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The Truth, the Whole Truth, and Nothing but the Truth about US Raffle Law Part IV

By Lance Trebesch July 14, 2011

State by State: Raffle Law in America

In the previous installment of our series on raffle law, we discussed taxes and eclectic rules. Today, what happens if you fail to follow those rules?

Crime and Punishment

Failure to comply with state law can result in fines and incarceration. In North Carolina, conducting an illegal raffle is a misdemeanor, and the punishment includes a prohibition: the guilty party “shall not conduct a raffle for a period of one year.” West Virginia provides for charitable gaming and fundraising, but calls for penalties and fines for any person involved in any sort of raffle for personal gain. In Ohio, a first offense against state raffle regulations is also a misdemeanor, but subsequent violations are considered felonies, while Rhode Island makes the first offense a felony, with penalties up to two years in prison and $2000 in fines!

How Long Have You Been Doing This?

Often, the right to hold a raffle is restricted only to certain charities. For instance, Minnesota allows raffles only for educational fundraising. Such raffles “may only be sold and the drawing conducted at a high school event sponsored by a school district” to adults over the age of 18, and all profits must remain in the school district. Arkansas outlawed raffles for many years, but recently amended its state constitution to allow, “non-profit tax-exempt religious, educations, veterans, fraternal, service, civic, medical, volunteer rescue service, volunteer firefights organization, or volunteer police organization…in continuing existence…for a period of not less than five years,” the right to raise money in this way.

Illinois has a similar law: “Licenses shall be issued only to bona fide religious, charitable, labor, business, fraternal, educational or veterans’ organizations that operate without profit to their members and which have been in existence continuously for a period of 5 years.”  Five years is also the minimum length of existence necessary to hold a raffle in Michigan.

Georgia is another state that specifically prohibits brand-new organizations from holding raffles. In Georgia, a charitable organization must be “in existence for 24 months immediately prior to the issuance of the license,” which costs no more than $100 and is good until the end of the calendar year. Applicants must register with the sheriff in the year prior to requiring the license. Louisiana also requires that groups wishing to run charitable games be “actively domiciled in Louisiana for two consecutive years immediately preceeding [sic] application.” Louisiana fundraisers are also required to attend state-sponsored training classes and purchase supplies from licensed suppliers. Plan ahead!

What Constitutes a Charity?

Connecticut also spells out the types of groups who may apply for a permit to conduct a raffle: “Educational or charitable, civic, service or social clubs, fraternal or fraternal benefit societies, veterans’, church or religious organizations, volunteer fire departments or political parties or town committees.” The price of the permit varies, depending on the type you may require. For instance, the state identifies “Cow-Chip” raffles, “Duck-Race” raffles, and “Frog-Race” raffles.

Maryland law specifies, “a bona fide charitable organization in this State may conduct a raffle for the exclusive benefit of the charitable organization if the prize awarded is real property,” but that real property raffles may only be held twice a year. Missouri, which heavily regulates any form of gambling, allows only “groups recognized under federal law as charitable or religious” to conduct raffles. This relatively new law was approved as recently as 1998 while New Jersey almost seems to brag that their Legalized Games of Chance Control Commission oversees “approximately 12,000 charitable, educational, religious, patriotic, public-spirited organizations and senior citizen associations and clubs organizations” in conducted legalized games of chance.

Next: Fun and Games