Planning a raffle for your school, church, or club? You’re gonna love this one, because it’s actually simpler than most people think.
Raffles feel harmless. You sell a few tickets, pick a winner, and hand over a prize. But in New Mexico, raffles are legally treated as gambling. That means real rules apply, and breaking them can cost you money or worse.
What Is a Raffle Under New Mexico Law?
A raffle is a drawing. People buy tickets. Someone pulls a winning ticket stub out of a box. The winner gets a prize.
Sounds simple, right? Here’s the catch. New Mexico law calls this a “game of chance.” Games of chance fall under gambling law. So does bingo. So do pull-tabs.
The main law covering this is called the New Mexico Bingo and Raffle Act. Honestly, this one law controls almost everything you need to know. Stay with me here, because the details actually matter.
Basic Raffle Laws
Who Can Legally Hold a Raffle
Not just anyone can run a raffle in New Mexico. Only a “qualified organization” can do it legally.
What counts as qualified? Think nonprofit groups. Religious organizations count. So do charities, veterans groups, fraternal clubs, and educational organizations. Firefighter groups qualify too.
There’s one more requirement, though. The organization must have existed and operated in New Mexico for at least two years before holding a raffle. A brand new club can’t just form and start selling tickets next week.
Wondering if your group qualifies? If you’re not a nonprofit type of organization with community purpose, the answer is probably no. Individuals cannot hold raffles on their own. Neither can regular businesses or political campaigns.
Do You Need a License?
Here’s where it gets interesting. Not every raffle needs a license.
If your organization holds one raffle or bingo event every three months, and no more than four total in a year, you’re exempt from licensing. So simple! You can run a small raffle without jumping through hoops.
But if you want to hold raffles more often than that, you need a license from the Gaming Control Board. The license costs $500 to start, and $500 again every time you renew it. Licenses last three years.
Sound complicated? It’s actually not. Small, occasional raffles are easy. Frequent raffles need paperwork.
Prize Rules You Need to Know
Big Prizes Trigger Extra Steps
Planning a raffle with a huge prize, like a truck or a big cash payout? Pause and read this part carefully.
If any single prize is worth more than $75,000, you must notify the Gaming Control Board at least ten days before you start selling tickets. This isn’t optional. Skip this step and you could be breaking the law even if everything else is fine.
What You Can Raffle Off
Here’s a neat detail most people miss. Your organization can raffle off almost anything that doesn’t normally require a special license to give away. That includes items like alcohol and even firearms in some cases.
Merchandise prizes get valued at their current retail price. And here’s a rule that surprises people: merchandise prizes cannot be swapped for cash. If you win a television, you get the television, not the cash value.
Penalties and Consequences
So what happens if you break these rules? Let’s talk about it, because the consequences are more serious than a lot of people assume.
Running a raffle without qualifying as an organization is treated like illegal gambling. Under New Mexico’s general gambling law, simple gambling is a petty misdemeanor. That can mean up to six months in jail and a fine up to $500.
Here’s where it gets more serious, though. If someone conducts a game of chance, like a raffle, without representing a qualified organization at all, that can be charged as a fourth-degree felony under the commercial gambling law. That’s a completely different level of trouble compared to a simple misdemeanor.
Think of a petty misdemeanor like a bad traffic ticket. A fourth-degree felony is a totally different category, with far more serious consequences for your record and your future.
Willfully violating the Bingo and Raffle Act itself carries its own penalties too. A first offense can bring a fine up to $1,000, up to six months in jail, or both. A second offense gets even tougher. You’re looking at a fine up to $2,500, up to a year in jail, or both.
Honestly, this is the part most people miss. Lying on a license application is also a big deal. If you make a false statement on your gaming license application, or fail to keep proper financial records, you could lose your license entirely. You could also be banned from applying again for at least a year.
Special Circumstances
Fairs, Fiestas, and Small Community Events
Not every drawing counts as a regulated raffle. If a prize drawing happens at a state or local fair or fiesta, and all the money raised stays in New Mexico for that community’s benefit, it may be exempt from the act.
You’re not alone if this confuses you. A lot of community organizers assume every drawing at every event needs a license. That’s simply not true for small fairs run by governments or for the benefit of local charities.
Youth Organizations Get Special Treatment
Here’s where things get serious for youth sports and school groups. New Mexico recently moved to exempt certain youth-focused organizations from many raffle restrictions.
Under House Bill 154, tax-exempt organizations that primarily serve kids eighteen and younger, like school clubs, athletic teams, or extracurricular groups, get more flexibility. These groups can now hold fundraising raffles without following some of the older rules in the Bingo and Raffle Act, including limits on how many raffles they can hold each year.
Makes sense, right? Youth sports teams often need quick, small fundraisers. This change cuts red tape for groups helping kids.
Political Campaigns Cannot Use Raffles
This one surprises people every year. Political candidates, or groups formed specifically to raise money for someone running for office, do not qualify as charitable organizations under New Mexico law. That means campaigns cannot legally use raffles to raise funds. No exceptions here.
How to Stay Compliant
Ready to hold a raffle the right way? Here’s what you actually need to do.
First, confirm your organization qualifies. You need nonprofit or charitable status and at least two years operating in New Mexico. Not sure if you qualify? Reach out to the Gaming Control Board before you sell a single ticket.
Second, count your raffles. If you’re only doing one every few months and four or fewer per year, you likely don’t need a license. Trust me, this works for most small community groups.
Third, if you’re running raffles more often, apply for a license through the Gaming Control Board. Budget for the $500 fee, and remember it needs renewal every three years.
Fourth, keep good records. Every dollar collected counts as gross receipts and needs to be reported. This includes donations tied to the raffle, not just ticket sales.
Fifth, if your top prize is worth more than $75,000, notify the board at least ten days before tickets go on sale. Don’t skip this step. It’s a specific requirement with a specific deadline.
Finally, print your ticket rules clearly. New Mexico requires raffle tickets and promotional materials to clearly state whether buying a ticket requires payment or not, and other key details about the drawing.
A Quick Story Worth Sharing
I looked into this topic recently for a friend running a small school fundraiser. She assumed any nonprofit could just start selling raffle tickets whenever they wanted. Turns out, most people get this wrong. The two-year existence requirement and the licensing threshold caught her off guard. She adjusted her plans and stayed on the right side of the law. Don’t be caught off guard like she almost was.
Frequently Asked Questions
Do I need a license to hold a single raffle in New Mexico?
No, if your organization holds no more than one raffle or bingo event every three months and no more than four in a year, you’re exempt from licensing.
Can any nonprofit hold a raffle?
Not automatically. Your organization needs to qualify as charitable, religious, fraternal, veteran, or similar, and it must have operated in New Mexico for at least two years.
What happens if I hold an illegal raffle?
You could face charges ranging from a petty misdemeanor up to a fourth-degree felony, depending on the circumstances and whether you represented a qualified organization.
Can I raffle off alcohol or firearms?
Yes, generally you can raffle items that don’t require a special distribution license, and that can include alcohol and firearms in certain situations.
Do youth sports teams have easier raffle rules now?
Yes. Recent legislation exempts many tax-exempt youth-serving organizations from some of the standard restrictions in the Bingo and Raffle Act.
Is there a tax on raffle proceeds?
Yes, New Mexico charges a small bingo and raffle tax on gross receipts from these games of chance.
Final Thoughts
New Mexico raffle laws aren’t as scary as they sound once you break them down. Qualify your organization, watch your raffle frequency, get a license if you need one, and report big prizes on time.
Most community groups fall well within the exempt categories and never need to worry about licensing at all. Now you know the basics. Stay informed, keep good records, and when in doubt, contact the Gaming Control Board or ask a lawyer before you sell that first ticket.
References
- New Mexico Bingo and Raffle Act, NMSA 1978, Sections 60-2F-1 through 60-2F-26: https://law.justia.com/codes/new-mexico/chapter-60/article-2f/
- New Mexico Gaming Control Board FAQs and Info: https://www.gcb.nm.gov/new-mexico-gaming-control-board-faqs-and-info/
- New Mexico Statutes Section 30-19-2, Gambling: https://law.justia.com/codes/new-mexico/chapter-30/article-19/section-30-19-2/
- New Mexico Statutes Section 30-19-3, Commercial Gambling: https://law.justia.com/codes/new-mexico/chapter-30/article-19/section-30-19-3/
- NM House Bill 154, Bingo and Raffle Act Youth Exemption: https://www.billtrack50.com/billdetail/1807652
