New Jersey Raffle Laws: Licenses, Prize Limits & Penalties

New Jersey raffle laws require every raffle to be run by a qualifying nonprofit that holds both a municipal license and a registration with the Legalized Games of Chance Control Commission (LGCCC), and the state regulates ticket content, prize amounts, how proceeds are spent, and post-event reporting. Violations carry civil penalties of up to $7,500 for a first offense and $15,000 for repeat offenses.

Which Organizations Qualify

Only certain nonprofits can hold a raffle in New Jersey. Under N.J.S.A. 5:8-51, eligible groups include veterans’ organizations, churches and religious organizations, charitable organizations, educational organizations, fraternal organizations, civic and service clubs, senior citizen associations, officially recognized volunteer fire companies, and officially recognized volunteer first aid or rescue squads.¹ Political organizations, private businesses, and individuals cannot hold raffles.

Before applying for any license, the organization must register with the LGCCC to verify nonprofit status. Registration means submitting governing documents such as a constitution or bylaws. Once approved, the group receives an identification number that has to appear on all raffle materials.² Out-of-state organizations can only run raffles in New Jersey through a New Jersey chapter that independently meets the eligibility rules.³

Getting the License

Every raffle needs a license from the municipality where the event will happen. The application must identify the raffle type, event date and location, prizes offered, and how the proceeds will be used. The local governing body reviews the application, then forwards it to the LGCCC for final authorization.³

The license type depends on the raffle format. New Jersey treats on-premises raffles (winner must be present) and off-premises raffles (tickets sold in advance, winner need not attend) as separate categories, and issues separate licenses accordingly. Common formats include 50/50 draws, merchandise draws, instant raffles or pull tabs (ticket price capped at $3.00), and calendar raffles.⁴

Fees scale with prize value. Most off-premises raffles cost $20 for each $1,000 (or fraction thereof) in total retail prize value. On-premises 50/50 and merchandise draws pay a flat $20 per day, but only if the anticipated prize exceeds $400. Off-premises 50/50 raffles pay $20 per drawing day, plus $20 per $1,000 when the awarded prize exceeds $1,000.⁵ Each license covers only the specific event and dates on the application. Changing the date, location, or prizes requires additional approval.

Prize Limits

The caps catch many organizations off guard. No single prize in a drawing raffle can exceed $100,000 in retail value. Across all raffles in one calendar year, an organization cannot award more than $500,000 in total prizes. For non-draw raffles like pull tabs or wheel spins, no individual prize can exceed $1,500.⁴

Two exceptions apply to the annual $500,000 cap. It does not apply to on-premises raffles, and it does not apply when all prizes are wholly donated to the organization.⁴ Exceeding these limits can put the entire license at risk.

What Has to Appear on Every Ticket

New Jersey specifies exactly what a raffle ticket must show. For off-premises merchandise draw raffles, the most common format, each ticket has to include:

The organization’s name, LGCCC identification number, and the license number for that specific raffle
The place, date, and time of the drawing
A list of every prize with its retail value
A consecutively assigned ticket number
The ticket price on the face
A statement of what the net proceeds will fund
A statement that no substitution of the offered prize may be made and no cash will be given instead

If a prize includes alcohol, the ticket must state that the winner has to be at least 21. If the winner must be present at the drawing, the ticket must say so; otherwise, the winner does not need to attend.⁶

The stub must carry the holder’s name and address, ticket number, raffle license number, and organization identification. Tickets cannot be sold above the price the license authorizes. Instant raffle tickets can only be sold at the price printed by the manufacturer.⁴ No credit sales. Every purchase must be paid for at the time.

Online Sales and the Mail Restriction

Two rules on how tickets can move surprise most organizers.

Remote ticket sales in New Jersey are narrow. Under N.J.S.A. 5:8-51.6, remote raffle participation is only permitted at large sporting venues or during a declared Public Health Emergency under the Governor’s authority.⁷ Outside those situations, ticket sales generally have to happen in person. Confirm the current rules with the LGCCC before setting up any digital ticketing.

Federal law separately bars using the U.S. Postal Service for raffle tickets, raffle advertisements, checks or money orders for ticket purchases, or lists of prize winners. Under 18 U.S.C. § 1302, this covers any scheme offering prizes dependent on chance, and the statute contains no explicit exemption for state-authorized raffles.⁸ A first violation is punishable by up to two years in prison, a fine, or both; subsequent offenses carry up to five years. Organizations that want to reach members beyond their immediate area should use hand delivery or a private carrier.

Where the Money Must Go

This is what separates a legal raffle from illegal gambling under New Jersey law. The entire net proceeds must go to educational, charitable, patriotic, religious, or public-spirited purposes. Veterans’ organizations and senior citizen associations may also apply proceeds to their own organizational support.¹ No portion of the revenue can be distributed to members or go to private benefit.

