Maryland Raffle Laws: Permits, Penalties, and Taxes

Maryland raffle laws restrict who can hold a raffle and how the event must be licensed: only qualifying nonprofits, political committees, and certain banks or credit unions may run one, personal property prizes are licensed at the county or city level, and real property prizes require an additional filing with the Maryland Secretary of State. Running a raffle outside those rules is a misdemeanor that can carry up to six months in jail.

Who Can Legally Hold a Raffle

Maryland classifies raffles as gaming events under Criminal Law Title 12, and the statute limits them to specific kinds of groups: fraternal, religious, civic, patriotic, educational, and charitable organizations, along with volunteer fire companies, rescue squads, veterans’ organizations, and bona fide nonprofits raising money for charitable, athletic, or educational purposes.¹ A for-profit business or an individual acting alone cannot legally hold a raffle in the state.

Three other groups have their own carve-outs. Charitable organizations may raffle real property they own or can convey title to. Political committees and candidates may raffle money or merchandise under tight caps. Depository institutions may run savings promotion raffles under the Financial Institutions Article.²

County Permits for Personal Property Prizes

If the prize is anything other than real estate, licensing happens at the county or city level. Many counties and Baltimore City require a permit before an organization can hold a raffle or sell tickets in that jurisdiction, including tickets for a raffle taking place somewhere else.³ The Maryland Lottery and Gaming Control Agency does not oversee charitable raffles; that job belongs to local government.

Fees and procedures vary. Montgomery County charges $80 for a raffle license.⁴ Baltimore County charges $56 per gaming permit per day.⁵ Check with the clerk’s office in every jurisdiction where you plan to hold the drawing or sell tickets.

Applications generally ask for information about the organization, the raffle itself (ticket price, drawing date, prizes), and how proceeds will be used. Expect to disclose raffle rules publicly and keep detailed financial records. Incomplete applications are typically returned, which can push back your event.⁶

Extra Rules for Real Property Raffles

Raffling real estate adds a state-level layer. A bona fide charitable organization may raffle real property it holds title to (or can convey title to) for the exclusive benefit of the organization, and no organization may hold more than two real property raffles in a single calendar year.²

Before advertising the raffle or selling any tickets, the organization must obtain the local permit required in the jurisdiction where the property sits and file a disclosure statement with the Maryland Secretary of State at least 10 business days in advance.⁷ The disclosure must include:

The property address, description, and a good-faith estimate of current fair market value
Drawing date, time, location, and ticket price
Any liens or encumbrances the winner will inherit, plus estimated closing costs
The organization’s name, address, and an authorized representative’s contact details
Copies of purchase agreements between the charity and whoever sold or is selling the property to it, showing the purchase price
Any conditions under which the raffle could be canceled and how ticket refunds would work

Once the property is transferred to the winner, the charity must submit a full accounting of all raffle income and expenses to the Secretary of State.³ That post-event filing is easy to forget once the drawing is done.

Political Committees and Bank Raffles

Political committees and candidates may run raffles with money or merchandise as prizes, but no single ticket may cost more than $5, and no individual may buy more than $50 worth of tickets. The raffle does not relieve the committee of its reporting and recordkeeping duties under the Election Law Article.²

Banks and credit unions may run savings promotion raffles, sometimes called prize-linked savings programs, under the Financial Institutions Article rather than the gaming code.²

Penalties for Running an Unauthorized Raffle

An organization that violates the gaming event rules, such as operating without the required permit or breaching a license condition, faces a misdemeanor. On conviction, the penalty is a fine of up to $1,000, loss of gaming privileges for up to 60 days, or both.⁸ For a nonprofit that fundraises through gaming, losing those privileges can hurt more than the fine.

Individuals who promote or facilitate an illegal raffle can be charged with unauthorized gambling, a misdemeanor punishable by up to six months in jail, a fine of up to $5,000, or both.⁹

Taxes on Prizes and Proceeds

Federal Reporting and Withholding

For payments made in 2026, the IRS requires a Form W-2G when raffle winnings reach or exceed $2,000. Federal income tax withholding is triggered when the proceeds (winnings minus the cost of the ticket) exceed $5,000.¹⁰ Withholding applies to the full proceeds, not just the amount above $5,000.¹¹

Even tax-exempt nonprofits may owe unrelated business income tax if a raffle does not fit specific IRS exemptions for volunteer-run activities. Missing a W-2G or failing to withhold when required can bring IRS penalties and interest.

Maryland Taxes

Both residents and nonresidents owe Maryland income tax on raffle prizes.¹² Ticket sales themselves are generally not subject to Maryland sales tax, but local admissions and amusement tax may apply to receipts from games associated with a fundraiser, at rates up to 10%. That tax is calculated on gross receipts, so the cost of prizes cannot be deducted first.¹³

Selling Tickets Online

Maryland’s raffle rules were written for in-person events, and the county-based permit structure creates uncertainty around online sales. If your organization plans to sell tickets electronically, confirm with the licensing authority in every jurisdiction where tickets will be sold, not only where the drawing happens. Some jurisdictions require a permit even when tickets are sold locally for a raffle held elsewhere.³

Records and Use of Proceeds

Track every dollar of ticket sales, prize costs, overhead, and disbursements, and keep the records for at least three years after the raffle ends. County licensing authorities may ask for documentation at any time, and the Secretary of State requires a post-raffle accounting for real property raffles.⁷

Proceeds must go to the charitable, educational, or other exempt purpose named in the permit application. Sending money to individual members or to unrelated expenses is the fastest way to lose gaming privileges and draw attention from local authorities and the IRS. Put one person in charge of raffle finances, and keep the funds in a separate account from general operating money so the audit trail is clean if anyone asks.

1
Maryland General Assembly. Maryland Code Criminal Law 12-101 – Definitions
2
Maryland General Assembly. Maryland Code Criminal Law 12-106 – Raffles
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Maryland Secretary of State. Raffles of Real Property and Personal Property
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Montgomery County Government. Fee Schedule – Licensure and Regulatory Services – Section: Raffle
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Baltimore County Government. Gaming Permit Application
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Montgomery County Government. Raffle – Licensing and Permits
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Cornell Law Institute. COMAR 01.02.07.03 – Required Permits and Filings
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Maryland General Assembly. Maryland Code Criminal Law 12-108
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Maryland General Assembly. Maryland Code Criminal Law 12-102 – Betting, Wagering, Gambling
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Internal Revenue Service. Instructions for Forms W-2G and 5754 (Rev. January 2026)
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eCFR. 26 CFR 31.3402(q)-1 – Extension of Withholding to Certain Gambling Winnings
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Comptroller of Maryland. Gambling Winnings and Your Maryland Tax Obligations
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Maryland Comptroller of the Treasury. Business Tax Tip 33 – Admissions and Amusement Tax on Fundraisers