Delaware permits qualified organizations to conduct raffles and other games of chance under a licensing framework administered by the state. This guide covers everything you need to know about running a legal raffle in the First State, including licensing requirements, prize limits, and reporting obligations.
Delaware Raffle Laws: Quick Facts
| Who Can Hold Raffles: | Qualified nonprofit organizations |
| License Required: | Yes, games of chance license |
| Governing Law: | Title 28, Chapter 17 (Games of Chance) |
| Minimum Existence: | 2 years in Delaware |
| Cash Prizes: | Permitted within limits |
| Online Sales: | Not specifically authorized |
| Reporting: | Annual reports required |
| License Fee: | Varies by organization type |
Who Can Conduct Raffles in Delaware?
Delaware's games of chance law (Title 28, Chapter 17 of the Delaware Code) authorizes specific types of organizations to conduct raffles and similar activities. The law is designed to ensure that gaming benefits legitimate charitable purposes.
Eligible Organizations Include:
- Volunteer fire companies and auxiliaries
- Religious organizations
- Civic and service clubs
- Veterans organizations
- Fraternal organizations
- Senior citizen clubs and organizations
- Other qualifying nonprofit entities
Organizations must have been in existence for at least two years before applying for a games of chance license. They must also demonstrate that proceeds will be used for charitable, educational, or community purposes.
Licensing Requirements
Delaware requires a games of chance license for any organization wishing to conduct raffles. The licensing process is overseen by the Delaware Department of Finance. For a broader overview of raffle regulations nationwide, see our complete guide to raffle laws by state.
License Application Steps:
- Submit application to the Delaware Division of Accounting
- Provide proof of nonprofit status and two-year operating history
- List all officers and directors of the organization
- Describe planned gaming activities
- Pay the required license fee
- Receive approval before conducting any raffle
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Prize Limits and Rules
Delaware sets specific limits on prizes that can be awarded through games of chance, including raffles.
Prize Regulations:
- Cash prizes: Permitted within established dollar limits per event
- Merchandise prizes: Allowed, subject to value caps
- Total prize limits: Vary by license type and event
- Frequency: Limited number of gaming events per year based on license
Prohibited Activities
- Operating without a valid games of chance license
- Exceeding prize limits set by license type
- Using proceeds for personal benefit or non-charitable purposes
- Allowing minors to purchase tickets or participate
- Compensating individuals to run gaming operations beyond allowed amounts
Conducting Your Raffle: Delaware Requirements
Delaware Raffle Compliance Checklist
- Obtain games of chance license from Division of Accounting
- Verify organization meets two-year existence requirement
- Ensure all prizes fall within permitted limits
- Designate responsible person for gaming operations
- Print tickets with required information
- Set up proper financial tracking
- Conduct drawing openly and fairly
- File annual report with the state
- Maintain records for at least three years
- Direct net proceeds to charitable purposes
Financial Reporting and Record Keeping
Licensed organizations must file annual reports detailing their gaming activities. Proper record keeping is essential for compliance and audit readiness.
Required Records:
- Gross receipts from ticket sales
- All prizes awarded and their values
- Operating expenses related to gaming
- Net proceeds and how they were distributed
- Names and addresses of prize winners (for prizes above reporting thresholds)
Online Raffle Rules in Delaware
Delaware's games of chance laws were enacted before digital commerce became widespread. The statutes do not specifically authorize online raffle ticket sales. Organizations considering online sales should consult with legal counsel and the Division of Accounting. For tips on organizing raffles effectively, see our guide to understanding different raffle formats.
Tax Implications
- Winners: Prizes valued at $600 or more must be reported to the IRS
- Organizations: Gaming income may be subject to UBIT if not properly structured
- Delaware state tax: Winners may owe Delaware income tax on prize winnings
Penalties for Violations
Common Violations
- Conducting raffles without a valid license
- Exceeding prize or event limits
- Failing to file required reports
- Diverting proceeds from charitable purposes
- Inadequate record keeping
Best Practices for Delaware Raffles
- Apply Early: Submit your license application well before your planned event
- Know Your Limits: Understand the prize caps for your specific license type
- Keep Detailed Records: Track every dollar in and out of your gaming operations
- Train Volunteers: Make sure everyone involved understands the rules
- File Reports Promptly: Meet all annual reporting deadlines
- Separate Funds: Maintain a dedicated account for gaming activities
Official Resources
Make Your Delaware Raffle a Success
Delaware provides a clear framework for nonprofits to conduct legal raffles through its games of chance licensing system. By obtaining the proper license, following prize limits, and maintaining thorough records, your organization can run successful and compliant fundraising events.
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