North Carolina Raffle Laws: Complete Legal Guide for Nonprofits

North Carolina regulates raffles under the North Carolina General Statutes Chapter 14, Article 37, allowing nonprofits to conduct various types of raffles including electronic raffles. This guide covers licensing, prize limits, and compliance requirements for legal raffles in the Tar Heel State.

⚠️ Legal Disclaimer: This guide provides general information about North Carolina raffle laws as of 2025. Laws change frequently. Always consult with legal counsel or the North Carolina Department of Public Safety for current requirements specific to your situation.

North Carolina Raffle Laws: Quick Facts

Who Can Hold Raffles: Qualified nonprofits
License Required: Yes, from local government
State Permit: Required for prizes over $125,000
Prize Limit (Local): $125,000 cash value
Prize Limit (State): $500,000 cash value
Real Property: $500,000 maximum
Electronic Raffles: Allowed with restrictions
50/50 Raffles: Specifically authorized

Who Can Conduct Raffles in North Carolina?

North Carolina allows specific types of nonprofit organizations to conduct raffles:

Eligible Organizations Include:

  • Tax-exempt nonprofit organizations
  • Nonprofit civic organizations
  • Nonprofit fraternal organizations
  • Nonprofit patriotic organizations
  • Nonprofit religious organizations
  • Nonprofit charitable organizations for educational or charitable purposes
  • Volunteer fire departments and rescue squads

Key Requirements

  • Must be organized and operating for nonprofit purposes
  • Cannot distribute profits to members or officers
  • Must use proceeds for organization's nonprofit purposes
  • Must have been in continuous existence for at least 1 year

Two-Tier Licensing System

Local Municipality License

For raffles with total cash prizes up to $125,000:

  • Issuing authority: City or county where raffle conducted
  • Application fee: Set by local government
  • Processing time: Varies by municipality
  • Valid period: As specified by local authority

State Raffle Permit

Required when total cash prizes exceed $125,000:

  • Issuing authority: NC Alcohol Law Enforcement Division
  • Maximum prizes: $500,000 cash value
  • Real property: Up to $500,000
  • Application: Must be submitted 4 weeks before ticket sales
  • Additional requirements: More stringent reporting

Prize Limits and Restrictions

Prize Value Limits:

  • Local permit only: Maximum $125,000 total cash value
  • State permit: Maximum $500,000 total cash value
  • Real property: Maximum $500,000 per raffle
  • 50/50 raffles: Winner gets 50% of gross receipts
  • No limit on: Number of raffles per year

Types of Prizes Allowed

  • Cash prizes
  • Merchandise
  • Real property
  • Vehicles
  • Gift certificates
  • Services

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Electronic Raffles in North Carolina

North Carolina specifically authorizes electronic raffles with proper safeguards:

Electronic Raffle Requirements:

  • System must use prescribed software
  • Must prevent unauthorized access
  • Create audit trail of all transactions
  • Display game rules and odds
  • Use approved random number generator
  • Allow only one entry per play

Electronic System Features

  • Can accept electronic payments
  • Must issue electronic receipts
  • Real-time reporting capabilities
  • Secure data storage requirements
  • Age verification systems

Conducting Your Raffle: Step-by-Step

North Carolina Raffle Compliance Checklist

  • Verify organization qualifies under statute
  • Determine total prize value
  • Apply for local municipality license
  • If over $125,000, apply for state permit
  • Design tickets with required information
  • Set up financial tracking system
  • Train volunteers on regulations
  • Plan drawing procedure
  • Prepare reporting documents
  • File post-raffle reports

Required Ticket Information

Each raffle ticket must contain:

  • Name of organization
  • License/permit number
  • Location of organization
  • Ticket price
  • Prizes offered with retail values
  • Location, date and time of drawing
  • Whether winner must be present

Operational Requirements

  • Only members can conduct raffle activities
  • No compensation for raffle work
  • Must maintain detailed records
  • Drawing must be open to public
  • Cannot discriminate in ticket sales

Financial Management & Reporting

Use of Proceeds

Net Proceeds Must Be Used For:

  • Religious purposes
  • Charitable purposes
  • Civic purposes
  • Educational purposes
  • Fraternal purposes
  • Cannot benefit private individuals

Record Keeping Requirements

Organizations must maintain for 3 years:

  • Gross receipts from ticket sales
  • Number of tickets sold
  • Cost of prizes awarded
  • Administrative expenses
  • Net proceeds and distribution
  • Winner information
  • Copies of all advertising

Reporting Obligations

  • Local raffles: Report as required by municipality
  • State permit raffles: Report within 30 days to ALE
  • Tax obligations: File appropriate federal and state forms
  • Public disclosure: Make reports available upon request

Special Types of Raffles

50/50 Raffles

North Carolina specifically authorizes 50/50 raffles:

  • Winner receives 50% of gross receipts
  • Organization keeps remaining 50%
  • Popular at sporting events
  • Subject to same licensing requirements
  • No specific dollar limits

Duck Races and Alternative Drawings

  • Allowed under raffle statutes
  • Must follow same licensing rules
  • Creative formats encouraged
  • Must ensure random selection

Common Violations and Penalties

Warning: Violations are Class 2 misdemeanors, punishable by fines and potential imprisonment. Organizations can lose eligibility for future raffles.

Common Violations

  • Operating without proper license/permit
  • Exceeding prize limits
  • Improper use of proceeds
  • Paying workers for raffle activities
  • Poor record keeping
  • Failing to file required reports

Best Practices for North Carolina Raffles

  1. Plan Prize Structure: Determine if you need state permit early
  2. Electronic Options: Consider electronic raffles for broader reach
  3. Document Everything: NC requires detailed records
  4. Train Thoroughly: All volunteers must understand rules
  5. File Promptly: Meet all reporting deadlines
  6. Leverage 50/50: Popular format with no prize procurement
  7. Stay Current: Laws change; verify requirements annually

Official Resources

Looking for raffle laws in other states?

View All States | Georgia | Michigan

Make Your North Carolina Raffle a Success

North Carolina offers one of the more flexible raffle environments in the Southeast, with provisions for electronic raffles and generous prize limits. The two-tier system allows smaller organizations to operate under local oversight while providing a path for larger fundraising efforts through state permits.

Take advantage of North Carolina's progressive approach by considering electronic raffle options and popular 50/50 formats. With proper planning and compliance, your North Carolina raffle can achieve impressive fundraising results while building community engagement.

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