Office of General Counsel

Raffles

 

Raffles can be an effective and entertaining way to raise money. If done incorrectly, however, a well-intentioned fund-raiser may violate the Arizona laws that regulate gambling. Violating these laws may create liability for the university and for the individuals involved. Any group planning a raffle should become familiar with the information contained in this briefing paper and should contact the Office of the Arizona Attorney General for additional information.

Arizona Law

Unless you are a tax-exempt organization as recognized under A.R.S. §43-1201, paragraphs 1, 2, 4, 5 ,6, 7, 10, or 11, you may not conduct a raffle or any other form of amusement gambling unless the event is registered with and approved by the Arizona Attorney General's Office, 1275 West Washington Street, Phoenix, AZ 85007, 602.542.3881. To register, you must complete a written Amusement Gambling and Raffle Registration Form for approval by the Attorney General's Office. (ARS §13-3311) If you are a tax-exempt organization as recognized under A.R.S. §42-1201, paragraphs 1, 2, 4, 5, 6, 7, 10, or 11, then you do not need to register with the Arizona Attorney General's Office but you still have to meet the conditions of A.R.S. 13-3302, B.

Arizona law prohibits all gambling unless the gambling falls within an express statutory exception. "Gambling" includes any act of risking or giving something of value for the opportunity to obtain a benefit from a game or contest of chance or skill or a future contingent event (ARS § 13-3301). A raffle involves the payment of money for the opportunity to benefit from a future contingent event and therefore will be illegal unless the raffle satisfies a narrowly defined statutory exception.

Raffles at ASU

ASU departments are not permitted to conduct raffles. Some other non-profit groups are legally permitted to conduct raffles, however, subject to the limitations described below.

The Arizona Attorney General has determined that ASU and its departments and administrative units are NOT permitted to conduct raffles. ARS § 13-3302 permits some tax-exempt organizations to conduct raffles, but only if the organization is tax exempt under paragraphs 1, 2, 4, 5, 6, 7, 10 or 11 of A.R.S. 43-1201. An organization, such as a student organization or other ASU affiliated organization, cannot legally conduct a raffle unless the organization meets this condition. The organization must also satisfy the following conditions:

  1. The organization must maintain its nonprofit status.
  2. No employee, member or agent of the organization may receive any direct or indirect pecuniary benefit from the raffle other than being able to participate in the raffle on a basis equal to all other participants. (This should be stated in the rules of the raffle.)
  3. The organization must have been in existence continuously for the five-year period preceding the time it conducts the raffle.
  4. No person except an employee or authorized agent of the organization may participate directly or indirectly in the management, sales, or operation of the raffle. (The "authorized agent" should not be an outside entity hired to run the raffle.)

The organization may sell tickets or request a donation for participation in the raffle only if the above conditions have been satisfied. When selling tickets or promoting the raffle, the organization should not represent that the price of the ticket will be tax deductible. The purchaser of the ticket will need to determine to what extent and what portion of the price of the ticket may be tax deductible.

If you intend to raffle prizes, please consider the nature of the prize and how that might impact who should be eligible to participate. For example, if the prize is an automobile, you should restrict entrants to those aged 16 or older. If you are raffling a prize that includes dinner at a nice restaurant, you may wish to be clear that the prize does not include any alcohol.


Some of the legal material found at this site has been abridged from laws, regulations, court decisions, administrative rulings, ABOR and ASU policies and other sources. Further details may be necessary for complete analysis and understanding in particular matters. The information contained at this site, and related links, is not a substitute for professional legal counsel. Any discrepancy between the information at this site and ASU policy is not intended to alter or amend official ASU policy or procedure.

Any links to non-Arizona State University information are provided as a courtesy. They are not intended to nor do they constitute an endorsement by the Arizona Board of Regents or Arizona State University of the linked materials.