Texas Raffle Laws: Complete Legal Guide for Nonprofits

Texas allows charitable raffles under specific conditions outlined in the Charitable Raffle Enabling Act. This comprehensive guide covers everything nonprofits need to know about conducting legal raffles in the Lone Star State, including prize limits, reporting requirements, and compliance steps.

Who Can Conduct Raffles in Texas?

Texas law allows only qualified nonprofit organizations to conduct charitable raffles:

Special Eligibility

The following organizations have different requirements:

• Religious societies: No 3-year requirement
• Volunteer fire departments: Eligible regardless of tax status
• Volunteer EMS: Eligible regardless of tax status

Texas Raffle Restrictions

Prize Limits

Frequency Limits

• Maximum 4 raffles per calendar year
• Only 2 raffles may have prizes over $10,000
• Each raffle is a separate event

Prohibited Activities

• No compensation: Cannot pay anyone to organize or conduct raffle
• No promotional items: Cannot provide free tickets or items to promote sales
• No third-party sales: Must sell tickets through members only
• No statewide advertising: Limited to organization's community

Conducting Your Raffle: Texas Requirements

Required Ticket Information

Each raffle ticket must clearly display:

• Name of the organization
• Address of the organization
• Ticket price
• Brief description of each prize over $10 value
• Date, time, and location of drawing
• Statement: "Need not be present to win"

Ticket Sales Rules

• Only organization members can sell tickets
• Cannot compensate ticket sellers
• Cannot offer discounts or free tickets
• Must sell tickets for same price to everyone
• Can sell tickets up to drawing time

Financial Management & Reporting

Use of Proceeds

Texas law requires that raffle proceeds be used for the organization's charitable purposes. Specific requirements:

• Cannot use proceeds to pay raffle expenses if they exceed 30% of gross receipts
• Must dedicate net proceeds to charitable purposes
• Cannot distribute to members or officers

Record Keeping Requirements

Annual Reporting

If any prize awarded exceeds $10,000 in value OR gross receipts exceed $10,000:

• Must file annual report with Texas Attorney General
• Due within 60 days after end of fiscal year
• Include financial information about each raffle
• Report form available on AG website

Special Considerations for Texas Raffles

Real Estate Prizes

Texas allows residential real property as prizes with special rules:

• Maximum value: $250,000
• Must be residential property only
• Organization must own property before raffle
• Cannot purchase specifically for raffle

Vehicle Prizes

• No specific restrictions beyond $75,000 limit
• Must handle title transfer properly
• Winner responsible for taxes and registration

Multi-Organization Raffles

Multiple qualified organizations can jointly conduct a raffle if:

• Each organization meets eligibility requirements
• Proceeds divided by written agreement
• Counts as one raffle for each organization

Common Violations and Penalties

Common Violations

• Conducting more than 4 raffles per year
• Exceeding prize value limits
• Paying people to sell tickets or organize raffle
• Selling tickets through non-members
• Failing to file required annual reports
• Using proceeds for non-charitable purposes

Best Practices for Texas Raffles

1. Plan Early: Start planning 3-4 months in advance
2. Document Everything: Keep meticulous records from day one
3. Train Volunteers: Ensure all ticket sellers understand the rules
4. Price Strategically: Set ticket prices to maximize participation
5. Market Locally: Focus on your community and membership
6. Be Transparent: Publicly display license and winner selection
7. File Reports Promptly: Don't miss the 60-day deadline

Make Your Texas Raffle a Success

Texas offers nonprofits significant flexibility in conducting raffles, with reasonable prize limits and no state registration requirements. The key to success is understanding and following the Charitable Raffle Enabling Act requirements.

Focus on proper record-keeping, stay within the frequency and prize limits, and ensure all ticket sales are handled by organization members. With careful planning and compliance, your Texas raffle can be both successful and fully legal.