To run a raffle in Michigan, a qualifying nonprofit files a Michigan raffle license application with the Charitable Gaming Division of the Michigan Lottery, mails it with a fee between $15 and $50 per drawing date, and allows four to six weeks for processing before the first drawing.1Michigan Lottery. Raffles The form itself is straightforward; the parts that slow organizations down are eligibility, prize-value math, and post-event reporting.
Who Can Apply
Michigan restricts raffle licenses to specific nonprofit types. Under the Traxler-McCauley-Law-Bowman Bingo Act, a qualified organization must be a bona fide religious, educational, service, senior citizens, fraternal, or veterans’ organization that operates without profit to its members.2Michigan Legislature. Michigan Compiled Laws 432-103a – Definitions A to Q Political committees, campaign organizations, and ballot question committees are specifically excluded.
You also have to clear a threshold: either your organization has existed continuously in Michigan for at least five years, or it holds federal tax exemption under Section 501(c) of the Internal Revenue Code.2Michigan Legislature. Michigan Compiled Laws 432-103a – Definitions A to Q A newer group with 501(c)(3) status can apply even without a five-year history. Without one of the two, the Division will deny the application.
Components of the military or the Michigan National Guard whose members are in active service or active state duty also qualify to conduct small or large raffles.2Michigan Legislature. Michigan Compiled Laws 432-103a – Definitions A to Q
What to Have Ready Before You Start the Form
Download the application from the Charitable Gaming Division’s site at michigan.gov/cg.1Michigan Lottery. Raffles Plan the event first, then fill out the form. You will need:
- Your Federal Employer Identification Number
- Names and home addresses of all current officers
- The ticket price
- The physical location of the drawing
- The dates tickets will be sold and the date of each drawing
- A list of every prize with its fair market value
- A description of how the proceeds will further your organization’s charitable purposes
The officer disclosure exists so the state knows who is personally accountable for how the event is run. Incomplete applications get returned, and the lost weeks can push your event past its planned date, so fill every field.
Fees by Raffle Size
Fees depend on the total prize value awarded on a single drawing date, not the value of any one prize:
- Small raffle, with prizes totaling $500 or less per drawing date: $15 covers up to three drawing dates, plus $5 for each additional date.
- Large raffle, with prizes exceeding $500 per drawing date: $50 per drawing date.1Michigan Lottery. Raffles
The math trips people up. Five gift baskets worth $80 each on one date totals $400 and stays in small-raffle territory. Add a $150 item to that same date and you cross the $500 line, which means the $50 large-raffle fee applies to that date.
Where to Send It
Mail the completed application and the fee to the Charitable Gaming Division at 101 E. Hillsdale, P.O. Box 30023, Lansing, MI 48909. Allow four to six weeks before your first drawing date.1Michigan Lottery. Raffles The Division may request additional documentation during processing, so an early submission gives you a buffer. Once approved, you receive a license that must be displayed at the raffle location during the drawing.
Rules That Shape How You Run the Raffle
A few rules affect how you plan the event, not just how you apply.
strong>Where the money goes. The entire net proceeds of a licensed raffle must be devoted exclusively to the lawful purposes of your organization.3Legal Information Institute. Michigan Administrative Code R 432.21519 – Accountability Raffle revenue cannot fund anything outside your stated charitable mission.
How you pay expenses. All costs connected to the raffle must be necessary and reasonable. Prize payments and worker compensation are the only expenses you can pay in cash from raffle proceeds. Every other raffle-related expense must be paid by check.3Legal Information Institute. Michigan Administrative Code R 432.21519 – Accountability The check requirement creates the paper trail the state expects to see in your financial report.
No mailing tickets. Federal law makes it a crime to knowingly deposit in the mail any ticket, chance, or share related to a lottery-style scheme. The same prohibition covers mailing promotional circulars and even mailing checks for ticket purchases.4Office of the Law Revision Counsel. 18 USC 1302 – Mailing Lottery Tickets or Related Matter Plan on in-person sales.
Online sales are complicated. No blanket federal rule bans internet raffle sales, but the Unlawful Internet Gambling Enforcement Act requires organizations to identify and block purchases from people in states where such sales are illegal. Major payment processors add a practical barrier: Stripe categorizes raffle tickets as gambling and generally prohibits them, Square imposes restrictions such as no cash prizes and no large prizes, and mobile apps like Venmo and Cash App prohibit raffle ticket transactions. Finding a processor willing to handle online raffle sales is often the hardest part.
After the Drawing
Within ten days after the final drawing, submit the Raffle Financial Statement (Form BSL-CG-1619) to the Charitable Gaming Division. The report accounts for ticket sales, prize values, expenses, and net proceeds directed to your charitable purpose.
Retain all game records and supporting documents for the current calendar year plus three years, or longer if the bureau directs you in writing.5Legal Information Institute. Michigan Administrative Code R 432.21518 – Game Records Retention A 2026 raffle means records through the end of 2029 at minimum. Keep copies of winning tickets, bank statements showing deposits, canceled checks for expenses, and any correspondence with the Division. Good records shorten future license applications and protect you in an audit.
Federal Tax Points to Know Before You Apply
Raffle income is generally treated by the IRS as unrelated business taxable income, but income is excluded from that tax when substantially all of the work running the raffle is performed by volunteers without compensation. Hiring paid staff or contractors to run significant portions of the event can trigger tax on the net income. The fact that proceeds fund your exempt-purpose programs does not, by itself, make the raffle activity related to your mission in the IRS’s view.6Internal Revenue Service. Exempt Organization Gaming and Unrelated Business Taxable Income
You also owe reporting to winners. For calendar year 2026, issue IRS Form W-2G to any winner whose prize is worth $2,000 or more; starting with the 2026 tax year, the threshold adjusts annually for inflation.7Internal Revenue Service. Instructions for Forms W-2G and 5754 Collect the winner’s name, address, and Social Security number before releasing the prize so you can complete the form on time.