In the United States, raffles, opportunity drawing and lotteries are governed by the individual states. Each state has its own set of definitions and laws that dictate what is considered a raffle, which organizations are permitted to host a raffle, and what is required to legally host a raffle within the state.
Some states make it a bit more complicated than others, but nonprofit organizations that host ticketing events like raffles often end up hosting more than one raffle per year and some of the biggest campaigns on Zeffy are raffles. AKA raffles raise a lot of money for the nonprofits that host them.
So, yes, the first raffle you host can be a bit time-consuming and confusing, but all the time and energy invested is ultimately worth it. Plus, raffles are a great way to mix up your fundraising campaign portfolio and, as an added bonus, they attract new donors to your nonprofit. And, of course, we’re here to help by walking you through the process of setting up a raffle on Zeffy and we’ve even got a few tips on how to create successful charity raffles and lotteries.
Okay, let’s get started.
Illinois defines a nonprofit raffle as:
In the state of Illinois a raffle is:
A form of lottery in which a player pays something of value for a chance to win—represented and differentiated by a number or a combination of numbers. The winning chances are determined through a draw or other method(s) based on an element of chance.1
Do you need a license to host a raffle in Illinois?
Yes. Yes you do. It is illegal to host a raffle in Illinois without a license.
Okay, now that that’s clear, who is allowed to host a raffle in Illinois?
Who can host a raffle in Illinois?
The only organizations that can host a raffle in Illinois are:
1. Religious, charitable, labor, business, fraternal, educational, veterans', or other bona fide not-for-profit organizations that:
- Have a nonprofit organization in Illinois.
- Operate without profit.
- Have been operating for 5 years before they apply for a raffle license.
- Have, during that entire 5-year period, been carrying out their objectives.
2. A nonprofit fundraising organization that the municipality or county determines is organized for the sole purpose of providing financial assistance to an individual or group of individuals suffering extreme financial hardship as the result of an illness, disability, accident, or disaster.
3. Any law enforcement agencies and associations that represent law enforcement officials.
4. Any fire protection agencies and associations that represent fire protection officials.
How does a nonprofit apply for a raffle license in Illinois?
In Illinois, raffle licenses are controlled by the counties or municipalities. So, if your nonprofit is planning to host a raffle, you need to apply through your county or municipality.
What do the counties and municipalities need to define in their raffle license laws?
There are 103 counties and over 1000 municipalities in Illinois… So, for now, we’re not going to dive into the details of each one. But, the state of Illinois does give general guidelines that each county and municiplaity need to follow when establish their raffle rules and regulations.
Each municipality or county needs to clearly define the following in their raffle license application:
- The maximum total retail value of all prizes or merchandise awarded by a nonprofit in a single raffle.
- The maximum retail value of each prize awarded by a nonprofit in a single raffle.
- The maximum price which may be charged for each raffle ticket.
- The maximum number of days during which tickets may be sold.
- Whether or not there is a fee to apply for a raffle license and if yes, how much it is.
- Licenses need to specify if they are valid for one raffle or for a certain number of raffles during a period of no more than one year.
- The county or municipality has to act on a license application within 30 days from the date of application.
Good to know:
All of your nonprofit’s net proceeds from any raffle you host must be used by your nonprofit and go towards your mission.
How many raffles does a license allow a nonprofit to host?
The state of Illinois allows the individual municipalities and counties to define how many raffles a nonprofit organziation can hold during their license period.
Does it cost money for a nonprofit to register for a raffle in Illinois?
Yes. Well, probably. Again, the state of Illinois allows the individual municipalities and counties to determine whether or not they are going to charge a licensing fee.
From our research, you should expect to pay a minimum of $25 to apply for a license.
Can you sell raffle tickets online in Illinois using Zeffy’s ticketing forms?
Yes and no. Whether or not a nonprofit can sell raffle tickets online is determined by, you guessed it, the individual counties and municipalities.
Aside from selling raffle tickets online, Zeffy can help your nonprofit:
Track your raffle sales by adding offline ticket purchases to your campaign.
Keep track of who purchased what and their info (such as email addresses and phone numbers) so you can contact the winner(s).
Keep track of how many tickets you have sold, any additional donations, etc.
Automatically create a contact list to send thank-you emails, re-engage with donors and even let donors know when next year’s raffle comes along.
The state of Illinois allows you to use the internet to:
- Advertise your raffle. (Newsletters, banners, etc.)
- Display the rules of the raffle.
- Store raffle contact information for your nonprofit, including the eligible organization’s name, address, telephone number, facsimile number, or e-mail address.
- Answer frequently asked questions.
- List descriptions, photographs, or videos of the raffle prizes.
- List the prize winners.
Good to know:
The state of Illinois requires nonprofits to keep all raffle ticket stubs, gross receipts, expenses and net proceeds for every raffle your nonprofit hosts for three (3) years.
What to include on tickets for your nonprofit’s raffle.
- A consecutive number for each ticket.
- The cost of each chance.
- The date/time/location of the draw.
- The name of your nonprofit organization.
- A description of prizes.
- Whether or not the person must be present at the drawing.
Although it’s not written, we do recommend that printed tickets have a detachable coupon or stub, and that both the ticket and its coupon or stub are marked with a unique and matching number.
You can purchase pre-made tickets or get inspired by our sample ticket:
After your nonprofit’s raffle…
The work doesn’t stop once the winners have been drawn. We know, we know, if only it were that simple. But, governments do love their paperwork and the state of Illinois is no different.
The state of Illinois requires your nonprofit to:
- Keep records of its gross receipts, expenses and net proceeds for every raffle it hosts.
- All deductions from gross receipts need to be documented with receipts or other records indicating the amount, a description of the item or service or other reason for the deduction, and the recipient.
- The distribution of net proceeds shall be itemized with the payee, purpose, amount and date of payment.
- After each raffle has been completed, your nonprofit needs to report and file its gross receipts, expenses and net proceeds from the raffle, and the distribution of net proceeds to your membership or governing board and your county or municipality.
A little more about all the paperwork:
- Nonprofits need to keep gross receipts from the operation of raffles separate from your nonprofits other revenue sources.
- Funds earned from raffles must be kept in a separate bank account.
- The person who accounts for gross receipts, expenses and net proceeds from raffles can not be the same person who accounts for your nonprofit’s other revenues.
If you need them: charitable lottery licence for other US states.