The Legalities of a Raffle
Selling raffle tickets is a fundraising activity. If you are considering holding a raffle, you should understand the regulations mandated by your state, county or local government. Failure to follow guidelines may result in a severe penalty. In some states, such as Hawaii, raffles are illegal.
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Registration
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Some states require raffle sponsors to register in advance of selling tickets. It may be necessary to send a registration form along with a fee to the state. Sponsors must receive written confirmation prior to initiating any raffle fundraising. If raffle tickets are complimentary, no registration is required.
Fund Allocation
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States may have specific allocation requirements regarding lottery proceeds. The state of California stipulates that at least 90 percent of gross receipts must go to a tax-exempt organization. The state of Louisiana limits lottery proceeds to five categories.
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Other Requirements
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State laws are different and unique. In the state of Colorado, the legality of raffles is dependent upon time in existence. Organizations must exist for five years before qualifying for a raffle license. Frequency is a factor in other states. These laws regulate the number of raffles one organization can hold. Michigan laws dictate the hours for ticket drawings.
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References
- RaffleFaq: Are Raffles Legal in the United States
- Louisiana Office of Charitable Gaming: Frequently Asked Questions
- Colorado Secretary of State: Bingo and Raffles
- Michigan Charitable Gaming Division: Raffle License Application
- Office of the Attorney General: Raffles
- Honolulu Police Department: Gambling FAQ
- Photo Credit red ticket image by Rick Sargeant from Fotolia.com
