Connecticut Raffle Laws: Permits, Proceeds, and Reporting

Connecticut raffle laws allow only qualifying nonprofits to hold a raffle, and every raffle needs a permit from the municipality where the drawing will take place. As of October 1, 2023, every Connecticut town, city, and borough is automatically covered by the state’s raffle statutes unless the municipality has voted to opt out.¹ The rules reach from who can sponsor the raffle through what the tickets look like, how the money gets spent, and what has to be reported afterward. Violations carry fines, jail time, or both.

Who Can Hold a Raffle

Sponsorship is limited to specific nonprofit groups: veterans’ organizations, churches and religious groups, civic and service clubs, fraternal societies, educational and charitable organizations, volunteer fire companies, and political parties or their town committees. A municipality may also sponsor a raffle through a committee organized for a centennial or similar anniversary.²

With the exception of a municipal anniversary committee, the sponsoring organization must have been organized in good faith and actively operating as a nonprofit within the issuing municipality for at least six months before applying.² For-profit businesses and private individuals cannot hold raffles, even if the plan is to donate the proceeds to charity. The raffle itself has to be run by qualified members of the organization, and the permit must be in hand before any tickets are sold.

Permit Classes, Prize Caps, and Fees

Connecticut sets seven raffle permit classes. Each class caps total prize value, limits how long the raffle can run, and caps how many permits of that class an organization can hold per year.³

Class 1: prizes up to $15,000, completed within 3 months, one permit per year, fee up to $75.
Class 2: prizes up to $2,000, completed within 2 months, three permits per year, fee up to $30.
Class 4: prizes up to $100, completed within 1 month, one permit per year, fee up to $15.
Class 5: prizes up to $50,000, completed within 9 months, five permits per year, fee up to $120.
Class 6: prizes up to $100,000, completed within 1 year, five permits per year, fee up to $150.
Class 7: prizes up to $50,000, completed within 15 months with no more than 12 separate drawings on different dates.

Class 3 covers bazaars rather than stand-alone raffles. The fees above are statutory maximums; your municipality may charge less.⁴

Where to Apply

Since January 1, 2018, the entire permitting process has been handled by the local municipal official rather than the state Department of Consumer Protection. DCP keeps authority only over sealed-ticket activities.⁵ Apply in the town, city, or borough where the drawing will be held.

If any facts in your application change after you file, notify the municipal official right away. The official can revoke the permit if the change raises public-interest concerns.⁶

What Tickets Must Show

Each raffle ticket must display the time, date, and place of the drawing, the three most valuable prizes, and the total number of tickets available.⁷ If the winner must be present to claim a prize, say so clearly on the ticket.

How to Value Prizes

Prize value drives which permit class you need, so get it right. The aggregate value is what the organization actually paid for the prizes. If a prize is donated, the value is its retail price.³ A car bought at a discount for $18,000 with a $25,000 sticker is reported at $18,000; the same car donated by a dealer is reported at $25,000. Undervaluing a prize to fit a cheaper class can be treated as a false statement on the application, which carries the same penalties as any other violation.

Online Ticket Sales

A nonprofit may sell or promote raffle tickets through its own website, but it cannot conduct or operate the raffle itself online.⁸ You can advertise and take orders on your site, but the drawing has to happen in person. Selling through third-party platforms or social media pages, rather than your own site, may fall outside the statute’s narrow language, so proceed carefully with anything beyond your own website.

How Proceeds Must Be Used

All raffle proceeds have to go toward the aims and purposes of the sponsoring organization and must be used as described in the permit application.⁹ When a raffle runs alongside another event like a dinner or carnival, the raffle money has to be kept separate. Each ticket must break out the raffle price from any admission charge, and the raffle proceeds have to be reported and spent independently from other event revenue.

Post-Raffle Reporting and Records

After the raffle, the sponsoring organization files a report covering total receipts, the number and price of tickets sold, expenses, profit, and a list of all prizes with a retail value of $50 or more.¹⁰ Keep documentation of ticket printing, prize purchases, permit fees, and other expenses; your municipal official may ask to review it.

Advertising

Raffle advertisements must include enough information for a participant to verify the raffle’s legitimacy. At minimum, that means identifying the sponsoring organization, the permit details, and the time and place of the drawing.¹¹ Prizes and conditions have to be represented accurately. Misleading promotions can result in permit revocation on top of criminal exposure.

Federal Tax Rules

Connecticut’s statutes govern how you run the raffle. Federal tax law adds a separate set of obligations for both the organization and larger winners.

Reporting and Withholding on Winners

For prizes awarded in 2026, the organization must file IRS Form W-2G for any winner whose prize meets or exceeds $2,000, provided the winnings are at least 300 times the ticket price.¹² If the prize value minus the ticket cost exceeds $5,000, the organization must also withhold 24% for federal income tax before handing over the prize.¹³ For non-cash prizes like a car or vacation package, the withholding rate rises to 31.58% because the winner has to pay the tax out of other funds.

When a group shares a winning ticket, the person who physically claims the prize fills out IRS Form 5754 to identify each member of the group and their share. The organization then issues a separate W-2G to each person based on their portion.¹⁴

Tax on the Nonprofit

Raffle income can count as unrelated business taxable income for a tax-exempt organization, which means the nonprofit may owe federal tax on the net proceeds. One exception usually applies: if substantially all the work of running the raffle is done by unpaid volunteers, the income is not treated as unrelated business income.¹⁵ Organizations that hire outside help or pay staff to manage a raffle should talk to a tax advisor, since losing the volunteer exception can create a real tax bill.

Penalties

Violating any provision of the raffle statutes, or making a false statement on a permit application or required report, carries a fine of up to $1,000, up to one year in jail, or both.¹⁶ The same statutory penalty applies across the board: running a raffle without a permit, misusing proceeds, missing a report, or falsifying a prize value. A fundraiser is still a fundraiser, but the paperwork carries real criminal exposure if it’s wrong.

1
Justia Law. Connecticut General Statutes 7-171 – Adoption of Bazaar and Raffle Provisions
2
Justia Law. Connecticut General Statutes 7-172 – Qualifications for Sponsorship of or Participation in Bazaar or Raffle
3
Justia Law. Connecticut General Statutes 7-175 – Kinds of Permits
4
CT.gov. Bingo, Bazaar and Raffle Information for Organizations and Municipal Officials in Connecticut
5
CT.gov. Charitable Games
6
Connecticut General Assembly. An Act Concerning Charitable Bingo Games, Bazaars, Raffles, the Department of Consumer Protection and Occupational Licensing
7
Justia Law. Connecticut General Statutes 7-178 – Equipment, Expenses, Information Required on Raffle Ticket
8
Connecticut General Assembly. An Act Permitting Nonprofit Organizations to Sell Raffle Tickets Online
9
Connecticut eRegulations. Division of Special Revenue Operation of Bazaars and Raffles 7-185-1 Through 7-185-17b
10
Justia Law. Connecticut General Statutes 7-182 – Report re Receipts, Number and Price of Tickets Sold, Expenses, Profit and List of Prizes
11
Justia Law. Connecticut General Statutes 7-183 – Advertising
12
Internal Revenue Service. Instructions for Forms W-2G and 5754 (Rev. January 2026)
13
Internal Revenue Service. Instructions for Forms W-2G and 5754
14
Internal Revenue Service. About Form 5754, Statement by Person(s) Receiving Gambling Winnings
15
Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
16
Justia Law. Connecticut General Statutes 7-186 – Penalty