Michigan Raffle Laws: Complete Legal Guide for Nonprofits
Michigan regulates raffles through the Bureau of State Lottery under the Charitable Gaming Act, offering multiple license types for different fundraising needs. This comprehensive guide covers small raffles, large raffles, and millionaire parties, helping nonprofits navigate Michigan's charitable gaming regulations.
Michigan Raffle Laws: Quick Facts
| Who Can Hold Raffles: | Qualified nonprofits |
| Small Raffle Limit: | $25,000 in prizes per event |
| Large Raffle License: | No prize limit |
| Millionaire Party: | Special event license |
| Online Sales: | Not permitted |
| 50/50 Raffles: | Allowed with license |
| License Cost: | $15-$150 depending on type |
| Minimum Existence: | 2 years (with exceptions) |
Who Can Conduct Raffles in Michigan?
Michigan restricts raffles to qualified organizations meeting specific criteria:
Eligible Organizations Must:
- Be organized for religious, educational, service, senior citizens, fraternal, or veterans purposes
- Have federal tax-exempt status under 501(c)
- Have been in existence for 2+ years (with exceptions)
- Have a dues-paying membership engaged in the organization's purposes
- Be licensed by the Bureau of State Lottery
Two-Year Rule Exceptions
The following can qualify without 2 years existence:
- Component of national organization in existence 2+ years
- Newly created through merger of qualifying organizations
- Charter school or public school organization
License Types and Requirements
Small Raffle License
Small Raffle Specifications:
- Prize limit: $25,000 total per event
- Ticket price: Maximum $100 per ticket
- License fee: $15 per raffle
- Processing time: 3-4 weeks
- Valid period: Single event only
Large Raffle License
- Prize limit: No maximum
- Ticket price: No limit
- License fee: $50-$150 based on prize value
- Bond required: May need surety bond
- Additional oversight: More detailed reporting
Special Event License (Millionaire Party)
- Combines multiple gaming activities
- Can include raffles with other games
- Limited to 4 events per year
- Specific venue requirements
- Professional suppliers may be used
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Conducting Your Raffle: Step-by-Step
Michigan Raffle Compliance Checklist
- Verify organization meets 2-year requirement
- Obtain federal tax-exempt status
- Determine raffle size (small vs. large)
- Apply for appropriate license type
- Submit application 6-8 weeks before event
- Design tickets with required information
- Set up separate bank account
- Train volunteers on regulations
- Plan drawing procedures
- Prepare financial reporting system
Required Ticket Information
Each raffle ticket must display:
- Name of licensed organization
- License number
- Date, time, and location of drawing
- Price of ticket
- Prizes offered with retail value over $100
- Whether winner must be present
- Consecutive numbering
- Stub for purchaser information
Operational Rules
- Only members can sell tickets and work event
- No compensation for raffle work
- All workers must be 18+
- Cannot sell tickets on credit
- Must use Michigan-licensed suppliers for equipment
Financial Management & Reporting
Banking Requirements
Financial Controls:
- Maintain separate charitable gaming account
- Deposit all proceeds within 2 business days
- Two signatures required on checks
- No commingling with other funds
- Detailed records of all transactions
Use of Proceeds
Michigan requires that net proceeds be used for:
- Organization's stated lawful purposes
- Cannot benefit any individual
- Allowable expenses limited to actual costs
- Must spend profits within 18 months
Reporting Requirements
- Financial report: Due within 60 days of event
- Contents: Gross receipts, prizes, expenses, net profit
- Annual report: Summary of all charitable gaming
- Record retention: Minimum 3 years
- Available for audit: Bureau can inspect anytime
50/50 Raffles in Michigan
Michigan allows 50/50 raffles with specific guidelines:
50/50 Raffle Rules:
- Requires appropriate raffle license
- Winner receives exactly 50% of gross receipts
- Can be conducted at sporting events
- Electronic 50/50 systems allowed with approval
- Must follow all standard raffle regulations
Millionaire Parties
Michigan's unique "Millionaire Party" events combine multiple games:
What's Included
- Casino-style gaming (blackjack, poker, roulette)
- Raffles as part of the event
- Silent auctions
- Other charitable gaming activities
Special Requirements
- Must use licensed suppliers
- Specific venue restrictions
- Limited to 4 events per year
- Chips used instead of cash during gaming
- More complex reporting requirements
Common Violations and Penalties
Common Violations
- Operating without proper license
- Exceeding prize limits on small raffle license
- Using unlicensed suppliers
- Improper financial record keeping
- Paying workers or providing compensation
- Failing to file required reports
- Misuse of charitable gaming proceeds
Best Practices for Michigan Raffles
- Apply Early: Submit applications 6-8 weeks in advance
- Choose Right License: Don't try to squeeze under small raffle limits
- Separate Accounting: Keep meticulous financial records
- Train Everyone: All volunteers must understand rules
- Use Licensed Suppliers: Only work with Michigan-approved vendors
- File Reports Promptly: Late reports risk future licenses
- Consider Millionaire Parties: Combine raffles with other gaming
Michigan Charitable Gaming License: Complete Breakdown
Every nonprofit that wants to conduct a raffle in Michigan must first obtain a charitable gaming license from the Bureau of State Lottery's Charitable Gaming Section. The license is not optional — it is a legal prerequisite, and operating without one carries serious penalties. Understanding the license types, application process, and renewal requirements is essential for any organization planning a raffle fundraiser in Michigan.
