Raffle Legal Requirements by State: Permits, Rules and Compliance Guide

Running a charity raffle can be an effective way to raise money for a nonprofit, school, church, sports club, or community organization. But before tickets go on sale, organizers need to understand that raffles are regulated activities in the United States. Raffle legal requirements by state can differ significantly, and additional city, county, or local rules may also apply.

The IRS considers raffles a form of gaming and notes that gaming activities are normally regulated under state and local law in the jurisdiction where they take place. That means there isn't one nationwide raffle permit or single set of rules that every nonprofit can follow.

Depending on the location and type of raffle, an organization may need to confirm its eligibility, obtain a raffle permit or charitable gaming license, follow specific ticket and drawing procedures, maintain financial records, and complete required reporting.

This guide provides general educational information about common U.S. raffle requirements. It is not legal, tax, or regulatory advice. Always verify current requirements with the appropriate state or local authority before launching a raffle.

Are Charity Raffles Legal?

Charity raffles can be legal in many jurisdictions, but being a nonprofit doesn't automatically give an organization permission to run one.

Raffles involve participants paying for a chance to win a prize, which generally places them within charitable gaming or gambling regulations. States have authority over how these activities operate, which organizations may conduct them, and what requirements must be satisfied.

This is why charity raffle laws can look very different depending on location.

Some jurisdictions require a license or permit before a qualifying nonprofit can conduct a raffle. Others provide exemptions for certain organizations or types of raffles. Registration requirements may also apply, and local authorities can sometimes impose additional rules.

For example, Washington has specific licensing provisions for charitable and nonprofit organizations conducting electronic raffles, including eligibility and recordkeeping requirements. This illustrates why organizations should never assume that rules from one state apply somewhere else.

Common regulatory approaches include:

Regulatory ApproachWhat It May Mean for an OrganizationPermit RequiredApproval may be required before conducting or promoting the raffleRegistration RequiredThe organization may need to register with a gaming or charitable authorityExemptions AvailableCertain qualifying organizations or raffle activities may be exempt from some licensing requirementsAdditional Local RulesCity, county, or other local requirements may apply in addition to state rules

The important point is not to determine which category your raffle belongs to based on a general article. Confirm it directly with the authority responsible for charitable gaming where your organization operates.

Who Can Usually Hold a Charity Raffle?

Eligibility is one of the first things organizers should investigate.

Many states limit charitable raffles to qualifying nonprofit or charitable organizations rather than allowing any individual, informal group, or business to organize them.

Depending on the jurisdiction, eligible organizations may include charitable nonprofits, religious organizations, schools or educational groups, veterans organizations, community organizations, fraternal groups, or certain sports organizations.

However, simply describing your group as nonprofit may not be enough.

A state may have its own definition of a qualifying charitable organization. It may require the organization to have operated for a certain period, maintain a particular organizational status, or satisfy other conditions before becoming eligible for a nonprofit raffle permit.

Organizers should therefore ask two separate questions:

Is our organization eligible to conduct a raffle?

What approvals are required for this particular raffle?

Confirm both before committing money to prizes, advertising, printing, or other campaign expenses.

Common Permit and License Requirements

A raffle license or permit is one of the most important requirements to investigate before launching a campaign.

Where approval is required, organizations may need to provide information about the nonprofit, raffle, prizes, drawing, fundraising purpose, and people responsible for conducting the campaign.

Common application requirements may involve organizational information, proof of nonprofit eligibility, raffle dates, drawing location, prize descriptions, responsible individuals, and supporting documentation.

Application processes and timelines vary.

This means organizers shouldn't wait until the week before ticket sales begin to investigate raffle permit requirements. If approval is necessary, build sufficient time into your planning schedule.

Also determine whether the approval applies to one raffle, multiple raffles, a specific period, or another defined arrangement.

If your organization runs raffles regularly, don't assume an old approval automatically covers the next campaign. Verify whether renewal or additional authorization is required.

Online Raffles Require Extra Attention

Online raffle platforms can make fundraising much easier, but using digital technology doesn't override state gaming laws.

An online raffle may potentially reach supporters outside the organization's immediate community. That makes it especially important to determine where tickets may legally be offered or sold and whether additional restrictions apply.

Organizations should verify requirements relating to online sales, participant location, payment methods, advertising, and electronic raffle systems where relevant.

This is particularly important for a hybrid raffle where supporters can participate both at an event and remotely.

