As a non-profit organization, one of the easiest ways to raise your much-needed funds is through some sort of game of chance. It could be a casino night or a limited-entry raffle for a new car. You could offer a 50/50 contest or just a raffle for a gift basket or a pair of concert tickets.
Truly the options are endless as to the ways to raise money through games of chance.
Too often, however, non-profit organizations inadvertently break the law by requiring a purchase of a ticket, an entry fee or some other barrier to entry that is prohibited.
It is a serious issue with serious repercussions. If your organization is found to violate state laws dealing with games of chance, you could be charged with a second-degree misdemeanor for a “deceptive and unfair trade practice” with potentially 60 days in jail and a $500 fine per offense. You could also face civil penalties of up to $1,000.
If your non-profit organization is looking to hold a raffle or a sweepstakes, please reach out to The Orlando Law Group today. Our attorneys specialize in helping non-profit organizations with all types of legal issues facing non-profit organizations, like games of chance.
No one goes after these types of issues, right?
Most people would think there is no big deal in holding a raffle or a casino night to raise money for a great cause. Every day in Florida, someone is holding a charity poker tournament, a casino night, a raffle drawing or something else.
And in most cases, law enforcement does not bother them.
It does happen, however.
In fact, it has happened to people and organizations The Orlando Law Group works with.
Several years ago, a non-profit organization was holding a charity poker tournament in Downtown Orlando and the marquee outside the venue read “Casino Night Tonight.” Inside were more than 100 leaders, elected officials and donors supporting this non-profit organization.
At the time, agencies were cracking down on illegal casinos that were being operated throughout the state. The local law enforcement came into the venue and stopped the poker tournament to ensure it wasn’t gambling.
Luckily for the non-profit organization, all of the rules were followed, and a professional casino company was hired. After around 30 minutes, the all-clear was given and the festivities resumed.
If the rules were not followed and law enforcement determined the tournament was gambling, it would have been a lot worse and maybe even been on the evening news.
The Laws are fairly easy to follow
In Florida, the statutes that govern non-profit organization raffles and sweepstakes, FS 849.0935, are fairly straightforward.
It is illegal in Florida:
(a) To design, engage in, promote, or conduct any drawing in which the winner is predetermined by means of matching, instant win, or preselected sweepstakes or otherwise or in which the selection of the winners is in any way rigged;
(b) To require an entry fee, donation, substantial consideration, payment, proof of purchase, or contribution as a condition of entering the drawing or of being selected to win a prize. However, this paragraph does not prohibit an organization from suggesting a minimum donation or from including a statement of such suggested minimum donation on any printed material used in connection with the fundraising event or drawing;
(c) To condition the drawing on a minimum number of tickets having been disbursed to contributors or on a minimum amount of contributions having been received;
(d) To arbitrarily remove, disqualify, disallow, or reject any entry or to discriminate in any manner between entrants who gave contributions to the organization and those who did not give such contributions;
(e) To fail to promptly notify, at the address set forth on the entry blank, any person whose entry is selected to win of the fact that he or she won;
(f) To fail to award all prizes offered;
(g) To print, publish, or circulate literature or advertising material used in connection with the drawing which is false, deceptive, or misleading;
(h) To cancel a drawing; or
(i) To condition the acquisition or giveaway of any prize upon the receipt of voluntary donations or contributions.
Be careful with entry fees
Perhaps the most common mistake non-profit organizations make is in charging an entry fee to participate in the casino night or a raffle and charity poker tournaments are often among the biggest offenders.
For many of those types of tournaments, the marketing materials say “$100 buy-in” to participate in the tournament. Then, to entice players, the organization shows the grand prize is a trip to Las Vegas.
That is illegal in Florida.
After all, if you must spend money to win, it is technically gambling. So instead, you need to ask for a “suggested minimum donation” to play in the poker tournament. And if someone wants to play for less or even for free, you must let them. It’s the law.
The same holds for any raffle contest, no matter how small. If someone asks for a free entry, you are required to give it to them.
While that may sound like you’re going to have a raffle filled with free entries when you are trying to raise money, that rarely happens and there are steps you can take to discourage free entries.
For instance, you could offer 10 raffle tickets with a purchase instead of just one. You can make it so that someone has to use the post office to request a free ticket or entry. You can provide a free entry to receive 1,000 chips in the poker tournament, but then offer an additional 10,000 chips for $100.
The important thing is that you cannot deny free entry to anyone.
Disclosures are required
One of the other places where non-profit organizations run afoul of the law is in disclosures for raffles and sweepstakes. The non-profit organization will put the raffle drawing on its website and on social media to draw attention and raise money for the non-profit organization, but the state requires certain language.
