How to Hold a Raffle Legally

Raffles. They can be the thing that helps you have a hope and a dream of winning money that you did not earn.

They are also very similar to lotteries, where people buy lottery tickets in the hopes that their numbers come up. About 80% of Americans play the lottery, so you could expect a similar number to be drawn to raffles.

However, you might be on the other side of the equation and want to host a raffle of your own.

Are raffles legal if you do them by yourself? Do you know how to hold a raffle legally?

This guide will show you how to run a raffle legally.

What Is a Raffle? 

Before we can talk about running a raffle legally, we must first discuss what legally defines a raffle.

In most of the country, a legal raffle is defined as an organization that accepts money from people to participate in it or something of financial value. To do this, this organization has to comply with all of the state and local regulations that come along with that business.

There are two other things you have to keep in mind when you are defining a raffle as well. These two things are that you are offering a prize of monetary value and that the prize is won at random.

If your event meets all of the criteria above, then it can be legally defined as a raffle.

Personal Raffles 

An important distinction between a legal and illegal raffle is if it is a personal raffle or not. This is defined as an individual person running a raffle for personal gain.

That type of raffle is considered illegal throughout the country. As stated above, you have to be part of an accredited organization that is regulated by your state or local jurisdiction to run a legal raffle.

Location 

So, your location can play a part here for multiple reasons. The first reason is that raffles are illegal altogether in at least three states in this country. One example is South Carolina, where the state does not allow any form of a raffle.

Then, there are specific regulations for online raffles. Some are more lenient such as Montana and Indiana, which only prohibit online purchases by credit card for raffles.

Other states prohibit online raffles entirely. These states include Alabama, Arkansas, California, Kansas, Minnesota, New Mexico, New York, and Rhode Island.

If your organization is operating in one of the states that were mentioned above, it is important to keep this in mind if you are trying to organize a raffle.

Not Taking a Fee

Are you worried about whether your raffle is legal or not? Well, one thing that can help you in this situation is not to take a fee.

As mentioned above, one of the biggest things that legally qualifies something as a raffle is if you are accepting payment from people to participate in it. Well, something that you can do to get rid of that concern is to not charge people to compete in the raffle.

How can you do this? It is easier than it sounds.

One thing you can do is simply accept personal information such as the person’s name, their age, contact information, and more. Then, you can pick a winner at random and you would have the person’s information as needed to get in contact with them.

This gives people a chance to compete in a private raffle without you having to worry about being considered profiting in the eyes of the law. In this situation, it is perfectly legal to do this as long as you let people compete in the raffle for free.

Setting Up a Lottery 

Now that you know some of the biggest things that go into a legal lottery, we can discuss some aspects of setting one up. Here are some things that you should keep in mind.

Luck or Skill? 

Are you going to make your raffle about luck or skill? If it is the latter, some may call this a contest. However, it holds pretty much the same legal ramifications as a raffle.

Whatever you decide, just know what you are getting into with the two. If you decide to have a raffle or contest that is based on skills, you may need to do more consulting with a lawyer to make sure that your rules and stipulations are clear in advance.

Doing a Raffle Online 

Another thing that you can consider is having a raffle online. This can allow you to get more people involved than you may be able to if you are in a remote area.

If you are going to go this route, just remember the states above that do not allow any kind of online raffles.

Once you check this, you can go on with organizing it. One thing you will want to consider is a platform to host it on. Look up some competition web design options that can work best for you.

Learn More About How to Hold a Raffle Legally 

These are some of the basic things that you should know when it comes to how to hold a raffle legally. You know how a raffle is legally defined, what you have to consider when organizing one, your location, and more.

Do you want to find out more relevant information about raffles? Check out our Entertainment section for more content.