Thinking about running a raffle in Arkansas? You should know the rules before you sell a single ticket. Arkansas has some of the strictest raffle laws in the country. Getting it wrong can cost your organization thousands of dollars.
This guide breaks down everything you need to know. We’ll cover who can run a raffle, how to get licensed, prize limits, and what happens if you break the rules.
What Is a Raffle Under Arkansas Law?
A raffle is a game of chance. People pay money for tickets. One or more winners are chosen at random. The winner gets a prize.
In Arkansas, raffles are technically considered a form of gambling. The state constitution actually bans lotteries. But there’s an important exception. Certain nonprofit organizations can legally hold raffles under very specific rules.
Right? It sounds complicated. But stay with me here.
Who Can Legally Run a Raffle in Arkansas?
Okay, this part is important. Not just anyone can hold a raffle in Arkansas.
Only “authorized organizations” are allowed. That’s the legal term used in the Arkansas Charitable Bingo and Raffles Enabling Act. An authorized organization is a nonprofit that has been tax-exempt and operating in Arkansas for at least five years before it runs a raffle.
What types of groups qualify? The law covers religious, educational, veterans, fraternal, service, civic, medical, volunteer rescue, volunteer firefighter, and volunteer police organizations. So your local church, VFW post, or community service club may qualify. A brand-new group that just formed last year? Probably not.
Wondering if your group qualifies? Check with the Arkansas Department of Finance and Administration before you start planning anything.
Getting Your License
Here’s where things get serious. You cannot run a raffle in Arkansas without a license. Period.
All raffle licenses are issued through the Arkansas Department of Finance and Administration, also known as the DFA. The annual license fee is $100. That’s pretty affordable for most nonprofits.
There is also a temporary raffle license option. This is sometimes called a Class II license. It’s designed for organizations that only want to hold one raffle event rather than a full year of activities.
You must display your license at all times during the raffle. It needs to be visible at the location where you’re selling tickets or holding the event. Keep that in mind when you’re planning your setup.
Basic Rules for Running a Raffle
Once you’re licensed, there are still strict rules to follow. Most people don’t realize how detailed these requirements are.
First, only your organization’s own officers and members can run the raffle. They must be volunteers. No one can be paid for their work on the raffle. This is a hard rule.
Second, you cannot hire a third party to run your raffle for you. No outside company. No paid raffle management service. Your own people have to do it.
Third, no electronic devices or machines can be used to play the raffle. The law is very clear on this.
The Big One: No Online Ticket Sales
Hold on, this part is really important.
You cannot sell raffle tickets online in Arkansas. Not through a website. Not by email. Not by fax. Not by phone. Not through any other electronic method.
Tickets must be sold in person. They can be sold at your organization’s premises. Uncompensated volunteers can also sell tickets off-site. But all sales must happen face to face.
This surprises a lot of organizations. Many groups assume they can just set up an online store and start selling. In Arkansas, that is illegal. Don’t be one of the groups that finds out the hard way.
You can, however, advertise your raffle online. Promoting it through your website or social media is fine. Selling through those channels is not.
Prize Limits You Need to Know
Arkansas puts caps on how much you can give away in prizes. These limits exist to keep raffles focused on charity rather than big-money gambling.
The total value of raffle prizes in a calendar year cannot exceed $50,000. That’s for prizes your organization purchases. If prizes are donated to your organization, the cap goes up to $100,000 for the year.
Individual cash prizes are capped at $5,000. You can give out bigger prizes if they are physical items, but cash payouts per prize are limited.
So simple! Just make sure you track all prize values carefully throughout the year.
Record-Keeping Requirements
Honestly, this is the part most organizations miss. And it can get them in real trouble.
Arkansas requires detailed records for every raffle you run. You must document all prize distributions. If you give out merchandise prizes, keep the receipts to show what items cost. You need a clear paper trail.
Why does this matter so much? Think of it like a tax audit. If the state questions your raffle, you need documentation to prove you followed the rules. No records means no defense.
Store your records carefully and keep them organized. The DFA can inspect them at any time.
How Raffle Proceeds Must Be Used
You can’t just pocket the money from a raffle. Arkansas law is very specific about where the proceeds go.
All net proceeds must be used for charitable, religious, or philanthropic purposes. “Net proceeds” means the money left over after you subtract the actual costs of running the raffle.
You cannot pay your members or staff with raffle proceeds. No one affiliated with your organization can receive compensation from raffle funds. That’s true even for people who help organize the event.
Makes sense, right? The whole point of a charitable raffle is to support a cause, not to pay people.
Penalties for Breaking the Rules
Let’s talk about what happens if your organization gets it wrong.
A first violation of the Arkansas Charitable Bingo and Raffles Enabling Act is a misdemeanor. The fine can be up to $5,000. A second or later violation bumps that fine up to $10,000.
If someone runs a raffle without any license at all, the penalties are even more serious. Unlicensed raffles fall under the same penalties as operating an illegal lottery. Think of it like the difference between a speeding ticket and reckless driving. One is bad. The other is much worse.
Your organization can also have its license suspended or revoked. That means you lose the ability to run future raffles or bingo events. For nonprofits that rely on these activities for fundraising, that’s a huge blow.
The Arkansas Sports Raffle Act: A Big 2025 Change
Wait, it gets better. Arkansas actually expanded its raffle laws in 2025.