The law is specific in that all tickets, brochures, advertising and forms must show:
(a) The rules governing the conduct and operation of the drawing.
(b) The full name of the organization and its principal place of business.
(c) The source of the funds used to award cash prizes or to purchase prizes.
(d) The date, hour, and place where the winner will be chosen and the prizes will be awarded, unless the brochures, advertisements, notices, tickets, or entry blanks are not offered to the public more than 3 days prior to the drawing.
(e) That no purchase or contribution is necessary.
While the law states that it must be “conspicuous,” it does not say where or how large it must be. And while it seems like a lot, a simple disclaimer can work. It can be something like this:
Doing Good Inc. will be conducting a hand drawing of raffle entries on January 1, 2026 at 2 p.m. at our office at 123 Any Street, Orlando. No purchase is necessary for the raffle of donated items.
Of course, since this is a legal requirement, it is critical to work with your attorney to ensure it is properly written for your unique circumstances.
One thing to note. If your non-profit organization is selling raffle tickets at an event – and only at the event – and drawing prizes that night, you will not need to list where and when the raffle will take place.
Just a reminder. Failure to follow these rules is a second-degree misdemeanor.
Large Prizes Have Unique Rules
One of the proven ways to raise money is to offer a limited number of raffle tickets for a high-value prize, like a great trip, a car lease or something like that. The size of the prize generates significant excitement for the non-profit organization and its donors, who gladly pay $100 a ticket for a one-in-200 chance at a Mercedes Benz.
If you don’t follow the law, you could end up paying $1,000 in fines to the state, in addition to being charged with a second-degree misdemeanor.
The cut-off point for this section of the law is when a non-profit organization offers a prize valued at $5,000 or more. At that level, there are very specific rules that you must follow.
First, you have to register for the contest with the state’s consumer affairs division and you need to build a page on your website with all of the rules of the contest. You will need to pay $100 to the state as a filing fee.
Then, you need to establish a trust account at a bank that will hold the amount of money that is required to pay the winners. The bank must then file a form from the state that verifies you opened the account and the amount of money in the account. You can also purchase a surety bond.
However, if you have registered with the state a similar contest for five consecutive years without any incident, the state may waive the requirements to have a trust account or a surety bond.
All of the above must be done at least seven days before the contest starts.
Finally, after you have given the prizes away, you must send to the state a certified list of all winners who received a prize of more than $25, including the value of the prize. You’re also required to keep these on file for anyone who requests them.
It can get complicated, so here’s the exact language found in Florida Statute 849.094:
Every operator of a game promotion in which the total announced value of the prizes offered is greater than $5,000 shall provide the Department of Agriculture and Consumer Services with a certified list of the names and addresses of all persons, whether from this state or from another state, who have won prizes which have a value of more than $25, the value of such prizes, and the dates when the prizes were won within 60 days after such winners have been finally determined.
The operator shall provide a copy of the list of winners, without charge, to any person who requests it. In lieu of the foregoing, the operator of a game promotion may, at his or her option, publish the same information about the winners in a Florida newspaper of general circulation within 60 days after such winners have been determined and shall provide to the Department of Agriculture and Consumer Services a certified copy of the publication containing the information about the winners.
The operator of a game promotion is not required to notify a winner by mail or by telephone when the winner is already in possession of a game card from which the winner can determine that he or she has won a designated prize. All winning entries shall be held by the operator for a period of 90 days after the close or completion of the game.
That’s a lot of work for a large prize pool, but it can be worth it depending on your non-profit organization’s needs.
Every state is different, so make sure you work with an attorney when planning any games of chance to ensure you are following state law. Florida’s full statute on charitable games of chance can be found here.
In March, The Orlando Law Group will be holding its first non-profit boot camp, where our attorneys will work closely with non-profit leaders to ensure the non-profit organization is following all the legal aspects required.
By attending, non-profits can truly give donors and the community the comfort that their non-profit is one being run with the highest standards.
The attorneys at The Orlando Law Group help non-profit organizations in Orlando, Waterford Lakes, Altamonte Springs, Winter Garden, Lake Nona, St. Cloud, Kissimmee, and throughout Central Florida.
If you have questions about anything discussed in this article or other legal matters, give our office a call at 407-512-4394 or fill out our online contact form to schedule a consultation to discuss your case. We have an office conveniently located at 12301 Lake Underhill Rd, Suite 213, Orlando, FL 32828, as well as offices in Seminole, Osceola and West Orange counties to assist you.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.