Texas Raffle Laws in 2026: The Complete Legal Guide
Most people think raffles are always illegal in Texas. They’re wrong. But here’s the thing: not all raffles are legal either. Texas has surprisingly specific rules about who can run raffles, what prizes they can offer, and how they have to operate. Get this wrong, and you’re looking at serious penalties. Let’s break down exactly what you need to know.
Whether you’re running a charity fundraiser or thinking about organizing a raffle, understanding these laws is critical. Texas takes gambling regulations seriously. The good news? Once you know the rules, it’s actually pretty straightforward.
What Is a Raffle?
A raffle is basically a lottery where people buy tickets for a chance to win a prize. Simple, right? But here’s where it gets official: in Texas, a raffle involves three key elements. You’re selling tickets or entries. You’re drawing winners at random. And you’re offering something of value as the prize.
The state defines raffles specifically because it wants to separate them from other types of gambling. Honestly, this distinction matters a lot when it comes to what’s legal and what isn’t.
Basic Texas Raffle Laws
Only Certain Organizations Can Run Raffles
Here’s the important part: you can’t just start a raffle whenever you want. Only specific organizations have the legal right to conduct raffles in Texas. These include charitable organizations, nonprofits, religious groups, and certain veteran’s organizations. Educational institutions can also run raffles under specific conditions.
Wait, it gets better. The organization running the raffle must have been registered and operating for at least one year. You can’t create an organization today and start a raffle tomorrow. Texas wants to ensure these are legitimate, established groups with real community roots.
Who Decides What’s Legal?
So who actually approves these raffles? Not the state directly. Local authorities in your county or city handle raffle oversight. This means the rules can vary slightly depending on where you are in Texas. What’s totally fine in one county might require special permission in another.
Think of it like local traffic laws. The basics are the same everywhere, but some cities have extra rules. You’ll want to check with your specific county or city before moving forward.
Tickets and Pricing Rules
Here’s something that surprises people: there are limits on how much you can charge for raffle tickets. You can’t sell tickets above a certain price point, and the state wants to make sure ticket prices are reasonable.
Each ticket sold must be identical in value and description. You can’t offer some people better odds than others. That would be… well, that would be cheating, basically. Fairness is the whole point here.
Important Operating Requirements
You Need Proper Registration
Before you sell a single ticket, your organization needs to register for raffle activities with the appropriate local authority. This usually means getting a license or permit from your city or county. Wondering if your organization already has this? Contact your local city clerk or county clerk’s office.
Registration isn’t complicated, but it is mandatory. Skip this step, and you’re committing a crime. Not a small one either.
Record-Keeping Is Serious Business
Okay, pause. Read this carefully. Texas requires detailed records of everything. How much money came in from ticket sales? Write it down. Who won? Document it. What was the prize? Record it. Prize values? All of it.
You must keep these records for a minimum of two years. The state can ask to see them anytime. If your records are messy or incomplete, that’s a major problem. It suggests you’re not operating legitimately.
Think of it like this: the government wants proof that your raffle was run fairly and transparently. Good record-keeping does that.
How to Handle the Money
All raffle proceeds go into a dedicated account. You can’t mix raffle money with regular organization funds. This separation exists because regulators need to see exactly how raffle revenue is used.
Here’s where most people get confused: not all the money goes to prizes. Some covers expenses like printing tickets or advertising. A reasonable portion goes to the organization’s mission. But there are limits on how much can be deducted for expenses.
Different organizations have different allowances. Charities typically can deduct a certain percentage for administrative costs. Religious organizations have their own guidelines. Check with your local authority for your specific situation.
Prize Restrictions
There Are Limits on What You Can Offer
Texas doesn’t let raffles become a substitute for casinos. That means there are rules about what prizes you can offer. Generally, prizes should have real value and be appropriate.
Cash prizes are allowed, but they’re regulated. You can’t offer unlimited cash payouts. Some organizations have caps on the largest single prize. Again, this varies by organization type and local rules.
Physical prizes like cars, electronics, or vacation packages? Those are totally fine. The value just needs to be disclosed clearly on the tickets.
Understand Prize Value Requirements
Here’s the thing: the stated prize value must be honest. If you’re offering a television, it actually has to be that television. You can’t advertise a $2,000 TV and give away a $500 one.
Not sure what your prize is actually worth? Look it up. Use retail prices or recent market values. If you’re offering a vacation, include all the details. Where? For how long? What’s included?
This transparency matters because people are spending money based on what you’re promising.
Penalties and Consequences
Criminal Charges Are Real
Let’s be honest: Texas doesn’t mess around with illegal raffles. If you run a raffle without proper authorization, you’re facing criminal charges. We’re not talking about a warning or a fine you can shake off.
Running an unlicensed raffle is a misdemeanor in most cases. You could face jail time up to 180 days. Plus fines up to $2,000. That’s real punishment. And honestly, it’s pretty serious for something that started as a fundraising idea.
If there are aggravating factors, like if you knowingly misrepresented the prizes or stole from the raffle proceeds, charges could be elevated to a felony. Now we’re talking years in prison and much larger fines.
