Until 1949 the issue of licences to organisations to conduct raffles was rigidly controlled and comparatively few licences were granted. The scope of prizes was confined to works of art, mineral specimens, and mechanical models. Further, the value of the prizes was, as a matter of policy, restricted, the average value permitted being approximately £25. Only in a few special cases were prize lists of £50 or 100 permitted.

This somewhat repressive policy had the following effects:

1. It caused normally law-abiding organisations, who desired to raise funds for charitable, philanthropic or sporting purposes, to embark on illegal raffles.

2. It brought the lottery legislation into disrepute and contempt. The majority of New Zealanders undoubtedly regard raffles as innocuous.

The upshot was that eventually New Zealand became inundated with all kinds of illegal raffles operating with various devices and subterfuges all designed to one end – to defeat the legislation. The most common method of evasion adopted by organisers was to issue tickets merely bearing the word “donation” together with a consecutive number. In effect, the public were invited to donate 6d. or 1s. to the particular purpose or objective, and in return were afforded the opportunity, by means of the consecutive number, to win a prize. Despite the opportunities for fraudulent practices on the part of the organisers, the general public did not hesitate to support these illegal raffles. Attempts were made by the Police to pursue a vigorous policy of law enforcement of the legislation prohibiting illegal raffles, but this was not particularly successful, mainly because participants were unwilling to come forward and provide the necessary evidence.

Following on the report of a Royal Commission on Gaming and Racing in 1947–48, the Government decided on a change of policy in respect of gambling generally. It came to the conclusion that repressive measures were ineffective and, consequently, it would be better to bring gambling out into the open where its volume and effect could be gauged and where steps could be taken for its guidance and control. Accordingly, the Gaming Amendment Act of 1949 was passed. Sections 16 and 17 of that Act were designed to widen the scope of prizes and to facilitate the issue of licences. It was considered that these relaxations would encourage organisations to operate raffles legally; thus the public would be afforded protection against fraudulent practices. That this liberal policy is effective is clearly shown by the fact that 1,625 raffle licences were issued in 1954, as against 507 in 1948. Further, it can be stated with confidence that illegal raffles have almost been eliminated in New Zealand. There is little doubt that organisations prefer to conduct raffles legally rather than illegally. The more liberal policy has also greatly eased the burden of law enforcement in respect of illegal raffles. With their gradual elimination, very little in the way of law enforcement is required and nowadays, when prosecutions are pursued, the offenders do not, as formerly, arouse public sympathy.

The present position is that small raffles in which no individual prize exceeds £10 in value and the total aggregate of prizes does not exceed £25 are licensed by the Police. In all other cases the licences are issued by the Department of Internal Affairs.

Prize limits in raffles are restricted, depending on whether the organisation concerned is local, provincial, or national. Selling areas are also restricted on the same basis. Up to a three months' selling period is permitted. Lottery duty of 10 per cent on gross sales is levied in all cases where the total prize list exceeds £500. The prohibited items in respect of prizes are motorcars (other than motor scooters or go-karts), houses or residential accommodation, firearms and ammunition, and intoxicating liquor. The raffling of land is permitted in certain circumstances.