Virginia Raffle Laws: Complete Legal Guide for Nonprofits

Virginia's raffle laws feature a unique $40,000 threshold system that determines registration requirements. This comprehensive guide covers everything nonprofits need to know about conducting legal raffles in the Commonwealth, from small community events to large-scale fundraising campaigns.

⚠️ Legal Disclaimer: This guide provides general information about Virginia raffle laws as of 2025. Laws change frequently. Always consult with legal counsel or the Virginia Department of Agriculture and Consumer Services for current requirements specific to your situation.

Virginia Raffle Laws: Quick Facts

Regulatory Authority: Division of Charitable Gaming (VDACS)
Who Can Hold Raffles: Qualified nonprofits (3+ years operation)
Registration Threshold: $40,000 annual gross receipts
Permit Fee (Over $40K): $200 annually
Minimum Existence: 3 years of regular operation
Online Sales: Permitted with approval
Drawing Location: Must be held within Virginia
Ticket Sales Area: Inside and outside permit jurisdiction
Record Retention: 3 years minimum

Understanding the $40,000 Threshold

Virginia's raffle laws are built around a crucial $40,000 annual threshold that determines regulatory requirements:

Small Raffles (Under $40,000 annually)

No permit required - Organizations that reasonably expect gross receipts of $40,000 or less from all raffles in a 12-month period are NOT required to:

  • Notify the Department of their intention to conduct raffles
  • Comply with Department regulations governing raffles
  • Obtain permits or licenses
  • Submit annual reports

Large Raffles (Over $40,000 annually)

Permit required - Organizations anticipating gross receipts exceeding $40,000 must:

  • Submit a permit application with $200 non-refundable fee
  • Undergo background investigation
  • Comply with all Department regulations
  • Submit annual reports
  • Maintain detailed records for 3 years

Who Can Conduct Raffles in Virginia?

Virginia Code § 18.2-340.23 defines specific eligibility requirements for raffle operators:

Eligible Organizations Must:

  • Have existed and met regularly for at least 3 years in Virginia
  • Be operated exclusively for religious, charitable, community, or educational purposes
  • Be an athletic association or booster club for school-sponsored activities
  • Be an association of war veterans or auxiliary units organized in the US
  • Be a nonprofit with annual raffle receipts of $40,000 or less (no other requirements)

Special Categories

  • School Booster Clubs: Athletic associations and band booster clubs for school-sponsored activities
  • Veterans Organizations: War veterans associations and auxiliary units organized in the United States
  • Small Nonprofits: Any nonprofit organization with annual raffle receipts under $40,000

Ineligible Organizations

  • For-profit businesses or corporations
  • Individuals (even donating proceeds to charity)
  • Political organizations or campaigns
  • Government entities
  • Organizations operating in Virginia for less than 3 years (except small nonprofits under $40K)
  • Organizations without proper charitable purposes

Permit Application Process (Over $40,000)

Organizations expecting to generate more than $40,000 annually must navigate Virginia's permit process:

Application Requirements

  • Form: Complete charitable gaming permit application
  • Fee: $200 non-refundable application fee
  • Documentation: Proof of 3-year operation and tax-exempt status
  • Background Check: Investigation of organization and interested persons
  • Financial Information: Expected gross receipts and expense projections

Permit Validity and Renewal

  • Permits are valid for one year from date of issuance
  • Some permits may specify shorter periods
  • Annual renewal required for continued operation
  • Background investigations ensure public safety and welfare

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Operational Requirements and Restrictions

Ticket Sales Regulations

Permitted Ticket Sales

  • Geographic Scope: Both inside and outside permit jurisdiction
  • Drawing Location: Must be held within Virginia
  • Online Sales: Permitted with proper approval and procedures
  • Sales Method: Direct sales by organization members or approved agents

Online Raffle Requirements

Virginia allows online raffle ticket sales with specific requirements:

  • Must obtain approval from Division of Charitable Gaming
  • Website must be operated by the charitable organization
  • Proper verification of purchaser eligibility required
  • All online sales must comply with Virginia gaming regulations
  • Drawing must still occur within Virginia state borders

Record Keeping Requirements (Permitted Organizations)

  • Duration: Maintain all records for minimum 3 years
  • Supplies: Record of all supplies purchased
  • Disbursements: Documentation of all expenditures
  • Winners: Name and address of winners with prizes over $599
  • Annual Reports: Filed with Division yearly

Conducting Your Virginia Raffle

Virginia Raffle Compliance Checklist

  • Determine if annual receipts will exceed $40,000 threshold
  • Verify organization has operated for 3+ years (if over $40K)
  • Confirm charitable purpose and tax-exempt status
  • Apply for permit if over $40,000 threshold ($200 fee)
  • Undergo background investigation (if required)
  • Design tickets with required information
  • Establish ticket sales procedures
  • Set up online sales system (if applicable)
  • Plan drawing within Virginia state boundaries
  • Prepare record-keeping system
  • Schedule annual reporting (if permitted)

Required Ticket Information

Virginia raffle tickets should clearly display:

  • Name of the organization conducting the raffle
  • Organization's address and contact information
  • Permit number (if required)
  • Ticket price
  • Date, time, and location of drawing
  • Description of prizes and their approximate values
  • Terms and conditions of participation

Drawing Requirements

  • Location: Must be conducted within Virginia state boundaries
  • Method: Fair and impartial selection process
  • Documentation: Proper witnessing and recording of results
  • Notification: Winners must be promptly contacted
  • Prize Distribution: Prizes must be awarded as advertised

Reporting and Compliance (Permitted Organizations)

Organizations with permits must meet specific reporting requirements:

Annual Reporting Requirements

  • Submit annual report to Division of Charitable Gaming
  • Include financial summary of all raffle activities
  • Document prize distributions and winners
  • Report any changes in organization status
  • Maintain compliance with permit conditions

Tax Implications

  • Report raffle income on federal tax returns (Form 990)
  • Issue 1099 forms for prizes over $600
  • Comply with Virginia state tax requirements
  • Consider income tax withholding for large prizes
  • Maintain documentation for tax purposes

Common Violations and Penalties

Warning: Violations of Virginia raffle laws can result in criminal charges, civil penalties, and loss of charitable gaming privileges.

Frequent Violations

  • Operating without required permits (over $40,000 threshold)
  • Failing to meet 3-year operational requirement
  • Conducting drawings outside Virginia boundaries
  • Inadequate record keeping or reporting
  • Misrepresenting organization eligibility
  • Improper online sales procedures
  • Failure to file annual reports

Potential Consequences

  • Criminal charges under Virginia gaming statutes
  • Civil fines and monetary penalties
  • Revocation of charitable gaming permits
  • Loss of tax-exempt status
  • Personal liability for organization leaders
  • Prohibition from future gaming activities

Best Practices for Virginia Raffles

  1. Assess the $40,000 Threshold Early: Accurately project annual receipts
  2. Document 3-Year History: Maintain records of regular organizational meetings
  3. Plan for Permit Processing: Allow 150 days for application review
  4. Establish Clear Procedures: Create written protocols for all activities
  5. Use Professional Tools: Consider software like rafflr for management and compliance
  6. Train Volunteers: Ensure all staff understand legal requirements
  7. Maintain Detailed Records: Document everything for compliance and reporting
  8. Seek Legal Guidance: Consult gaming attorneys for complex situations

Official Virginia Resources

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Successfully Navigate Virginia's Raffle Regulations

Virginia's $40,000 threshold system creates a straightforward framework for nonprofit raffles. Small organizations can operate with minimal regulatory burden, while larger operations receive clear guidance for compliance. The key is understanding which category your raffle falls into and following the appropriate requirements.

Whether you're running a small community raffle or a major fundraising campaign, proper planning and compliance will ensure your success. Virginia's allowance for online sales and flexible ticket distribution makes it one of the more permissive states for nonprofit raffles.

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