Raffle Laws in Indiana (2026): Rules Most People Get Wrong

Most people think running a raffle is simple. Buy some tickets, pick a winner, done. But in Indiana, the rules are strict. And a lot of well-meaning groups find out the hard way.

Whether you’re with a church, a school, or a nonprofit, this guide covers everything you need to stay legal. Let’s break it down.

What Is a Raffle in Indiana?

A raffle is when you sell tickets for a chance to win a prize through a random drawing. That’s it. Simple definition, right?

But here’s where Indiana gets serious. Games of chance are actually illegal in Indiana for most people and groups. There are only three exceptions: state-run gaming like the lottery, licensed gambling like riverboat casinos, and licensed charity gaming.

Raffles fall under that third category. That means only certain groups can run them, and only under specific rules.

Who Can Legally Run a Raffle in Indiana?

Okay, this is important. Not just anyone can host a raffle in Indiana.

Only qualified organizations, such as religious, educational, and charitable entities recognized as tax-exempt under Section 501 of the Internal Revenue Code, can conduct raffles.

Think churches, schools, veterans’ groups, and registered nonprofits. If your group doesn’t fall into one of these categories, you cannot legally run a raffle in Indiana.

Wondering about personal raffles? Don’t do it. A person who knowingly or intentionally conducts lotteries or sells chances to those games has committed a Level 6 felony. That’s not a fine. That’s a criminal charge.

Do You Need a License?

Yes, in most cases you do. But the good news is there are different levels.

There is an exception to obtaining a license if the value of all prizes awarded at the activity does not exceed $2,500 for a single activity and not more than $7,500 during a calendar year.

So if your prizes are small, you might just need to file an Exempt Activity Notification instead of a full license. Pretty straightforward, right?

But if your prizes are bigger, you need an actual gaming license from the Indiana Gaming Commission. If your organization does hold an activity that meets the licensure exception more than once a year, you are required to file an annual written notice no later than 30 days before the first event of the year.

Start your paperwork early. Seriously. Processing times vary: Festival Licenses take about 45 days, Exempt Notification approvals take 14 days, and Qualified Applications take up to 60 days.

Types of Raffle Licenses in Indiana

There are several license options depending on the size and type of your event.

The Annual Activity License covers ongoing raffle activities throughout the year. The Single Activity License covers just one event. There’s also a Festival License for short-term events and a Convention License for national organizations meeting in Indiana.

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Annual raffle license fees range from $25 to $200, depending on the organization’s gross receipts. That’s pretty affordable for most groups.

Hold on, this part matters. The license must be displayed at the event, and promotional materials must include the license number. Don’t forget this step.

Basic Rules for Running a Raffle

So your organization qualifies and you’ve got your license. Now what? Here are the key rules you must follow.

Who Can Sell Tickets

Only members of the organization, paid employees, volunteer ticket agents, and children under 18 in the case of school fundraisers are allowed to sell raffle tickets.

You can’t just hire random people off the street to sell for you. It has to be connected to your organization.

How Tickets Must Be Sold

Cash, debit cards, checks, and credit cards can be accepted, but credit card use is only allowed in face-to-face transactions.

This next one surprises a lot of people. Indiana law prohibits selling raffle tickets or conducting drawings over the Internet. All nonprofit organizations must keep sales and drawings to in-person events.

No online ticket sales. Period. Not even through PayPal or Venmo. Many groups assume online is fine. It is not.

How Drawings Must Work

Tickets must be represented as physical copies and placed in a receptacle that allows for thorough mixing, such as a drum or bucket.

The drawing process must be fair and transparent. You can’t just pull a name from a hat in a back room. Keep it open for everyone to see.

Who Can Play

Tickets can only be sold to individuals aged 18 or older. This is firm. Minors can sell tickets in school fundraisers, but they cannot buy them.

Prize Rules: What You Can and Can’t Award

Not all prizes are allowed. Indiana has specific limits here.

Individual prizes cannot exceed $599, and the total prize pool for one pull tab, punchboard, or tip board game cannot exceed $15,000.

Alcohol is allowed as a prize, but with conditions. Alcohol is allowed if it’s in sealed bottles or cases intended for off-premises consumption, and the winner and prize distributor must be at least 21 years old.

Makes sense, right? You’re giving away a bottle of wine, not serving drinks at the event.

Where the Money Has to Go

This is one of the most important rules. And honestly, it’s the one that makes the whole system work.

At least 90% of the gross receipts from the raffle must support the organization’s charitable goals. You can’t pocket raffle money. You can’t use it for personal expenses. It goes to the cause.

All raffle proceeds must be used for the organization’s lawful purposes, benefiting the supported community or cause.

This is why Indiana limits raffles to nonprofits and charities. The money is supposed to help people.

Recordkeeping Rules

A lot of groups mess this up. They run the raffle fine but forget to keep records.

