A raffle is a game of chance in which a participant is required to purchase a ticket for a chance to win a prize, with the winner to be determined by random drawing.
I am not raising money for a charity; I can conduct a raffle, right?
No. Only qualified 501(c)(3) or 501(c)(19) organizations that have applied and been approved are allowed to hold a raffle. Holding a raffle would be a violation of law and subject to criminal prosecution.
What are the consequences for holding an unauthorized event?
If the Secretary of State is notified of an unapproved event, the Division will notify the local district attorney general. Conducting an unapproved game of chance may be a violation of the criminal gaming statute, and local law enforcement has jurisdiction to investigate and prosecute the individuals responsible for the event.
Who is allowed to hold a raffle?
Only a qualified 501(c)(3) or 501(c)(19) organization that has submitted an application to the Division of Charitable Solicitations and Gaming and that has been approved by the Tennessee General Assembly can hold a raffle.
What types of gaming events are 501(c)(3) or 501(c)(19) organizations allowed to hold?
Raffles, reverse raffles, cakewalks, cake wheels, and bingo.
Are there individuals who are not allowed to purchase tickets?
Yes. The individuals who are not allowed to purchase tickets include:
Any member of the board of directors of a 501(c)(3) or 501(c)(19) organization authorized by the general assembly to operate an annual event for such organization.
Any officer or employee of a 501(c)(3) or 501(c)(19) organization authorized by the general assembly to operate an annual event for such organization.
Any immediate family member residing in the same household as the board of directors or an officer/employee of the organization. (The Charitable Gaming Law defines immediate family as spouse, child, step-child, brother, sister, son-in-law, daughter-in-law, parent or grandparent)
Any member of the general assembly during such member's term of office as a member of the general assembly.
The Secretary of State or any employee of the Secretary during the Secretary's term of office and such employee's term of employment with the Secretary.
Any vendors including employees, agents, or subcontractors (also includes immediate family members of the same household) who provide printing services, telephone services, and any records, devices, or other gaming-related supplies and those who provide prizes for the authorized annual gaming event.
What happens if the reports are not filed?
An organization that fails to submit the report by 90 days will be responsible for a $10.00 per month late fee. If a report is not filed at all, action may be taken against the organization. Failure to timely file in 2 of 3 consecutive gaming event periods could result in disqualification from conducting future events.
Are accounting reports or post event financial data required?
Yes. A financial report is due 90 days after the annual event date stated in your application. If gross revenue from an event exceeds $75,000 an audited financial statement is also required. Also, organizations must return at least 25% of its gross proceeds of the event back to its stated charitable purpose or program.
Are political candidates and campaigns allowed to conduct raffles or other games of chance?
No. The law only allows qualified 501(c)(3) and 501(c)(19) organizations to hold gaming events. Political candidates and campaigns for public office are not considered 501(c)(3) or 501(c)(19) tax exempt organizations.
Who must comply?
State and local government: Agencies distributing federal assistance or entities distributing federal assistance to the state or local government entity.
Higher education: college, university, or other post-secondary institution
Local education agency or system of vocational education, or other school system
An entire corporation, partnership, or other private organization, or an entire sole proprietorship
The entire plant or private corporation or other organization which is a geographically separate facility to which federal financial assistance is extended.
What is Title VI?
Title VI of the 1964 Civil Rights Act says, ”No person in the United States shall, on the grounds of race, color or national origin, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under any program or activity receiving federal financial assistance.” 42 U.S.C.§2000d
Whom do I contact if I find out about a game of chance that is not approved?
Please contact the district attorney for the county in which you believe the game of chance is taking place or contact Charitable Solicitations at (615) 741-2555 and the Division will notify the appropriate authorities.
If the political candidate or campaign asks for a donation to be entered into a drawing, is that allowed?
No. If someone is required to pay for a chance to win a prize, it is considered a raffle. Only qualified and approved 501(c)(3) and 501(c)(19) organizations may hold a raffle. It does not matter that the payment is called a “donation.”
When can an organization begin selling tickets?
Organizations with an approved gaming event can begin selling tickets 120 days before the event.
What gaming events are not allowed?
Poker games and/or tournaments, pull-tabs, punchboards, video lottery games, instant and online lottery games, keno, and games of chance associated with casinos including, but not limited to slot machines, roulette wheels, and the like. Events such as bingo or “casino nights” that are purely recreational in nature and in which participants are not required to pay to participate with the promise of a prize, jackpot, or “winner-takes-all” would not fall into this category.
May two 501(c)(3) or 501(c)(19) organizations jointly operate an annual event?
