Can Nonprofits Sell Raffle Tickets Online? What Organizations Need to Know Before Going Digital
Can nonprofits sell raffle tickets online? The answer depends on state law, the organization, prize structure and sales process. Learn what nonprofits should check before accepting raffle ticket purchases online.
Can Nonprofits Sell Raffle Tickets Online? What Organizations Need to Know Before Going Digital
Online fundraising has changed what nonprofit organizations expect from a campaign. Supporters can donate from their phones, register for events online, share fundraisers through social media and make payments without ever handling cash or writing a check.
It is natural for nonprofits to expect raffle fundraising to work the same way.
The problem is that raffle laws did not develop at the same speed as fundraising technology. A nonprofit may be legally permitted to conduct a raffle while still facing restrictions on whether tickets can be purchased online, where purchasers may be located, how payments can be processed or how tickets and drawings must be administered.
That creates one of the most important questions in modern charitable gaming:
Can nonprofits sell raffle tickets online?
The answer depends heavily on the state, the organization and the exact transaction being proposed.
Quick Answer: Can Nonprofits Sell Raffle Tickets Online?
Sometimes. There is no single nationwide rule that allows every nonprofit to sell raffle tickets online.
The IRS recognizes raffles as a form of gaming and explains that gaming is normally regulated by state and local law in the jurisdiction where the activity occurs. That means federal nonprofit status does not create a nationwide right to conduct an online raffle.
A state may permit charitable raffles but restrict internet ticket sales. Another may allow electronic sales subject to licensing, geolocation or other requirements. A third may allow online ticket sales but restrict cash prizes or 50/50 raffle structures.
The important distinction is this:
A raffle being legal does not automatically mean an online raffle is legal.
Nonprofits need to determine whether their state permits both the raffle itself and the specific method being used to sell tickets.
Organizations researching a particular jurisdiction can begin with the RaffleGives State Raffle Laws library.
Online Raffle Laws at a Glance
Question | General Answer |
|---|---|
Can nonprofits legally conduct raffles? | In many states, qualifying organizations can |
Does 501(c)(3) status automatically authorize a raffle? | No |
Can every legal raffle sell tickets online? | No |
Are online raffle laws the same nationwide? | No |
Can states regulate where purchasers are located? | Yes |
Can states impose licensing requirements? | Yes |
Are cash and 50/50 raffles permitted everywhere? | No |
Can electronic payment rules differ from raffle legality? | Yes |
Can ticket and drawing requirements affect digital raffles? | Yes |
Should a nonprofit verify its exact online sales process? | Yes |
The question nonprofits should ask is not simply whether raffles are allowed in their state.
They need to ask whether their organization, prize structure, ticket-sale method, purchaser location and drawing process comply with the rules that apply to the campaign.
Why Is Selling Raffle Tickets Online Different From Holding a Raffle?
A raffle generally involves participants providing something of value for a chance to win a prize. Because that structure involves gaming, states regulate raffles differently from ordinary charitable donations, merchandise sales or event registrations.
Moving the transaction online introduces another layer.
An in-person raffle might involve a volunteer selling a paper ticket to a supporter standing directly in front of them. The organization knows where the sale occurred, can physically issue the ticket and can follow whatever paper-ticket procedures its jurisdiction requires.
An online transaction can be very different. The purchaser could be across town, across the state or across the country. The payment may be processed electronically, the ticket may exist digitally, and the purchaser may never interact directly with someone from the organization.
That is why a law authorizing charitable raffles should not automatically be interpreted as authorization for unrestricted internet ticket sales.
Does 501(c)(3) Status Allow a Nonprofit to Sell Raffle Tickets Online?
No. Federal tax-exempt status does not itself authorize online raffle-ticket sales.
The IRS identifies raffles as gaming activities and explains that gaming is normally regulated under state and local law. A nonprofit therefore needs to evaluate the charitable gaming laws governing its campaign separately from its federal tax-exempt status.
This distinction applies to both traditional and digital raffles.
