With this additional information required, we are finding that many organizations are conducting some sort of gaming activity that previously was buried as a part of a fundraiser, such as a gala, dinner or golf tournament. What most organizations do not realize is that state laws always govern any type of gaming activity. While most people understand that state laws may regulate professional gaming activities, they fail to realize that state laws also regulate gaming activity that is carried out as a part of a fun filled event conducted by a nonprofit organization or a church.
At this point, I will apologize to all of my followers that are not from Texas. I have been asked to specifically blog the Texas rules for raffles. Realizing that some of my readers are from other states, I encourage everyone to do a little digging and determine how your state may be regulating raffles and determine if your organization is in compliance with the applicable state statutes.
In 1999, Texas passed The Charitable Raffle Enabling Act that allows for charitable raffles to be conducted by qualifying organizations. However, there are strict rules to be followed, if an organization desires its raffle to be covered by the act.
What Is A Raffle
In general, a raffle occurs any time someone pays for the chance to win a prize. Qualifying organizations are allowed to conduct two raffles each year that comply with the state law.
Who Can Conduct a Raffle In Texas
An organization has to be a qualified organization:
- An association organized primarily for religious purposes that has been in existence for 10 years;
- A voluntary EMS that does not pay its members;
- A volunteer fire department that does not pay its members; and
- A nonprofit organization that:
- is at least three years old;
- elects its governing body;
- has 501(c) tax exemption;
- has members;
- does not distribute its income to its members; and
- does not participate in political campaigns.
What Must the Organzation Do
The qualifying organization must follow a few rules:
- They must have possession of the prizes that are offered.
- Prizes may not be cash or items converted to cash. (It is thought that this does not prohibit gift cards as long as they cannot be readily converted to cash.)
- If the organization purchases the prize, its value cannot exceed $50,000.
- It must print tickets that include the name & address of the organization, the price of the ticket, the date the prize will be awarded and a general description of each prize that is valued at more than $10.
- Tickets may only be sold by members or authorized representatives. They may not be sold by compensated staff. You also cannot pay someone to plan and conduct the raffle.
- The raffle cannot be advertised statewide or through paid advertisements. This means that it cannot be advertised on the organization's website as this would be considered as "state wide."
Conducting an illegal raffle is issue for the organization's local district attorney. It is a Class A misdemeanor for conducting an illegal raffle and a Class C misdemeanor for participating in one. This means that the people actually conducting the raffle are at risk and should take seriously the above rules.
In essence, an organization cannot have an unplanned raffle or a spur of the moment raffle. Complying with the above rules take care and consideration. Therefore, organizations and churches should prepare policies and procedures to guide any type of activity that can be construed as a "raffle".