Washington state raffle laws treat raffles as gambling, which means the Washington State Gambling Commission (WSGC) regulates them. A qualifying nonprofit can run a raffle without a license if it stays under $5,000 in gross gambling revenue for the year and meets a short list of conditions; anything beyond that requires a WSGC license before tickets go on sale.1Washington State Gambling Commission. Information for Raffle Operators Getting this wrong is not a paperwork problem. Running an unauthorized raffle can be charged as professional gambling, a felony, and the proceeds can be forfeited.
Running a Raffle Without a License
Under RCW 9.46.0315, a bona fide charitable or nonprofit organization can hold a raffle without a gambling license if it meets every condition in the statute.2Washington State Legislature. RCW 9.46.0315 The organization must have existed for at least 12 months, and every dollar of proceeds must go to charitable, educational, or civic purposes.
The operational limits are strict:
- No more than two exempt raffles per calendar year.
- All tickets sold and the drawing held during the same event, at the same location.3Washington State Legislature. WAC 230-11-010
- Only members of the nonprofit may sell tickets, and they cannot be paid to do it.
- No cash prizes. Total non-cash prize value for a single event cannot exceed $5,000.2Washington State Legislature. RCW 9.46.0315
- The organization’s gross revenue from all gambling activities combined cannot exceed $5,000 in the calendar year.1Washington State Gambling Commission. Information for Raffle Operators
Unlicensed nonprofits don’t report to the WSGC, but the exemption is a defense you may have to prove. Keep internal records of ticket sales, expenses, and how the proceeds were spent.
When a WSGC License Is Required
Once your organization crosses $5,000 in gross gambling revenue for the year, or the raffle otherwise falls outside the exemption (paid sellers, multiple locations, cash prizes, more than two events), you need a license before selling tickets.4Washington State Gambling Commission. Raffles, Excluding Electronic and Enhanced The application asks about your organization’s structure, how the raffle will be run, and how proceeds will be used. After the license issues, you have 30 days to complete required training. Licenses renew annually, and the WSGC audits and investigates for compliance.
Fees for a Standard Raffle License
A standard raffle license has a $70 base fee plus 3.583% of gross gambling receipts, capped at $3,200 for the license year. The base fee is credited toward your quarterly fee: if the quarter’s calculation on receipts comes to $100 and you already paid the $70 base, you owe $30 that quarter.5Washington State Gambling Commission. Licensing Fees for Charitable or Nonprofit Organizations and Individuals Washington also has separate license categories for enhanced raffles (large charitable events with grand prizes up to $10,000,000) and electronic raffles, each with a $5,500 base fee. Those are specialty categories with their own operating rules; most organizations reading this will be looking at a standard license.
Ticket and Drawing Rules
Every ticket sold in a Washington raffle must carry a unique identifier. Consecutive numbers, non-repeating numbers, or non-repeating letters or symbols all work, so long as no two tickets in the same raffle share one.3Washington State Legislature. WAC 230-11-010 The drawing itself has to be genuinely random. WAC 230-11-045 requires that each ticket have an equal chance of being drawn and that the receptacle be designed so no ticket has an advantage.6Washington State Legislature. Chapter 230-11 WAC, Section 230-11-045 The drawing must take place on the date disclosed to ticket buyers.
