Most nonprofits think running a raffle is simple. Sell some tickets, pick a winner, done. Wrong. New York has some of the strictest raffle laws in the country. One mistake could cost you thousands in fines or even jail time.
Honestly, the rules are confusing at first. But once you understand them, they make sense. Let’s break down exactly what you need to know to stay legal.
What Are Raffles Under New York Law?
A raffle is any game where people buy tickets for a chance to win a prize. The winner is picked randomly. Sounds simple, right?
New York calls raffles “games of chance.” They’re heavily regulated because they’re technically gambling. But nonprofits can run them legally if they follow the rules.
The state takes this seriously. Running an illegal raffle isn’t just a slap on the wrist. We’re talking real penalties here.
Who Can Actually Run a Raffle in New York?
You can’t just wake up and decide to run a raffle. New York only allows specific organizations to do it.
You must be an authorized organization. That means you’re a registered nonprofit with proper status. Churches, schools, veterans groups, volunteer fire departments, and charities qualify.
Here’s the catch. Your organization must have been active for at least one year before running a raffle. Brand new nonprofits need to wait.
Also, your group can’t exist mainly to run raffles. At least 75% of your activities must be for other purposes. Political parties can’t run raffles at all in New York.
Sound strict? It is. The state wants to make sure only legitimate groups are raising money this way.
The Three Categories of Raffles in New York
New York divides raffles into three categories based on how much money you expect to make. This is super important because different categories have different rules.
Small Raffles (Under $5,000 per raffle and under $30,000 per year)
This is the easiest category. You don’t need a license from the state. You still need local approval from your municipality, though.
Your single raffle must make less than $5,000 in net proceeds. Your total for all raffles in a calendar year must be under $30,000.
Pretty straightforward. Many small nonprofits fall into this category.
Medium Raffles (Between $5,000 and $29,999 for any single raffle)
Now things get more complicated. You need to register with the New York State Gaming Commission.
You’ll get a Games of Chance Identification Number. You must include this number on all your forms and applications.
You also need to apply for a local license from your municipality. Both state and local approval are required.
Large Raffles (Over $30,000 per year or over $30,000 for any single raffle)
These require the most paperwork. Same registration process as medium raffles, but with extra reporting requirements.
You’ll need to file detailed financial reports after each raffle. The Gaming Commission watches these closely.
Most small nonprofits never reach this level. But if you’re raffling off a car or house, you might.
Basic Rules Every Raffle Must Follow
Wondering if this applies to you? Yes, it does. Every raffle in New York must follow these rules, regardless of size.
Age Restrictions
Only people 18 or older can buy raffle tickets. Only people 18 or older can sell raffle tickets. Only people 18 or older can help run the raffle drawing.
No exceptions. Not even if a parent is present.
Location Rules
You can only sell tickets in municipalities that have passed a local law allowing games of chance. This usually means your home municipality and nearby ones.
You need approval to sell tickets outside your home area. Use the Raffle Consent Form to get permission from other municipalities.
Time Limits
You can’t sell raffle tickets more than 180 days before the drawing. Six months is the maximum.
Plan accordingly. Don’t start selling too early.
Payment Methods
Cash, checks, debit cards, and credit cards are all allowed. Pretty modern, right?
Prize Limits
Here’s where it gets specific. No single prize can exceed $300,000. No series of prizes can exceed $500,000.
The total value of all prizes you give away in a year can’t exceed $3 million. That’s across all raffles combined.
Honestly, most organizations never get close to these limits. But they exist.
Members Only
Only bona fide members of your organization can help run the raffle. You can’t hire random people to sell tickets or manage drawings.
This rule is strict. The state checks.
Selling Raffle Tickets Online
Wait, it gets better. You can sell raffle tickets online in New York. But there’s a catch (of course).
You must get approval from the Gaming Commission first. Fill out the Internet Raffle Application at least 60 days before you start selling.
You need a separate application for each raffle. Yep, that’s right. Every single raffle needs its own approval.
The regulations were adopted in 2022 after years of delay. Professional sports teams lobbied hard for this because they wanted to sell 50/50 raffle tickets online.
Online sales can dramatically increase your fundraising. But the paperwork is real.
What Happens If You Break These Laws?
Not sure what counts as a violation? Let me break it down.
Criminal Penalties
Running an illegal raffle is promoting gambling. That’s a crime in New York.
Promoting gambling in the second degree is a Class A misdemeanor. You could face up to one year in jail. Fines can reach $1,000 per violation.
Promoting gambling in the first degree is a Class E felony. This is serious. You could face up to four years in prison. Fines can hit $5,000.
Think of it like this. A misdemeanor is bad. A felony can destroy your life.
Civil Penalties
The Gaming Commission can impose additional fines. They can revoke your license. They can ban you from running raffles in the future.
Organizations with repeated violations lose their nonprofit status sometimes. That’s devastating.
Common Violations
Most violations happen by accident. People just don’t know the rules.
Using non-members to sell tickets is illegal. Exceeding prize limits is illegal. Operating without a license is illegal. Failing to maintain a separate bank account is illegal.
Late or missing financial reports can get you in trouble. Using net proceeds for unauthorized purposes is a violation.
Operating outside your licensed municipality without permission? Violation.
You’re not alone, this confuses a lot of people. But ignorance isn’t a defense.
How to Run a Legal Raffle in New York
Okay, pause. Read this carefully. Following these steps keeps you out of trouble.
Step 1: Make Sure You Qualify
Check that your organization has been active for at least one year. Verify you’re a registered nonprofit. Make sure at least 75% of your activities are non-gambling related.
