General information, not legal or tax advice. Raffle rules are set by each state; check with your state's charitable gaming regulator. State examples were read on each state's official site, and federal rules checked against IRS Publication 3079, IRS Publication 526 and the IRS Instructions for Form W-2G (Rev. 01/2026), on November 2026.
Are raffles legal for nonprofits? In most US states, yes, but only under the conditions that state sets. A raffle is a form of gambling, so it is illegal unless state law makes an exception for charities, and those exceptions come with rules on who qualifies, permits, prizes and ticket sales. A few states allow no charity raffles at all.
Quick answer
Can a nonprofit legally hold a raffle?
Usually, if state law allows charity raffles and your group meets its conditions. Most states limit raffles to qualified nonprofits and add a license, registration or prize cap, and many restrict online sales. A few states ban them. Federal tax status alone is not permission; check your state's charitable gaming regulator first.
Why a raffle is regulated: prize, chance and payment
A raffle has the three elements of a lottery. IRS Publication 3079 defines a lottery as a game where a prize is offered, participants pay for the chance to win, and the prize is awarded by chance, and it lists raffles as lotteries. State laws use similar tests.
Take away any one element and it is usually no longer a lottery. A silent auction removes chance, and a free drawing removes payment. That is why sweepstakes say "no purchase necessary," though some states still regulate free promotions.
Are raffles legal for nonprofits in every state?
No. Most states carve out an exception for charitable, religious, educational or civic groups, but the conditions vary widely, and a few states have no exception for charity raffles. Online lists of ban states often disagree, so confirm with your own regulator.
The rules tend to cover the same topics:
| Rule area | What states commonly do | Ask your regulator |
|---|---|---|
| Who may hold one | Nonprofits only, often after a minimum time in operation | Does our group qualify, and what proof is needed? |
| Tax status | Some accept federal 501(c) status; others need a state exemption or registration | Is IRS recognition enough here? |
| License or permit | State, county or city permit; small raffles sometimes exempt | Who issues it, the fee, and the lead time? |
| Prizes | Caps on prize value; some limit cash prizes or 50/50s | Are cash prizes allowed, and up to what value? |
| Sales and reporting | Limits on online sales, sellers and buyer age; yearly reports | Can we sell online, and what must we file after? |
Do you need 501(c)(3) status to hold a raffle?
Not always, and having it isn't always enough. Some states accept other nonprofit types; others look at state status: California's Attorney General says IRS exemption alone does not qualify a group, which also needs a California Franchise Tax Board exemption.
Raffle laws by state: four examples
To show how far the rules differ, here are four states as their official pages read in November 2026. Check your own state.
| State and office | Who qualifies | Smaller raffles | Larger raffles or sales |
|---|---|---|---|
| California: Attorney General, Registry of Charities and Fundraisers | Eligible nonprofits qualified to do business in California for at least one year | No small-raffle exemption: yearly registration (Form CT-NRP-1, $30) confirmed before any tickets are sold | At least 90% of gross ticket receipts to charitable purposes; yearly report due February 1 |
| Washington: State Gambling Commission | Groups organized and operating for at least 12 months | Two unlicensed public raffles a year, combined gross $5,000 or less, police notified 5 days before the drawing | License needed beyond those limits; buyers must be 18 or older |
| New York: State Gaming Commission | "Authorized organizations" under state law | A single raffle under $5,000 net: officers confirm the group qualifies | Filing at $5,000 net a year; license from the municipal clerk at $30,000 |
| Minnesota: Statutes 349.166 (Gambling Control Board) | Organizations as defined in state gambling law | No board registration if prizes total $1,500 or less a year ($5,000 at one event for a 501(c)(3)) | Exempt permit for up to 5 days and $50,000 in prizes a year, $100 per occasion |
California's rules are on the Attorney General's raffles page. The Washington, New York and Minnesota rows come from the Washington State Gambling Commission raffles page, the New York State Gaming Commission raffles page and Minnesota Statutes section 349.166 on the Revisor of Statutes site.
Can nonprofits sell raffle tickets online?
Often not, or only with approval. A platform can take payment from anywhere, but your permission stops at your state line. In the examples above, California says raffles can't be conducted over the internet and Washington bars ticket sales by internet or phone, though both allow online advertising. New York requires Commission approval before selling online.
If your state allows online sales, check the platform's own list of states it serves before you choose one; our guide to the best raffle software for nonprofits compares them. Social media adds its own layer, covered in how to do a raffle on Facebook.
Federal rules that apply in every state
The IRS adds a few duties everywhere:
- Prize reporting. Under the IRS Instructions for Form W-2G, for payments made in 2026 you file Form W-2G when a prize is $2,000 or more and at least 300 times the ticket price.
- Withholding. When winnings minus the ticket price are more than $5,000, you withhold 24%.
- No deduction for buyers. IRS Publication 526 says raffle ticket purchases can't be deducted as charitable contributions.
- Wagering tax. Publication 3079 says drawings by tax-exempt groups aren't subject to the federal wagering tax, as long as no proceeds benefit a private individual.
How to check your state's raffle rules
- Find the regulator. Search your state name plus "charitable gaming" or "raffle license." It may be a gaming commission, the attorney general or another office.
- Read the official page, not a vendor summary, and note the date.
- Check local rules. Some states hand permits to a city, town or county clerk.
- Ask in writing. Email the regulator your plan: group, prizes, price, sales method and date.
- Get approvals that sit above the law. Churches and parent groups also need denomination or district sign-off; see whether a church can do a raffle and whether a PTO can do a raffle.
What if a raffle isn't allowed?
If your state says no, or the permit won't arrive in time, remove one of the three elements. A silent auction removes chance; see our comparison of a raffle vs a silent auction. Cash-prize formats such as a 50/50 raffle often face extra limits, so check them separately.
Next step
Once your state confirms you can go ahead, plan the rest of the raffle with our step-by-step guide to how to run a raffle fundraiser.
Frequently asked questions
Do you need a license for a small charity raffle?
It depends on the state. Some exempt small raffles below a prize or revenue limit, such as Washington's two unlicensed raffles a year up to $5,000 combined gross. Others, such as California, require yearly registration before any raffle, whatever its size. Your state's charitable gaming regulator can tell you which rule applies.
Which states ban charity raffles?
A few states have no legal exception for charity raffles, and online lists of them don't always agree. Look up your state's gambling law or ask the attorney general's office directly. If the answer is no, consider a silent auction or a free drawing instead.
Can an individual hold a raffle for a charity?
Usually not. State raffle exceptions are generally written for qualified organizations, so a raffle run by an individual, even for a good cause, may count as illegal gambling. Partner with an eligible nonprofit that holds the permit and runs the raffle in its own name, and let it control the money.
What happens if you run an illegal raffle?
Penalties are set by state law and can include fines or criminal charges for the people who ran it, and trouble with future permits or charity registration. If you have already sold tickets without permission, contact your regulator before the drawing.