In Michigan, a raffle is legal only if a qualified nonprofit organization runs it under a license from the Michigan Lottery’s Charitable Gaming Division. The governing statute is the Traxler-McCauley-Law-Bowman Bingo Act, MCL 432.101 et seq., which divides raffles into small raffles (total prizes of $500 or less per occasion) and large raffles (prizes of more than $500). Businesses, individuals, and organizations that have not been qualified by the Division generally cannot sell raffle tickets, even when every dollar goes to a good cause.
Charities, schools, churches, booster clubs, and veterans’ groups rely on raffles because they are simple and profitable. They are also regulated more closely than many organizers expect. This guide covers who can hold a license, how the two license types work, what the application requires, how 50/50 drawings are treated, and what can happen when a raffle runs without a license.
What Counts as a Raffle in Michigan?
The Bingo Act defines a raffle as an event for which raffle tickets are sold and at which one or more winners are determined, either by randomly selecting stubs from all of the tickets sold or by an alternative method approved in writing by the Bureau of State Lottery, and a preannounced prize is awarded (MCL 432.103a(f)). The Division’s Raffle Guide puts it more plainly: if you charge people, or require them to donate or provide something of value, to take part in a drawing for a prize, you are conducting a raffle.
That is true even when every prize is donated. The Division’s raffle FAQ confirms that a license is required regardless of whether prizes were purchased or donated. Silent auctions are different: because they are not games of chance, they do not require a raffle license.
Raffles vs. Sweepstakes and Promotional Drawings
Outside the Bingo Act, Michigan’s Penal Code prohibits setting up or promoting a lottery or gift enterprise “except as otherwise provided by law,” and it specifically bars knowingly allowing money or property to be raffled off in a building a person owns or controls (MCL 750.372). A violation is a misdemeanor punishable by up to two years in prison or a fine of up to $1,000. The statute exempts a promotional drawing that is clearly occasional and ancillary to a person’s primary business, but that exemption does not cover a scheme in which people pay money solely for the chance to win or buy a product for substantially more than its fair market value to enter.
In practice, that means a for-profit business generally cannot sell chances to win a prize. Businesses that want to run a giveaway usually structure it as a free-entry sweepstakes instead. Our articles on internet sweepstakes law and online contest laws for businesses explain how those promotions differ from raffles.
Who Can Conduct a Licensed Raffle?
Only a “qualified organization” may obtain a raffle license. Under MCL 432.103a(d), that means either:
- A bona fide religious, educational, service, senior citizens, fraternal, or veterans’ organization that operates without profit to its members and that either has existed continuously as an organization for five years or is tax-exempt under section 501(c) of the Internal Revenue Code; or
- For raffles only, a component of the military or the Michigan National Guard whose members are in active service or active state service.
Political committees organized under the Michigan Campaign Finance Act are expressly excluded. An organization must also be qualified by the Charitable Gaming Division before any license can be issued, although qualification documents can be submitted together with the first raffle application.
The commissioner has limited authority to waive qualification requirements under “extreme hardship” conditions, for a nonprofit or even for an individual or group of individuals, but only if the entire proceeds, less actual reasonable expenses, go to a charitable purpose and no one involved in running the event is compensated (MCL 432.104a(2)-(3)). Those waivers are discretionary and should never be assumed.
Small Raffle vs. Large Raffle Licenses
The type of license depends on the total value of the prizes. Donated prizes are valued at the retail price they would have cost; for handmade items, the donor sets the value.
- Small raffle: the total value of all prizes does not exceed $500 during one occasion (MCL 432.103a(k)). The Division counts any ticket-seller incentive prize toward the $500 limit. The fee is $15 for up to three drawing dates, plus $5 for each additional date.
- Large raffle: the total value of all prizes exceeds $500 per occasion (MCL 432.103(b)). The fee is $50 per drawing date (MCL 432.104a).
A qualified organization may obtain an unlimited number of small and large raffle licenses (MCL 432.105d(1)). Only one small raffle license may be issued for a location each day, and when a small raffle license covers more than one date, every drawing must be held at the same location.
