Yes — raffles are legal in Texas, but only for certain qualified organizations and under strict rules. If your organization is a qualified nonprofit or similar entity, you may hold raffles under the Charitable Raffle Enabling Act (CREA). But if you’re an individual, for-profit business, or you don’t follow the law’s detailed requirements, the raffle is illegal and treated as gambling.
Because raffles involve paying for a chance to win something, they sit on the boundary of fundraising and gambling. Texas law permits raffles only when they’re done by qualified organizations, follow prize and ticket rules, and meet all statutory conditions. Let’s walk through exactly what is allowed, what isn’t, and what happens if you skip the rules.
What the Law Says: CREA & Authorized Raffles
Under Texas law (Chapter 2002, Texas Occupations Code), a “raffle” is defined as “the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize.”
Who may legally hold a raffle?
Under CREA, the only organizations allowed to conduct raffles are “qualified organizations.” These include:
- Faith-based nonprofit religious societies that have operated in Texas at least 10 years.
- Volunteer fire departments (nonpaid or nominal compensation) or volunteer EMS services meeting statutory requirements.
- Nonprofit organizations (501(c) tax-exempt) that have been in existence at least 3 years, and meet other conditions like not distributing income to members.
- Additionally, under the Professional Sports Team Charitable Foundation Raffle Enabling Act, certain sports-team-related nonprofit foundations may hold raffles.
What are the main conditions?
- The organization may hold up to four raffles per calendar year (recent amendment) under CREA.
- Cash prizes are prohibited under CREA. “Money” includes coins, paper currency, or negotiable instruments convertible to currency.
- Prize limits apply: for purchased prizes (i.e., those the organization paid for) value may not exceed $75,000. For donated prizes there is no value limit under certain conditions.
- Tickets must include required information: organization name & address, ticket price, description of prizes over $10, date of drawing.
- The prize must be in the organization’s possession at the drawing date or a bond must be posted with the county clerk.
- Tickets may not be sold statewide or advertised broadly; sales must be local or to identified supporters.
What Happens If You Don’t Follow the Rules?
If an entity that is not qualified or fails to meet CREA conditions holds a raffle, it’s considered illegal gambling under Texas Penal Code Chapter 47.
Penalties can include:
- A Class C misdemeanor for the raffle organizer or seller (fines up to ~$500) in some cases.
- Possibly more serious charges (state jail felony) if tied to organized crime or other enhancement factors.
Key Practical Notes for Organizations
If you plan to run a raffle in Texas in 2025, here’s a checklist:
- Confirm qualification: Be sure your organization fits the definition of “qualified” under CREA.
- Limit raffles: You may hold up to four in a calendar year (per current law).
- No cash prizes: Choose tangible, non-cash prizes unless under a different statutory allowance (sports team foundation).
- Ticket design: Print tickets with required info (organization, address, price, description, drawing date).
- Possess the prize or post a bond with the clerk if it’s not yet in hand.
- Adhere to sales & advertising rules: No selling statewide, no mass advertising to unknown individuals.
- Use proceeds for charitable purposes: Net proceeds must go to your stated charitable mission.
- Stay local & documented: Local fundraising, documentation, and transparent records are key.
Final Word
Overall Raffles are legal in Texas, but only under specific conditions and only by qualified nonprofits. If you’re an individual or for-profit business, or if you fail to follow the rules, a “raffle” you hold may be considered illegal gambling. Organizations must strictly follow CREA’s rules—about who can hold a raffle, what prizes can be offered, how tickets are sold, and how proceeds are used.