Before promoting an online campaign widely, confirm where participation is permitted. Your fundraising platform can help manage the campaign, but responsibility for understanding the organization's applicable legal requirements remains with the organization.

Typical Rules Organizations Must Follow

Once eligibility and required approvals have been confirmed, attention should turn to how the raffle will actually operate.

Clear raffle rules help protect the organization and provide supporters with important information before they purchase tickets.

Depending on applicable requirements, your published rules may need to address:

Organization information. Clearly identify who is conducting the raffle.

Eligibility. Explain who may participate and any applicable restrictions.

Ticket information. Make pricing and participation procedures clear.

Prize descriptions. Explain what participants can win and provide accurate information about major prizes.

Sales period. State when ticket sales open and close.

Drawing information. Explain when and how the winner will be selected.

Winner notification. Describe how winners will be contacted or announced.

Prize collection. Explain relevant procedures for claiming prizes.

Organizers should avoid changing important rules after ticket sales have started unless the change is permitted and properly communicated.

Transparency matters because participants are making decisions based on the terms presented when they enter.

A Charity Raffle Planning Checklist can help ensure these details are reviewed before campaign promotion begins.

Keep Accurate Ticket and Drawing Records

Good documentation supports raffle compliance and makes post-event reporting much easier.

Organizations should establish their recordkeeping process before selling the first ticket.

Depending on the raffle format and applicable requirements, records may include ticket sales, ticket numbers, participant information where appropriate, drawing records, prize information, winner documentation, expenses, and campaign revenue.

The drawing itself should follow the process described in the organization's official rules and any applicable regulatory requirements.

If volunteers are responsible for ticket distribution or sales, provide clear instructions for how ticket activity should be recorded and reconciled.

Digital systems can reduce some manual work, but organizers should still understand what information is being recorded and what documentation must be retained.

Financial Recordkeeping Matters

Raffle financial records should provide a clear picture of how the campaign performed.

The IRS specifically looks at gaming information such as gross receipts, prizes, expenses, and net income when evaluating exempt organizations' gaming activities. Its guidance also asks organizations to describe the records used to document gross receipts and expenses.

Useful records can include:

• Gross raffle ticket revenue
• Purchased prizes
• Donated prize information
• Marketing expenses
• Event-related expenses
• Platform or processing expenses
• Winner information
• Other raffle-related costs
• Net proceeds

Avoid recording only the amount remaining after expenses.

Current Form 990 instructions specifically identify raffles as gaming and provide reporting rules for gross gaming income.

Even when an organization isn't subject to a particular reporting requirement, maintaining organized financial records makes it easier to evaluate fundraising performance and work with accountants or regulatory authorities when necessary.

Tax Considerations for Charity Raffles

Legal permission to run a raffle and federal tax treatment are related but separate issues.

The IRS treats raffles as gaming activities. Depending on how the activity is conducted, gaming income may create federal reporting or unrelated business income considerations for a tax-exempt organization. Exceptions may apply, including circumstances involving volunteer labor, so organization-specific guidance can be valuable.

Winners may also have tax responsibilities.

The IRS states that gambling income includes raffle winnings, including cash and the fair market value of non-cash prizes such as cars or trips. Certain winnings can also trigger Form W-2G reporting requirements for the organization conducting the raffle.

Because thresholds and requirements can change, nonprofits should verify current IRS guidance rather than relying on numbers copied from an old article.

Your Nonprofit Raffle Tax Implications and Raffle Prize Taxes for Winners guides can provide additional educational information about these topics.

For organization-specific questions, consult a qualified CPA or tax professional.

Common Legal Mistakes to Avoid

Many raffle legality problems can be prevented by checking requirements before the campaign begins.

Selling Tickets Before Checking Requirements

Don't launch ticket sales and investigate licensing afterward. Confirm eligibility, permits, registration, and applicable rules first.

Assuming Nonprofit Status Is Enough

Tax-exempt status doesn't automatically establish eligibility under every state's charitable gaming laws.

Copying Another Organization's Rules

A raffle conducted by another nonprofit may operate under different circumstances or regulations. Create rules based on your own raffle and applicable requirements.

Poor Documentation

Missing ticket, prize, winner, or financial records can create unnecessary problems when completing reports or answering questions.

Misleading Advertising

Marketing should accurately describe prizes, drawing information, eligibility, and other important conditions. Avoid creating expectations that conflict with the official raffle rules.

