Charities & Nonprofits:
Charitable Raffles

The Charitable Raffle Enabling Act, effective January 1, 1990, permits "qualified organizations" to hold up to two raffles per calendar year, with certain specified restrictions.

In general, a qualified organization is:

1. An association organized primarily for religious purposes that has been in existence in Texas for at least 10 years;
2. A volunteer emergency medical service that does not pay its members other than nominal compensation;
3. A volunteer fire department that operates fire fighting equipment and does not pay its members other than nominal compensation; or
4. A nonprofit organization that has existed for at least three preceding years, during which it has had a governing body duly elected by its members and is exempt from federal income tax under Section 501(c), Internal Revenue Code; does not distribute any of its income to its members, officers or governing body; does not devote a substantial part of its activities to attempting to influence legislation; and does not participate in any political campaign.

The language of the law is very technical. If you are considering holding a raffle to benefit an organization, you should check the statute to be sure it qualifies.

Prizes Offered and Money Earned

An organization may offer any prize except money. If the raffle organizers offer a prize which they have purchased or have given other consideration for, the value of the prize may not exceed $50,000. There is no value limit on prizes donated to the organization.

Texas lottery tickets may be purchased and offered as prizes, even though the tickets' payoff may exceed $50,000. The organization must have each raffle prize in its possession or must post a bond for the full amount of the value of the prize with the county clerk of the county where the raffle will be held.

Proceeds from ticket sales must be used only for the charitable purposes of the organization.

Restrictions

An organization is not required to register with the State before conducting a raffle. However certain restrictions apply.

• A qualified organization may hold only two raffles per year and only one raffle at a time.
• Raffle tickets may not be advertised statewide or through paid advertisements. Each raffle ticket must state the name or address of the organization holding the raffle, the name of an officer of the organization, the price of the ticket, and a general description of each prize to be awarded that has a value of over $10.
• A prize may not be money.
• Only members of the organization, or student organizations recognized by institutions of higher education selling on behalf of the institution, may sell tickets.
• No one may be compensated directly or indirectly for organizing or conducting a raffle or for selling raffle tickets. The organization may not permit a non-member or other unauthorized person to sell or offer to sell raffle tickets.

Penalties and Enforcement

Only raffles held according to the terms of the Raffle Enabling Act are authorized raffles. The law is Chapter 2002, Occupations Code, Texas Codes Annotated.

An unauthorized raffle is considered gambling under the Texas Penal Code. Conducting such a raffle is a Class A misdemeanor. Participating in an unauthorized raffle is a Class C misdemeanor.

A county attorney, district attorney or the attorney general may bring an action in state court to stop a violation or potential violation of the Charitable Raffle Enabling Act.

Please understand that this office cannot advise you about whether a proposed raffle would be authorized under the law. If you have specific questions about the law, you should consult a private attorney.