What Is the Michigan Charitable Gaming License?
The Michigan Charitable Gaming License is a permit issued by the Michigan Bureau of State Lottery that authorizes qualified nonprofit organizations to conduct specific types of charitable gaming events, including raffles, millionaire parties, and charity game ticket sales. The license system exists under the Traxler-McCauley-Law-Bowman Bingo Act (Act 382 of 1972), as amended, which governs all charitable gaming in Michigan.
The license ensures that only legitimate nonprofit organizations conduct gaming activities and that proceeds go toward charitable purposes rather than private benefit.
Who Needs a Michigan Charitable Gaming License?
Any organization that wants to hold a raffle, millionaire party, or sell charity game tickets in Michigan must obtain the appropriate license. Specifically, this includes:
- 501(c)(3) nonprofits — charities, educational organizations, religious institutions
- Churches and religious organizations — including parishes, synagogues, mosques, and affiliated groups
- Schools and PTOs — public schools, charter schools, and parent-teacher organizations
- Civic organizations — Rotary clubs, Lions clubs, Kiwanis, and similar service groups
- Veterans organizations — VFW posts, American Legion chapters, DAV chapters
- Fraternal organizations — Elks lodges, Moose lodges, Knights of Columbus councils
- Senior citizens organizations — groups organized for the benefit of seniors
Types of Michigan Charitable Gaming Licenses
Michigan issues three primary classes of charitable gaming licenses. The class you need depends on the type and scale of your event:
Class A License — Small Raffles
- What it allows: Raffles with total prizes valued at $25,000 or less per event
- Maximum ticket price: $100 per ticket
- License fee: $15 per event
- Events per year: No limit on number of small raffles
- Bond required: No
- Best for: Smaller fundraisers, reverse raffles, basket raffles, and community events
Class B License — Large Raffles
- What it allows: Raffles with total prizes exceeding $25,000 (no upper limit)
- Maximum ticket price: No limit
- License fee: $50-$150, scaled to total prize value
- Bond required: May require surety bond depending on prize value
- Additional requirements: More detailed financial reporting, potential for on-site Bureau inspection
- Best for: Major fundraising galas, car raffles, house raffles, and high-dollar raffle events
Class C License — Millionaire Parties
- What it allows: Multi-game events combining raffles with casino-style gaming (blackjack, poker, roulette)
- License fee: $50-$100 per event
- Events per year: Maximum 4 millionaire parties annually
- Special rules: Must use licensed gaming suppliers, specific venue requirements, chips required for table games
- Best for: Casino night fundraisers, gala events, and organizations that want to maximize revenue from a single event
How to Apply for a Michigan Charitable Gaming License: Step-by-Step
The application process is straightforward but requires advance planning. Here is how to get your Michigan raffle license:
- Confirm eligibility — Verify your organization has 501(c) tax-exempt status, has been in existence for at least 2 years (or qualifies for an exception), and has a dues-paying membership
- Determine the correct license class — Class A for prizes under $25,000, Class B for larger prizes, Class C for millionaire parties
- Download the application — Get the appropriate form from the Michigan Bureau of State Lottery Charitable Gaming Forms page
- Complete the application — Include organization name, EIN, event date, venue, estimated prize value, and officer information
- Attach required documentation — IRS determination letter (proof of tax-exempt status), articles of incorporation, bylaws, and officer list
- Pay the license fee — $15 for Class A, $50-$150 for Class B, $50-$100 for Class C
- Submit to the Bureau of State Lottery — Mail or submit online through Michigan's charitable gaming portal
- Wait for approval — Processing typically takes 3-6 weeks. Submit well in advance of your event date
- Receive your license number — This must be printed on all raffle tickets and displayed at your event
License Fees and Processing Timeline
Michigan Gaming License Fee Schedule
| Class A (Small Raffle): | $15 per event |
| Class B (Large Raffle): | $50-$150 based on prize value |
| Class C (Millionaire Party): | $50-$100 per event |
| Processing Time: | 3-6 weeks (plan for 6-8) |
| Surety Bond (Class B): | Varies by prize value |
| First-Time Applicants: | May require additional documentation |
Renewal Requirements
Michigan charitable gaming licenses are issued per event, not on an annual basis. This means you need a new license for each raffle or millionaire party you hold. However, organizations that conduct frequent events should be aware of these ongoing requirements:
- Each event needs its own license — There is no blanket annual raffle license in Michigan
- Good standing required — All previous event financial reports must be filed before a new license will be approved
