Are house raffles legal in the United States?

17 January 2009
Posted in Organizing House Raffles

Although not a new phenomenon, win a house raffles have risen in popularity in the United States as homeowners explore new ways of "selling" their properties due to challenging market conditions. This has generated interest across the country, however gaming laws differ from one state to another. As a result, what constitutes a legal house raffle in California may not be considered legal where you live. Unfortunately, as we are not lawyers, we cannot provide any advice on the legality of house raffles in individual states or countries.

In the United States, house raffles can be legal if all proceeds benefit a registered non-profit organization. However, it is usually illegal to run a raffle or lottery to generate a profit for a business or an individual. That said, in some states even charitable raffles may be considered a form of lottery and therefore not deemed legal.

Beyond this, there may be other requirements to take into consideration. In some cases, the organization must have been in existence for a minimum number of years before being eligible to apply for a raffle or bingo license. Alternatively, a registered charity may be limited to a fixed number of raffles per year. There may also be constraints relating to the value of the property prize itself, as well as other aspects of the raffle.

Some charities have been using house raffles a successful fundraising mechanism for years. If you have identified a non-profit organization in your state that has experience with these issues, it may be worthwhile contacting them to discuss the possibility of featuring your own property in one of their forthcoming raffles. Alternatively, they may be able to suggest another charity that may be a more suitable partner instead.

Looking beyond traditional raffles, the landscape for house competitions is varied. In some jurisdictions, it is legal to organize a prize competition (as opposed to a games of chance) by introducing a degree of skill in the competition. This includes essay contests, Spot the Ball competitions or even Sudoku competitions. In fact, in some countries in Europe, house competitions are more commonplace than charity house raffles. As with raffles, the legality of skill competitions should be carefully assessed within your individual state. They may also be subject to a different tax treatment than raffles and from one country to another, particularly with regards to ticket sales.

In summary, anyone wishing to organize a house raffle or competition should research these various topics as soon as possible. Depending on your state, the process can be more or less lengthy and time consuming. In some cases, it may be worthwhile seeking professional advice to help fast-track this process and avoid any pitfalls along the way.

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