General information, not legal or tax advice. Raffle rules are set by each state; check with your state's charitable gaming regulator. Federal rules checked against IRS Publication 3079 and the IRS Instructions for Forms W-2G and 5754 (Rev. January 2026) on November 2026.
Can a church do a raffle? In most states, yes, but only on the state's terms. Most states that allow charity raffles let religious organizations hold them, usually with a permit, registration or prize limit attached. A few states don't allow charity raffles at all, and some denominations restrict them even where the law doesn't.
Quick answer
Can a church legally do a raffle?
Usually yes. Most states let religious and charitable organizations hold raffles, but often only with a license or permit, limits on prizes and ticket sales, and rules on how proceeds are used. Check your state's charitable gaming regulator, your city or county clerk and your denomination's policy before selling any tickets.
Can a church do a raffle? What the law looks at
IRS Publication 3079 defines a lottery the way most state laws do: a prize is offered, participants pay for the chance to win, and the prize is awarded by chance. A church raffle ticks all three boxes, so it is illegal unless state law carves out an exception for charities. Most states do, and churches usually qualify, but being a church gives you eligibility, not permission.
| Common state condition | What it usually means | Ask your regulator |
|---|---|---|
| Eligible organization | Religious or charitable groups only, sometimes after a set number of years in existence | Does our church qualify, and what proof do you need? |
| License, permit or registration | Issued by a state agency or a city, county or town office | Who issues it, what does it cost, how far ahead must we apply? |
| Prize limits | Caps on prize value, or no cash prizes | What is the maximum, and are cash prizes allowed? |
Do churches need a raffle license?
Often, yes. Depending on the state, the license or permit comes from a gaming commission, the attorney general, the secretary of state, the lottery or charitable gaming office, or a local office such as the town clerk or police chief. Some states exempt very small raffles below a prize threshold; others require a permit for every raffle.
One church-specific snag: applications often ask for proof of nonprofit status, such as an IRS determination letter. The IRS says churches that meet the 501(c)(3) requirements are automatically considered tax exempt and don't have to apply for recognition, so many congregations have no letter. Ask the regulator what it accepts instead, such as a letter from your denomination or proof of a group exemption.
Is a raffle gambling for a church?
Legally, yes: a raffle is a game of chance, which is why states regulate it. Whether it fits your church's values is a separate question, and traditions answer it differently: some parishes hold a raffle at every festival, while some denominational bodies discourage or ban games of chance. Check your diocese, synod, conference or presbytery policy and your bylaws.
Church raffle rules from the IRS
State law decides whether you can hold the raffle. Federal tax law adds a few duties that apply in every state, set out in IRS Publication 3079, Tax-Exempt Organizations and Gaming.
- Tickets aren't donations. IRS Publication 526 says amounts paid for raffle tickets can't be deducted as charitable contributions. Leave them off giving records and your church contribution statements.
- Big prizes are reported. The church files Form W-2G for prizes that meet the IRS threshold (table below).
- Usually no wagering excise tax. Publication 3079 exempts drawings run by tax-exempt organizations, as long as no net proceeds benefit a private individual.
- Usually no unrelated business income tax. Gaming at an annual fundraising event isn't "regularly carried on," and gaming run with substantially all volunteer labor is excluded.
| Prize value (minus ticket price) | Form W-2G? | Withholding? |
|---|---|---|
| Under $2,000, or under 300 times the ticket price | No | No |
| $2,000 to $5,000, and at least 300 times the ticket price | Yes | Only if the winner gives no taxpayer ID (backup) |
| Over $5,000 | Yes | Yes, 24% (31.58% if the church pays the tax on a noncash prize) |
The $2,000 figure applies to payments made in 2026 and will be adjusted for inflation, per the IRS Instructions for Forms W-2G and 5754. Publication 3079 (revised 2018) still shows the old $600 threshold, so go by the newer instructions. Noncash prizes count at fair market value.
Church-specific checks before you sell tickets
- Board or pastor approval in writing, plus your denomination's policy.
- State and local permission in hand before you advertise or sell the first ticket.
- Insurance. Ask your insurer whether the event and any big prize are covered.
- Tickets and rules. Print what your state requires; our checklist of what to put on a raffle ticket covers the usual items.
- Money handling. Two unrelated volunteers count cash together, and raffle money goes into its own ledger line.
- Donated prizes. Thank local businesses with a thank-you letter for in-kind donations that describes the item.
Template: questions for your state raffle regulator
Hello, I volunteer with [Church name] in [City, County]. We plan a raffle on [date] with prizes worth about $[amount].
1. Does a church qualify to hold a raffle, and what proof of status do you accept if we have no IRS determination letter?
2. Do we need a license, permit or registration, from whom, and how far ahead?
3. Are there limits on prize value, cash prizes or the number of raffles per year?
4. What must tickets say, and what do we report afterward?
Thank you, [Name, phone]
Safer alternatives if a raffle isn't allowed
If your state, your denomination or your congregation says no, remove one of the three elements. Take away payment or chance and you no longer have a lottery, though some states still regulate free drawings and promotions, so run the plan past the regulator.
| Alternative | Element removed | Watch out for |
|---|---|---|
| Silent auction | Chance (highest bid wins) | Buyers can deduct only what they pay above the item's value |
| Free-entry drawing | Payment | A "suggested donation" to enter can count as payment |
| Door prize included with a dinner ticket | None, if the ticket price buys the chance | Can count as a raffle; ask first |
| Fixed-price sale (pies, quilts, baskets) | Chance | No legal issue as a raffle; price items fairly |
A silent auction suits one big donated item. Our guide on whether silent auction purchases are tax deductible explains what bidders can and can't claim.
Next step
Once your permit and board approval are in place, plan a fair, visible drawing. Our guide on how to do a raffle drawing covers the setup, witnesses and contacting winners. Running a school group as well? See whether a PTO can do a raffle.
Frequently asked questions
Is a church raffle tax deductible?
No. IRS Publication 526 says amounts paid for raffle tickets can't be deducted as charitable contributions, because the buyer gets a chance to win in return. A separate gift made with no ticket attached can be deductible, so record the two apart and never call ticket sales donations on receipts.
Can a church sell raffle tickets online?
It depends on the state. Some allow online sales for licensed charities, some limit sales to in person or within the state, and payment platforms add their own rules. Ask your regulator directly, and check the platform's terms before you set up an online ticket page or take card payments.
Can a church raffle give away cash prizes?
Some states allow cash prizes in charity raffles and some limit or ban them. A 50/50 raffle, where part of the pot goes to the winner, is a cash prize too. Confirm with your state regulator first, and file Form W-2G when a prize meets the IRS threshold.
What happens if a church holds a raffle without a permit?
Where a permit is required, an unlicensed raffle can be treated as illegal gambling under state law, and organizers can face penalties. It can also cause trouble with your insurer and your denomination. Getting the permit first is far cheaper than fixing it afterward.