An IRS determination letter may establish that an organization is recognized as tax-exempt under Section 501(c)(3). It does not tell the organization whether its state permits a cash raffle, whether it needs a charitable gaming license or whether supporters can purchase tickets through an online checkout.
For the broader federal and state distinction, read our complete guide to 501(c)(3) raffle rules for nonprofits.
Are Online Raffles Legal in Every State?
No.
The United States does not have one charitable raffle framework that applies uniformly across all states. State laws differ considerably, and those differences become even more important when technology is involved.
Some states have modernized their charitable gaming systems to accommodate forms of electronic or internet raffle activity. Others still operate under laws and regulations designed primarily around physical tickets, in-person transactions or traditional drawing procedures.
There are also states where charitable raffles are permitted but the online sales question is much more restrictive.
Massachusetts illustrates the distinction particularly well. The Massachusetts Attorney General's current raffle guidance says the state has no law allowing raffle-ticket sales over the internet and points to requirements that can prevent online sales. A nonprofit in Massachusetts therefore should not conclude that because it can legally conduct a charitable raffle, it can automatically put the checkout process online. Massachusetts Government
This is why RaffleGives treats raffle legality and digital raffle legality as separate questions.
What Does “Online Raffle” Actually Mean?
The phrase can describe several different activities, and that creates confusion.
A nonprofit might advertise a traditional raffle on Facebook while still requiring supporters to purchase physical tickets. Another organization might allow supporters to submit an online form but complete payment separately. A third might use a complete digital checkout where the purchaser pays online and receives an electronically recorded raffle entry.
Those are not necessarily the same legal transaction.
A modern online raffle can involve several components:
Promotion
The organization markets the raffle through its website, email, social media, QR codes or other digital channels.
Payment
The supporter pays electronically.
Ticket issuance
The supporter receives or is assigned a raffle entry.
Participant verification
The system records purchaser information and, where necessary, location or eligibility.
Drawing administration
The organization determines the winner according to applicable law.
A state may treat these components differently.
That is why asking whether a nonprofit can “promote a raffle online” is not necessarily the same question as asking whether it can sell the raffle ticket online.
Can a Nonprofit Promote a Raffle on Social Media?
Promotion and ticket sales should be evaluated separately.
A nonprofit might use Facebook, LinkedIn, Instagram, email or its own website to tell supporters that a raffle exists. That does not necessarily mean the organization can complete the raffle-ticket transaction through those channels.
The legal issue becomes more significant when the supporter moves from seeing an advertisement to actually purchasing an entry.
Organizations should therefore avoid assuming that permission to advertise a charitable fundraiser automatically determines how the raffle ticket itself may be sold.
The sales process needs its own compliance review.
Does It Matter Where the Raffle Ticket Buyer Is Located?
It can matter considerably.
Internet fundraising makes geographic boundaries less visible to supporters. A link posted publicly can potentially reach people far beyond the nonprofit's immediate community.
Charitable gaming laws, however, remain jurisdictional.
A state may regulate where the transaction occurs, where the organization operates, where the purchaser is physically located or some combination of those factors. Some digital charitable gaming systems therefore use location controls as part of the purchasing process.
This is particularly important for nonprofits with large social media audiences or supporters in multiple states.
A campaign link being technically accessible outside the state does not automatically mean an out-of-state supporter is legally eligible to purchase a ticket.
Why Does Purchaser Location Matter for Online Raffles?
A traditional raffle has obvious physical boundaries. An online campaign often does not.
Imagine a nonprofit posts its raffle link on social media. A supporter shares it with a friend, who shares it again. Within hours, people outside the organization's city and potentially outside its state can reach the same checkout page.
That reach is one of the major fundraising advantages of digital technology, but it can also create a compliance problem if the organization accepts purchases from jurisdictions where the transaction is not permitted.
The solution is not to abandon digital fundraising.
It is to build compliance into the transaction.
Depending on the jurisdiction, that can involve purchaser information, eligibility controls, geographic restrictions and other safeguards appropriate to the applicable law.
Can Nonprofits Use Credit or Debit Cards for Raffle Tickets?
