Both Raffles and Sweepstakes allow donors to purchase entries for the chance to win a prize. However, Raffles are prohibited in some areas and Sweepstakes require you to offer a free method of entry in addition to other regulations.
What are the legal requirements for charity Raffles?
Rules regarding charity Raffles will differ depending on where in the world your organization is based.
What do US organizations need to know about running Raffles?
Organizations based in the United States should consider the following:
Gambling laws: Federal government regulators view Raffles as a form of gambling since donors make a payment in exchange for a chance to win something, just as you'd do at a casino.
Federal requirements: Raffles for charitable purposes are allowed at the federal level for 501(c) organizations.
State and local requirements: Organizations running Raffles must comply with the state and local raffle laws and regulations that apply. Please check the state and local laws in the area your organization is domiciled. Note that state and local requirements may be stricter than federal requirements.
States that prohibit online Raffles: Some states prohibit online Raffles, making it very difficult to run an interstate Raffle and impossible to run one nationally:
Alabama
California
Hawaii
Indiana
Iowa
Kansas
Minnesota
New Jersey
Rhode Island
Utah
Washington
Wisconsin
If your organization is fundraising in one of these states, you may want to consider running a Sweepstakes instead. They function similarly to Raffles but have fewer restrictions geographically.
Can organizations outside the US run online Raffles?
Please consult your legal counsel before running your Raffle to ensure that it is compliant with all laws and regulations in your country and jurisdiction.
Why should I consider running a Sweepstakes instead of a Raffle?
Because they require a free method of entry, Sweepstakes are not considered gambling and generally have fewer geographic regulatory restrictions than Raffles. Entries can be sold nationally or internationally, so Sweepstakes are an excellent choice for international organizations.
Requirements
Sweepstakes require:
Free entry option (limited to one per person)
Official rules displayed on the Campaign Page
Approval before going live
Automated drawing (winners must be drawn by Givebacks' certified randomization algorithm)
Registration and bonding if the total retail value for all prizes is $5,000 or more
Approximate Retail Value (ARV) of each prize
What restrictions apply to Sweepstakes Campaigns?
Sweepstakes prohibit the following:
50/50 or split-the-pot drawings
Allowing donors to purchase entries for specific prizes
Limiting the total number of entries available for purchase
Manually drawing winners
The appearance of the word “Raffle” anywhere on your Campaign Page
Frequently Asked Questions
What’s the main difference between a Raffle and a Sweepstakes?
The main difference is that Raffles are considered gambling because donors pay for entries without a free option, while Sweepstakes must offer a free method of entry, making them not considered gambling. This distinction affects their legal requirements and geographic restrictions.
Which states prohibit online Raffles?
Thirteen states prohibit online Raffles: Alabama, California, Hawaii, Indiana, Iowa, Kansas, Minnesota, New Jersey, Rhode Island, Utah, Washington, and Wisconsin. Organizations in these states should consider running a Sweepstakes instead.
Can I run a 50/50 Raffle as a Sweepstakes?
No, 50/50 or split-the-pot drawings are prohibited for Sweepstakes. If you want to run a cash prize fundraiser where winners receive a portion of proceeds, you must use a Raffle format and comply with all applicable Raffle laws.
Do I need approval to launch my Sweepstakes?
Yes, all Sweepstakes require approval before going live to ensure legal compliance. This approval process verifies that your Sweepstakes meets all regulatory requirements including official rules, free entry options, and proper prize disclosures.
Can I manually draw winners for my Sweepstakes?
No, Sweepstakes winners must be drawn using Givebacks' certified randomization algorithm. Manual drawing is prohibited for Sweepstakes to ensure fairness and legal compliance. However, Raffles can be drawn manually if desired.
Questions? Click the "?" icon to contact Givebacks Support.