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Raffle laws

NC Raffle Laws: Are raffles legal in North Carolina? [2024]

April 2, 2024

Fundraising raffles are an effective way to raise money and build relationships within communities of supporters.

But are raffles legal in North Carolina? NC raffle laws state that raffles are in fact, legal activities for nonprofit organizations, as long as specific rules and regulations are followed.

This is your go-to guide to the legislation and rules you need to know to avoid violations and make sure your raffle goes off without a hitch.

Are raffles legal in NC for nonprofits?

Raffles are legal for nonprofit organizations, political candidates, committees, and government entities. However, organizers must closely examine laws set forth by the North Carolina General Assembly to avoid criminal penalties for violations (more on this below).

Nonprofits must be recognized as tax-exempt by the Department of Revenue to gain authorization to conduct fundraising raffles.

What does North Carolina consider a raffle?

North Carolina designates raffles as a type of game where a prize is won by randomly drawing the name or number of one or more people who've purchased a chance to win.

A drawing made from tickets handed to individuals at an event without purchase or that did not require payment would not be considered a raffle for legal purposes. Instead, these events would be considered drawings or door prizes.

NC raffle laws 

Section 14-309.15 of North Carolina's raffle policy outlines the following rules for participants and hosts to be aware of:

  • At most, four raffles can be hosted by the same organization annually.
  • The maximum cash prize allowed is $125,000.
  • The maximum fair market value is $125,000 if merchandise is used as a prize.
  • Total cash prizes any nonprofit offers (across multiple raffles) can be at most $250,000 in a calendar year.
  • A minimum of 90% of the net proceeds of a raffle run by a nonprofit must go to the organization, and none may be used to pay anyone to conduct the raffle or rent a space to host it.
  • Real property can be offered as a raffle prize at a maximum appraised value of $500,000 per calendar year.
  • Alcohol consumption or sale is only legal when it happens outside of the room or space where a raffle prize winner is being announced.

Are 50/50 raffles legal in North Carolina? 

A 50/50 raffle falls under a legal activity and is subject to the laws mentioned above. The other benefit to a 50/50 raffle is that it meets the North Carolina state's net proceeds requirements. 

Nonprofits can partner with a corporate sponsor or local business that wants to donate to boost the total prize amount and cross-promote the raffle. When the raffle concludes, the nonprofit can use the remaining profit (meeting the minimum 90% net proceeds requirement) to fund its mission.

NC raffle laws: FAQs

Can you do raffles in North Carolina?

You can do raffles in North Carolina as a legal activity. The North Carolina General Assembly allows any qualified charitable, educational, political, or government organization to conduct a raffle in accordance with specific laws and legislation.

The ultimate guide to selling raffle tickets effectively

Can you sell raffle tickets online in North Carolina?

You can't sell raffle tickets online in North Carolina. That means while you can't use a fundraising platform to manage the purchasing process, you can still lean on technology to simplify running a raffle.

Zeffy offers a 100% free raffle solution that helps nonprofits track:

  • Offline/in-person raffle ticket sales
  • Participant information
  • Prizes and winner information
  • Fundraising totals

What is the difference between a raffle, a lottery, and a sweepstake?

The difference between a raffle, lottery, and sweepstakes will vary based on the organization hosting and the state that governs these activities. 

In North Carolina:

  • A sweepstakes is any game, advertising scheme plan, or other promotion that someone enters to become eligible for a prize with or without payment. Winners are determined by chance.
  • A lottery is any game or series of games established and operated by an organization that involves tickets to participate in a game of chance.
  • A raffle is a type of lottery in which people pay to enter. A prize is won randomly by drawing a name or number.

The North Carolina General Assembly governs all of these activities.

Is a raffle considered gambling?

A raffle is not considered gambling in North Carolina. However, some states consider raffles gambling, and it's best to review local legislation to comply accordingly.

Review raffle laws by state

Can you have a cash prize in a raffle?

You can have a cash prize in a raffle, which is often the approach of a 50/50 raffle. In North Carolina, it's important to know that there are limitations around cash prizes.

The maximum cash prize that any one raffle can offer is $125,000. There is additionally a cap on cash prize totals across multiple raffles in a calendar year of $250,000.

Check out unique prize ideas to raise more from your raffle

What is the statute 14 309.15 in NC?

Statute 14-309.15 in NC refers to violations of raffle laws. Anyone who violates NC raffle laws listed in this particular legislation is guilty of a Class 2 misdemeanor.

A conviction will also ban an individual from conducting a raffle for one year from the violation. 

Are raffle winnings subject to taxes in NC?

Raffle winnings are subject to federal and state taxes. IRS Form W-2G is where winnings must be reported by the individual who received a prize.

The organization hosting a raffle should collect a winner's name, address, and taxpayer identification. IRS Form 5754 is used to collect winner information.

Any raffle prize that exceeds $5,000 is subject to tax withholding and requires coordination with the tax department before the winner can receive it.

North Carolina raffle laws and legislation listed in this article:

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