Changing Rules Mid-Campaign

Changing drawing dates, prizes, eligibility, or other important terms after tickets have been sold can create confusion and compliance concerns. Verify requirements before making significant changes.

Forgetting Winner Procedures

Plan how winners will be selected, documented, contacted, and announced before the drawing takes place.

Assuming Online Means Nationwide

Putting a raffle online doesn't automatically make ticket sales legal across every U.S. state. Confirm where participation is allowed before expanding promotion.

These considerations can also be incorporated into your Common Charity Raffle Mistakes guide and volunteer training materials.

Working with Legal or Regulatory Authorities

When you're unsure about a requirement, go to the authority responsible for the rules rather than relying solely on blogs, social media posts, or another nonprofit's experience.

Depending on your location, this might be a state gaming commission, attorney general, secretary of state, charitable gaming division, lottery authority, or another regulatory body.

Useful questions include:

“Is our organization eligible to conduct this raffle?”

“Do we need a permit, license, or registration?”

“Are online ticket sales permitted?”

“Are there restrictions on who can purchase tickets?”

“What records are we required to maintain?”

“Are there specific rules for advertising or prizes?”

“What reporting is required after the drawing?”

“Do local requirements also apply?”

Keep copies of relevant approvals and guidance with your raffle records.

If the requirements are unclear, your raffle involves substantial prizes or revenue, or the campaign will involve multiple jurisdictions, consider consulting qualified legal counsel familiar with charitable gaming.

Charity Raffle Compliance Checklist

Before ticket sales begin, confirm that your organization has addressed the fundamentals:

• Organizational eligibility confirmed
• State raffle requirements reviewed
• Local requirements checked
• Required registration completed
• Raffle permit or license obtained if applicable
• Online ticket sales requirements reviewed
• Official raffle rules prepared
• Eligibility requirements published
• Ticket information finalized
• Prize descriptions documented
• Prize values recorded where appropriate
• Drawing date and process confirmed
• Winner notification process prepared
• Ticket records established
• Volunteer responsibilities assigned
• Financial recordkeeping process established
• Tax considerations reviewed
• Required post-raffle reporting identified
• Important records retained
• Professional advice obtained when necessary

Build these checks into your fundraising workflow rather than treating compliance as a final task immediately before launch.

Frequently Asked Questions

Do nonprofits always need a raffle permit?

No single rule applies across the United States. Permit and licensing requirements depend on state and sometimes local law. Some jurisdictions provide exemptions under certain circumstances, while others require qualifying organizations to obtain approval. Verify the requirements that apply where your raffle will operate.

Are raffle laws different in every state?

Yes. Raffles are primarily regulated at the state and local level, and requirements can vary significantly. The IRS also confirms that gaming activities are normally regulated under state and local law.

Can schools and churches run raffles?

They may be eligible in some jurisdictions, but eligibility isn't automatic nationwide. Schools, churches, and other community organizations should confirm whether they meet their jurisdiction's definition of an eligible organization and whether a permit or registration is required.

Are raffle prizes taxable?

Raffle winnings are generally considered gambling income for federal tax purposes, including the fair market value of certain non-cash prizes. Individual circumstances and reporting requirements can vary, so winners should consult current IRS guidance or a qualified tax professional.

What records should organizations keep?

Depending on applicable requirements, useful records may include ticket sales, prizes, winners, expenses, gross revenue, drawing information, permits, and other supporting documentation. State authorities may impose additional recordkeeping requirements.

Where can I check my state's raffle rules?

Start with an official state government source responsible for charitable gaming. Depending on the state, that could be a gaming commission, attorney general, charitable gaming division, lottery authority, or another agency. Also check whether county or city rules apply.

Run a Compliant Charity Raffle with GalaBid

Understanding raffle legal requirements by state should be one of the first steps in planning a fundraiser, not something organizers investigate after tickets are already being sold.

Confirm that your organization is eligible, determine whether a permit or registration is necessary, create clear raffle rules, establish reliable ticket and financial records, and understand how the drawing and winner notification will work. For online campaigns, pay particular attention to where participation can legally be offered.

GalaBid helps nonprofits organize raffle ticket sales, manage participants, track fundraising activity, and run transparent campaigns through an online raffle platform built for modern fundraising.

Technology can make administering a raffle easier, but every organization remains responsible for determining which laws and regulations apply to its campaign. Verify current state and local requirements with the appropriate regulatory authority and seek qualified legal or tax advice when necessary.

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