- Updated documentation — If officers change or your tax-exempt status is modified, you must provide updated documents
- Annual qualifying form — Organizations conducting multiple events per year may file an annual qualification to streamline repeat applications
- Continuous compliance — Any outstanding violations or unpaid fines will block new license approvals
Penalties for Operating Without a License
Running a raffle without the proper Michigan charitable gaming license is not a minor administrative oversight — it is a criminal violation. Consequences include:
Potential Penalties:
- Criminal charges: Operating without a license is a misdemeanor under Michigan law
- Fines: Up to $10,000 per violation
- License revocation: Loss of ability to obtain future charitable gaming licenses
- Seizure of proceeds: The Bureau can seize all funds from an unlicensed event
- Ban from charitable gaming: Individuals involved may be permanently barred from participating in charitable gaming activities
- Reputational damage: Violations are public record and can harm your organization's standing in the community
Even unintentional violations — such as exceeding the $25,000 prize limit on a Class A license — can trigger enforcement action. When in doubt, apply for the higher license class to avoid risk. For more on raffle laws across all states, see our comprehensive legal guide.
Michigan Gaming Control Board and Raffle Regulation
A common point of confusion: the Michigan Gaming Control Board (MGCB) oversees commercial casinos and Detroit's three casinos, while charitable gaming (including raffles) falls under the Bureau of State Lottery's Charitable Gaming Section. However, both agencies coordinate on gaming enforcement, and the regulatory framework shares common compliance principles.
How Michigan Regulates Charitable Raffles
The Bureau of State Lottery's Charitable Gaming Section is responsible for:
- License issuance and review — Processing all charitable gaming license applications
- Compliance monitoring — Conducting on-site inspections and audits of licensed events
- Financial oversight — Reviewing post-event financial reports for accuracy
- Enforcement actions — Investigating complaints, issuing fines, and revoking licenses
- Supplier licensing — Approving and monitoring gaming equipment suppliers
- Public education — Providing guidance materials and answering compliance questions
Reporting Requirements
Michigan takes charitable gaming reporting seriously. Organizations must meet these obligations:
Post-Event Financial Report
- Deadline: Within 60 days of each raffle event
- Contents: Gross receipts from ticket sales, total prizes awarded (with fair market values), all expenses incurred, net profit calculation
- Form: Bureau-provided financial report form specific to your license type
- Submission: Mail to the Bureau of State Lottery or submit through their online portal
Record-Keeping Rules
Beyond filing reports, Michigan requires organizations to maintain detailed records that can be inspected at any time:
- Financial records: Bank statements, deposit slips, canceled checks, and receipts for all transactions related to the event
- Ticket accounting: Records showing total tickets printed, sold, unsold, and voided — all with sequential numbering
- Prize documentation: Receipts for purchased prizes, donor letters for donated prizes with fair market values
- Volunteer records: Names of all individuals who worked the event (must be organization members)
- Retention period: Minimum 3 years from the date of the event
- Availability: Records must be available for Bureau inspection with reasonable notice
Annual Reports
Organizations that conduct multiple charitable gaming events in a calendar year must also file an annual summary report. This report consolidates all gaming activity and includes:
- Total gross revenue from all charitable gaming events for the year
- Total prizes awarded across all events
- Total expenses by category (venue, printing, supplies, etc.)
- Net proceeds and how they were used for charitable purposes
- Confirmation that proceeds were spent within the required 18-month window
Organizations using raffle management software often find it significantly easier to maintain the level of record-keeping Michigan requires, since digital systems automatically track ticket sales, participant information, and financial data.
Official Resources
Make Your Michigan Raffle a Success
Michigan offers flexible options for charitable raffles, from simple small raffles to elaborate millionaire parties. The key is choosing the right license type for your fundraising goals and maintaining strict compliance with financial reporting requirements.
Consider starting with small raffles to build experience, then graduating to large raffles or millionaire parties as your organization grows. Michigan's detailed regulations provide clear guidelines that, when followed properly, create successful and compliant fundraising events.
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