Why is it illegal to hold online raffles in the US?

Also, is there any way to get around this law?

Asked on September 25, 2011 under Business Law, West Virginia


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Each state in this country has its own laws as to whether or not a raffle let alone an online raffle is legal or illegal. The foundation to establish whether or not a raffle is legal or not is that the entity holding the raffle has to be a recognized tax exempt charitable organization under Internal Revenue Service guidelines and regulations (federal law).

If this is established, then is the charitable organization allowed to do business in a given state?In order to do so, the charitable entity (usually a corportation) must register with a given state's Secretary of State to do business and pay a yearly fee to do so.

Next, does the given state allow raffles and if so, does it allow online raflles. Pretty much all states that allow raffles mandate that the entity holding the raffle be a recognized charitable organization under federal law.

Not all states preclude online raffles. It is determined on a state by state basis.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.