To run a raffle legally in Indiana, your group has to be a tax-exempt “qualified organization” that has existed in the state for at least three years, and if prizes at a single event top $2,500 or your yearly charity gaming prizes top $7,500, you need a license from the Indiana Gaming Commission before selling a ticket. Everything else in Indiana raffle laws — prize caps, proceeds rules, record-keeping, tax reporting, penalties — flows from those two gates.
Who Can Legally Run a Raffle
Indiana limits raffles to “qualified organizations.” To qualify, a group must operate without profit to its members, hold tax-exempt status under Section 501 of the Internal Revenue Code, and have been continuously in existence in Indiana for at least three years. An organization affiliated with a parent entity that meets the three-year requirement also counts.1Indiana State Government. Become a Qualified Organization
The categories that can qualify include religious organizations, educational organizations (including schools, PTOs, and state educational institutions), veterans organizations, civic and senior citizen organizations, and bona fide political parties producing exempt function income. Indiana-licensed hospitals, health facilities, and psychiatric facilities can also qualify, but only for exempt-level events. A bona fide business organization can apply as well, but only for a door prize license, not a raffle.1Indiana State Government. Become a Qualified Organization
A group that doesn’t fit one of those categories, or that hasn’t hit the three-year mark, cannot legally run a raffle in Indiana at all. Renting a nonprofit’s name to work around that rule is exactly what the felony provision discussed below is written to catch.
When You Need a License and When You Don’t
Not every raffle requires a license. If your event’s total prize value stays at or below $2,500, and your organization’s charity gaming prizes for the calendar year stay at or below $7,500, you can operate under an exempt activity notification instead of a formal license.2Indiana Gaming Commission. Charity Gaming Basics
Exempt doesn’t mean invisible. If you plan more than one exempt event in a year, you have to file an annual written notice with the Indiana Gaming Commission before March 1 or at least one week before your first event, whichever comes first. The notice covers the estimated frequency of events, their locations, and the estimated value of prizes. You still have to keep accurate financial records of every transaction, and the Commission can inspect them at any time.3Indiana General Assembly. Indiana Code 4-32.2-4-3 – Exceptions to License Requirement
Cross either threshold and you need a license in hand before the first ticket is sold.
Types of Raffle Licenses
Indiana offers several license types tied to how you plan to run raffles:
- A single raffle license covers one raffle at a specific time and location.
- An annual raffle license lets your organization run raffles throughout the license period at the listed location, and holders can sell tickets around the clock from that facility.
- A festival license covers a multi-activity event that can include bingo, charity game nights, raffles, and door prizes at once. Organizations can hold up to three festival-type events per calendar year, and none may run back to back.
- An annual comprehensive license authorizes bingo, charity game nights, raffles, door prizes, and pull-tab events at your licensed location.2Indiana Gaming Commission. Charity Gaming Basics
The first-time fee for any charity gaming license is $50. Renewal fees are calculated from the gross receipts of your most recent event of the same license type. An expedited review, completed within 10 business days, is available for an additional fee.4Indiana State Government. What Is the Cost to Obtain a Charity Gaming Event License5Indiana Gaming Commission. Charity Gaming Forms
Prize Limits and How Proceeds Must Be Used
Prize caps depend on whether the raffle stands alone or is bundled with another charity gaming event. A raffle held as part of another allowable event, like a festival or bingo night, is capped at $5,000 in total prizes. The Indiana Gaming Commission can authorize one exception per year, allowing a single combined event with raffle prizes up to $25,000. Door prizes awarded during a raffle event are separately capped at $1,500. A standalone raffle not held at another allowable event has no statutory prize cap under the same provision.6Indiana General Assembly. Indiana Code 4-32.2-5-18 – Raffle Event Prize Limits
All net proceeds have to go toward the lawful purposes of the qualified organization. If 90 percent or more of your total gross receipts come from licensed charity gaming events, you have to donate at least 60 percent of your gross charity gaming receipts (minus prize payouts) to an outside qualified recipient that is not an affiliate or parent of your organization.7Justia. Indiana Code 4-32.2-5-4 – Donation of Gross Charity Gaming Receipts
Records and Reporting Deadlines
Indiana requires detailed records of every raffle: gross receipts from each activity, prize payouts, net receipts to the organization, and rental or facility costs. Records must be kept for three years from the close of the financial accounting period for the license covering the event.8Legal Information Institute. Indiana Code 68 IAC 21-11-1 – Records of Qualified Organization
The reporting windows are short. The Event Summary Report is due within 10 days of the event. Single activity and festival license holders file their financial report within 10 days after the activity closes. Annual license holders file the financial and gross receipts report by the 10th day of the month their license expires.2Indiana Gaming Commission. Charity Gaming Basics Late filings are a common trigger for audits and problems at renewal time.
Federal Tax Reporting for Prize Winners
Raffle proceeds are covered by federal reporting rules that catch organizers off guard. For prizes awarded in 2026, the organization must file IRS Form W-2G when the prize value (reduced by the cost of the ticket, at the organization’s option) is $2,000 or more and the payout is at least 300 times the wager amount.9Internal Revenue Service. Instructions for Forms W-2G and 5754 (01/2026) With typical ticket prices of a few dollars, the 300-times threshold is easy to hit on any prize worth $2,000 or more.
If a winner doesn’t provide a correct taxpayer identification number (Social Security number, ITIN, or EIN), the organization must withhold 24 percent of the prize value as federal backup withholding.10Internal Revenue Service. Topic No. 307, Backup Withholding For non-cash prizes like a car or a vacation package, that can mean collecting the withholding in cash from the winner before releasing the prize. Collecting TINs at ticket sale, or at least before the drawing, saves the awkwardness.
Winners should know that raffle prizes are taxable income whether or not a W-2G is issued.
Penalties for Violations
A person or organization that recklessly, knowingly, or intentionally violates Indiana’s charity gaming laws commits a Class B misdemeanor, which carries up to 180 days in jail and a fine of up to $1,000.11Justia. Indiana Code 4-32.2-8-4 – Criminal Penalties12Indiana General Assembly. Indiana Code 35-50-3-3 – Class B Misdemeanor That covers running a raffle without a license, misusing proceeds, and failing to maintain records.
The stakes climb for outside operators. An individual, corporation, partnership, or LLC that enters a contract with a qualified organization in violation of the rules on outside assistance commits a Class D felony. The provision targets commercial operators trying to run charity gaming as a business under a nonprofit’s name.11Justia. Indiana Code 4-32.2-8-4 – Criminal Penalties
Beyond criminal charges, the Indiana Gaming Commission can revoke or suspend a charity gaming license and bar an organization from future licensing.
Recent and Upcoming Changes
Indiana’s charity gaming rules keep moving. Senate Enrolled Act 108, passed in 2025, changed identification requirements and location limitations for charity gaming events. The Indiana Gaming Commission has also issued guidance on accepting credit card and electronic payments for raffles and water races, and interim rules covering electronic pull-tab and raffle systems took effect under LSA #25-645. New rules on remuneration for conducting allowable activities take effect July 1, 2026.13Indiana Gaming Commission. Charity Gaming Check the Gaming Commission’s charity gaming page for the current version of any rule that affects your event before you apply.