Running a raffle in Oregon sounds simple. Sell some tickets, draw a winner, donate the money. Easy, right? Not so fast. Oregon has strict rules about who can run a raffle, how it must be run, and what happens if you break the law.
Whether you’re a nonprofit, a school, or a community group, this guide covers everything you need to know before selling your first ticket.
What Is a Raffle?
A raffle is a game of chance. People buy tickets, a winner is drawn at random, and that winner gets a prize. Simple enough.
But in Oregon, a raffle is also considered a form of gambling. That means it falls under the same laws that regulate gambling in the state. You can’t just hold one whenever you want.
Oregon allows raffles only for nonprofit, tax-exempt organizations. Private individuals and for-profit businesses cannot legally hold a raffle in Oregon. That’s one of the biggest things people get wrong.
Who Can Legally Run a Raffle in Oregon?
Okay, this one’s important. Not just anyone can run a raffle here.
Oregon law says only tax-exempt nonprofit organizations may hold raffles. This includes charities, religious groups, fraternal organizations, schools, and public agencies. Your group must have held federal tax-exempt status for at least one year before applying for a raffle license.
Wondering if your group qualifies? Check your IRS determination letter. If you have 501(c)(3) or similar tax-exempt status and have held it for at least a year, you’re on the right track.
For-profit companies, private clubs without tax-exempt status, and individuals cannot legally run a raffle in Oregon. If you try, you could face serious criminal penalties. More on that in a moment.
Do You Always Need a License?
Here’s where it gets interesting. Not every nonprofit needs a license.
Oregon carves out a small exemption. If your nonprofit’s total raffle ticket sales stay under $10,000 in a single calendar year, you do not need a license from the Oregon Department of Justice. You still must follow all the other rules, though. You just skip the licensing step.
Once your raffle sales hit $10,000 or more per year, you need a license. The Oregon Department of Justice handles these licenses through its Charitable Activities Section.
Think of the $10,000 threshold like a speed limit. Go under it, and you’re fine without the permit. Cross it, and you need to be licensed.
Classes of Raffle Licenses in Oregon
Oregon offers two types of raffle licenses for nonprofits.
A Class B license lets you run raffles throughout the year. Each individual raffle, though, cannot have a handle (total ticket sales) of more than $10,000 per game. This is the entry-level license for smaller operations.
A Class A license allows larger raffles with handles that exceed $10,000 per game. Class A licensees also have to submit a notice to the Department of Justice at least two weeks before selling any tickets for each raffle. There’s more paperwork, but more flexibility too.
License fees range from $20 to $100 depending on the type and expected handle. That’s honestly pretty affordable for what you get.
Basic Rules for Running a Raffle
Pretty straightforward once you know them. Let’s break it down.
Every ticket must give buyers an equal chance to win. No rigging the draw, no double-entering stubs. Each sold ticket stub goes into the drawing container, and each one has an equal shot. Unsold tickets cannot go in the draw container. Period.
You do not have to be present to win. Oregon law specifically says no one can be required to show up at the drawing to receive a prize. That’s a nice rule for buyers.
Ticket sellers must return all stubs to the organization. The drawing container must be set up so every ticket has an equal shot at being pulled. These aren’t just suggestions. They’re legal requirements.
Prize Limits You Need to Know
Hold on, this part is important.
Oregon law sets hard limits on prizes. Cash prizes in a single raffle cannot exceed $5,000. That’s the ceiling for cash, no exceptions.
For non-cash prizes, the rules are different. A single non-cash prize cannot exceed $75,000 in retail value. And the total value of all prizes in one raffle cannot exceed $100,000.
Gift cards and gift certificates can go over the $5,000 cash limit, as long as they can’t be redeemed for cash directly.
Most people don’t realize these limits exist. They assume they can raffle off a $10,000 cash prize. They find out the hard way that’s not allowed. Don’t be one of them.
Important Rules Before Ticket Sales Begin
Your organization must already own the prize before you start selling tickets. You can’t sell tickets first and then buy the prize with the money you raise. Oregon law prohibits that directly.
If you’re raffling off a car, you need to have the title ready. If it’s a used or custom vehicle, you’ll also need a written appraisal from a licensed appraiser.
Once you start selling tickets, you generally can’t cancel the raffle. Oregon law says you must award the prize regardless of how many tickets you sell. So if you sell five tickets on a $50,000 boat, someone is winning that boat.
That’s a real risk. Plan carefully before advertising any high-value prizes. The DOJ application actually warns organizations that raffles for high-end items like cars are especially risky.
You also cannot sell tickets more than twelve months before the drawing date.
No Online Ticket Sales
This one surprises a lot of people. Oregon does not allow online raffle ticket sales. All ticket sales must happen in person or through other offline methods.
You’re not alone in finding this frustrating. Many states have moved toward allowing online sales, but Oregon hasn’t made that change yet. Keep selling tickets the old-fashioned way for now.
Ticket Pricing and Language Rules
You can set any ticket price you want. Oregon doesn’t cap how much you charge per ticket. But there’s a rule about how you describe the purchase.
You cannot call a raffle ticket purchase a “donation.” You cannot imply it’s tax-deductible as a charitable contribution. It’s a ticket purchase. That’s it. Calling it a donation misrepresents it and violates Oregon administrative rules.
