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In the United States, online raffles, opportunity drawing, and lotteries are governed by individual states. Each state has raffle rules that dictate what is considered a raffle, which organizations are permitted to host a raffle, and what is required to conduct raffles legally within the state.
Some states make it a bit more complicated than others for lawful purposes. Still, nonprofit organizations that host ticketing events like raffles often end up hosting more than one raffle per year, and some of Zeffy's most extensive campaigns are raffles. AKA raffles raise a lot of money for the nonprofits that host them.
So, yes, the first raffle you host can be time-consuming and confusing, but all the time and energy invested is ultimately worth it. Plus, raffles are a great way to mix up your fundraising campaign portfolio, and, as a bonus, they attract new donors to your nonprofit.
Okay, let’s dig into Illinois lottery law and raffle rules.
Illinois raffle definition under the Video Gaming Act
The Illinois General Assembly's Video Gaming Act and the Illinois Raffles and Poker Runs Act are the best guides for defining a raffle in Illinois.
A raffle is a form of lottery in which a player pays something of value for a chance to win—represented and differentiated by a number or a combination of numbers. The winning chances are determined through a draw or other method(s) based on an element of chance according to the Illinois Raffles and Poker Runs Act.
Do you need a license to host a raffle in Illinois?
Yes, you do. It is illegal to host a raffle in Illinois without a license therefor pursuant to the raffle act and compliance by the Illinois Gaming Board. Such a person might be subject to criminal code violations which we'll touch on below.
How does a nonprofit apply for a raffle license in Illinois?
Raffle licenses issued pursuant to Illinois law are controlled by the counties or municipalities. So, if your nonprofit plans to host a raffle, you must apply through your county or municipality.
Raffle licenses issued pursuant to Illinois law are controlled by the counties or municipalities. So, if your nonprofit plans to host a raffle, a bona fide member must apply through your county or municipality.
How many raffles does a license allow a nonprofit to host?
The state of Illinois allows individual municipalities and counties to define the number of raffles a nonprofit organization can hold during its license period.
Does it cost money for a nonprofit to register for a raffle in Illinois?
License fees for charitable game operators vary by county and municipality and the prize amount awarded during a raffle.
Examples of fees for raffle licenses across Illinois:
Aurora County: Ranges from free to $25 based on prize value
Oswego: Ranges from free to $25 based on prize value
Okay, now that it’s clear, who is allowed to host a raffle in Illinois?
Who can host a raffle in Illinois?
The only organizations that can host a raffle in Illinois are:
1. Bona fide religious, charitable, labor, business, fraternal, educational, and veterans organizations, or other bona fide not-for-profit organizations that:
Have a nonprofit organization in Illinois.
Operate without profit.
Have been operating for 5 years before they apply for a raffle license.
Have, during that entire 5-year specified period, been carrying out their objectives?
2. A nonprofit fundraising organization that the municipality or county determines is organized to be providing financial assistance to an individual or group of individuals suffering extreme financial hardship due to an illness, disability, accident, or disaster.
3. Any law enforcement agencies and associations that represent law enforcement officials.
4. Any fire protection agencies and associations that represent fire protection officials.
5. A political committee permitted to host a raffle must first receive an approved license from the State Board of Elections and have no members deemed not within good moral character. The entire net proceeds of any raffle must be exclusively devoted to the lawful purposes of the political committee permitted to conduct that game.
In addition, eligible organizations must not owe the State Board of Elections any unpaid civil penalty authorized by Sections 9-3, 9-10, and 9-23 of the criminal code, or be the subject of an unresolved claim at the time of its application for a license to conduct a raffle.
Local governing body raffle laws
There are 103 counties and over 1000 municipalities in Illinois, so we’re not going to dive into the details of each one for now. However, the state of Illinois does provide general guidelines that each county and municipality must follow when establishing their applicable rules and regulations.
Each municipality or county needs to define the following in their raffle license application clearly:
The maximum retail value of all prizes or merchandise nonprofit awards in a single raffle.
The maximum retail value of each prize a nonprofit awards in a single raffle.
The maximum price which may be charged for each raffle ticket.
The maximum number of days during which tickets may be sold.
Is there a fee to apply for a raffle license, and how much is it?
What are the exact activities a license authorizes?
Licenses must specify if they are valid for one raffle or a certain number of raffles for no more than one year.
The county or municipality has to act on a license application within 30 days from the date of application.
It’s good to know that all of your nonprofit’s entire net proceeds from any raffle you host must be used by your nonprofit and go towards your mission.
Can you sell raffle tickets online in Illinois using Zeffy’s ticketing forms?
Yes and no. Whether or not a nonprofit can sell raffle tickets online is determined by, you guessed it, the individual counties and municipalities.
The state of Illinois allows you to use the internet to:
Advertise your raffle. (Newsletters, banners, etc.)
Display the rules of the raffle.
Store raffle contact information for your nonprofit, including the licensed organization name, address, telephone number, facsimile number, or e-mail address.
Answer frequently asked questions.
List descriptions, photographs, or videos of the raffle prizes. (get inspired by these raffle prize ideas)
List the prize winners.
The state of Illinois requires nonprofits to keep all raffle ticket stubs, gross receipts, expenses, and net proceeds for every raffle your nonprofit hosts for three (3) years.
What to include on tickets for your nonprofit’s raffle
A consecutive number for each ticket.
The cost of each chance.
The date/time/location of the draw.
The name of your licensed organization.
A description of prizes.
Whether or not the person must be present at the drawing.
Although it’s not written, we recommend that printed tickets have a detachable coupon or stub and that both the ticket and its coupon or stub be marked with a unique and matching number.
You can purchase pre-made tickets or get inspired by our sample ticket:
The work doesn’t stop once the winners have been drawn. We know, we know, if only it were that simple. However, governments love their paperwork, and Illinois is no different.
The state of Illinois requires your nonprofit to do the following if you plan to conduct raffles:
Keep records of gross receipts, reasonable operating expenses incurred, reasonable sums expended, and net proceeds for every raffle it hosts.
All deductions from gross receipts must be documented with receipts or other records indicating the amount, a description of the item or service or other reason for the deduction, and the recipient.
The distribution of net proceeds itemized according to the payee, purpose, amount, and payment date.
After each raffle has been completed, your nonprofit must report and file its gross receipts, expenses, and net proceeds from the raffle, as well as the distribution of net proceeds to your membership or local government.
Winners cannot be determined by the outcome of a publicly exhibited sporting contest.
A little more about all the paperwork:
Nonprofits must keep gross receipts from the raffle operation separate from their nonprofit's other revenue sources.
Funds earned from raffles must be kept in a separate bank account.
The person who accounts for gross receipts, expenses, and net proceeds from raffles can not be the same person who accounts for your nonprofit’s other revenues.
You can run a raffle in Illinois if you’re an organization licensed with a valid raffle license and follow all local rules and requirements. Nonprofit organizations can host a raffle once they obtain a license in the city or county where they plan to host their event.
The rules and regulations for a compliant charity raffle in Illinois will depend on the specific municipality.
The legal difference between a raffle and a drawing is whether or not participants pay to enter and how winners are ultimately chosen.
A raffle in Illinois is a lottery or game of chance used to raise funds, subject to certain restrictions. Raffle winners are typically decided through a drawing or some other method based on an element of chance. A raffle does not include a "skill" event, nor can it be determined by the outcome of a publicly exhibited sporting event.
While a raffle can be a drawing in Illinois, not all are raffles. The term drawing is used more broadly to consider any contest where winners are randomly selected. They can be free to enter.
A raffle can be considered a form of gambling under Illinois law based on its three components: consideration (participants pay to enter by purchasing tickets), chance (winners are selected randomly), and prize (a prize is awarded).
That’s why you want to ensure nothing is done without a valid raffle license in Illinois. Following applicable local laws in your local county or municipality will help to ensure compliance.
Raffles must be free of:
Persons conducting illegal gambling
Highlighting a gambling promoter
Compliance breaches with rules finally determined by local government
Poker runs that violate the raffles act
Any person defined as a professional gambler
Manipulation of any prize awarded outside of fair chance
Association to political committees that lack good moral character
The Riverboat Gambling Act governs changes to laws regarding gambling activity in the state of Illinois. It helps inform each local governing body about rules for riverboat casinos. Organizations licensed to host raffles and poker runs do not fall under the act.
A political committee licensed to host a raffle must follow the following rules:
The committee cannot have any officer convicted of a felony.
The committee cannot have any officer who is or has been a professional gambler or gambling promoter.
The committee cannot have any officer who is not of good moral character.
The committee cannot have any officer who is also an officer of a company in which someone meeting the above conditions (felony conviction, gambling promoter, or poor moral character) has a proprietary, equitable, or credit interest or is employed.
The committee cannot have any person meeting the above conditions (felony, gambling, or moral character) involved in managing or operating the raffle.
The committee cannot owe any unpaid civil penalty to the State Board of Elections or have any unresolved claim for a civil penalty.
The committee must be current on all required filings under Article 9 of The Election Code, with no report or document overdue by more than 10 days.
Reporting your net proceeds is all about tracking your raffle accordingly. A raffle platform like Zeffy can help you maintain accurate, real-time records of every raffle ticket sold to ensure compliance with applicable local laws.
Any time you conduct raffles, you'll want easy access to records relating to your tickets, winners, and prizes awarded for lawful purposes. Such reports, along with your valid license application, will keep you in compliance so you can get the most funding from your event. Host a 100% free raffle with tracking you can count on with Zeffy
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