Michigan Raffle Laws: What You Need to Know

Michigan has specific laws governing all types of sweepstakes, raffles, and 50-50 drawings. It is common for charities to use these vehicles to raise money to further their charitable purpose. If your organization is raising money in this fashion, it is important you understand the relevant Michigan laws.

Michigan raffle laws come into play anytime there is a “game of chance.” A raffle is where tickets are sold and winners are determined on a random basis. Almost all raffles must be licensed by the State of Michigan.

The application process can take up to six weeks, so it is best to plan far in advance. The raffle application is available here.

For a consultation regarding your raffle, contact Revision Legal’s attorneys today by calling 855-473-8474 or completing the form below.

Michigan Charitable Gaming Law: A Comprehensive Overview

Michigan’s charitable gaming laws are governed primarily by the Charitable Organizations and Solicitations Act, MCL § 400.271 et seq., and the Bingo Act, MCL § 432.101 et seq. These statutes establish a comprehensive licensing and regulatory framework for all games of chance conducted for charitable purposes in Michigan. Understanding this framework is essential for any nonprofit, charity, or civic organization planning to conduct a raffle, bingo game, millionaire party, or other charitable gaming event.

What Is a Raffle Under Michigan Law?

Under MCL § 432.103, a raffle is a game of chance in which a participant is required to purchase a ticket for a chance to win a prize, and winners are determined by a random drawing from the tickets sold. The key elements that distinguish a raffle from other games of chance are (1) the requirement to purchase a ticket, (2) the random selection of winners, and (3) the awarding of a prize. Michigan law requires that virtually all raffles conducted within the state be licensed by the Michigan Bureau of State Lottery, Charitable Gaming Division.

Who Can Conduct a Licensed Raffle in Michigan?

Only qualified organizations may obtain a charitable gaming license in Michigan. Under MCL § 432.103, a qualified organization is a nonprofit organization that has been in existence for at least two years and has operated for purposes that are charitable, educational, civic, religious, fraternal, veterans, police or firefighter, or other types specifically identified in the statute. Newly formed organizations that have not been in existence for two years are generally not eligible for a raffle license, which is an important planning consideration for new nonprofits.

For-profit businesses cannot conduct charitable gaming under Michigan law, even if the proceeds are donated to charity. The organization conducting the raffle must be the licensed charitable organization itself.

Types of Raffle Licenses in Michigan

Michigan offers two primary types of raffle licenses for qualified organizations:

• Annual raffle license: Allows the organization to conduct multiple raffles throughout the year. This is the most common choice for organizations that conduct regular fundraising events. The annual license requires a one-time application fee and annual renewal.
• Single-event raffle license: Permits the organization to conduct a raffle in connection with a single event. This is appropriate for organizations that conduct only occasional one-time raffles and do not want to maintain an annual license.

Raffle Licensing Requirements and Application Process

To obtain a raffle license in Michigan, a qualified organization must submit an application to the Michigan Bureau of State Lottery, Charitable Gaming Division. The application requires:

• Documentation of the organization’s nonprofit status (e.g., IRS determination letter, articles of incorporation);
• Proof that the organization has been in existence for at least two years;
• A list of the organization’s officers and members;
• A description of the raffle to be conducted, including the date, location, and prizes; and
• Payment of the applicable license fee.

As noted above, the application process can take up to six weeks, so organizations must plan well in advance of the intended raffle date. Submitting an incomplete application will delay the process further, so organizations should work with legal counsel to ensure that all required documentation is assembled before filing.

Operational Requirements for Michigan Raffles

Michigan law imposes specific operational requirements on licensed raffle conduct. These include:

• Raffle tickets must bear the name of the licensed organization, the date and location of the drawing, the price of the ticket, and a sequential ticket number;
• All raffle proceeds must be used for the charitable purposes of the organization;
• Raffle activities must be conducted only by members of the licensed organization (paid or contracted employees of a for-profit company generally cannot conduct the raffle on behalf of the nonprofit);
• Accurate records of all ticket sales, expenses, and prize distributions must be maintained; and
• Required reports must be filed with the Charitable Gaming Division following the raffle event.

50-50 Drawings and Other Games of Chance

A 50-50 drawing—where ticket buyers split the total pot with the organization—is a form of raffle under Michigan law and requires the same licensing as a standard raffle. Similarly, door prize drawings at events may constitute a game of chance requiring a license depending on whether ticket purchase is required for entry.

Organizations that fail to obtain the required license before conducting a raffle in Michigan face potential civil and criminal penalties under MCL § 432.122. The penalties can include fines and, in egregious cases, misdemeanor charges. The risk is real and avoidable—obtaining the proper license before conducting any game of chance is both legally required and straightforward with proper advance planning.

Contact Revision Legal’s attorneys today if you have questions about Michigan raffle laws, need assistance with the license application process, or want to ensure that your charitable gaming activities comply with state law. Call 855-473-8474 or complete the contact form to schedule a consultation.

Sweepstakes vs. Raffles: Understanding the Legal Distinction

Many organizations confuse sweepstakes with raffles, but the legal distinction is significant under Michigan law. A sweepstakes does not require any consideration (payment) to enter—participants can enter for free. A raffle, by contrast, requires the purchase of a ticket and therefore involves consideration. The presence of consideration is what triggers Michigan’s licensing requirements. If your organization’s promotion requires participants to pay to enter, it is a raffle and requires a license. If free entry is available and all participants have an equal chance of winning regardless of whether they paid, the promotion may qualify as a sweepstakes and may not require a raffle license.

The no-purchase-necessary rule is critical for avoiding the classification of a promotion as an illegal lottery or an unlicensed raffle. Many organizations that have designed a promotion with a “buy or enter free” model have inadvertently created compliance problems because the free entry mechanism was not truly equal to the paid entry. Our attorneys advise organizations on designing compliant promotions that achieve their fundraising or marketing objectives while satisfying Michigan’s charitable gaming and sweepstakes laws. Contact us today for a consultation.

Michigan also has specific regulations for “millionaire parties“—charitable gaming events where participants use simulated currency to play casino-style games. Millionaire parties are authorized under the Bingo Act and require a separate millionaire party license. Organizations that want to conduct a millionaire party in Michigan must apply at least 30 days before the event and comply with specific requirements regarding the use of licensed equipment, the conduct of the event, and the use of proceeds. These events can be excellent fundraisers when properly licensed, but they carry significant compliance obligations that require careful advance planning with experienced legal counsel.