Laws governing raffle tickets in Texas are outlined under Chapter 2002 of the Texas Occupations Code section titled "Charitable Raffles." This chapter also is known as the Charitable Raffle Enabling Act. The act defines what constitutes a raffle ticket and organizations qualified to sell them. The act also describes the lawful sale of raffle tickets in the state.
Section 2002.002. of the Charitable Raffle Enabling Act in Texas defines a raffle as “the award of one or more prizes by chance at a single occasion among a single pool or group of persons.” Participants expect a chance to receive a “promised a thing of value” in exchange for a ticket, which serves as the claim to a prize. The law only permits “qualified organizations” to hold raffle drawings in the state.
Organizations permitted to hold raffle drawings in Texas include nonprofit volunteer emergency medical services that only give members "nominal" compensation and are structured to deliver emergency medical, ambulance or rescue services. Churches, synagogues and other religious organizations that have been in operation for at least 10 years also are considered qualified organizations. A qualified volunteer fire department meets this definition as well and the category refers to associations that only nominally compensate members who primarily provide firefighting assistance.
Qualified Nonprofit Organizations
According to the Charitable Raffle Enabling Act, a qualified nonprofit organization is one that is incorporated and holds a certificate of authority as required by the Texas Non-Profit Corporation Act. The nonprofit must have been in operation for more than three years and have obtained an exemption from federal income tax under Section 501(c) of the Internal Revenue Service Code.
Other Texas Raffle Laws
Proceeds from the sale of raffle tickets in Texas by qualified organizations must be solely dedicated to further charitable purposes. State law prohibits any form of paid advertising or promotion of a raffle through mediums that include newspaper, television and radio. An organization holding a raffle must print the drawing's entry fee, name and address of the organization, a description of prizes and the date when prizes will be awarded on the raffle tickets. State law prohibits the award of money as a prize in raffle drawings.
Restrictions and Penalties
Qualified organizations cannot hold more than two raffle drawings each year, and the drawings cannot be held at the same time. Those who participate in the organization and sale of raffle tickets cannot be compensated. Any violation of the provisions of this act is considered gambling, a Class A misdemeanor under the Texas Penal Code. A Class A misdemeanor in Texas is punishable by a fine of up to $400, a jail term of up to one year or a combination of both.