Disclaimer: This article offers general information and is not intended as legal or professional advice. You should consult with legal counsel regarding your specific situation. While the information presented is believed to be factual and current as of August 31, 2021, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subject discussed.
Charitable gaming can be a fantastic tool for cost-effective fundraising while driving community engagement. With a great balance of low cost, easy implementation, and wide appeal, charitable gaming can be a great idea for nonprofits, charities, and foundations. Charitable gaming events like 50/50, Catch the Ace, and Sweepstakes are effective ways to raise both awareness and money for an organization.
Charitable gaming and raffles regulatory guidance for Texas
How does the state of Texas define charitable gaming?
The state of Texas recognizes raffles and bingo as charitable gaming activities.
- Raffles: The state of Texas defines raffles as "the award of one or more prizes by chance at a single occasion among a single pool or group of persons who have paid or promised a thing of value for a ticket that represents a chance to win a prize."
- Bingo: Bingo is authorized under Texas state law. However, each county is required to pass its own laws allowing or barring the game. At present, 226 out of 254 Texas counties fully or partially allow bingo.
Who can conduct online charitable gaming events in Texas?
In the state of Texas, the Charitable Raffle Enabling Act (CREA), permits charitable organizations to hold up to two raffles per calendar year, with certain specified restrictions. Charitable organizations include qualified religious societies, qualified volunteer fire departments, qualified volunteer emergency medical services, or qualified nonprofit organizations.
Texas allows for bingo to be run by qualified religious societies, qualified volunteer fire departments, qualified volunteer emergency medical services, or qualified nonprofit organizations.
Here are detailed definitions for qualifying organization types:
- Qualified nonprofit organization: An unincorporated association or a corporation that does not distribute any of its income to its members, officers, or governing body, other than as reasonable compensation for services and has obtained tax-exempt status under Section 501(c).
- Qualified religious society: Must have been in existence in Texas for at least 10 years and does not distribute any of its income to its members, officers, or governing body.
- Qualified volunteer emergency medical service: Any organization that actively provides emergency medical, rescue, or ambulance services; does not pay its members compensation other than nominal compensation; and does not distribute any of its income to its members, officers, or governing body other than for reimbursement of expenses.
- Qualified volunteer fire department: An association that operates fire-fighting equipment, is organized primarily to provide and actively provides fire-fighting services, and does not pay its members compensation other than nominal compensation.
Note that these are general definitions and are not all-inclusive. There are differences in the exact requirements for raffles and bingo. For more information, consult the text of the laws:
Texas State Code - Charitable Raffles
Texas State Code - Bingo
Licensing and registration requirements for online charitable gaming (raffles and bingo) in Texas
The state of Texas does not require organizations to have any license or permit to conduct a raffle. Any raffle must only be conducted by a qualified organization.
Bingo may be run in Texas by qualified organizations with a proper license.
Types of charitable bingo licenses in Texas
Texas offers both renewable annual licenses and non-annual temporary licenses.
- Temporary licenses are valid for a single six-hour period during a single calendar day. An organization may not receive more than six such licenses in a single calendar year. Each date must be registered and approved in advance.
- Annual licenses entitle holders to receive no more than 24 temporary licenses in a 12-month period. The dates of the game for an annual license holder do not need to be included in the application.
Regular annual licenses are classified for Class A to Class J based on the amount of gross annual receipts. This classification determines the price of the license fee.
How much does a charitable bingo license cost in Texas?
The price of a charitable bingo license in Texas varies based on the amount of gross annual receipts. It is possible to obtain a two-year license by paying double the application fee.
How to apply for a charitable bingo license in Texas?
The specifics of applying for a bingo license in Texas vary based on the type of organization applying. To apply for a regular annual license, submit the proper form for your organization. A list of forms can be found on the Texas Lottery Commission website.
What is the validity of a charitable bingo license in Texas?.
Charitable bingo licenses in Texas are valid for either 12 or 24 months after the date of issuance or renewal.
Charitable gaming resources for Texas
Texas Comptroller of Public Accounts
Lyndon B. Johnson State Office Building
111 East 17th Street
Austin, TX 78774
Office of the Attorney General
PO Box 12548
Austin, TX 78711-2548
Office of the Governor
P.O. Box 12428
Austin, Texas 78711-2428