Colorado's raffle laws provide clear guidelines for nonprofit organizations wanting to conduct legal fundraising activities. With over 5.8 million residents and a strong culture of community support, Colorado offers excellent opportunities for charitable raffles when conducted according to state regulations.
Legal Disclaimer
This guide provides general information about Colorado raffle laws as of 2025. Laws can change, and specific situations may require legal counsel. Always consult with a qualified attorney or contact the Colorado Division of Gaming for official legal advice before conducting any raffle.
Overview of Colorado Raffle Laws
Colorado regulates charitable gaming activities, including raffles, under the Colorado Limited Gaming Act and associated regulations. The Colorado Division of Gaming oversees compliance and licensing for organizations conducting raffles in the state.
Who Can Conduct Raffles in Colorado
Colorado allows specific types of organizations to conduct raffles legally:
- 501(c)(3) Charitable Organizations - Must be federally tax-exempt
- 501(c)(4) Civic Organizations - Social welfare organizations
- 501(c)(7) Social Clubs - Fraternal and social organizations
- 501(c)(8) Fraternal Organizations - Lodge-based groups
- 501(c)(10) Domestic Fraternal Societies - Religious fraternal groups
- 501(c)(19) Veterans' Organizations - Military service groups
Key Requirement
Organizations must be in good standing with the IRS and have been operating for at least two years before conducting raffles in Colorado.
Colorado Raffle License Requirements
Bingo-Raffle License Application
Most charitable organizations conducting raffles in Colorado must obtain a Bingo-Raffle License from the Colorado Division of Gaming. This license covers both bingo and raffle activities.
License Application Requirements
- Application Form: Complete DR 4001 Bingo-Raffle License Application
- IRS Determination Letter: Proof of tax-exempt status
- Articles of Incorporation: Organizational documentation
- Bylaws: Current organizational bylaws
- Financial Statements: Most recent audited financial statements
- License Fee: $50 initial application fee
Processing Time: Typically 30-45 days from complete application submission
Exemptions from Licensing
Some smaller raffles may be exempt from licensing requirements:
- Small Raffle Exemption: Raffles with total value of all prizes under $5,000
- Frequency Limitation: Maximum of two exempt raffles per calendar year
- Single Event Restriction: All drawing must occur at one event
- Direct Benefit Requirement: Proceeds must directly benefit the organization
Colorado Raffle Regulations and Restrictions
Prize Value Limitations
Colorado sets specific limits on raffle prizes:
Prize Value Limits
- Single Prize Maximum: $50,000 per individual prize
- Total Prize Pool: No limit on total value of all prizes combined
- Cash Prizes: Permitted up to maximum prize limits
- Merchandise Prizes: Fair market value applies to limits
Ticket Sales and Pricing
Colorado regulates how raffle tickets can be sold and priced:
- Sales Locations: Tickets may be sold statewide
- Internet Sales: Online ticket sales are permitted with proper licensing
- Minimum Age: Participants must be 18 years or older
- Ticket Pricing: No specific price restrictions
- Sales Period: Tickets may be sold up to 365 days before drawing
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Required Record Keeping
Organizations must maintain detailed records of raffle activities:
- Ticket Records: Serial numbers, sales documentation
- Financial Records: All revenues and expenses
- Winner Information: Names, addresses, prize values
- Volunteer Records: Staff and volunteer involvement
- Permit Documentation: All licensing and approval documents
- Retention Period: Records must be kept for minimum of three years
Colorado Tax Requirements
Winner Tax Obligations
Prize winners in Colorado have specific tax responsibilities:
Tax Reporting Requirements
- IRS Form W-2G: Required for prizes $600 or more that exceed 300 times the wager
- Backup Withholding: May be required if winner doesn't provide valid TIN
- State Taxes: Colorado income tax applies to prize winnings
- Federal Taxes: All prizes are subject to federal income tax
Organizational Tax Benefits
Qualified organizations can benefit from tax advantages:
- Income Tax Exemption: Raffle proceeds generally not subject to corporate income tax
- Sales Tax: May be exempt on raffle ticket sales
- Donor Deductions: Ticket purchases may qualify as charitable contributions
Compliance Best Practices
Pre-Event Planning
Ensure compliance before launching your raffle:
Pre-Launch Checklist
- Verify current IRS tax-exempt status
- Obtain required Colorado gaming license
- Review prize values against state limits
- Establish compliant record-keeping systems
- Train volunteers on legal requirements
- Prepare tax reporting documentation
During Event Operations
Maintain compliance throughout your raffle:
- Age Verification: Check ID for all ticket purchasers
- Record Keeping: Document all transactions immediately
- Fair Drawing: Use transparent, verifiable selection methods
- Winner Verification: Confirm winner eligibility before awarding prizes
Post-Event Requirements
Complete all post-raffle obligations:
- Winner Documentation: Collect required tax information
- Financial Reporting: Complete revenue and expense documentation
- Tax Filings: Submit required federal and state forms
- License Renewal: Maintain current gaming license status
Common Colorado Raffle Violations
Licensing Violations
Avoid these common licensing mistakes:
- Operating Without License: Conducting raffles without proper permits
- Expired Licenses: Failing to renew gaming licenses on time
- Unlicensed Volunteers: Using volunteers not properly registered
- Location Violations: Conducting raffles in prohibited locations
Prize and Ticket Violations
Common mistakes related to prizes and ticket sales:
- Excessive Prize Values: Exceeding $50,000 single prize limit
- Improper Ticket Sales: Selling to minors under 18
- Record Keeping Failures: Inadequate documentation
- Tax Reporting Errors: Failing to report large prizes properly
Colorado-Specific Considerations
Local Municipality Regulations
Some Colorado cities and counties have additional requirements:
- Denver: Additional permits may be required for large events
- Colorado Springs: Special venue requirements for gaming activities
- Aurora: Local business license requirements
- Fort Collins: Zoning restrictions on gaming events
Local Requirements
Always check with your specific city or county for additional local requirements that may apply to your raffle. Local regulations can be more restrictive than state law.
Cultural and Community Factors
Consider Colorado's unique characteristics when planning raffles:
- Outdoor Culture: Adventure and outdoor gear often popular prizes
- Environmental Awareness: Eco-friendly practices resonate with communities
- Tech-Savvy Population: Digital raffle platforms gain acceptance
- Community-Oriented: Local business partnerships strengthen events
Resources and Contacts
Official Government Resources
- Colorado Division of Gaming: Primary regulatory authority
- Phone: (303) 205-1355
- Website: gaming.colorado.gov
- Address: 1881 Pierce Street, Suite 112, Lakewood, CO 80214
Professional Support
Consider consulting these professionals for complex raffles:
- Gaming Attorneys: Legal compliance and interpretation
- Nonprofit Consultants: Fundraising strategy and planning
- Tax Professionals: Tax reporting and compliance
- Insurance Agents: Event liability and coverage
Technology and Modern Raffles
Digital Raffle Platforms
Colorado allows online raffle ticket sales with proper licensing, opening opportunities for:
- Broader Reach: Statewide and potentially national sales
- Automated Compliance: Digital tracking and record-keeping
- Enhanced Security: Transparent drawing and winner selection
- Cost Efficiency: Reduced administrative overhead
Professional Raffle Management
Modern raffle software helps ensure compliance:
- Automated record keeping and reporting
- Built-in compliance checks and alerts
- Professional presentation and credibility
- Integration with payment processing and tax reporting
Ready to conduct a legally compliant raffle in Colorado? Explore professional raffle management tools designed to help you follow all state requirements automatically.