Highlights:
- Most jurisdictions require a gambling license for a raffle.
- 50/50 raffles also can be provided only with an official permit.
- There is no need to receive a license for charity raffles with no purchases from the client side.
- The first step to receiving a raffle license is choosing a suitable jurisdiction.
- Only players older than 16 or 18 may buy raffle tickets (the allowed age depends on the jurisdiction).
Do You Need a Gambling License for a Raffle?
Yes, as we mentioned, you need a gambling license for a raffle in most jurisdictions. In legal terms, lotteries, bingo, and raffles are gambling, and each operator should have a special permit to provide such activities. Thus, you should guarantee consumer protection and fair results. Moreover, running licensed raffles will not lead to legal actions, fines, or criminal charges as it might be with unlicensed gambling activities.
Nonetheless, some jurisdictions enable charitable raffles online without a gambling license. It means clients do not need to spend money to participate in such a lottery – and that’s why a license is not required.
IRS Rules
The IRS, or the Internal Revenue Service in the USA, considers raffles, lotteries, 21, bingo, and punch boards gambling activities. Thus, you must obtain a license to provide these services to your clients, avoiding tax implications.
The 50/50 raffle also requires a license. This type of raffle is a fundraising lottery in which ticket sales generate a cash prize. The winner receives 50% of the proceeds, while the remaining supports the designated charity.
How to Get a Gambling License for a Raffle
You must go through several steps to obtain a gaming license for a raffle. It involves the selection of the necessary jurisdiction, company registration, collection of a package of documents, etc. We describe all these stages in more detail below.
Choosing the Country & Location
Step 1
Check out the regulations and prices in different countries to pick the suitable jurisdiction for licensing. For instance, Curaçao is well-known for its quick registration process and affordable price. In contrast, Malta is stricter but has a flawless reputation. For North American operators, the Kahnawake jurisdiction offers favorable conditions for raffle licensing. If you are looking for a crypto-friendly regulator, select the Isle of Man.
Selecting License Type
Step 2
If you plan to hold raffles regularly, you should opt for a suitable license that covers the necessary gambling activities. In most cases, regulators offer two permit types: B2B and B2C. Your choice is B2C type, as this license enables you to provide gambling services to individuals.
Business Registration
Step 3
To receive a gambling license for raffles, you first need to open a company. Most authorities usually require your business entity to be registered in a specific region. Sometimes, regulations require the availability of a local director or representative.
Collection and Preparation of All the Documents
Step 4
Check out the list of the necessary documents to apply for a license and collect them. For instance, some of the mandatory documents are a business plan, passports of the company’s management, proof of financial stability, utility bills, software certification, etc.
Application for a Gambling License
Step 5
Submit the prepared application to the gambling regulator, paying pre-application and other fees. The price depends on the jurisdiction and its reputation. The review process may take from 3 weeks to several months.
Obtaining a Crypto License
Step 6
Once the regulator approves your application, you obtain a license to run raffles. You should operate according to the regulations, submit reports, and renew the permit according to the schedule.
List of All Required Documents
Here is a list of the necessary documents to apply for a license to sell raffle tickets legally:
- detailed business plan for your gambling business;
- documents that prove your financial stability (bank statement, for example);
- photocopies of utility bills and ID cards or passports (for the top management in the company);
- documents that prove your domain ownership and cybersecurity measures;
- RNG and AML certificates;
- criminal record certificates;
- CVs.
This list may have some changes according to the specific regulator requirements. The documentation requirements can vary by jurisdiction, with some like Anjouan offering more streamlined processes.
How Legal Pilot Can Help With Obtaining a Gambling License
Obtaining a gambling license for a raffle may be challenging for business owners, as this procedure requires a profound understanding of laws and regulatory frames in a particular region. Still, we encourage you to collaborate with Legal Pilot specialists to not only expedite the licensing process but also ensure full compliance with all regulatory requirements.
Our team will recommend the most profitable jurisdictions for company registration and assist in gathering all necessary documentation for the license application. Our professional help is your quick access to the necessary gambling license for a raffle. Remember that we are a private legal firm with over 10+ years of experience and over 100 satisfied clients who have successfully obtained their licenses across various jurisdictions.
Final Thoughts
So, we have described the cases when a gaming license for a raffle is required and explained the IRS terms. Moreover, we have analyzed all the steps to obtain the permit. This includes picking the suitable jurisdiction, company registration, license type selection, and applying. We also prepared a list of the necessary documents for obtaining the license: passports, CVs, RNG certificates, bank statements, and more.
Based on the information presented, we recommend closely checking the legal gambling terms in the jurisdiction before applying for a gaming license for a raffle. What’s more, pick regulators with minimal requirements and affordable prices to save money. If you have any doubts and you don’t want to waste your time and money, ask for professional help. Contact our managers at any time to initiate a licensing process.
FAQ
Regulatory authorities, gambling operators, software providers, and compliance officers are responsible for adherence to the laws.
No, it is not necessary to be a charity or nonprofit organization to run raffles.
No, in most jurisdictions, children cannot buy raffle tickets. This is allowed from citizens older than 16 (18 in some countries).