Payment method is another issue that should not be assumed from general raffle legality.
States can regulate charitable gaming payments differently. A jurisdiction may permit a nonprofit to conduct a raffle while imposing separate rules on electronic transactions, credit cards, debit cards or other forms of payment.
Payment processors can also have their own requirements governing gaming-related transactions.
A nonprofit therefore needs to consider both sides of the transaction: what the law allows and what its payment provider permits.
Simply connecting a checkout form to a payment processor does not establish that the resulting raffle transaction is compliant.
Can Nonprofits Run Online 50/50 Raffles?
Potentially, where applicable law permits both the 50/50 structure and the online sales process.
These are separate legal questions.
A state may permit ordinary charitable raffles but restrict cash prizes. Another may permit cash raffles but limit how tickets can be sold. Another may provide a workable framework for digital 50/50 fundraising.
The nonprofit must satisfy all of the applicable pieces.
This distinction is particularly important because 50/50 raffles are naturally suited to digital fundraising. As participation increases, the prize can grow, giving the organization a changing campaign story it can share with supporters.
But the fundraising opportunity does not eliminate the underlying legal requirements.
Can a Nonprofit Sell Raffle Tickets Across State Lines?
Organizations should be extremely cautious about treating an online raffle as a nationwide fundraiser.
A website may be accessible nationally, but charitable gaming laws are not national.
If a nonprofit intends to accept raffle-ticket purchases from people located in multiple states, it needs to understand the laws that could apply to those transactions. The fact that the nonprofit's home state permits a particular raffle does not automatically mean a purchaser in another jurisdiction may participate.
This is one of the major differences between an ordinary online donation campaign and an online raffle.
A donation page can potentially reach supporters across the country. A raffle adds consideration, chance and a prize, which brings charitable gaming rules into the transaction.
For many nonprofits, a state-specific campaign is therefore much easier to structure responsibly than assuming the raffle can immediately operate nationwide.
Do Online Raffle Tickets Have to Look Like Paper Tickets?
That depends on the jurisdiction.
Some charitable gaming regulations were written around traditional paper raffle tickets and contain requirements involving numbering, ticket stubs, purchaser information, drawing information or physical drawing procedures.
Virginia provides a good example. Its current regulations establish specific construction requirements for standalone raffle tickets, and its statutory drawing process involves eligible ticket stubs or detachable sections. That is one reason we advise Virginia nonprofits to verify the exact digital process they intend to use rather than assuming general raffle authorization automatically authorizes a fully digital workflow.
Our dedicated Virginia 50/50 raffle laws guide explains those requirements in more detail.
Other states have taken different approaches.
The correct technology therefore depends on the legal framework governing the campaign.
Can an Online Raffle Use an Automated Winner Generator?
Not automatically.
A digital platform may be technically capable of randomly selecting a winning entry, but the applicable charitable gaming law may specify how the drawing must occur.
Some jurisdictions can accommodate electronic systems. Others retain drawing procedures designed around physical tickets or other prescribed methods.
The nonprofit should determine the legal drawing method before configuring the campaign.
This is another example of a principle that applies throughout digital charitable gaming:
Technology should adapt to the applicable law, not replace it.
Does Moving a Raffle Online Change Federal Tax Rules?
Putting the transaction online does not eliminate the federal tax considerations associated with nonprofit gaming.
The IRS considers raffles a form of gaming. Depending on the circumstances, gaming activity can potentially generate unrelated business taxable income, although exceptions may apply. IRS
Organizations also need to remember that purchasing a raffle ticket is not treated the same way as making an ordinary charitable contribution. IRS Publication 526 states that amounts paid to purchase raffle, bingo or lottery tickets cannot be deducted as charitable contributions. IRS
Raffle activity can also affect nonprofit reporting. Current IRS Form 990 instructions include raffles among gaming activities and require organizations reporting more than $15,000 of gross gaming income on the applicable Form 990 line to complete the relevant Schedule G reporting. IRS
The federal tax layer and the state charitable gaming layer therefore need to be considered separately.
What About Taxes on Raffle Winnings?