Yes, however each participating organization must file an application and each pay the required fee. All applicants must qualify. If one organization fails to qualify, then participants will be rejected.
What does Title VI not do?
Does not apply to Federal assistance provided through insurance or guaranty contracts, (e.g. FHA loan insurance).
Does not apply to employment, except where employment practices result in discrimination against program beneficiaries or where the purpose of the Federal assistance is to provide employment.
Does not apply to direct benefit programs such as Social Security.
Does not apply only to contracts and set-aside programs.
If 25% is not returned to the charitable purpose or program, what does the organization need to do?
The nonprofit must file a notice with the Division stating the reason less than 25% was returned to its charitable purpose or program. If this happens in two (2) consecutive years, the nonprofit will be disqualified from applying or holding future gaming events for a period of five (5) years.
The General Assembly recently passed a bill I am interested in, where can I find this?
After bills are passed by the General Assembly, they are signed by both Speakers and the Governor. Our office is tasked with chaptering and posting these online.
Once a bill is received by our office, it may take a day or so to get it posted online. Acts and resolutions from the most recent General Assembly, as well as previous sessions, can be found here.
You can view the status of a bill by visiting the General Assembly’s website here.
The General Assembly passed a Private Act pertaining to my local government, how do I get a copy of this?
Once receiving a private act from the General Assembly, our office will mail a certified copy to the local governing body the act applies to. This will also include instructions on how to notify the Secretary of State of the outcome once voted on by the local government.
Title VI is a mechanism that directs the federal financial assistance, which drives or promotes economic development. By legislative mandate, Title VI examines the following public policy issues:
Accessibility for all persons
Infrastructure development
Accountability in public funds expenditures
Minority participation in decision making
Disparate impact
Program service delivery
Economic empowerment
Public-Private partnerships in part or whole with public funds
Environmental Justice
Site and location of facilities
How do I know if a gaming event is approved?
The Division of Charitable Solicitations and Gaming maintains a list of approved events on its website at Gaming Events.
Are raffles or other games of chance allowed in the State of Tennessee?
Raffles and games of chance are considered gambling, which is prohibited in Tennessee. However, certain charitable organizations are allowed to apply to have one raffle, reverse raffle, cakewalk or cakewheel each year if that event is conducted in accordance with the procedures set forth in the Tennessee Charitable Gaming Implementation Law.
What “Programs or Activities” are covered by Title VI?
To ensure the broad, institution wide application of Title VI and other civil rights statutes Congress passed The Civil Rights Restoration Act of 1987. This act clarifies the definition of “programs and activities” covered by the nondiscrimination provisions of civil rights statutes. The revised definition states that discrimination is prohibited throughout an entire agency or institution, if any part of that agency or institution receives Federal financial assistance.
Examples:
(A) a department, agency, special purpose district, or other instrumentality of a state or local government; or (B) the entity of such state or local government that distributes such assistance and each such department or agency (and each other state or local government entity) to which the assistance is extended, in the case of assistance to a state or local government;
(A) a college, university, or other postsecondary institution, or a public system of education; or system of vocational education, or other school system.
Title VI applies to discrimination throughout an agency, not just to actions involving the federally assisted program. Therefore, if an agency receives any federal financial assistance for any program or activity the entire agency is required to comply with Title VI, not just that particular program. Example: The Harriet Tubman Express program receives money from HUD, the agency /division that Harriet Tubman Express programs are under (Health Services) must also be in compliance with Title VI rules and regulations.
What is Federal Financial Assistance?
Federal financial assistance means more than just money. It is also aid that enhances the ability to improve or expand allocation of a recipient’s own resources.
Examples:
Student aid (releases recipient’s funds for other uses)
Training of employees (permits better use of the employer)
Grants and Loans, tax-exempt bonds
Property
Loan of Personnel
Tax incentives and tax-exempt status
Technical assistance, etc.
If I don’t call it a raffle or sell tickets, but ask for donations for a chance to win a prize, is that allowed?
No. An event is considered a raffle if someone must pay for a chance to win a prize and would be a violation of law. It does not matter that the payment is called a “donation.”
What is a qualified 501(c)(3) or 501(c)(19) organization?
A qualified 501(c)(3) or 501(c)(19) organization is a group that has been recognized by the Internal Revenue Service (IRS) for at least five years as a tax-exempt organization and which has been in continuous and active existence in the State of Tennessee. 501(c)(3) and 501(c)(19) tax-exempt status can only be granted by the IRS. To learn more about the application process for tax-exempt status, please visit the IRS's web page for Charities & Nonprofits.