You Cannot Sell Raffle Tickets Online
This one catches organizations off guard. Washington prohibits selling raffle tickets over the internet even if you hold a valid license.7Washington State Legislature. Chapter 230-11 WAC Raffles You can advertise a raffle on your website and social media and post the rules, but the actual purchase has to happen in person. Enhanced raffles are the narrow exception the state carves out, and they permit sales by mail, fax, and telephone rather than online transactions.8Washington State Legislature. RCW 9.46.0323
Prize Limits
For a licensed standard raffle, no single prize can exceed $60,000, and total prizes across the license year cannot exceed $400,000.9Washington State Legislature. Chapter 230-11 WAC, Section 230-11-065 Those are ceilings, not defaults. If you want to offer a single prize worth more than $40,000, or your total prizes for the year will exceed $300,000, you have to submit a detailed raffle plan and get a WSGC vote before selling tickets. The plan has to cover projected budgets, break-even sales numbers, prize security, and how you’ll use the proceeds.10Washington State Legislature. WAC 230-11-067
For unlicensed exempt raffles, cash prizes are not allowed and total non-cash prizes for the event cannot exceed $5,000. Whatever category you fall into, the organization has to own the prizes before the drawing date. If a raffle lets a winner choose between merchandise and cash, the cash equivalent must already be on deposit in the gambling receipts account.9Washington State Legislature. Chapter 230-11 WAC, Section 230-11-065
Recordkeeping and Reporting
Licensed operators keep records of ticket sales, expenses, and prize distributions for three years from the end of the fiscal year the raffle occurred in. Two categories have shorter one-year retention: ticket stubs from raffles where winners didn’t need to be present, and unsold tickets from raffles with more than $5,000 in gross receipts.11Washington State Legislature. Chapter 230-11 WAC, Section 230-11-100
Organizations with gross gambling receipts over $50,000, or those offering prizes that required commission approval, have a longer list. They must keep validated deposit receipts, winning tickets, names and contact information for every winner of a prize worth more than $50, invoices for prize purchases, and documentation of every expense. Records must be complete within 30 days of the drawing.12Washington State Legislature. WAC 230-11-100 Annual financial reports are required; missing them can bring fines or suspension.
Federal Tax Withholding on Winners
State law tells you how to run the raffle. Federal tax law governs what happens when someone wins, and the reporting and withholding fall on the sponsor, not the winner.
Under 26 U.S.C. § 3402(q), the organization must withhold 24% for federal income tax when a winner’s proceeds exceed $5,000 and the payout is at least 300 times the wager.13Office of the Law Revision Counsel. 26 USC 3402 The ticket price is the wager, so a $10 ticket producing a $5,001 prize triggers withholding. The 24% applies to the winnings minus the ticket price, not just the amount above $5,000.14Internal Revenue Service. Instructions for Forms W-2G and 5754
Sponsors file Form W-2G for each reportable winner. For 2026, the reporting threshold on Form W-2G is $2,000 in winnings when the payout is at least 300 times the wager.14Internal Revenue Service. Instructions for Forms W-2G and 5754 If a winner doesn’t give you a valid taxpayer identification number, apply backup withholding of 24% on reportable prizes at or below $5,000. Report all withheld amounts on Form 945.15Internal Revenue Service. About Form 945 Collect a Form W-9 from every winner whose prize could hit the reporting threshold. If you should have withheld and didn’t, the organization is on the hook for the tax.
Federal Mail Prohibition
Compliance with state law is not the whole picture. Under 18 U.S.C. § 1302, it is a federal crime to send raffle tickets, advertisements for a raffle, prize lists, or payments for tickets through the United States Postal Service. The statute covers any “lottery, gift enterprise, or similar scheme offering prizes dependent in whole or in part upon lot or chance.”16Office of the Law Revision Counsel. 18 U.S.C. 1302 A first offense carries a fine and up to two years in prison; later offenses carry up to five years. Washington’s enhanced-raffle statute specifically authorizes ticket orders by mail, but whether that state authorization insulates an organization from federal prosecution is not a settled question, and any organization considering it should get legal advice.8Washington State Legislature. RCW 9.46.0323
Penalties for Getting It Wrong
Washington treats an unauthorized raffle as professional gambling. Under RCW 9.46.220, professional gambling in the first degree is a Class B felony when the operation involves five or more people, accepts wagers exceeding $5,000 in a 30-day period, or charges fees for participation in unlicensed gambling.17Washington State Legislature. RCW 9.46.220 Class B felonies carry substantial prison time and fines.
RCW 9.46.231 adds forfeiture. Money, negotiable instruments, and any assets acquired with traceable gambling proceeds can be seized. If the offense is at least a Class C felony, real property can be seized too. Forfeited assets go to law enforcement for gambling-related enforcement.18Washington State Legislature. RCW 9.46.231
Licensed operators are not immune. Improper ticket sales, missing financial reports, and drawing procedure violations can bring fines, suspension, or a bar from future gambling licenses. The most common problems the WSGC sees are the ordinary ones: sloppy recordkeeping, late reports, and prize amounts that quietly creep past what was approved.