $50 for a 1 in 6000 chance of winning $114,000. That is certainly enough to pay for a very nice Pagoda but given that much money would you spend even 100K on a car?

The 24% withholding is a requirement for federal and state income taxes to be paid on winnings. Winner gets the net, but perhaps the withholding is either an over or under payment--that will be determined when you file the tax return.

Yes, if you "buy" a Pagoda or another car, you then have to pay all those other taxes: sales tax, license tab, registration, excise tax, etc. etc.

When they offfered a new S Class some years ago, it was only the "base model". Who buys the base model? You need SOME options. Those options would have easily added $20K to the base. Then all the taxes.

With absolute certainty I calculated that I could NOT AFFORD to win that car...I could not come up with all the cash for the extras and taxes.

[JamesL]

My mum always said to me that she'd never heard of a poor bookmaker
To that end, the UK Government takes a tax on the STAKE, not the winnings. All winnings - including the lottery  - are tax free. But the Govt does very well, thanks

[Garry]

Same in Australia, they only tax the stake 10% as a goods and service tax and the winner takes all. That way they get a better return on everything put in and not just the winnings paid out.

[John Betsch - "SADIE"]

This really has morphed into a very interesting thread; like they say you never know what you don't know! Again even a silly thread like this shows the value of membership!

JB

[mdsalemi]

Honestly, it's not much different than any other fundraising raffle, be it a car club or a church. They all have to follow the same sets of rules. I think, however, in other clubs (say, the BMWCCA) there's a much larger membership, thus a much larger pool in which to sell tickets, so things are just a bit different. But, the net take on a percentage basis for the club is about the same. It's what helps fund the club itself. Just interesting that they chose a Pagoda.

I had never heard of Ed Owen, or why he is the point person to help the winner find a Pagoda...but come to find out he's a principal in an independent service facility in Waltham MA specializing in BMW and Mercedes. I don't think he's a member here. Must be some connection to someone on the board of the MBCA.

[badali]

I buy a ticket for each raffle.  If I net $114000 it would still be a nice windfall.  I would have to wait until after tax time next year before spending any of it.  It would put me in a tax bracket I've never come close to.  You could get taxed another $20k on top.  I would probably use the money to do a nice mechanical restoration of my 230SL.  Fix leaks and replace suspension parts professionally by one of the better know Pagoda specialist.  My car drives great but could use some freshening up...

[FastWgn]

I had never heard of Ed Owen, or why he is the point person to help the winner find a Pagoda...but come to find out he's a principal in an independent service facility in Waltham MA specializing in BMW and Mercedes. I don't think he's a member here. Must be some connection to someone on the board of the MBCA.

He is the President of the Minuteman chapter and has spent a large part of his life working on Pagoda's, including a stint at Hatch, another Pagoda expert shop.

[opopotts]

Canadian members are now being told that we are not allowed to participate any more and that any tickets purchased will have their money refunded.