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.
⚠️ Legal Disclaimer: This guide provides general information about Texas raffle laws as of 2025. Laws change frequently. Always consult with legal counsel or the Texas Attorney General's office for current requirements specific to your situation.
Texas Raffle Laws: Quick Facts
Who Can Hold Raffles:
Qualified 501(c) nonprofits
Registration Required:
No state registration
Minimum Existence:
3 years in Texas
Raffles Per Year:
Maximum 4 per year
Prize Value Limit:
$75,000 per prize
Cash Prizes:
Maximum $75,000 cash
Residential Property:
Up to $250,000 value
Ticket Price Limit:
None specified
Who Can Conduct Raffles in Texas?
Texas law allows only qualified nonprofit organizations to conduct charitable raffles:
Eligible Organizations Must:
Have existed in Texas for at least 3 years
Be exempt from federal income tax under 501(c)(3), (4), (5), (6), (7), (8), (10), (19), or a volunteer emergency medical service
Not distribute any income to members, officers, or governing body
Not devote substantial part of activities to lobbying
Not participate in political campaigns
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
Maximum Prize Values:
Cash prizes: Up to $75,000
Non-cash prizes: Up to $75,000 per prize
Residential property: Up to $250,000
Total prizes per raffle: No limit on aggregate value
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
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Conducting Your Raffle: Texas Requirements
Texas Raffle Compliance Checklist
Verify organization has existed in Texas for 3+ years
Confirm current 501(c) tax-exempt status
Ensure no more than 4 raffles planned this year
Verify prize values within legal limits
Design tickets with all required information
Use only organization members to sell tickets
Set up proper financial tracking systems
Plan drawing at predetermined time and place
Prepare annual reporting if prizes exceed $10,000
Keep all records for at least 4 years
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
Maintain These Records for 4 Years:
Gross receipts from ticket sales
Number of tickets sold
Itemized list of all prizes and values
Itemized list of all expenses
Net proceeds and their disposition
Names and addresses of prize winners
Copy of each ticket sold
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
Warning: Violations of Texas raffle laws are Class C misdemeanors punishable by fines up to $500 per violation.
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
Plan Early: Start planning 3-4 months in advance
Document Everything: Keep meticulous records from day one
Train Volunteers: Ensure all ticket sellers understand the rules
Price Strategically: Set ticket prices to maximize participation
Market Locally: Focus on your community and membership
Be Transparent: Publicly display license and winner selection
File Reports Promptly: Don't miss the 60-day deadline
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.
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