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Raffle laws vary by state. Navigating Texas raffle laws can feel overwhelming, but understanding the rules is crucial for nonprofit organizations looking to host a successful fundraiser.
Raffles can be an excellent way to raise significant funds and attract new donors, but compliance with state regulations is non-negotiable. Who can host a raffle? What are the legal requirements? How many fundraisers can a nonprofit have in Texas?
We’ll break it down and guide you through setting up your event on the Zeffy raffle platform. Plus, we’ll share expert tips to ensure your raffle meets legal standards and maximizes your fundraising potential.
The state of Texas makes holding a raffle pretty easy. But, before we go any further into these creative nonprofit fundraising events, both the Charitable Raffle Enabling Act (CREA) and Professional Sports Teams Charitable Foundation Raffle Enabling Act define a raffle as:
“the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize."
So, a raffle may be their fundraisers or part of special occasions like casino night fundraising events to raise funds. Raffles are legal in Texas if only nonprofit organizations are hosting them.
To host a raffle in Texas, you must be a qualified tax-exempt nonprofit organization and fall into one of the following categories:
Qualified religious society: Must have existed in Texas for at least 10 years.
Qualified volunteer fire department: Must operate firefighting equipment, provide firefighting services, and not pay members beyond nominal compensation.
Qualified volunteer emergency medical service: Must not pay members beyond nominal compensation.
Qualified 501(c) tax-exempt nonprofit organization: Must have existed for at least three years.
Professional sports team charitable foundation: Under the Professional Sports Team Charitable Foundation Raffle Enabling Act, only foundations associated with a “professional sports team” as defined by statute may conduct raffles. To qualify, the foundation must:
Be associated with a professional sports team with a home or rodeo venue in Texas.
Be a 501(c)(3) tax-exempt nonprofit organization.
Have been in existence for at least three years.
(Individuals and for-profit businesses who are no tax exempt are prohibited from holding raffles in Texas.)
How does a nonprofit register for a raffle in Texas?
Good news for nonprofits in Texas! You do not have to register or obtain a license or permit to host a raffle. However, you must ensure that your organization meets all tax-exempt requirements and is properly registered with the IRS and the Texas Secretary of State.
Steps to ensure compliance
1. File Articles of Incorporation: Establish your organization as a legal entity by filing with the Texas Secretary of State.
2. Obtain IRS 501(c) tax-exempt status: Secure federal tax exemption to operate legally.
3. Maintain proper documentation: Keep accurate records of raffle proceeds and expenditures to demonstrate compliance.
Most organizations are allowed to hold up to 4 raffles per calendar year. However, sports team foundations can conduct raffles during each preseason, regular season, and postseason home game or rodeo event.
Ticket and prize rules
What are the ticket requirements we should follow?
Each raffle ticket must include the following information:
The name of the organization conducting the raffle.
The organization’s address or the address of a named officer.
The ticket price.
A description of each prize valued at more than $10.
CREA prohibits cash prizes, including coins, paper currency, or negotiable instruments. Even a certificate of deposit is not allowed. However, U.S. savings bonds and prepaid credit cards are permitted as prizes.
The following prize value limits are also in place:
For purchased prizes, the value of each prize cannot exceed $75,000.
For a purchased residential dwelling, the limit increases to $250,000.
You must either have the prize in your possession before the raffle or post a bond with the county clerk where the raffle will be held. While CREA doesn’t specify the type of bond required, county clerks generally expect a surety bond.
Promotion and how to sell raffle tickets
Advertising rules
When it comes to promoting your raffle, there are restrictions you should be aware of. You cannot promote or advertise a raffle statewide except through the following approved channels:
Your organization’s website
Publications or newsletters are shared only with identified supporters
Social media or email targeted exclusively at existing supporters
The term "statewide" isn’t defined clearly in law, but it’s generally interpreted to include Internet-based sales. Sticking to your website, having in-person flyers, and sending emails to supporters to help spread the word is the best approach.
Selling tickets online
Unfortunately, selling or offering to sell tickets online to a statewide audience is not allowed. It’ll be important to focus on in-person selling channels to boost participation.
All proceeds from the raffle must be used for charitable purposes as defined by CREA. Misuse of funds could result in criminal penalties.
Compensation rules
You generally cannot compensate a person for organizing or conducting a raffle. However, a member of the organization may organize and conduct the raffle as part of their employment, but it must be a minimal portion of their work.
Casino and poker nights
Unlike raffles, there is no exception for nonprofits to host casino or poker night fundraising events. These activities fall under the Texas gambling law, Chapter 47 of the Penal Code, which applies to both nonprofits and for-profits.
Poker or casino activities held in a private place (where the public does not have access) are allowed, but all proceeds must be redistributed among the players. The host cannot keep any portion of the winnings.