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Organizations must maintain ledgers for ticket sales, including details like date, location, and seller information.

Organizations must maintain detailed records of ticket sales and prize distributions for three years, ensuring accountability during potential audits by the Indiana Gaming Commission.

Three years. Keep everything. The IGC can audit you, and you need to be ready.

A financial report must be submitted within 10 days after a Single and Festival License event, and monthly for Annual Licenses. Miss this deadline and you’re risking your license.

Penalties: What Happens If You Break the Rules

Let’s talk about consequences. Because they’re real, and they’re steep.

Think of it like this: it starts with fines, but it can turn into criminal charges fast.

Violations can result in fines starting at $1,000 for the first offense, increasing to $2,500 for the second, and $5,000 for each subsequent violation.

That’s just for administrative violations. Criminal penalties are worse.

Conducting a raffle without the appropriate license from the Indiana Gaming Commission is a Class A misdemeanor, punishable by up to one year in jail and a fine of up to $5,000.

And if you’re running a raffle as a private individual for personal gain? A person who knowingly or intentionally conducts lotteries or sells chances to those games has committed a Level 6 felony.

Wait, it gets worse. Fraudulent activities, such as rigging outcomes or misrepresenting terms, can lead to more serious charges, including fraud.

Beyond fines and jail time, organizations found in violation risk losing public trust, which can jeopardize future fundraising efforts. That kind of reputation damage can follow a nonprofit for years.

Tax Rules You Need to Know

Honestly, this is the part most people skip. Don’t skip it.

According to IRS guidelines, if a raffle prize exceeds $600 and is at least 300 times the ticket price, organizations must report the winnings on Form W-2G.

Big prizes come with paperwork. For prizes over $5,000, federal law requires 24% of the prize’s value to be withheld for income tax purposes.

So if someone wins a $10,000 prize, you’re withholding $2,400 before handing it over. Plan for this when you set up your prize structure.

Recent Updates: What Changed in 2025

Indiana updated its charity gaming laws in 2025. Here’s what you should know.

The Indiana Gaming Commission now has authority to establish standards for electronic raffle software systems, web applications, methods, or processes. This is new, and it could open the door to more digital tools in the future.

New interim rules for electronic pull tab and raffle systems were also introduced in 2025. The rules are evolving. Always check the IGC website for the latest updates before your event.

How to Run a Legal Raffle: Step by Step

You’re not alone in finding this complicated. Most people don’t know all these rules. Here’s a simple path forward.

Step one: confirm your organization qualifies. You need to be a registered nonprofit, religious group, educational institution, or similar entity.

Step two: figure out your prize total. Under $2,500 per event and $7,500 per year? You may only need an Exempt Notification. Over those limits? You need a full license.

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Step three: apply early. Give yourself at least 30 to 60 days depending on the license type. Don’t wait until the week before your event.

Step four: follow all ticket sale rules. In-person only. No internet sales. Only sell to people 18 and older. Keep records of every sale.

Step five: run a transparent drawing. Use a physical drum or container. Let people watch. Don’t do it behind closed doors.

Step six: file your financial report. Do it within 10 days of a single event. Monthly if you’re on an annual license.

Step seven: keep your records for three years. Store everything: ticket logs, sales records, prize information, financial reports.

Questions? Contact the Indiana Gaming Commission directly at [email protected] or call 317-232-4646. They’re there to help, not just to punish.

Frequently Asked Questions

Can anyone run a raffle in Indiana? No. Only qualified nonprofit organizations like charities, churches, and schools can legally run raffles in Indiana.

Can I sell raffle tickets online in Indiana? No. Indiana law prohibits online ticket sales. All sales and drawings must happen in person.

Do I need a license for a small raffle? Not always. If your prizes are under $2,500 per event and $7,500 per year, you may only need to file an Exempt Activity Notification form instead of a full license.

What happens if I run a raffle without a license? You could face fines up to $5,000, a Class A misdemeanor charge, or even criminal prosecution depending on the situation.

Can kids sell raffle tickets? Minors can sell raffle tickets in school fundraisers, but they cannot buy tickets, handle money, or help organize the event.

How long do I have to keep raffle records? You must keep all records for at least three years, plus the current year.

Can alcohol be a raffle prize? Yes, but only if it’s sealed and meant for off-premises consumption. Both the winner and the person giving the prize must be at least 21.

Final Thoughts

Indiana raffle laws are stricter than most people expect. The rules cover who can run raffles, who can sell tickets, how drawings must work, and where the money has to go.

The good news? Following the rules isn’t that hard once you know them. Get the right license. Keep your records. Do your drawing in public. Send in your financial reports on time.

Now you know the basics. If you’re planning a raffle, start your paperwork early and reach out to the Indiana Gaming Commission if you’re unsure. When in doubt, ask first. It’s a lot cheaper than a $5,000 fine.