Indiana charity gaming rules are set out in Indiana Code Title 4, Article 32.3 and enforced by the Indiana Gaming Commission (IGC). To run bingo, raffles, pull tabs, or similar games for your nonprofit, you need the right license, your organization and the people running the game have to qualify, prize amounts are capped by game type, and you have tax and record-keeping duties at both the state and federal levels.
Which Organizations Can Run Games
Only a “qualified organization” can conduct charity gaming in Indiana. That generally means a religious, charitable, fraternal, veterans’, civic, educational, or similar group with tax-exempt status under Section 501 of the Internal Revenue Code, and the group must already be actively operating and serving its stated purpose before it applies for a license.1Justia. Indiana Code Title 4, Article 32.3 – Charity Gaming
Every dollar of net proceeds has to go toward the organization’s charitable, educational, or community-service purposes. Gaming money cannot be used for personal gain or unrelated expenses, and the IGC has authority to investigate how proceeds are spent.
License Types
Indiana offers different licenses depending on how often and how large your gaming events will be. Picking the wrong one is a common early mistake.
- Annual Activity License. For organizations running recurring gaming, such as weekly bingo. Valid for twelve months and allows up to three events per calendar week.
- Single Activity License. For a one-time event. Valid for one day and one time frame.
- Festival License. Allows multiple gaming activities at one location over up to five consecutive days. Suited to fairs and festivals.
- Convention Raffle License. For out-of-state organizations running raffles at an Indiana convention center or other approved location.
- Exempt Activity Notification. Not a license but a filing. Available when total prize payouts for a single event are $2,500 or less and the organization has not exceeded $7,500 in total payouts for the calendar year.
Applications require proof of tax-exempt status, the intended use of proceeds, and details about the planned activities.2Indiana Gaming Commission. Charity Gaming Forms
Games Allowed and Prize Limits
Bingo
Bingo carries the tightest prize rules. A single bingo game prize cannot exceed $1,000, a progressive bingo prize cannot exceed $2,000, and total prizes at one bingo event are capped at $6,000.3Indiana General Assembly. Indiana Code 4-32.3-5-15 – Bingo Event Prize Limits
The IGC can grant special permission for up to two bingo events per year where the total prize cap rises to $10,000. Organizations have to request that authorization ahead of the event.
Raffles
Raffles have no prize cap under Article 32.3. The older prize limits, and the process of requesting permission to exceed them, no longer exist.4Indiana Gaming Commission. Indiana Code 4-32.3
Tickets have to be sold at uniform prices, and the drawing has to be run fairly and openly. Indiana prohibits selling raffle tickets or conducting drawings over the internet. All sales and drawings must be in person, so raffles run through social media or third-party online platforms are outside the law.
Pull Tabs, Punchboards, and Tip Boards
Total prizes awarded for one pull tab, punchboard, or tip board game cannot exceed $15,000. These are typically sold alongside bingo at events held under an annual activity license.5Indiana General Assembly. Indiana Code 4-32.3-5-16 – Pull Tab, Punchboard, and Tip Board Prize Limits
Door Prizes
Under an annual activity license, the total value of all door prizes at a single event cannot exceed $1,500. For an event filed under the exempt activity notification, the total payout for all gaming at the event, door prizes included, cannot exceed $2,500.
Who Can Operate and Work the Games
Indiana restricts who can actually run the games. The operator, meaning the person who manages and oversees the gaming activity, must have been a member in good standing of the qualified organization for at least sixty days. Workers who handle tickets, call numbers, or otherwise assist at the event must have been members for at least thirty days.4Indiana Gaming Commission. Indiana Code 4-32.3
You cannot bring in outside contractors or temporary hires to run the games. The operator’s authority has to be formally acknowledged by the organization on the form the IGC prescribes, and the gaming license must be prominently displayed at every event so attendees and inspectors can verify it.
State and Federal Taxes
Being a nonprofit does not exempt you from gaming-related tax obligations. There are three separate pieces to track.
Indiana Gaming Card Excise Tax
Indiana imposes a 10% gaming card excise tax on pull tabs, punchboards, and tip boards. The tax is not on gross receipts or winnings. It is 10% of what the organization pays a distributor to buy the pull tabs, punchboards, and tip boards.6Indiana General Assembly. Indiana Code 4-32.3-10-1 – Gaming Card Excise Tax Imposed
Unrelated Business Income Tax
The IRS generally treats gaming income as unrelated business taxable income, even when the money funds your charitable programs, because running bingo or selling raffle tickets is not itself a charitable activity. If your gross income from gaming and other unrelated business activities reaches $1,000 or more, you have to file Form 990-T.7Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
Miss that filing and the penalty is 5% of the unpaid tax for each month the return is late, up to 25%. Returns more than 60 days late trigger a minimum penalty of the lesser of the tax due or $525. The IRS will waive the penalty if you show reasonable cause.8Internal Revenue Service. Instructions for Form 990-T
Withholding and W-2G on Large Prizes
For sweepstakes, raffles, and lotteries, you have to withhold 24% of any prize where the winnings minus the wager exceed $5,000. For 2026, the reporting threshold for filing Form W-2G has been adjusted to $2,000, so W-2G filings are required for qualifying prizes at or above that amount.9Internal Revenue Service. Instructions for Forms W-2G and 5754
Bingo is treated differently. Regular gambling withholding generally does not apply to bingo winnings, but 24% backup withholding kicks in if the winner does not provide a taxpayer identification number and the winnings meet or exceed the reporting threshold.
Raffle Tickets Are Not Deductible
Buyers cannot deduct the cost of a raffle ticket, bingo card, or other gaming chance as a charitable contribution. The IRS treats these payments as purchasing a chance to win rather than making a gift. Do not imply otherwise to supporters.10Internal Revenue Service. Publication 526 – Charitable Contributions
Records and Reporting
The IGC requires financial reports showing gross receipts, prize payouts, and net proceeds. That is how the Commission verifies funds are reaching charitable purposes and that prize limits held.
Charity gaming records have to be kept for three years plus the current year, and they are subject to IGC audit at any time. At a minimum, track every dollar of ticket sales and every dollar spent on prizes, supplies, and charitable distributions.1Justia. Indiana Code Title 4, Article 32.3 – Charity Gaming
On the federal side, report gaming revenues at gross rather than net on Form 990. Reporting only the net after prizes is a common error the IRS flags and can create filing-requirement problems and penalties.7Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
What Happens If You Break the Rules
The IGC can revoke or suspend a gaming license under Chapter 3 of Article 32.3, cutting off a revenue stream the organization may rely on. Conducting charity gaming without a valid license, or allowing unqualified individuals to operate games, can also carry criminal penalties under Indiana law.
Federal risk runs alongside the state risk. Consistently failing to report gaming income, file Form 990-T, or withhold on large prizes can cause the IRS to revoke your 501(c) status. Losing tax-exempt status ends more than gaming: it eliminates the ability to receive tax-deductible donations for any purpose and subjects all income to federal taxation.