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Raffles

By State law, schools and the District are not allowed to hold raffles. Only raffles held according to the terms of the Charitable Raffle Enabling Act are authorized raffles. The law is Chapter 2002, Occupations Code, Texas Codes Annotated.

A raffle is defined as the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize.

Some examples of unlawful raffles include any raffle that is:

  • Conducted by an individual
  • Conducted by a for-profit business
  • Conducted by a charity that has no members or otherwise does not qualify

 

What does the law permit?

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.

What is a "qualified organization"?

In general, a qualified organization is:

  1. A nonprofit association organized primarily for religious purposes that has been in existence in Texas for at least 10 years;
  2. A nonprofit volunteer emergency medical service that does not pay its members other than nominal compensation;
  3. A nonprofit volunteer fire department that operates fire fighting equipment, provides firefighting services, 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 you qualify.

What prizes may be offered?

A qualified 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.

Is an organization required to register with the State before conducting a raffle?

No.

What are the restrictions on how the raffle may be conducted?

  • A qualified organization may hold only two raffles per [calendar] year and only one raffle at a time.
  • Raffle tickets may not be advertised state wide or through paid advertisements. Each raffle ticket must state the name of the organization holding the raffle, address of the organization or of a named officer of the organization, the price of the ticket, a general description of each prize to be awarded that has a value of over $10, and the date the raffle prizes will be awarded.
  • 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.

How may the proceeds from ticket sales be used?

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

Are there any penalties for conducting or participating in an unauthorized raffle?

Yes. Only raffles held according to the terms of the Raffle Enabling Act are authorized raffles. 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.

What law enforcement authorities may stop an unauthorized raffle?

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.

Where can I get more information on the requirements for holding a raffle?

For more information on conducting a raffle, please read Chapter 2002, Charitable Raffles, Occupations Code, Texas Codes Annotated.

Waco ISD’s Internal Audit Department does not possess expertise nor authority over raffle rules. The information included in these guidelines serves as a source of general information. If you have specific questions about the law, please consult an attorney with expertise in this area.

Also, for more information, please call the Attorney General’s office or refer to their Web site at texasattorneygeneral.gov

Consumer Information

For more information, call the Attorney General's Consumer Protection Hotline at 800-621-0508

All consumer complaints must be made in online at File a Consumer Complaint or by mail. See Printable Complaint Form for a complaint form. Write to:

Office of the Attorney General
P.O. Box 12548
Austin, Texas 78711–2548