Raffle winnings are generally gambling winnings for federal income tax purposes.
The IRS states that gambling income includes raffle winnings, including the fair market value of noncash prizes. Reporting and withholding requirements can also apply depending on the size and circumstances of the prize. IRS
For nonprofits, this means the compliance process does not necessarily end when the winning entry is selected.
Organizations offering significant prizes should determine their federal reporting and withholding responsibilities before the drawing occurs.
That process is covered more fully in our guide to 501(c)(3) raffle rules.
Can a Third-Party Platform Make an Online Raffle Legal?
No platform can turn an otherwise prohibited raffle into a legal one simply by providing technology.
A raffle platform can help an organization administer functions that are permitted under applicable law. Depending on the platform and jurisdiction, that may include campaign creation, ticket administration, reporting, payment integration, supporter communication and campaign distribution.
The underlying organization and campaign still need to satisfy applicable charitable gaming requirements.
Some jurisdictions also regulate third-party providers themselves or limit the roles outside parties may perform in charitable gaming.
Nonprofits should therefore evaluate a platform based on more than features.
They should ask whether the technology can operate within the legal requirements governing their campaign.
What Should Nonprofits Look for in an Online Raffle Platform?
Compliance should be part of the product evaluation from the beginning.
A generic giveaway application may be capable of randomly selecting a winner. That does not mean it was designed for regulated nonprofit raffle fundraising.
Organizations should look for technology that can support the administrative requirements associated with a real charitable raffle, including accurate participant records, ticket tracking, reporting and payment workflows.
The platform should also make the campaign easier for supporters to participate in and easier for the nonprofit to promote.
Mobile-friendly participation matters because many supporters will encounter the campaign through social media, text, email or a QR code rather than sitting at a desktop computer.
Distribution matters too.
RaffleGives' Ambassador Program is designed to help organizations activate board members, volunteers, parents, employees, alumni and other supporters as campaign distributors. Each supporter already has a personal network, and digital fundraising makes it easier for the organization to extend its reach through those relationships.
How Does RaffleGives Approach Online Raffle Fundraising?
RaffleGives is built specifically around nonprofit raffle fundraising, with a focus on digital cash and 50/50 campaigns where the applicable law permits them.
Organizations can create their campaign, connect their own Stripe account, configure the raffle and submit it for review. RaffleGives does not hold the nonprofit's fundraising proceeds, and the platform uses performance-based pricing rather than requiring a monthly software subscription.
The technology can support ticket administration, reporting, receipts, campaign sharing, QR distribution and Ambassador-driven fundraising. But those capabilities operate within a compliance-first framework.
The goal is not to assume that every nonprofit in every state can use every feature in exactly the same way.
The goal is to match the fundraising technology to what the organization is legally permitted to do.
Organizations can see how RaffleGives works and explore our State Raffle Laws resources before building a campaign.
What Should a Nonprofit Check Before Selling Raffle Tickets Online?
Start by confirming that the organization itself is eligible to conduct charitable gaming in the relevant jurisdiction. Federal nonprofit status should not be treated as automatic state raffle authorization.
Next, determine whether the proposed raffle structure is permitted. That includes the prize, ticket pricing, campaign dates and whether a cash or 50/50 format is allowed.
Then investigate the digital transaction itself. Determine whether online sales are permitted, where purchasers may be located, which payment methods can be used and what information the organization must collect.
Finally, confirm the ticketing, drawing, reporting and recordkeeping requirements.
Only after those pieces are established should the organization open the campaign to supporters.
Online Raffle Compliance Checklist for Nonprofits
Before enabling online ticket sales, an organization should be able to answer:
A nonprofit that cannot confidently answer one of these questions should resolve it before accepting online ticket purchases.
What Are the Most Common Online Raffle Mistakes?
The first is assuming that raffle legality equals online raffle legality. It does not. A state can permit charitable raffles while imposing restrictions that make a particular digital sales process unavailable.
The second is assuming that 501(c)(3) status creates nationwide raffle authority. Federal tax-exempt recognition and state charitable gaming authorization are separate legal questions.