The $100 Exempt Raffle
A qualified organization does not need a license for a raffle held at a single gathering it sponsors if there is no presale of tickets and the total retail value of all prizes awarded that day is $100 or less (MCL 432.105d(4)). The Raffle Guide adds that the organization must already be qualified with the Division and that the gathering’s primary purpose must be something other than the raffle. A club holding a 50/50 drawing at its bar every day, for example, does not qualify, because its operating hours are not a single gathering.
Applying for a Michigan Raffle License
Applications go to the Charitable Gaming Division on its prescribed form. Under MCL 432.104, the application must identify the organization and its officers, the location and dates of the event, the members responsible for conducting it, facts showing that the organization is qualified, and a sworn statement of nonprofit status signed by the principal officer. Timing matters:
- Applications may be submitted up to 18 months before the drawing.
- The Division advises allowing up to four weeks for qualification and processing.
- Preprinted tickets must show the license number, so leave time to print and sell tickets after the license is issued.
- Requests to change a drawing date, time, or location must be made in writing at least 20 days before the original drawing date.
Once a license number has been issued, the event may be advertised by any legal means, and the license number must appear in the advertising. The Charitable Gaming Division’s raffle page provides the current application, rules, and ticket accountability forms.
Running the Raffle: Tickets, 50/50 Drawings, and Records
The Division’s rules and Raffle Guide impose practical requirements that trip up many first-time organizers:
- Preprinted tickets are required whenever tickets are sold before the day of the event. Each ticket must show the licensee’s name, the license number, the word “Raffle,” the date, time, and location of the drawing, the ticket price, the top prize, and a unique sequential number, and it may not use the words “Lotto” or “Lottery.”
- Roll-type tickets may be used only for in-house raffles, where all tickets are sold and all prizes are awarded at the licensed location during the licensed hours.
- Age limits: raffle ticket buyers and sellers must be at least 18 years old.
- Drawing location: drawings may take place only at the location stated on the license.
- Reporting: the principal officer must review and sign the financial statement and make sure it reaches the Division by the 10th day of the month following the raffle.
Are 50/50 Raffles Legal in Michigan?
Yes, when they are licensed. A 50/50 drawing, in which half of ticket sales goes to the winner and the organization keeps the rest, is simply a raffle, and the Division describes it as a common form of in-house raffle. It needs a small or large raffle license based on the prize amount unless it satisfies every condition of the $100 exemption.
Can You Sell Raffle Tickets Online?
Proceed with caution. The Bingo Act does not expressly authorize internet raffle ticket sales, and its definition of a raffle is built around drawing stubs from the tickets sold unless the Bureau approves an alternative method in writing. The Division’s Raffle Guide likewise describes paper tickets with stubs completed by the purchaser. Before selling tickets through a website, app, or third-party fundraising platform, get written guidance from the Charitable Gaming Division.
Penalties for Unlicensed or Noncompliant Raffles
The Bingo Act shields raffle activity from other gambling laws only when that activity is conducted under the Act and its rules (MCL 432.119). A raffle run without a required license loses that protection and can fall within the Penal Code’s lottery prohibition in MCL 750.372, a misdemeanor punishable by up to two years in prison or a $1,000 fine.
For licensed organizations, the commissioner may deny, suspend, summarily suspend for up to 60 days, or revoke a license when the licensee or its officers, directors, agents, members, or employees violate the Act or its rules (MCL 432.116). A licensee whose license is revoked is ineligible to apply for a new license for two years, and a person convicted of a gambling offense may not serve as an officer of a licensee or help conduct a raffle for one year after the conviction becomes final (MCL 432.118).
Plan Your Raffle Before You Print Tickets
Most raffle problems are avoidable: confirm your organization is qualified, choose the right license for the prize value, print compliant tickets, and keep clean records. The analysis gets more complicated when a business sponsor, event venue, or online platform is involved, or when a drawing is tied to a broader promotion governed by sponsorship and vendor contracts.
If your organization is planning a raffle, 50/50 drawing, or prize promotion in Michigan, the business attorneys at Revision Legal can review your structure, licensing, and promotional materials before tickets go on sale. Contact us through the form on this page or call (855) 473-8474.