On March 13, 2025, Governor Sarah Huckabee Sanders signed the Arkansas Sports Raffle Act into law. This was a major update. It created a brand-new category of legal raffle specifically for universities and their affiliated nonprofits.
Under this new law, colleges and universities in Arkansas can now hold raffles tied to their sporting events. These are essentially 50/50 raffles, which are already common at college sports events across the country. The winner takes half the pot, and the school’s athletic program keeps the other half.
For example, the University of Arkansas Razorback Foundation launched the first raffle under this new law in May 2025. The foundation is a 501(c)(3) nonprofit that has been operating since 1982. It met all the requirements to qualify.
This new sports raffle category operates separately from the regular Charitable Bingo and Raffles Enabling Act. It has its own rules and is not limited by the standard prize caps. Participants must be 18 or older and physically located in Arkansas at the time of purchase.
What About Door Prizes?
A lot of people ask about this one. You’re not alone, this confuses many nonprofit leaders.
Here’s the deal. If attendees pay to come to your event and you give away a prize from a free drawing, that is generally not considered a raffle under Arkansas law. No one is paying specifically for a chance to win. They’re just buying a ticket to attend.
But if people pay extra for raffle tickets on top of the event admission, that’s a raffle. At that point, your organization needs to be a licensed authorized organization.
Not sure which situation applies to you? The Arkansas Attorney General’s office issued an opinion on this exact question in 2025. It’s worth reading if you’re in a gray area. Or better yet, consult a local attorney.
How to Apply for a Raffle License in Arkansas
So what do you need to do? Here’s a quick rundown.
Start by confirming your organization qualifies. You need to be a tax-exempt nonprofit with at least five years of continuous operation in Arkansas. Gather documentation that proves this.
Next, contact the DFA’s Miscellaneous Tax Section. You can reach them by mail at: Department of Finance and Administration, Miscellaneous Tax Section, P.O. Box 896, Little Rock, AR 72203.
Fill out the license application. You’ll need your organization’s legal name, federal identification number (FEIN), your event location, proof of nonprofit status, and details about your charitable purpose.
Pay the $100 annual license fee. Once approved, display the license clearly at all raffle events.
Trust me, going through the proper steps is much easier than dealing with fines or a revoked license later.
Frequently Asked Questions
Can any nonprofit in Arkansas hold a raffle?
No. Your organization must be a tax-exempt nonprofit that has been continuously operating in Arkansas for at least five years before holding a raffle.
Can I sell Arkansas raffle tickets on my website or social media?
No. Online, phone, email, fax, and mail sales of raffle tickets are all prohibited. Tickets must be sold in person by uncompensated volunteers.
What is the prize limit for a raffle in Arkansas?
The annual prize limit is $50,000 for purchased prizes and $100,000 for donated prizes. Individual cash prizes are capped at $5,000.
Can I pay someone to help run my raffle?
No. All people involved in running the raffle must be bona fide members or officers of your organization and must volunteer without any compensation.
What happens if I run a raffle without a license in Arkansas?
Running an unlicensed raffle can result in criminal penalties similar to operating an illegal lottery. Licensed organizations that break the rules face fines up to $5,000 for a first offense and $10,000 for repeat violations.
Do university sports raffles follow the same rules as charitable raffles?
No. The Arkansas Sports Raffle Act signed in 2025 created a separate category for university-affiliated raffles tied to sporting events. These operate under different rules than standard charitable raffles.
Final Thoughts
Arkansas takes raffle laws seriously. The rules are strict. But they are also pretty clear once you understand them.
If your organization qualifies, get licensed, follow the prize limits, keep good records, and use the proceeds for your charitable mission. Make sure your volunteers are doing all the work. And whatever you do, do not try to sell tickets online.
Nonprofits that follow the rules can run successful raffles and raise real money for their communities. Just make sure you know the rules before you start.
Now you know the basics. When in doubt, reach out to the Arkansas DFA or speak with a local attorney before your next fundraiser.
References
- Arkansas Charitable Bingo and Raffles Enabling Act, Ark. Code Ann. § 23-114-101 et seq.: https://law.justia.com/codes/arkansas/title-23/subtitle-4/chapter-114/
- Arkansas Sports Raffle Act (Act 305 of 2025), Ark. Code Ann. § 23-120-101 et seq.: https://webftp.blr.arkansas.gov/Home/FTPDocument?path=ACTS%2F2025R%2FPublic%2FSearchable%2FACT305.pdf
- Arkansas Department of Finance and Administration, Bingo/Raffle Tax: https://www.dfa.arkansas.gov/office/taxes/excise-tax-administration/miscellaneous-tax/arkansas-miscellaneous-tax-laws/bingo-raffle/
- Arkansas Constitution, Amendment 84, Bingo and Raffles: https://law.justia.com/constitution/arkansas/amendments/amendment-84/
- Arkansas Attorney General Opinion No. 2025-022 (Door Prizes and Raffles): https://ezel.ai/ag-opinions/ar/2025-022-question-can-a-501-c-3-nonprofit-organization-donate-college
- Code of Arkansas Rules, 23 CAR § 350-119, Bingo and Raffle Prizes: https://codeofarrules.arkansas.gov/Rules/Rule?levelType=section&titleID=23&chapterID=199&subChapterID=245&partID=902&subPartID=6427§ionID=41846
