All About Raffles in Texas

Raffles can be an effective fundraising tool for nonprofits, but in Texas, they're subject to specific legal guidelines under the Charitable Raffle Enabling Act (CREA). It's crucial for organizations to understand these rules to ensure compliance and avoid potential legal issues. Click HERE for state guidelines.

What Constitutes a Raffle in Texas?

In Texas, a raffle is defined as the award of one or more prizes by chance at a single occasion among a single group of persons who have paid for a ticket that represents a chance to win a prize. This broad definition encompasses various fundraising activities, including games of chance by other names:

• 50/50 raffles (Click HERE to see related article)

• Jar raffles

• Calendar raffles

• Wine pulls

• Balloon pops

All these are considered raffles under Texas law and must adhere to CREA regulations.

Eligibility to Conduct Raffles

Only certain organizations qualify to hold raffles in Texas. Click HERE for our infographic on Texas Raffle Rules.

• Nonprofits that have been in existence for at least three years

• Organizations with a 501(c) tax-exempt status

• Religious organizations existing in Texas for at least 10 years

• Volunteer fire departments and emergency medical services that do not compensate members beyond nominal amounts

Individuals and for-profit businesses are prohibited from conducting raffles.

Raffle Limitations and Requirements

• Number of Raffles: Qualified organizations may conduct up to four raffles per calendar year.

• Prizes:

  • Cash prizes are strictly prohibited.

  • The value of purchased prizes must not exceed $75,000.

  • For residential dwellings, the value limit is $250,000.

  • There is no value limit on donated prizes.

• Ticket Requirements: Each raffle ticket must include:

  • The name of the organization conducting the raffle

  • The address of the organization or a named officer

  • The ticket price

  • A general description of each prize valued over $10

  • The date the prize(s) will be awarded

• Advertising: Raffles cannot be advertised statewide. Promotion is limited to the organization's website, newsletters, social media, or emails directed to existing supporters.

• Ticket Sales: Only members of the organization may sell raffle tickets. Compensating individuals for organizing or conducting a raffle is prohibited.

• Compliance and Penalties

Noncompliance with CREA can result in serious consequences per the Texas Attorney General’s website. Click HERE for details on penalties an enforcement.

• Conducting an unauthorized raffle is considered illegal gambling, a Class A misdemeanor.

• Participating in such a raffle can be a Class C misdemeanor.

• Violations can lead to legal actions by county attorneys, district attorneys, or the Texas Attorney General's Office.

Raffle Tips

• Plan Ahead: Ensure your organization meets all eligibility criteria before planning a raffle.

• Transparency: Clearly communicate raffle details to participants, including how proceeds will support your mission.

• Record-Keeping: Maintain detailed records of ticket sales, expenses, and prize distributions.

• Consult Legal Counsel: When in doubt, seek legal advice to ensure full compliance with state laws.

By adhering to these guidelines, Texas nonprofits can effectively utilize raffles as a fundraising strategy while remaining within the bounds of the law.

Cheers,

Michelle Crim, CFRE

Dynamic Development Strategies can help. We offer coaching, grant writing, and fundraising services for our nonprofit clients. We specialize in small to mid-size organizations because we understand your challenges. Please contact us for more information.

https://www.dynamicdevelopmentstrategies.com/