Everyone loves a raffle. It’s so exciting to sit there with your ticket and hope that your number gets called and you’re the big winner. But is this also a way to make money? Here are some tips on how to set up a raffle business.
Before You Do Anything – Check the Laws
No surprise, before you try to set up a raffle business, you should check the laws in your state or jurisdiction. At their heart, raffles are a form of gambling (specifically a lottery), and in the United States and many other countries, gambling is tightly controlled. In some states, raffles are completely illegal. In a number of states, raffles are only allowed as a form of non-profit fundraising. In addition, you may also need to obtain a permit before running a raffle.
For example, in Delaware,
- only charitable organizations can run raffles
- net profits from permitted raffles are used solely for the achievement of the purposes of the organization as described in the organization’s by-laws
You only need a permit if the raffle ticket is more than $5 for a single drawing or more than $15 for multiple drawings, or the total prize is $5000 or more. But you still must be a qualified charitable organization.
So Can You Set Up a Raffle Business?
You may be able to set up a raffle business that works with non-profit organizations to run their raffles. That way, the proceeds are going to the charitable organization and you aren’t running an illegal lottery. You will first want to see what other organizations are out there providing this service and figure out what they charge and if you can do better. What special services do you want to be able to provide the charitable organizations? Will you help them assemble prizes or advertise the raffle? Will you handle accepting payments and dealing with any tax paperwork? Will you create an online portal to sell tickets?
You can also work to become an expert at the raffle laws in your jurisdiction and be able to help organizations figure out how to keep their raffles legal. You may have to be careful to only allow people who live in certain states to buy raffle tickets. In some cases, just selling a raffle ticket to someone in a state with different raffle laws can be prohibited.
The water is murky, but there is a place for an expert in raffles – and setting yourself up as that expert might be just the way to set up a raffle business and profit.
Megan is a 40-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
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