What the law says
A raffle has all three parts of a lottery (you pay, chance picks the winner and there’s a prize), and US states and the UK define it exactly that way. Texas law even lists “raffle” by name in its definition of a lottery.
That’s why charity raffles need special permission. In California, a charity has to register with the attorney general before selling tickets, and at least 90% of the ticket money must go to charitable purposes. Texas only allows raffles by certain nonprofits, and the prizes can’t be cash. The UK has a set of exemptions, from the raffle at a school fair to small society lotteries registered with the local council.
The 50/50 problem
The 50/50 draw, where half the ticket money goes to the winner, is the raffle most likely to break the rules. It’s legal in states like Pennsylvania with a licence, but California only allows it for charities linked to major league sports teams, and in Texas the ban on cash prizes rules it out for ordinary charities. If you’re organising one, check your state’s rules first.
What it means for you
Buying a ticket at a school fair is about as harmless as gambling gets, and the money goes to a good cause. Running a raffle is where people get caught out. If you’re not a registered charity, or you’re planning to sell tickets online, check the rules first, because a well-meant raffle can easily be an illegal lottery.
Questions people also ask
Are 50/50 raffles legal?
It depends on the state. Pennsylvania allows them with a small games of chance licence. California only allows them for charities linked to major league sports teams at home games. Texas charity raffles can't offer cash prizes, which rules out a normal 50/50.
Can a business or an individual run a raffle?
Generally no in the US, because it's an illegal lottery. Businesses use a free way to enter ("no purchase necessary") instead, which turns it into a sweepstakes.
Is an office sweepstake legal in the UK?
Yes, as a "work lottery" among colleagues, as long as nobody makes a profit.
Do I need a licence for a raffle at a school fair in the UK?
No, if tickets are only sold at the event and no more than £500 of the money raised goes on prizes.
Sources
- Texas Attorney General letter opinion on lotteries and raffles (1997)
- California Attorney General, charitable raffles
- California Attorney General, major league sports raffles (50/50)
- Texas Attorney General, charitable raffles
- Pennsylvania Department of Revenue, Local Option Small Games of Chance
- UK Gambling Act 2005, schedule 11 (exempt lotteries)
- UK Gambling Commission, lotteries you can run without a licence