Raffle Laws in Tennessee (2026): Stricter Than You Think
Most people assume raffles are totally fine. You’ve seen them at church fundraisers, school events, and charity galas. They seem harmless, right?
Wrong. In Tennessee, raffles are actually illegal by default. Seriously. The state treats them as gambling. And if you run one without approval, you could face criminal charges. Let’s break down exactly what you need to know before you sell a single ticket.
What Is a Raffle in Tennessee?
A raffle is when someone buys a ticket for a chance to win a prize. The winner is picked by random drawing. Pretty simple.
But here’s the thing. Under Tennessee law, that description also fits the legal definition of gambling. Paying money for a chance to win something is considered “risking something of value for a profit that depends on chance.” That’s gambling. And gambling is mostly illegal in Tennessee.
Honestly, this surprises a lot of people. They assume a raffle for charity is different. It’s not, unless you follow a very specific process.
Are Raffles Legal in Tennessee?
Here’s where things get interesting.
Raffles and games of chance where someone must buy a ticket, make a donation, or purchase something are considered gambling. This is prohibited by the Tennessee Constitution and state law under Tenn. Code Ann. § 39-17-506.
So technically, raffles are illegal. But there’s a narrow exception.
Certain charitable organizations may apply to hold one raffle each year. Only a 501(c)(3) or 501(c)(19) organization may apply, and they must first submit an application and be granted permission.
That’s it. One event per year. Only certain nonprofits. And only with government approval. Tennessee is one of the strictest states in the country when it comes to raffles.
Who Can Hold a Raffle?
Not everyone qualifies. Not even close.
Only a qualified 501(c)(3) or 501(c)(19) organization that has submitted an application to the Division of Charitable Solicitations and Gaming and has been approved by the Tennessee General Assembly can hold a raffle.
Think of 501(c)(3) organizations as charities like food banks or animal shelters. Think of 501(c)(19) organizations as veterans’ groups. These are the only two types that can even apply.
Your local PTA? Probably can’t do it on their own. A neighborhood group raising money for a park? Nope. A political campaign? Absolutely not. Political candidates and campaigns for public office are not considered 501(c)(3) or 501(c)(19) tax-exempt organizations and cannot hold a raffle.
Wondering if your group qualifies? Check your IRS determination letter. If it says 501(c)(3) or 501(c)(19), you might be eligible. If it says anything else, you’re out.
The Three-Year Rule
Okay, this one’s important. Even if your organization has the right tax status, you have to wait.
501(c)(3) and 501(c)(19) organizations must be active and in continuous existence in Tennessee for at least three years before they can qualify to hold a gaming event.
So if your nonprofit is brand new, you’ll need to wait three years before you can even apply. That’s a long time. Plan ahead.
How the Approval Process Works
This is the part that makes Tennessee unique. It’s not just about getting a permit from a local office. You actually need approval from the state legislature.
Here’s how it works step by step.
First, your organization applies during the application period. The application can be filed online using Tennessee’s Charity and Business Filing System, TNCaB, during the application period, which runs July 1 through January 31.
Second, you pay a fee. The initial registration fee is $50. After your event, a second fee is owed based on how much money you raised.
Third, the state reviews your application. Applications that meet the qualifications of the law will be submitted via the omnibus list to the Tennessee General Assembly by March 1st of each year.
Fourth, the legislature votes. An event must be authorized by a two-thirds vote of all members elected to each house of the General Assembly. That’s a supermajority. It’s a high bar.
Fifth, if approved, you can hold your event. Events can then be held between July 1st and June 30th of the following year.
Sound complicated? It really is. But that’s how Tennessee does it. The process is designed to be strict and careful.
What Games Are Allowed?
Not all games of chance are treated the same. Tennessee has an approved list.
Authorized types of games include raffles, reverse raffles, cakewalks, cake wheels, and bingo.
A reverse raffle is basically the same as a regular raffle, but the last ticket drawn wins instead of the first. Cakewalks and cake wheels are old-school carnival games. Bingo is, well, bingo.
But here’s what you cannot do. Unauthorized games include pull-tabs, punchboards, video lottery games, instant and online lottery games, keno, and games of chance associated with casinos including, but not limited to, slot machines, roulette wheels, and the like.
Pretty much anything that looks like a casino game is off-limits. Stick to the approved list.
The 25% Rule
Here’s a rule that catches a lot of organizations off guard.
Each approved organization is limited to one gaming event per year, and at least 25% of gross proceeds must go back to the organization’s stated charitable purpose.
So if your raffle brings in $10,000, at least $2,500 must go directly to your charity’s mission. You can’t just use all the money for expenses or administrative costs.
If 25% is not returned to the charitable purpose or program in two consecutive years, the nonprofit will be disqualified from applying or holding future gaming events for a period of five years.
That’s a tough penalty. Five years is a long time to lose that fundraising option.
Who Cannot Buy Tickets?
Hold on, this part is important. Even after you’re approved, not everyone can buy tickets.
The individuals who are not allowed to purchase tickets include any member of the board of directors of the organization authorized to operate the event, any officer or employee of that organization, and any immediate family member residing in the same household as the board of directors or an officer or employee of the organization.
So the people running your nonprofit can’t participate in their own raffle. Neither can their spouses or kids who live with them. That’s the law.
It makes sense when you think about it. It prevents insiders from rigging the drawing in their favor.
When Are Tickets Allowed to Go on Sale?
Timing matters here. Organizations with an approved gaming event can begin selling tickets 120 days before the event.
