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Qualified charitable organizations can host fundraising raffles in Arizona without violating any laws. Understanding the latest rules and regulations will benefit event planners, fundraisers, and anyone interested in raffle legality.
Raffles are considered legal in Arizona only for organizations with an IRS tax-exempt status following a specific set of rules. All other raffles are considered illegal under Arizona law.
Qualified organizations include:
Civic leagues
Religious or apostolic organizations or corporations
Fraternal beneficiary societies, order, or organizations
Labor, agricultural, or horticultural organizations
Corporations
Teachers’ or public employees’ retirement fund organizations
Business leagues, chambers of commerce, real estate boards, or boards of trade that are not organized for profit
Historical societies
Political organizations/clubs
Are 50/50 raffles legal in Arizona?
Legal events in Arizona include 50/50 raffles run by tax-exempt organizations for fundraising purposes. This type of raffle requires participants to purchase tickets for the opportunity to win a cash prize.
The funds raised by the raffle are split evenly between the prize pot and the cause. Nonprofits can use 50/50 raffles to raise more in a shorter amount of time to fund their mission, projects, and initiatives.
Nonprofits can follow the following rules to remain compliant with Arizona raffle laws:
Your nonprofit must be tax-exempt under 501(c)(3) of the Internal Revenue Code and exist in Arizona for at least one year before conducting the raffle.
No member, director, officer, worker, or agent of your organization can receive a benefit from the raffle.
Only bona fide members of your organization can participate in raffle sales, management, or operations.
All in-person ticket sales must be conducted by organization members directly and not through a third-party seller.
All online ticket sales have to happen to those in Arizona through your organization's website.
Violations are subject to civil and sometimes criminal penalties.
There are also a few special circumstance rules that may apply to specific nonprofits:
Hospitals or foundations focused on cardiovascular medical research may hire an outside agent to manage raffles, sales, and operations if the proceeds fund medical research, education, or care.
Child abuse organizations with a 20-year history can contract with an outside agent for raffle management, sales, and operations if the proceeds go to services to prevent child abuse and advocacy for victims.
In both instances, a maximum of 3 raffles may happen in a calendar year. Any fee paid to an outside agent must remain under 15 percent of the raffle's net proceeds.
How one Arizona nonprofit’s raffle raised $7.9K
Iben Beachin LLC combined its vacation rental services with charitable giving to host a raffle to benefit a family in need. The raffle raised an impressive $7,900, and all ticket sales went to the Bicklers as their 15-year-old son completed cancer treatment.
The organization brought the raffle to life with Zeffy's raffles and lottery forms to invite people to participate and make a big impact through each ticket sold.
Raffle best practices we love
Bring in a personal touch: The raffle features an image of the Bickler family and Jackson with a personal appeal to remind people why their actions matter.
Offer an exciting prize: Every raffle ticket increased the chances that someone could win a 3-night stay in a beautiful beach rental, enticing bulk ticket purchases and more money raised for the cause.
Create urgency: The beach vacation raffle capped tickets at 250 total with a clear entry close date to drive people to take action in a timely manner.
Add a donation option: Passionate supporters could easily add a donation to their raffle ticket purchase to make an even bigger impact on the Bickler family.
Make it easy to share: Visitors can quickly share the raffle with even more people to bring in overwhelming support for the cause through email, social media, and a direct link to the raffle page.
In addition to the impressive fundraising totals Iben Beachin LLC helped raise through their raffle, they saved $395 in fees through Zeffy. The fundraising platform’s 100% free model for nonprofits ensures that every cent of donations and purchases goes directly to the cause.
Raffles are illegal in Arizona if they are run by any entity other than a qualified 501(c)(3) tax-exempt organization. They are also considered illegal if they violate Arizona raffle laws set forth by the Arizona Department of Gaming.
Legal raffles are allowed in the state and are subject to specific rules and regulations.
Are there other Arizona fundraising laws to be aware of?
Arizona fundraising laws help designate processes for raising money on behalf of a charitable organization. These laws cover registration, violations, and classification.
Here are a few to stay aware of:
Charitable organizations must file registration statements with the secretary of state before soliciting their first contribution or donation.
An individual may be tax-exempt if the IRS determines they are a charitable organization eligible to fundraise.
An annual information return should be filed with the secretary of state for the preceding fiscal year.
A raffle is considered a legal form of gambling in Arizona. Arizona Revised Statutes 13-3301 categorize raffles as tax-exempt organization gambling subject to regulations.
The state recognizes gambling as the act of risking or giving something of value in exchange for the opportunity to benefit from a game or contest of chance or skill or a future contingent event.
Arizona allows gambling, such as raffles, under statutorily recognized exemptions.
What type of gambling is legal in Arizona?
Bingo and raffles are a few gambling types that are legal in Arizona. Generally, all gambling is illegal unless it falls under these particular tax-exempt organization gambling activities.
Signs of illegal gambling in Arizona include:
Online gambling
The host requires fees to participate (buy-ins or re-buys)
The host requires a cover charge or voluntary donation for participation
The host takes a percentage of the money players win or wager
The host requires a minimum purchase to participate
The host provides equipment and charges rental fees to participate
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