In the United States, each state has its own set of definitions and laws that dictate what is considered a raffle, which organizations are permitted to host a raffle, and what is required to legally host a raffle.
Yes, the first raffle you host can be time consuming and confusing, but all the time and energy invested is ultimately worth it. (Some of the biggest campaigns on Zeffy are raffles. AKA raffles raise a lot of money for the nonprofits that host them.) Plus, raffles are a great way to mix up your fundraising campaign portfolio and, as an added bonus, attract new donors to your nonprofit.
Okay, let’s get started.
The state of Texas makes holding a raffle pretty easy. But, before we go any further, the Charitable Raffle Enabling Act (CREA) defines a raffle as:
… the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize.
Who can host a raffle in Texas?
To host a raffle in the state of Texas you need to be a qualified nonprofit organization and fall into one of the following categories: (Individuals and for-profit businesses cannot hold raffles)
- A qualified religious society that has been in existence in Texas for at least 10 years.
- A qualified volunteer fire department that operates firefighting equipment, provides fire-fighting services and that does not pay its members other than nominal compensation.
- A qualified volunteer emergency medical service that does not pay its members other than nominal compensation.
- A qualified 501(c) tax-exempt, nonprofit organization that has been in existence for at least three years.
How does a nonprofit register for a raffle in Texas?
You do not have to register or obtain a license or permit to host a raffle in Texas. (Go Texas!) However, you do have to be a qualified nonprofit organization. (See previous section.)
Although you do not have to register or provide any follow-up forms, there are a couple rules that need to be followed:
- Depending on whether you read CREA or this summary, a nonprofit organization can hold a maximum of two (2) to four (4) raffles per calendar year and they cannot hold more than one raffle at a time. In Texas a calendar year is January 1 through December 31.
- You have to set the date of the draw before selling or offering to sell and raffle tickets. If you are unable to award a prize on the initial date, you can set another date no later than 30 days after the original date or refund the amount paid by each person.
- You cannot use mass communication (TV, radio or newspaper) to promote your raffle. But, you can promote your raffle on your website or through existing newsletters, emails, and social media accounts to existing members.
Can you sell nonprofit raffle tickets online in Texas using Zeffy’s ticketing forms?
We won’t lie, this is a bit of a grey area in Texas. CREA states that an organization may not “sell or offer to sell tickets for a raffle statewide.” And, “statewide” is often thought to include the internet, but it is not at all clear.
What needs to appear on your nonprofit's raffle tickets in Texas.
Raffle tickets in the state of Texas need to clearly display the following information:
- The name of your organization.
- The address of your organization or of a named officer of the organization.
- The ticket price.
- A general description of each prize valued at more than $10.
- The date on which the raffle prize or prizes will be awarded.
We think it’s also probably a good idea to include a ticket number and the information of the person who purchased the ticket so that you can contact the winners after the draw.
We’ve whipped up an a example to give you a better idea:
Does it cost money to register for a lottery?
Nope. Texas doesn’t require nonprofit organizations to register their raffles.
Here’s a recap of all the links and documents mentioned in this article:
If you need them: charitable lottery licence laws for other US states.