Raffles are legal in Indiana, but only when a qualifying nonprofit runs them under a license from the Indiana Gaming Commission (IGC). Charity gaming is governed by Indiana Code Title 4, Article 32.3, and selling a single ticket without the right license is a crime. The rules reach beyond the license itself: who can work the event, how tickets can be promoted, what taxes apply to prizes, and how long records must be kept.
Which Organizations Qualify
Indiana limits charity gaming to “qualified organizations.” In practice that means bona fide charitable, civic, fraternal, veterans, religious, or educational groups operating in the state.1Indiana General Assembly. Indiana Code 4-32.3-2-31 – Qualified Organization The group’s governing documents (constitution, articles, charter, or bylaws) must include a dissolution clause that directs remaining assets to its nonprofit purposes, and the group must hold federal tax-exempt status under Section 501 of the Internal Revenue Code.2Justia. Indiana Code Title 4 Article 32.3 – Charity Gaming
The people doing the work face their own thresholds. An operator (the person in charge of the event) must have been a member in good standing for at least 60 days. General workers must have been members for at least 30 days.3Indiana Gaming Commission. Indiana Code 4-32.3 The operator’s role has to be acknowledged on a form the commission prescribes. Full-time employees can participate, but the statute defines them as people who work at least 32 hours a week in a role primarily unrelated to charity gaming.
Getting a License from the IGC
Every organization must obtain an IGC license before holding a raffle.4Indiana Gaming Commission. IGC Charity Gaming The application covers the event date, location, and how proceeds will be used. The commission confirms the group meets statutory qualifications, and background checks on officers and board members can be part of that review.
License types are structured around how often a group holds events:
- Single Activity License covers a one-time raffle.
- Annual License covers charity gaming for a one-year period, which suits groups running events regularly.
- Multi-Year License is available to certain organizations, such as veterans groups, and covers multiple years on a single application.
The first-time license fee is $50. After that, fees are calculated from the organization’s gross receipts at its last event of the same license type.5IN.gov. What Is the Cost To Obtain a Charity Gaming Event License Once licensed, you have to stay inside the terms on the license. Breaking them can mean revocation or denial of future applications.
Rules You Have to Follow at the Event
Ticket Sales and Age
Only people 18 or older can buy raffle tickets in Indiana, and the organization must verify age and refuse sales to anyone underage.6Indiana General Assembly. 68 IAC 21-10.7 – Electronic Raffles The drawing itself has to be run fairly and transparently, and the organization is responsible for the integrity of the process.
Electronic Raffles Need Prior Approval
Indiana does not ban electronic raffles. It does require that any electronic raffle software system, web application, or digital process be approved by the IGC before use.7Indiana General Assembly. Indiana Code 4-32.3-5-24.5 – Electronic Raffle Software System Downloading an app and selling digital tickets through it without that sign-off is not allowed.
Prizes and How Proceeds Are Used
Indiana has no statutory cap on raffle prizes, either per prize or in total, since the transition to Article 32.3.3Indiana Gaming Commission. Indiana Code 4-32.3 The point of charity gaming, though, is to raise money for charitable purposes, and the IGC expects the great majority of proceeds to support the organization’s mission. Groups that spend raffle money mostly on expenses or non-charitable purposes risk compliance action.
The Federal Mail Rule That Trips People Up
Federal law makes it a crime to mail raffle tickets, advertisements for raffles, or any payment sent through the mail to buy tickets. Under 18 U.S.C. § 1302, knowingly depositing those items in the mail is punishable by up to two years in prison for a first offense and up to five years for later violations.8Office of the Law Revision Counsel. 18 U.S. Code 1302 – Mailing Lottery Tickets or Related Matter The statute’s reference to “lottery” sweeps in raffles, and the USPS treats all lottery matter as nonmailable under 39 U.S.C. § 3001.9Postal Explorer. Publication 52 – Lottery
In plain terms: no mailing tickets to buyers, no flyers with ticket order forms, no accepting mailed-in payments. Promotion outside in-person sales has to go through other channels, such as email, social media, or your own website (and the website route still has to respect Indiana’s electronic raffle approval rules).
Taxes and Withholding on Prizes
Federal tax rules put the reporting burden on the organization, not the winner. Starting in 2026, the IRS requires Form W-2G when a raffle prize is $2,000 or more and is at least 300 times the ticket price. That $2,000 figure reflects a new inflation adjustment; the threshold had been $600 for years. For prizes over $5,000 after subtracting the wager, the organization must withhold 24% of the prize value for federal income tax.10Internal Revenue Service. Instructions for Forms W-2G and 5754
Non-cash prizes complicate things. For a car, vacation, or other item, the organization uses fair market value for both reporting and withholding.11Internal Revenue Service. Instructions for Forms W-2G and 5754 A $30,000 vehicle prize means roughly $7,200 in withholding that has to come from somewhere before the winner takes delivery. Many groups solve this by requiring the winner to pay the withholding when claiming the prize, but that condition needs to be in the raffle rules before any ticket is sold.
There is also Unrelated Business Income Tax to think about. The IRS treats gaming as a business activity rather than a charitable one, no matter how the proceeds are spent. The practical escape hatch for most nonprofits is the volunteer labor exclusion: if substantially all the work of running the raffle is done by unpaid volunteers, the activity is excluded from unrelated business income entirely. Groups that lean on paid staff for gaming lose that protection and may owe federal tax on the net. Section 501(c)(7) social clubs face tighter restrictions and should treat gaming income from nonmembers and the general public as unrelated business income subject to a 15% gross receipts ceiling.12Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
Records You Have to Keep
Indiana requires organizations to retain all charity gaming records for three years plus the current year. Anything inside that window must be available for inspection.13Indiana Gaming Commission. Charity Gaming Basics The expected records include ticket sales data, prize distributions, bank statements, deposit records, and disbursement logs that show who received funds, how much, and why.
Financial reports attach to the license type. Single Activity Licensees file a financial report after each event. Annual Licensees file a gross receipts report when the license expires. Multi-Year Licensees file anniversary and renewal reports.14Indiana Gaming Commission. Charity Gaming Forms Groups that make charitable distributions also submit a Charitable Contribution Distribution List, and every event gets an Event Summary Report. The commission has unrestricted access to organizational records, including membership rolls.
Penalties for Running a Raffle Without a License
Conducting a raffle without a proper IGC license is a Class A misdemeanor, which carries up to one year in jail and a fine of up to $5,000.15Indiana General Assembly. Indiana Code 35-50-3-2 – Class A Misdemeanor The IGC can pursue administrative penalties on top of that. Statutory grounds include operating without a license, failing to ensure the integrity of events, and selling to minors.16Indiana General Assembly. Indiana Code 4-32.3-8-1 – Grounds for Penalties Administrative action can mean fines, license revocation, and denial of future applications. People who knowingly bypass licensing rules or misuse charitable funds can face personal liability, including civil actions for restitution.