Many nonprofit groups hold bingo games and raffles to raise money to support their philanthropic missions. The state of Michigan, like many other states, classifies raffles and other charitable contests as games of chance. As such, raffles are subject to state regulation. Anyone wanting to hold a raffle in Michigan must file an application and receive a license.
Under the Michigan Charitable Gaming Act Rule R 432.1101, a raffle is any event where tickets are sold with the winner collecting a prize, or where winners are selected by a drawing of ticket stubs.
Who Can Conduct A Raffle
Michigan only allows certain charities to conduct raffles and those charities must be licensed. The Michigan Charitable Gaming Act Rule R 432.21202 quantifies a "bona -fide" charity organization as one which is registered with the state and meets all the state qualifications for nonprofit corporations.
Large Raffle License
A large-raffle license is needed if the total value of all prizes awarded will exceed $500 in a single day. As of June 2011, the license costs $50.00 per drawing date.
Small Raffle License
A small-raffle license is required if the prizes awarded in all drawings will not exceed $500.00. The organization can offer multiple drawings as long as the total of the drawings does not exceed the threshold. The license fee as of June, 2011 is $15.00 for up to three dates and $5.00 for every date thereafter.
Raffles That Don't Need a License
Michigan law allows qualified charitable organizations to hold raffle without a license as long as the raffle is a single event, there are no pre-sold tickets and the gross total of prizes does not exceed $100.00