If you need to raise money, fundraisers are a great way of accumulating funds in a short amount of time. When car washes and bake sales stop earning cash, hosting a raffle can prove to be a lucrative way to make money. Raffles are considered a form of gambling and are subject to laws that govern the selling of raffle tickets and the types of organisations that can do so.
The federal government has determined that raffles are a form of gambling and gaming. All raffles are regulated by the state's powers, with each state outlining guidelines for licensing and organisation. A list of raffle laws by state can be found at RaffleFAQ.com. Raffles are illegal in Arkansas, Kansas, South Carolina, South Dakota, Utah and Wyoming.
Each state regulates their raffle laws either by state, county or city level. Each level of government can impose raffle laws and requirements in the form of licenses, permits and paperwork. In most states that allow raffles, the purpose of the raffle must be for charitable organisations or non-profit organisations.
License and permit requirements might need to be filed on the local or state level. Some licenses require your organisation to be of a minimum age, give away a limited number of prizes or host a maximum number of raffles. File the appropriate paperwork in advance of the raffle to allow for processing and approval times. Most license applications require an application fee in order to be considered for approval.
Internet gambling is illegal in all 50 states. Raffles are generally considered a form of gambling, and the United States has a ban on this type of activity. However, some non-profit organisations and charities post internet advertisements that promote their raffles. Although selling raffle tickets on the internet can be considered internet gambling, advertising a raffle might not be illegal. Consult with an attorney to discern your local laws.
It is considered unlawful to conduct a raffle for the purpose of profit for an individual or business other than a charitable organisation. Because each state governs its raffle regulations differently, your state's attorney general's office should be able to clearly define the laws your raffle might be subject to.