The third is forgetting geography. A public campaign link can travel far beyond the organization's intended audience, but accessibility does not determine participant eligibility.
Another common mistake is selecting software before understanding the law. A platform should be configured around the campaign's legal requirements rather than forcing the nonprofit's raffle into whatever workflow the software happens to provide.
Finally, organizations should not focus exclusively on ticket sales. Drawing procedures, financial reconciliation, tax reporting, winner documentation and recordkeeping remain part of running the campaign.
Frequently Asked Questions About Selling Raffle Tickets Online
Can nonprofits sell raffle tickets online?
Sometimes. Online raffle-ticket sales depend primarily on applicable state and local charitable gaming laws. A nonprofit should confirm that both its raffle and proposed online sales process are permitted.
Are online raffles legal in the United States?
There is no single nationwide charitable raffle rule. States regulate nonprofit raffles differently, so an online raffle that is workable in one state may be restricted in another.
Can a 501(c)(3) sell raffle tickets online?
501(c)(3) status does not itself authorize online raffle sales. The nonprofit must determine whether the charitable gaming laws governing its campaign permit the organization and the proposed digital transaction.
Can nonprofits advertise raffles online?
Online promotion and online ticket sales are different activities. Organizations should evaluate the rules applicable to both rather than assuming permission to advertise determines whether an online purchase may be completed.
Can a nonprofit sell raffle tickets through social media?
Social media can be used to distribute campaign information and links, but whether the actual raffle-ticket transaction can occur online depends on applicable law and platform requirements.
Can a nonprofit sell raffle tickets to people in other states?
Not automatically. An organization's home-state raffle authorization does not necessarily permit ticket purchases from participants located in other jurisdictions.
Can nonprofits use Stripe for raffle ticket payments?
The legal ability to accept an electronic payment depends on the campaign and jurisdiction, while payment providers maintain their own policies and account requirements. Organizations should verify both before launching.
Are online 50/50 raffles legal?
They are permitted in some jurisdictions under applicable requirements but not universally. The nonprofit needs to confirm both the legality of the cash 50/50 structure and the online ticket-sale method.
Are online raffle tickets tax deductible?
No. The IRS states that amounts paid to purchase raffle or lottery tickets are not deductible as charitable contributions, regardless of whether the ticket is purchased online or in person. IRS
Is an online giveaway the same thing as a nonprofit raffle?
Not necessarily. The legal structure of a promotion depends on factors such as consideration, chance and prize. A generic giveaway tool should not automatically be treated as a compliant charitable raffle platform.
Related Online Raffle Resources
Nonprofits should begin with our State Raffle Laws library to determine how charitable gaming requirements differ by jurisdiction.
For the relationship between federal nonprofit status and raffle authorization, read 501(c)(3) Raffle Rules: What Nonprofits Need to Know Before Holding a Raffle.
Virginia organizations can review our complete Virginia raffle laws guide and the dedicated Virginia 50/50 raffle laws resource.
Organizations evaluating technology can also read RaffleGives: The Best Online Raffle Platform for Nonprofits Running Cash and 50/50 Raffles and Free Raffle Websites for Nonprofits: What Does “Free” Really Mean?.
Ready to Explore Online Raffle Fundraising?
Online raffle technology can give nonprofits something traditional fundraising methods struggle to provide: the ability to turn an existing community into a much larger distribution network.
But digital reach should come after compliance, not before it.
Determine whether your organization qualifies, what type of raffle your state permits, whether tickets may be sold online, where purchasers may be located and how the drawing must be conducted. Once those requirements are clear, technology can make the campaign easier to administer, easier to share and easier for supporters to participate in.
RaffleGives is designed to help nonprofits build that next generation of raffle fundraising where applicable law permits it.
This article is provided for general informational purposes and does not constitute legal, tax or accounting advice. Charitable gaming requirements vary by jurisdiction and can depend on an organization's status, raffle structure, purchaser location and sales method. Organizations should verify current requirements with the appropriate regulator and consult qualified counsel when appropriate.