Civil Penalties and Restitution
Beyond criminal charges, the state can pursue civil action. This means refunding ticket buyers if the raffle was illegal. If your raffle took in $50,000 and you never got licensed, you might have to return all that money.
Winners might also have a claim against you if the prizes were misrepresented. This gets complicated and expensive quickly.
Impact on Your Organization
Even if your organization doesn’t face direct criminal charges, an illegal raffle can destroy your nonprofit status. The state can revoke your charitable registration. Other funding sources might dry up. Donors get nervous when an organization breaks the law.
Think of it this way: one illegal raffle could undo years of legitimate work and community trust.
Special Circumstances and Exceptions
Raffle Exemptions for Small Organizations
Texas does offer some flexibility for certain small raffles. Some local authorities allow very limited raffles with minimal reporting requirements. These usually have low ticket volumes and small prize values.
Don’t count on this exemption though. You still need to check locally. What qualifies in one jurisdiction might not in another.
Online and Digital Raffles
Here’s where it gets interesting: the rules around online raffle tickets are still developing. Generally, raffles conducted primarily online face stricter scrutiny. Selling tickets through Facebook or email might create additional legal issues.
Honestly, this is the part most people get wrong. Just because you can technically set up an online raffle doesn’t mean it’s legal. Stick with traditional in-person sales unless you’ve confirmed with local authorities that digital sales are permitted.
Raffles for Specific Causes
Religious organizations, veterans groups, and certain charities sometimes have different rules. A church running a raffle for youth missions might have different requirements than a general charitable organization. A veterans organization might have exemptions that other groups don’t.
This variation exists, but you have to know what applies to you. Don’t assume you’re covered. Ask your local authority specifically about your organization type.
How to Run a Legal Raffle in Texas
Step 1: Verify Your Organization Is Eligible
First, confirm that your organization qualifies to run a raffle. Are you a registered nonprofit? A religious organization? A veterans group? An educational institution? Make sure your organization type is actually permitted.
This takes five minutes. Call your local city or county clerk. They’ll tell you if you’re eligible.
Step 2: Get Local Approval
Contact your city or county authority and ask about raffle licenses or permits. Different areas use different terminology. Some require a formal license. Others require you to file a raffle notice.
Have your organization’s information ready. They’ll want to know about the raffle purpose, estimated ticket sales, and prize details. Some jurisdictions have applications you fill out online. Others use paper forms.
Step 3: Plan Your Raffle Details
Before you start selling, decide on ticket prices, number of tickets, prizes, and drawing date. Write this down. These details need to be consistent once you start selling.
All tickets should be identical. All advertising should match your planned ticket price and prize offerings. Any discrepancy raises red flags.
Step 4: Document Everything
Set up a dedicated account or ledger for raffle money. Record every dollar that comes in. Record every dollar that goes out. Keep receipts for prizes purchased. Keep lists of ticket sales and winners.
This documentation is your protection. It proves you operated legitimately. It also protects you if anyone questions the raffle later.
Step 5: Conduct the Drawing
Hold the drawing on the announced date in a public or witnessed setting. You want transparency here. The more people who watch the drawing happen, the better. Document who drew the winning tickets and when.
Winners should be notified clearly. Provide written confirmation of their prize and any requirements for claiming it.
Step 6: Keep Records for Two Years
Don’t throw away documentation after the drawing. Store records for at least two years. Someone might ask questions later, and you want proof that everything was handled correctly.
Frequently Asked Questions
Can I run a raffle just once without officially registering? No. Even a single raffle requires proper local approval and licensing. Running an unlicensed raffle, regardless of how small, is illegal.
What’s the difference between a raffle and a lottery? In Texas legal terms, a raffle involves selling tickets for a drawing, while a lottery is broader and usually involves state-run gambling. Raffles have specific legal channels for nonprofits. Lotteries don’t.
Can I sell raffle tickets online? It depends on your local jurisdiction and whether your organization has specific authorization for online sales. Most traditional rules apply, but some areas restrict digital raffle sales. Check locally first.
What happens if I win a raffle prize? Do I have to claim it immediately? Winners should be notified and given a reasonable timeframe to claim prizes. Your raffle rules should specify this. Typically, 30 to 90 days is standard, but you set the terms.
Can I donate raffle profits to a charity instead of keeping them for my organization? Yes, but you need to disclose this in advance and ensure it aligns with your organization’s mission. The funds still need to be properly documented and reported.
Final Thoughts
Running a legal raffle in Texas isn’t complicated once you understand the basic rules. Get your organization verified. Get local approval. Keep meticulous records. Conduct fair drawings. Stay compliant.
The stakes are too high to guess or skip steps. An illegal raffle can result in criminal charges, hefty fines, and serious damage to your organization’s reputation. But a legal raffle, run properly, can be an excellent fundraising tool.
When in doubt, ask your local city or county authority. That’s literally their job. They want legitimate organizations to succeed. They just want you to do it the right way.
Now you know the basics. Stay informed, follow the rules, and your raffle will be a success.