That’s about four months. Don’t start early. Selling tickets before you’re legally allowed to is a violation.
After the Raffle: Reporting Requirements
The event is over. You think you’re done. Not so fast.
After an approved raffle takes place, a financial report is due within 90 days. If gross revenue from an event exceeds $50,000, an audited financial statement is also required.
Miss the 90-day window? An organization that fails to submit the report by 90 days will be responsible for a $10.00 per month late fee. If a report is not filed at all, action may be taken against the organization.
Keep good records of everything. Ticket sales, expenses, prizes, who bought what. You’ll need all of it.
What About “Donations” Instead of Ticket Purchases?
A lot of people try to get clever here. They think calling it a “donation” instead of a ticket purchase changes things legally.
It doesn’t. Not even a little bit.
If someone is required to pay for a chance to win a prize, it is considered a raffle. It does not matter that the payment is called a donation.
Basically, if paying is required to enter the drawing, it’s a raffle. Full stop. Changing the name doesn’t change the legal reality.
Penalties for Illegal Raffles
Now, here’s where it gets serious.
Under Tennessee Code Annotated (TCA) 39-17-506, operating an unlawful lottery, including an unapproved raffle, is a Class C misdemeanor, punishable by a fine of up to $50 and up to 30 days in jail.
That’s the base level. But it can get much worse.
If a raffle is part of a larger illegal gambling operation, organizers may face aggravated gambling promotion charges under TCA 39-17-505, a Class E felony. This offense carries penalties of one to six years in prison and fines up to $3,000.
Think of it like this. A small illegal raffle is similar to a traffic violation, just with possible jail time. A big illegal operation is closer to a serious felony. Neither is a road you want to go down.
Civil penalties are also on the table. The Secretary of State has authority to impose civil penalties up to $5,000 for each violation. Multiple violations are each treated separately.
And enforcement is real. If the Secretary of State learns of an unauthorized raffle or other illegal gaming event, the matter is referred to the local district attorney for investigation and criminal prosecution.
Most people assume no one is watching. But tips do get reported. Don’t risk it.
What About Office Pools and March Madness Brackets?
You’re not alone if you’ve wondered about this.
Technically, March Madness office pools are illegal in Tennessee, unless the proceeds are donated to charity and the organizer takes no fee or organizer’s cut.
Yep. Those innocent office pools at work are technically illegal. Most people don’t realize how strict these laws are. Use your judgment, but know the legal reality.
Free Giveaways and Sweepstakes
Here’s some good news. If your group wants to give something away for free, the rules are different.
Organizations may sponsor cash or prize giveaways or sweepstakes only if persons wishing to participate are given an opportunity to do so without being required to pay any money, make any donation, or purchase any product or service.
So if entry is truly free, it’s not a raffle. It’s a giveaway. That’s legal.
The key word is “required.” If anyone has to pay anything to enter, it becomes a raffle under Tennessee law.
How to Report an Illegal Raffle
See something that looks like an unauthorized raffle? You can report it.
Contact the district attorney for the county where you believe the game of chance is taking place, or contact Charitable Solicitations at (615) 741-2555. The Division will then notify the appropriate authorities.
You can also report directly to the Tennessee Secretary of State’s office online at sos.tn.gov.
How to Apply for a Legal Raffle
Alright. Your organization qualifies and you want to do this the right way. Here’s what you need to do.
First, make sure you have active 501(c)(3) or 501(c)(19) status and have been operating in Tennessee for at least three years.
Second, register as a charitable organization with the Secretary of State if you haven’t already.
Third, apply during the open application period, which runs July 1 through January 31. You can do this online at sos.tn.gov through the TNCaB system.
Fourth, pay the initial $50 application fee.
Fifth, wait for General Assembly approval. Applications are submitted to the legislature by March 1 each year.
Sixth, if approved, hold your event between July 1 and June 30.
Seventh, file your financial report within 90 days of the event.
That’s the full path. It takes planning. But it’s the only legal way to do it in Tennessee.
Frequently Asked Questions
Can a church hold a raffle in Tennessee? A church can apply if it qualifies as a 501(c)(3) organization and has been operating in Tennessee for at least three years. Just like any other nonprofit, it must go through the full application and General Assembly approval process.
Can a school hold a raffle in Tennessee? Public schools are generally not 501(c)(3) organizations, so they likely cannot apply on their own. A school’s booster club with proper 501(c)(3) status and three years of operation may be able to apply.
What happens if my nonprofit holds a raffle without approval? The case can be referred to the local district attorney for criminal prosecution. Individual organizers can personally face criminal charges, and the organization can lose its charitable registration.
Can I call it a “donation” instead of a ticket purchase to avoid raffle rules? No. If someone must pay anything for a chance to win a prize, it is legally a raffle, regardless of what you call the payment.
How many raffles can one organization hold per year? Just one. Tennessee law limits each approved organization to a single gaming event per year.
Final Thoughts
Tennessee’s raffle laws are strict. Seriously strict. Most states make it relatively easy for nonprofits to hold a raffle. Tennessee requires an act of the state legislature. That’s a big deal.
If your organization wants to hold a raffle, start the process early. Apply between July and January. Get your paperwork together. Make sure you’ve been operating in Tennessee for at least three years. And always make sure at least 25% of the money raised goes to your charitable mission.
When in doubt, call the Secretary of State’s office at (615) 741-2555. Or consult a Tennessee attorney who understands nonprofit and gaming law. A quick phone call is way better than a criminal charge.
Now you know the rules. Stay legal, stay informed, and good luck with your fundraising.
