The Charitable Raffle Enabling Act (“CREA”), permits "qualified organizations" to hold up to two raffles per calendar year, with certain specified restrictions.

The language of the law is very technical.  If your organization is considering holding a raffle you should check the statute to be sure it qualifies.your organization qualifies.

Penalties and Enforcement

An unauthorized raffle is considered gambling under the Texas Penal Code. Conducting such a raffle is a Class A misdemeanor. Participating in an unauthorized raffle is a Class C misdemeanor.

A county attorney, district attorney or the Office of the Attorney General (OAG) may bring an action in state court to stop a violation or potential violation of the Charitable Raffle Enabling Act (CREA).

Frequently Asked Questions

What is a raffle?

CREA 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 who have paid or promised a thing of value for a ticket that represents a chance to win a prize."

Who may conduct raffles?

Only a qualified religious society that has been in existence in Texas for at least 10 years; a qualified volunteer fire department that operates firefighting equipment, provides fire-fighting services and that does not pay its members other than nominal compensation; a qualified volunteer emergency medical service that does not pay its members other than nominal compensation; or a qualified 501(c) tax-exempt, nonprofit organization that has been in existence for at least three years may hold raffles in Texas under CREA. Individuals and for profit businesses may not hold raffles.

Do I have to register or obtain a permit to conduct a raffle?

No. You just have to qualify under the law.

How many raffles may be held?

Each qualified organization is allowed two raffles per calendar year.

What if a raffle cannot be held on the date scheduled?

The organization may set another date not later than 30 days from the original date. If the prizes are not awarded within 30 days of the original date, the organization must refund the ticket money to the purchasers.

For what may the money raised be used?

All proceeds from raffles must be used for the charitable purposes of the organization as defined by CREA 2002.002(1).

Can I advertise and sell tickets on the Internet?

CREA states that the organization may not promote or advertise a raffle statewide, other than on the organization’s website or through a publication or solicitation, including a newsletter, social media, or email, provided only to previously identified supporters of the organization. Selling or offering to sell tickets statewide is prohibited. The term statewide has not been defined or interpreted in any known court proceeding or Attorney General Opinion, but it is generally thought that statewide would include the Internet.

May I hire someone to organize and conduct the raffle?

No. The organization may not compensate a person directly or indirectly for organizing or conducting a raffle. A member of the organization who is employed by the organization may organize and conduct a raffle, but the member’s work organizing or conducting a raffle may not be more than a de minimis portion of the member’s employment with the organization.

What must be printed on the tickets?

Five items must be on each ticket:

  • The name of the organization conducting the raffle
  • The address of the organization or of a named officer of the organization
  • The ticket price
  • A general description of each prize having a value of more than $10 to be awarded in the raffle
  • The date on which the raffle prize or prizes will be awarded

Can I give cash prizes?

No. Cash prizes are strictly prohibited. "Money" is defined by CREA as "coins, paper currency, or a negotiable instrument that represents and is readily convertible to coins or paper currency." See 2002.002(1-a).  A certificate of deposit is a prohibited prize.  A U.S. savings bond and a prepaid, or “stored value,” credit card is not prohibited.

Is there a limit on the value of prizes?

Yes. For purchased prizes, the value of each prize may not exceed $50,000. For a purchased residential dwelling, the value may not exceed $250,000. There is no limit on the value of donated prizes.

Do I need to have the prize on hand at the time of the drawing?

CREA states that the organization must have the prize in its possession or ownership or it must post a bond with the county clerk of the county in which the raffle is to be held for the full amount of the money value of the prize.

How do I post a bond with the county clerk?

The statute is very vague on this, but it is assumed that it must be some sort of surety bond. Many county clerks are unaware of the required procedure, so it is suggested that a surety bond be obtained from a bond company and the county clerk's office then asked to keep it on file until the prize is awarded. Refer the clerk's office to CREA 2002.056(d)(2)

Poker/Casino Nights

Can my nonprofit hold a poker tournament or casino night fundraiser?

Unlike raffles and bingo, there is NO exception to the gambling law in Texas for nonprofits to hold poker or casino night fundraising events. The gambling law, Chapter 47 of the Penal Code, applies to nonprofits and to for profits equally.  See Tex. Pen. Code Ann. §47 (Vernon 2003).

What if the poker tournament or casino night is held in a private place?

It is legal for individuals to play poker or other casino activities in a private place, defined as "a place to which the public does not have access." They can bet money and win money. However, all money must be redistributed to the participants. The "house" cannot keep a cut, thus it would obviously be difficult for a nonprofit to raise funds in this way.