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The Legal Checklist for Running a Fire Department Raffle

·11 min read
The Legal Checklist for Running a Fire Department Raffle

Raffles Are Big Money — and Big Liability

A well-run raffle can bring in $5,000 to $20,000 for your department. Sell 1,000 tickets at $20 each for a chance to win a shotgun, a grill, or a vacation package, and you are looking at $20,000 in gross revenue minus the cost of the prize.

But here is the part nobody talks about at the planning meeting: raffles are a form of gambling. Every state regulates them differently. Some states require permits. Some limit prize values. Some restrict who can buy tickets. And some states prohibit certain types of raffles entirely.

Running a raffle without knowing the rules is not just careless — it can result in fines, loss of your nonprofit status, or criminal charges against your officers. This is not a scare tactic. It happens.

Here is the checklist to follow before you sell a single ticket.

Step 1: Confirm Your Department Is Eligible

In most states, only qualified nonprofit organizations can legally run a raffle. Volunteer fire departments typically qualify, but you need to confirm two things:

  • Your department has current 501(c)(3) or 501(c)(4) status with the IRS. If your tax-exempt status has lapsed (it happens more than you think — the IRS revokes it automatically if you miss three years of Form 990 filings), you cannot legally run a raffle in most states.
  • Your department is registered with the state. Many states require nonprofits to register with the state attorney general or secretary of state before conducting any fundraising activities, including raffles.
Action item: Pull up your IRS determination letter and confirm your EIN is active on the IRS Tax Exempt Organization Search tool. If it is not, fix that first.

Step 2: Get the Required Permit or License

Most states require a raffle permit or license before you can sell tickets. The process varies wildly:

  • Some states are simple. File a one-page form with your county clerk, pay a $25 fee, and you are good to go.
  • Some states are complex. You need to submit your raffle plan 30 to 60 days in advance, list the prizes, the ticket price, the drawing date, and the intended use of proceeds.
  • Some states have no permit requirement but still have rules you must follow.
The states with the strictest raffle laws tend to be New York, California, Massachusetts, and Illinois. If you are in one of these states, read the specific regulations carefully or consult a local attorney.

Action item: Search "[your state] raffle permit nonprofit" or contact your county clerk's office. Get the permit application and submit it at least 60 days before your raffle.

Step 3: Know Your Ticket Rules

Every state has rules about raffle ticket sales. Common requirements include:

  • Tickets must have a printed price. You cannot sell them for different amounts to different people.
  • Tickets must be sequentially numbered. This is for accounting and audit purposes.
  • You must disclose the organization name, the drawing date, and the prize on the ticket or at the point of sale.
  • Some states prohibit selling tickets online or by mail. This is a big one. If your state requires tickets to be sold in person, you cannot sell them through your website. Check this before you set up an online ticket page.
  • Some states limit the price per ticket. For example, some states cap raffle tickets at $50 each.
  • Minors cannot purchase raffle tickets in most states. If you are selling at a public event, have a process for verifying age.
Action item: Get a copy of your state's raffle statute. Read the section on ticket requirements. Print it and bring it to your planning meeting.

Step 4: Understand Prize Limits and Tax Obligations

Prize Value Limits

Some states cap the total value of raffle prizes. For example, a state might limit total prize value to $50,000 per year for a single organization. If you run multiple raffles, the values combine.

Winner Tax Reporting

If a prize is worth $600 or more, federal tax law requires you to report the winnings to the IRS on Form W-2G. You also need to collect the winner's name, address, and Social Security number.

This is uncomfortable but non-negotiable. If you are raffling off a $2,000 shotgun, you need to hand the winner a W-2G form along with their prize. Many departments do not do this and it creates problems during audits.

For prizes worth $5,000 or more, you are required to withhold 24 percent for federal income tax before awarding the prize, or collect the withholding amount from the winner.

Action item: If your top prize is worth $600 or more, prepare W-2G forms in advance. Have a clipboard ready at the drawing with a form for the winner to fill out.

Step 5: Separate Raffle Funds from General Funds

Keep your raffle money in a separate account or at minimum track it as a separate line item in your books. You need to be able to show:

  • Total tickets sold
  • Total revenue collected
  • Cost of prizes
  • Net proceeds
  • How the net proceeds were used
Many states require you to file a post-raffle report with the same office that issued your permit. Even if your state does not require it, keeping clean records protects your department in case of an audit or a complaint.

Action item: Set up a separate line item in your treasurer's ledger for raffle income and expenses before you sell the first ticket.

Step 6: Handle the Drawing Properly

The drawing itself needs to be fair and transparent. Best practices:

  • Hold the drawing at a public event where ticket holders can attend. If they cannot attend, state clearly on the ticket that "winner need not be present."
  • Use a transparent, verifiable method. Draw tickets from a drum or container in front of witnesses. Do not draw names from a hat in the back office.
  • Record the drawing. Take a video on a phone. This protects you if anyone disputes the result.
  • Announce the winner publicly. Post it on your website and social media. Contact the winner directly.
  • Have at least two officers present to witness and verify the drawing.

Step 7: Common Prize Categories and What to Watch

Firearms Raffles

Gun raffles are extremely popular for fire department fundraisers. But they come with extra rules:

  • The winner must pass a federal background check before taking possession of the firearm. You cannot hand someone a shotgun at the drawing.
  • Partner with a licensed FFL dealer. The winner goes to the dealer, completes the 4473 form, passes the background check, and picks up the firearm there.
  • Some states prohibit firearm raffles entirely. Check your state law.

Alcohol Raffles

Raffling alcohol (e.g., a basket of wine) is prohibited or restricted in many states. Some states allow it only if you have a liquor license. When in doubt, skip it.

Cash Raffles

Some states prohibit cash prizes in raffles. Others allow them but with lower limits. A 50/50 raffle (half the pot goes to the winner, half to the department) is technically a cash raffle and is subject to these rules.

Vehicle or Large Equipment Raffles

If you are raffling a car, truck, ATV, or boat, be aware that title transfer, sales tax, and registration fees may apply. Clarify in your rules whether the winner is responsible for these costs.

Step 8: Promote It Right

Once your legal ducks are in a row, promote the raffle hard:

  • Post it on your department website and Facebook page with clear details: prize, ticket price, drawing date, and where to buy
  • Have members sell tickets at every public event, practice night, and community gathering
  • Put up flyers at local businesses (ask permission first)
  • If your state allows online ticket sales, set up a ticket page and share the link everywhere
Track your ticket sales carefully. Number every ticket. Know who bought what. When the drawing comes, you should be able to account for every ticket sold.

Step 9: After the Drawing

  • File any required post-raffle reports with your state or county
  • Issue W-2G forms to winners of prizes worth $600 or more
  • Post the results publicly — winner name (with their permission), prize awarded, total raised
  • Deposit the net proceeds and record the income properly in your books
  • Thank your ticket buyers. A short post or email: "Thanks to everyone who supported our annual raffle. We raised $8,500 which will fund new turnout gear for 4 volunteers."
You can collect buyer contact information during the ticket sale process and add them to your department's donor list. Having a tool like Station Donations to manage your donor contacts makes follow-up simple — every person who buys a ticket is a potential future donor.

The Bottom Line

Raffles are one of the highest-margin fundraisers a fire department can run. A $10,000 raffle with a $1,500 prize nets you $8,500 in profit. But cutting legal corners can cost you far more than the raffle raises.

Do the homework. Get the permit. Follow the rules. Keep clean records. Run a fair drawing. Then do it again next year.

Ready to put this into action?

Station Donations gives your department a professional fundraising website in 5 minutes. Collect donations, sell event tickets, and track every dollar — free to start, no tech skills needed.