Step 2: Get Local Approval
Contact your municipality’s clerk or gaming office. Find out if your town allows games of chance.
If yes, ask about the local licensing process. Get the required forms. Submit them with all required documentation.
Step 3: Register with the State (if needed)
If your raffle will make over $5,000 for a single event or over $30,000 for the year, register with the Gaming Commission.
Get your Games of Chance Identification Number. This takes time, so start early.
Step 4: Apply for Online Sales (if needed)
Planning to sell tickets online? Submit your Internet Raffle Application. Do this at least 60 days before your first sale.
Remember, you need a separate application for each raffle. Budget your time accordingly.
Step 5: Set Up Your Raffle Properly
Create a separate bank account for raffle funds. Never mix raffle money with your general operating account.
Set your ticket price. Common prices are $5, $10, or $25. New York doesn’t have strict ticket price limits like some states.
Determine your prizes. Make sure the total value stays within legal limits.
Step 6: Sell Tickets Legally
Only use members of your organization to sell tickets. Make sure everyone involved is at least 18 years old.
Only sell in approved municipalities. Keep good records of every ticket sold.
Don’t start selling more than 180 days before the drawing. Mark your calendar.
Step 7: Hold the Drawing
The drawing can be at your organization’s premises or another approved location. State-owned property is allowed if you get permission from the agency that owns it.
Make sure the selection process is truly random. Document everything.
Announce the winner publicly. Award the prize promptly.
Step 8: File Required Reports
If your raffle required a license, you must file financial reports. Include all income, expenses, and how you used the net proceeds.
File on time. Late reports can jeopardize future licenses.
Special Rules for 50/50 Raffles
These are popular at sports events. Half the pot goes to the winner, half goes to the charity.
The same rules apply. You still need all the proper approvals. The prize value counts as 50% of the total ticket sales.
Weekly drawings are allowed. Some organizations run “Queen of Hearts” style raffles where the grand prize builds each week.
You must have written house rules. Post them prominently where tickets are sold.
What About Raffles at Schools?
Schools and PTAs can run raffles. The same rules apply. You must be a qualified nonprofit with proper registration.
Small school raffles under $5,000 don’t need a state license. You still need local approval, though.
Stay conservative. The last thing you want is legal trouble over a school fundraiser.
How to Check If Your Municipality Allows Raffles
Not all municipalities in New York allow games of chance. Some have passed local laws permitting them. Others haven’t.
Visit the Gaming Commission website. They have a searchable database of municipalities with games of chance laws.
You can also call your town clerk. They can tell you right away.
If your town doesn’t allow it, you can’t run a raffle there. Period.
Exceptions and Special Circumstances
Some organizations get extra leniency. Volunteer fire departments and veterans organizations sometimes qualify for fewer restrictions.
But don’t assume. Always check with the Gaming Commission before making plans.
Tips for Staying Compliant
Start early. Begin your licensing process at least 60 days before your event. Honestly, 90 days is better.
Know your limits. Track prizes carefully to stay within caps. One raffle over the limit can trigger problems.
Train volunteers. Make sure everyone helping knows the rules. Give them written guidelines.
Document everything. Keep records of all sales, expenses, and decisions. Over-document rather than under-document.
Segregate funds. Never mix raffle money with other accounts. This is huge.
File reports promptly. Missing deadlines can jeopardize future licenses. Set reminders.
Use the Gaming Commission resources. They have guides, forms, and help available.
What to Do If You Make a Mistake
Discovered you broke a rule? Don’t panic. Contact a lawyer who specializes in gaming law.
Sometimes you can fix things before they become major problems. Self-reporting violations can reduce penalties.
But never ignore issues. They don’t go away on their own.
Resources and Help
The New York State Gaming Commission is your primary resource. Their website has all the forms, guidelines, and contact information you need.
Your municipality’s gaming office or town clerk can answer local questions. Most are helpful if you approach them respectfully.
Consider consulting a lawyer if your raffle is large or complex. The cost is worth avoiding bigger problems later.
Frequently Asked Questions
Do I need a license for a small raffle under $5,000?
No, you don’t need a state license. You still need local approval from your municipality. Make sure your town has a games of chance law that allows raffles.
Can I sell raffle tickets online in New York?
Yes, but you must get Gaming Commission approval first. Submit an Internet Raffle Application at least 60 days before selling. You need a separate application for each raffle.
What’s the maximum prize value I can offer?
No single prize can exceed $300,000. No series of prizes can exceed $500,000. Your total prizes for all raffles in a year can’t exceed $3 million.
Can minors participate in raffles?
No one under 18 can buy tickets, sell tickets, or help run a raffle. This rule has no exceptions, even with parent permission.
What if my municipality doesn’t allow games of chance?
You can’t run a raffle there. Check the Gaming Commission website for municipalities that do allow it. You may be able to sell tickets in neighboring towns if they have the proper laws.
Final Thoughts
New York raffle laws are complicated. But they’re not impossible to navigate.
The key is starting early and following every step. Don’t skip requirements because you think they don’t apply. They probably do.
Most violations happen because people don’t know the rules. Now you do. Stay informed, stay legal, and when in doubt, ask a professional.
Your nonprofit’s reputation is too valuable to risk. Do it right from the start.
References
- New York General Municipal Law Article 9-A – Official state raffle statutes
- New York State Gaming Commission – Raffles – Official guidelines and forms
- New York Penal Law Article 225 – Gambling offense definitions and penalties
- Gaming Commission Raffle Guidelines – Detailed compliance instructions
- New York State Gaming Commission Internet Raffle Application – Online ticket sales approval process
