Florida Raffle Laws: Nonprofit Rules, Tickets, and Penalties

Florida raffle laws allow only certain tax-exempt nonprofits to run drawings by chance, and even then, the organization cannot require anyone to pay, donate, or buy something to enter. Every raffle must include a free method of entry, every ticket and flyer must carry specific disclosures, and the organization must be registered with the state as a charitable solicitor before it sells a single ticket. Getting any of this wrong is a second-degree misdemeanor under Section 849.0935 and a deceptive trade practice on top of that.

Who Can Legally Hold a Raffle in Florida

Outside the narrow exception in Section 849.0935, raffles are illegal gambling under Section 849.09. The exception is only available to organizations that hold a current IRS determination letter under one of these subsections of 26 U.S.C. § 501(c):

501(c)(3) charitable, religious, educational, and scientific organizations
501(c)(4) social welfare organizations
501(c)(7) social and recreational clubs
501(c)(8) fraternal beneficiary societies
501(c)(10) domestic fraternal societies operating under the lodge system
501(c)(19) veterans’ organizations

Only bona fide members or officers of the organization can run the raffle on its behalf. If the IRS determination letter lapses, the exception disappears with it, and the drawing falls back under the general gambling prohibition.¹

The Free Entry Rule

This is where most organizers get into trouble. Florida law prohibits requiring any entry fee, donation, payment, proof of purchase, or contribution as a condition of entering the raffle or being selected to win. Every ticket, entry blank, advertisement, and notice must conspicuously say that no purchase or contribution is necessary.¹

You can suggest a donation amount. You cannot enforce one. An organization can sell tickets at a set donation level while also offering a free method of entry to anyone who asks for it. Making the free-entry path hard to find or impractical to use defeats the exception and invites enforcement.

What Must Appear on Tickets and Advertising

Every brochure, advertisement, notice, ticket, and entry blank has to display five items conspicuously:

The rules governing how the drawing will be conducted and operated
The full legal name of the organization and its principal place of business
The source of the funds used to purchase the prize, or the source of the cash prize
The date, hour, and place where the winner will be chosen and the prizes awarded (this one can be omitted only if the materials aren’t distributed more than three days before the drawing)
A statement that no purchase or contribution is necessary

Conspicuous means conspicuous. Fine print at the bottom of a flyer doesn’t satisfy the statute. Any claims about the prize itself must also be truthful, and advertised prizes have to actually be available.²

Registering as a Charitable Solicitor First

Before selling tickets, the organization must register with the Florida Department of Agriculture and Consumer Services under Chapter 496, the Solicitation of Contributions Act. This is a separate requirement from IRS tax-exempt status, and it applies to any charity soliciting contributions in or from Florida.³

Organizations with less than $25,000 in total annual revenue that use only uncompensated volunteers and hire no professional solicitors or fundraising consultants can file a simplified small-organization application at no charge. Once revenue crosses $25,000 or any of those conditions changes, the organization has 30 days to file the standard registration.⁴

Every solicitation, receipt, and contribution confirmation has to include the state disclosure statement pointing donors to the Division of Consumer Services at 1-800-HELP-FLA (435-7352) and www.800helpfla.com. Registration renews annually. If it lapses, the organization cannot legally solicit contributions, including through raffles, until it’s restored.³

Conduct That Will Get a Raffle Shut Down

Section 849.0935 lists specific practices that are illegal regardless of the organization’s status:

Predetermining the winner through matching, instant-win, preselected sweepstakes, or any other method that manipulates the outcome. The drawing has to be genuinely random.
Requiring an entry fee, donation, or proof of purchase as a condition of entry or winning, including a “suggested” amount that is actually enforced.
Printing, publishing, or circulating literature or advertising about the drawing that is false, deceptive, or misleading.
Deviating from the disclosed rules once the raffle is underway, including changing the selection method or altering prize distribution.

These prohibitions reach anyone who promotes, operates, or conducts the drawing on the organization’s behalf, not just the officers named on the paperwork.¹

Taxes on Prizes and Proceeds

What the Winner Owes

Raffle prizes are taxable income under federal law. Winners have to report the fair market value of any prize, cash or non-cash, on their federal return, and the reporting obligation applies whether or not the organization sends a tax form. The IRS treats raffle winnings the same as other gambling income.⁵

What the Organization Has to Report and Withhold

For calendar year 2026, the organization must file Form W-2G when raffle winnings are $2,000 or more and at least 300 times the wager. Because Florida raffles must offer a free entry option, a $0 wager means any prize of $2,000 or more can trigger W-2G reporting.⁶

When the prize value exceeds $5,000 after subtracting the wager, the organization must withhold federal income tax at 24%. For non-cash prizes, the organization can collect the withholding from the winner before handing over the prize, or pay it on the winner’s behalf at an effective rate of 31.58%.⁶

Unrelated Business Income

Nonprofits often assume raffle proceeds are automatically tax-free because they fund a charitable mission. They aren’t. The IRS treats gaming income, including raffle proceeds, as unrelated business taxable income when the activity is regularly carried on, and spending the money on exempt purposes doesn’t change that.⁷

The usual way out: if substantially all the work of running the raffle is done by uncompensated volunteers, the income is excluded from unrelated business tax. Organizations that hire outside firms to run their raffles or pay staff to work the event should talk to a tax advisor, because the volunteer exclusion may not cover them.⁷

Penalties for Getting It Wrong

A violation of Section 849.0935 is a second-degree misdemeanor, carrying up to 60 days in jail and a fine of up to $500.⁸⁹

The criminal charge isn’t the whole exposure. A raffle violation is also a deceptive and unfair trade practice under Florida law, which opens the door to injunctions, civil penalties, and attorney’s fees in actions brought by the state or by affected participants.¹

An organization that isn’t in one of the qualifying 501(c) subsections, or whose IRS determination letter or Chapter 496 registration has lapsed, isn’t covered by Section 849.0935 at all. Its raffle is treated as ordinary illegal gambling, which carries stiffer penalties than the misdemeanor above.

1
Florida Senate. Florida Code 849.0935 – Charitable, Nonprofit Organizations; Drawings by Chance; Required Disclosures; Unlawful Acts and Practices; Penalties
2
The Florida Legislature. Florida Statute 849.0935 – Charitable, Nonprofit Organizations; Drawings by Chance; Required Disclosures; Unlawful Acts and Practices; Penalties
3
Florida Senate. Florida Statutes Chapter 496 – Solicitation of Contributions Act
4
Florida Administrative Code Gateway. Solicitation of Contributions Registration Application
5
Internal Revenue Service. Topic No. 419, Gambling Income and Losses
6
Internal Revenue Service. Instructions for Forms W-2G and 5754
7
Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
8
The Florida Legislature. Florida Statute 775.083 – Fines
9
The Florida Legislature. Florida Statute 775.082 – Penalties; Applicability of Sentencing Structures; Mandatory Minimum Sentences