Recent legal updates to be aware of
HB 2757 (Influential June 15, 2021) increased the prize limit from $50,000 to $75,000, raising the number of allowable raffles per year from 2 to 4.
HB 2168 (Effective June 8, 2021) removed the criminal penalty for accepting forms of payment other than U.S. currency or debit cards when purchasing a raffle ticket.
An unauthorized raffle is considered gambling under the Texas Penal Code and can result in criminal penalties. Violations can be pursued by the county attorney, district attorney, or the Office of the Attorney General (OAG).
Gambling violation: Under Texas law, running an unauthorized raffle is considered gambling, and it can result in a Class C misdemeanor, which can result in a fine of up to $500.
More serious consequences: If the violation falls under organized crime activity (Title 11 of the Texas Penal Code), it could result in a state jail felony. This could involve a fine of up to $10,000 and a potential sentence of up to two years in a state correctional facility.
Federal penalties: Federal violations carry even steeper consequences, with a potential prison sentence of up to 5 years and fines of up to $250,000 for individuals or $500,000 for organizations.
Legal actions: Violations may prompt legal action from county attorneys, district attorneys, or the Office of the Attorney General (OAG), who can bring an action in state court to stop a violation.
The quick checklist for a successful Texas raffle
Confirm your eligibility
Make sure your organization one of the following:
A 501(c) nonprofit that’s been around for at least 3 years.
A qualified religious society in Texas for 10+ years.
A volunteer fire department or emergency medical service that provides services without pay.
Plan your raffle calendar
Mark your dates in advance (you can hold up to 4 raffles per year.)
Set the date to award the prizes before selling tickets.
If you need to change the prize date, set a new date within 30 days.
If prizes aren’t awarded within 30 days, be ready to refund all ticket purchases.
Prepare your raffle tickets
Confirm tickets are ready to go and printed with the following information clearly displayed:
Organization’s name and address
Ticket price
Description of all prizes over $10 in value
The date the prize(s) will be awarded
Choose your prizes
Make sure to select prizes that meet the following criteria:
No cash prizes
The value of a purchased prize doesn’t exceed $75,000 for general prizes or $750,000 for a residential dwelling
Any prize that exceeds the maximum for Texas have been donated with official receipts to confirm that
You possess the prize or post a bond with the county clerk before selling tickets
Promote your raffle and start selling
All promotions for your raffle stick to:
Your website
Email, newsletters, or social media shared only with identified supporters
Keep your reporting in one place that’s accessible at all times.
Communicate clearly with participants about compliance measures and rules.
Use your reporting to find opportunities for growth in future raffles.
Manage your raffle without the added fees using Zeffy’s 100% free raffle software
Zeffy’s raffle software is designed to simplify fundraising while maximizing impact. As the only 100% free platform for nonprofits, Zeffy ensures that every dollar raised goes directly to your cause—no hidden fees or deductions.
While you can’t sell tickets online in Texas, you can use Zeffy to:
Segment donor communications and set up emails to supporters about your raffle
Track raffle sales and winner information
Coordinate other fundraising campaigns like events and auctions that might coincide with your raffle or boost engagement afterward
Plus, Zeffy also has the tools to support all nonprofit fundraising activities you may want to explore.
Not at all! In Texas, nonprofit organizations with a federal tax exempt status don’t need to register their raffles. That means you can focus on planning your fundraiser without worrying about extra paperwork or fees.
There’s no magic number here—it really depends on your organization’s goals, resources, and donor base. Some nonprofits benefit from running a few large events, while others thrive with multiple smaller campaigns.
One thing is for sure: diversifying your efforts, like adding a raffle to your annual fundraiser, is a great way to reach new supporters and maximize your impact. The key is to find a balance that works for your team and your mission.
Under CREA, if the raffle prizes cannot be awarded on the original date, the organization must set a new date within 30 days. If the prizes are not awarded within this timeframe, the organization must refund the ticket money to the purchasers.
The Professional Sports Team Charitable Foundation Raffle Enabling Act does not address this issue.
Sometimes things don’t go as planned, and that’s okay! Under the Charitable Raffle Enabling Act (CREA), if you can’t hold your raffle as scheduled, your organization must choose a new date within 30 days.
If, for some reason, you can’t award the prizes within that timeframe, you’ll need to refund ticket purchasers. However, the Professional Sports Team Charitable Foundation Raffle Enabling Act doesn’t cover this scenario, so double-check which rules apply to your raffle.
A nonprofit organization does not need to pay sales tax on raffle tickets because the sale of raffle tickets is considered the sale of the right to win an item.
Here’s a recap of all the links and documents mentioned in this article:
