Raffle legal basics for small organizers

Raffle rules differ widely from place to place. This is a map of the questions to ask, not an answer to them.

Raffles feel informal. A roll of tickets, a jar, a prize basket: what could be regulated about that? Quite a lot, it turns out. In many jurisdictions a raffle is legally a form of gambling, and only certain organizations are allowed to run one, sometimes only with a license. The good news is that most rules are written with small charities in mind, and the agency that regulates them usually publishes plain-language guides. This page explains the vocabulary and the questions that come up, so you know what to ask.

Why raffles are regulated

Lawyers often describe gambling as having three elements: a prize, chance deciding who wins, and consideration, meaning the participant gives something of value (usually money) to enter. A paid raffle has all three. That is why many US states prohibit raffles except by qualifying nonprofit organizations, and why some require registration, a license or a permit even for those organizations.

Remove any one element and the activity is usually treated differently. A free door-prize drawing where everyone who attends gets a ticket, with no purchase required, typically lacks consideration. A contest decided by skill lacks chance. That is why businesses run “sweepstakes” with “no purchase necessary” language. But exactly how each element is interpreted depends on local law, so do not assume a creative structure gets you out of the rules.

Who can hold a raffle

In the US, many states limit paid raffles to organizations such as registered charities, religious organizations, schools and their parent groups, veterans’ groups, fraternal organizations, volunteer fire departments and similar nonprofits. Some require the organization to have existed for a minimum number of years. Individuals and for-profit businesses are commonly not allowed to run paid raffles at all, even for a good cause. Some states do not allow raffles under any circumstances, or allow only specific types.

Outside the US the picture is just as varied. Some countries treat small raffles at a single event as exempt, as long as the proceeds go to a good cause and tickets are only sold at that event; larger lotteries require registration with a local authority or a national gambling regulator.

Licenses, permits and limits

Where a license or permit is required, it may come from a state agency, a county clerk or a city. Typical conditions include:

• a cap on the total value of prizes or on gross ticket sales;
• a limit on how many raffles an organization may run per year;
• rules about who can sell tickets (often only members or volunteers, sometimes no paid sellers);
• requirements that net proceeds go to the organization’s charitable purpose;
• a requirement to print certain information on each ticket, such as the organization name, the drawing date and place, the price and the license number;
• a post-event report showing receipts, expenses and winners, filed by a deadline.

Some states exempt very small raffles from licensing, for example when total prizes or receipts stay under a set amount. The thresholds differ, so look them up for your state and year.

Selling tickets online or across borders

Selling raffle tickets over the internet adds questions. Some jurisdictions forbid online raffle sales entirely; others allow them only to residents of the state; others require age and location checks. Mailing tickets across state lines can also be restricted. If you plan to sell beyond the people physically at your event, check the rules before you build a payment page.

Age limits

Many places set a minimum age to buy a raffle ticket, often 18. School raffles are a common trap: a student can usually help with a parent group fundraiser, but selling tickets to other children or letting children buy tickets may be restricted. Check, and set your table rules accordingly.

Taxes and prizes

In the United States, prizes can create tax obligations for both the winner and the organization. Above certain prize values, organizations may need to collect a winner’s taxpayer information, file information returns, or withhold tax. Donated prizes and proceeds can also have implications for the organization’s own tax filings. Ask your treasurer or accountant before offering a high-value prize such as a car, a trip or a large cash pot.

Fifty-fifty drawings

A 50/50 drawing, where the winner gets half the pot, is still a raffle in most places, with the same eligibility and license questions. Some states have specific rules for 50/50s, including how the pot is announced and recorded.

Free drawings and door prizes

A drawing that anyone can enter for free is usually much simpler. Common examples: every attendee gets a door-prize ticket at sign-in; every employee is entered in a holiday drawing; every student who returns a form is entered. Even so, keep it clean:

• do not require a purchase or donation to enter, and do not give paying people extra entries unless you have checked that this is allowed;
• write down simple rules: eligibility, drawing time, how winners are notified, and what happens to unclaimed prizes;
• draw fairly and in public, and keep the results.

Records worth keeping

Whatever the rules, good records protect you. Keep the ticket stubs or entry list, the tally sheets for ticket sales and cash, the prize list with values, and the winner list with signatures for prize pickup. Our ticket numbering and record keeping guide shows a simple system.

Where to find the actual rules

Start with a search for your state name plus “charitable gaming” or “raffle license.” The responsible office might be a gaming commission, a lottery commission, the attorney general’s charities division, the secretary of state or the department of revenue. Many publish a short FAQ for nonprofits. Your city or county clerk can tell you about local permits. Outside the US, look for the national or regional gambling regulator. If your organization belongs to a larger body (a diocese, a state PTA, a national charity), it may have its own raffle policy and sample forms.

Where The Hat Draw fits

The Hat Draw is only the drawing step: it picks names fairly from a list you type or paste. It does not sell tickets, take payments, hold money or verify eligibility, and it is not a lottery or wagering service. Whether your raffle is legal depends on how you sell entries and award prizes, not on the tool you use to draw. If you are not sure your event is allowed, ask the agency before the event, not after.

More: all guides · how the draw works

Open The Hat Draw →

Last updated 10 October 2026.