Net proceeds can fund capital improvements to a facility the organization owns, but only if that facility, or the relevant portion of it, is used for qualifying educational, charitable, patriotic, religious, or public-spirited purposes.⁹ Diverting funds elsewhere puts both the license and the registration at risk.

Advertising

Raffle advertisements must include the organization’s name, municipal license number, event details, and a description of the prizes.¹⁰ Advertisements cannot suggest guaranteed winnings, exaggerate the odds, imply government endorsement, or use official seals without authorization. Social media promotions are held to the same standard as print. Mass-media advertising through newspapers, radio, television, or billboards is prohibited in any municipality that has not adopted the Raffles Licensing Law.¹

Federal Tax Reporting on Prizes

Raffle winnings are taxable income under federal law, and the organization running the raffle has its own reporting and withholding duties.

Form W-2G

For 2026, the IRS requires a Form W-2G when raffle winnings are at least $2,000 and are at least 300 times the ticket price. The $2,000 floor is new for 2026, adjusted for inflation from the longstanding $600 threshold that applied in prior years.¹¹ A W-2G is also required whenever the organization withholds federal tax on a prize, regardless of amount.

A practical example: at a $5 ticket price, 300 times is $1,500, but the $2,000 floor governs, so reporting kicks in at $2,000. At a $10 ticket price, 300 times is $3,000, and that higher figure governs.

Withholding

When raffle winnings minus the ticket price exceed $5,000, the organization must withhold 24% for federal income tax. For a noncash prize like a car, fair market value determines whether the threshold is met. If the winner pays the withholding tax out of pocket, the rate is 24% of the fair market value minus the wager. If the organization covers the tax for the winner, the rate is 31.58%.¹¹

Group Winners

When a prize is shared, the person receiving the winnings completes IRS Form 5754 so the organization can issue a separate W-2G to each winner showing their share.¹²

Are Ticket Purchases Deductible?

No. Even though the raffle benefits a charity, the cost of a ticket is not a deductible charitable contribution. The IRS treats it as payment for a chance to win.¹³ Buyers who want a deduction should make a separate donation.

Recordkeeping and the Post-Event Report

Organizations have to keep detailed financial records for at least two years covering ticket sales, expenses, and prize distributions, using a ledger or accounting system that tracks every transaction and shows where proceeds went.¹⁰

After the event, the organization must file a Report of Operations with the LGCCC no later than the 15th day of the calendar month following the month the raffle was held. The report has to include gross receipts, expenses and who was paid, net profit, how the net profit was or will be used, and a list of all prizes with their values.³ Filing late or incomplete can bring fines or restrictions on future licenses. Keep physical copies of all sold and unsold tickets and receipts for expenses in case of an audit.

Penalties

Under N.J.S.A. 5:8-57.2, violating a raffle law or regulation administered by the LGCCC carries civil penalties of up to $7,500 for a first offense and up to $15,000 for a second or subsequent offense. Each separate statutory violation counts as its own offense, so a single raffle with multiple problems can stack penalties quickly.¹

Organizations with a valid LGCCC registration that was not suspended or revoked at the time of the violation are exempt from those specific civil penalties, but they remain subject to other consequences. The LGCCC and the local governing body can suspend or revoke a raffle license for any violation, and the LGCCC can order the organization to return money obtained through unlawful practices. Warnings, reprimands, and cease-and-desist orders are also available.¹ Municipalities may deny future license applications to organizations with a history of violations. Misusing raffle proceeds or failing to award prizes could also expose individuals to criminal prosecution under New Jersey’s general theft and fraud statutes.

1
New Jersey Division of Consumer Affairs. Legalized Games of Chance Control Commission – Bingos and Raffles Law
2
New Jersey Division of Consumer Affairs. Registered Organizations
3
Legalized Games of Chance Control Commission. Bingo and Raffle License Process Instructions
4
Legal Information Institute. New Jersey Admin Code 13:47-8.3 – Amount of Prize Limitation; Maximum Charge
5
New Jersey Division of Consumer Affairs. License Fees
6
Cornell Law School. New Jersey Admin Code 13:47-8.7 – Contents of Ticket; Off-Premises Raffle Awarding Merchandise as a Prize
7
Justia Law. New Jersey Code 5:8-51.6 – Conduct of Raffles in Large Sporting Venues
8
Office of the Law Revision Counsel. 18 USC 1302 – Mailing Lottery Tickets or Related Matter
9
Justia Law. New Jersey Code 5:8-51.4 – Use of Net Proceeds for Capital Improvements
10
New Jersey Division of Consumer Affairs. Chapter 47 Rules of Legalized Games of Chance
11
Internal Revenue Service. Instructions for Forms W-2G and 5754
12
Internal Revenue Service. Form 5754 Statement by Person(s) Receiving Gambling Winnings
13
Internal Revenue Service. Publication 526 – Charitable Contributions