Honestly, this is the rule most organizers overlook. Make sure your materials are clear.
Special Prize Rules: Alcohol and Firearms
Raffling off a case of wine? A firearm? Oregon has extra rules for that.
If your raffle prize includes alcohol, such as cider, beer, wine, or spirits, you must also follow the Oregon Liquor Control Commission’s raffle regulations. It’s an extra layer of compliance on top of the DOJ rules.
If your prize is a firearm, you must also follow ATF (Bureau of Alcohol, Tobacco, Firearms and Explosives) regulations. Firearms transfers must still go through a licensed dealer with the required background checks.
Sound complicated? It can be. When in doubt, contact the Oregon DOJ Charitable Activities Section before setting your prize.
What Happens If You Break the Raffle Laws?
Now, here’s where things get serious.
Running a raffle without proper authorization in Oregon is not just a civil issue. It can become a criminal one.
Under Oregon law, knowingly promoting or profiting from unlawful gambling is a Class C felony. That means up to five years in prison and fines up to $125,000. Think of it like the difference between a parking ticket and a real crime.
For licensed nonprofits that break specific rules, the DOJ can suspend or revoke your license. The state can also impose civil penalties. You could lose your ability to run any charitable gaming events in the future.
If your organization’s handle exceeds $250,000 in a year and the games don’t generate at least five percent of that amount for your charitable purposes after expenses, that’s also a legal violation.
How to Apply for a Raffle License in Oregon
Ready to get licensed? Here’s what you do.
Contact the Oregon Department of Justice Charitable Activities Section. They are located at 100 SW Market St., Portland, OR 97201. You can reach them by phone at (971) 673-1880 or by email at [email protected].
You will need to submit a completed application along with your IRS tax-exempt determination letter. You’ll also complete a Raffle Rule Review and Certification. Class A licensees pay a bit more and have additional reporting requirements.
Give yourself enough time. The DOJ needs to review your application before you can start selling tickets. Don’t wait until a week before your event.
After your raffle, licensed organizations must file annual reports with the DOJ. These reports show your handle, prizes awarded, and expenses. Skipping the report is a violation.
Reporting and Record Keeping
Every licensed organization is required to keep good records and file reports. This isn’t optional.
You track ticket sales, prizes, and all raffle-related expenses. Annual reports go to the DOJ. These keep your license in good standing and show the state that your gaming proceeds are actually going to your charitable mission.
Basically, the state wants to make sure raffle money is being used for good causes. The record-keeping requirement is how they verify that.
Frequently Asked Questions
Can a for-profit business run a raffle in Oregon?
No. Only nonprofit, tax-exempt organizations may legally conduct raffles in Oregon. For-profit businesses and private individuals are not permitted.
Do I need a license if my raffle raises less than $10,000?
Not necessarily. Nonprofits whose total raffle sales stay under $10,000 per calendar year are exempt from the licensing requirement. All other rules still apply.
Can I sell raffle tickets online in Oregon?
No. Oregon does not allow online raffle ticket sales. All ticket sales must be conducted in person or offline.
What is the cash prize limit for a raffle in Oregon?
Cash prizes in a single raffle cannot exceed $5,000. Non-cash prizes can be higher, up to $75,000 per prize and $100,000 total per raffle.
Can I cancel a raffle if ticket sales are low?
Generally, no. Once you begin selling tickets, you are required to complete the raffle and award the prize. The only exception is circumstances truly beyond your control, and even then, you must refund all buyers within 30 days.
Can I raffle off alcohol or a gun?
Yes, but there are extra rules. Alcohol prizes must comply with Oregon Liquor Control Commission regulations. Firearm prizes must follow ATF rules, including background checks through a licensed dealer.
What happens if someone runs an illegal raffle in Oregon?
Promoting or profiting from unlawful gambling is a Class C felony in Oregon. This can mean up to five years in prison and significant fines.
Final Thoughts
Oregon raffle laws are stricter than most people expect. But once you know the rules, they’re totally manageable.
You need to be a qualified nonprofit. You need to follow prize limits. You need to own the prize before selling tickets. And you definitely can’t do any of this online.
When in doubt, contact the Oregon Department of Justice Charitable Activities Section before you start planning. They are there to help. A quick call can save you a lot of trouble.
Now you know the basics. Plan carefully, stay compliant, and your raffle can be a great fundraiser for your cause.
References
- Oregon Revised Statutes Chapter 464: Charitable Gaming – https://www.oregonlegislature.gov/bills_laws/ors/ors464.html
- Oregon DOJ Charitable Gaming FAQs and Resources – https://www.doj.state.or.us/charitable-activities/charitable-gaming/charitable-gaming-faqs/
- Oregon Administrative Rule 137-025-0290: Conduct of Raffles in General – https://oregon.public.law/rules/oar_137-025-0290
- Oregon Administrative Rule 137-025-0300: Raffle Prize Limits – https://oregon.public.law/rules/oar_137-025-0300
- Oregon DOJ Charitable Gaming License Applications and Reports – https://www.doj.state.or.us/charitable-activities/charitable-gaming/charitable-gaming-license-applications-and-reports/
- Oregon DOJ Charitable Gaming Handbook – https://www.doj.state.or.us/wp-content/uploads/2021/12/gaming_handbook.pdf
