Raffle Amendment

Raffle Amendment SCR 1618

Raffle is defined in the proposed amendment to mean a game of chance in which each participant buys a ticket or tickets from a nonprofit organization, with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing.

The following limitations also are included in the constitutional amendment:

  • An organization shall not be able to use an electronic gaming or bending machine to sell tickets or conduct raffles.
  • An organization shall not contract with a professional raffle or other lottery vendor for the management, operation or conduct of any raffle; and
  • Raffles shall be licensed and regulated by the Office of Charitable Gaming in the Kansas Department of Revenue, or by a successor agency.

Definition of a raffle:

Raffle means a game of chance in which each participant buys a ticket or tickets from a nonprofit organization with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing.

If a nonprofit meets the criteria described in the constitutional amendment and the gross receipts are $25,000 or less, the organization does not need to apply for a raffle license.

Raffle frequently asked questions

A group of friends wants to sponsor a raffle for medical expenses for a family in our community. Is that legal?
Under the constitutional amendment approved by the voters of Kansas only a qualified nonprofit may legally conduct raffles in Kansas. This would not be legal.

Question: Must the organization be a nonprofit to qualify for a raffle license?
Yes, and it must meet the state requirements of a nonprofit.

Question: Can school districts conduct raffles?
Yes, each school within the district is considered a separate entity when conducting a raffle.

Question: Does the organization need a separate license every time they conduct a raffle?
The raffle license is valid for one year. There are no limitations on the number of raffles a licensee may conduct during that time period.

Question: When will the license expire?
All charitable gaming licenses expire June 30. This includes bingo and raffle licenses.

Question: What if the organization did not have a license and gross receipts exceeded $25,000?
The organization must contact the Kansas Department of Revenue. This will be handled on a case-by-case situation.

Question: What if I apply for a license and it is denied?
Licenses may be denied by the state. If that is the case and an organization has paid the licensee fee it may be refunded upon request.

Question: Is a 50/50 drawing considered a raffle?
Yes.

Question: Can an organization hire a professional company to conduct their raffle?
The state statutes do not allow for this to occur.

Question 10: What if the organization has their license suspended by the state, is there a refund?
No.

Question: What if the organization receives a raffle license and then does not host one? Can they receive a refund?
Contact the Kansas Department of Revenue at 785-368-8222.

Question: Can a business hold a raffle and donate the money to a nonprofit?
Only a non-profit may legally hold a raffle. Businesses do not qualify.

Question: Can I file and pay electronically?
Yes, the Kansas Department of Revenue encourages all taxpayers to do this. It saves time and postage. Log into the Kansas Customer Service Center at https:/www.kdor.org/TaxCenter

Online raffle application

Only nonprofits whose gross raffle receipts exceed $25,000 need to apply for a raffle license.

Applications must be filed and license received prior to ticket sales. Click here to access the Raffle License Application (BI-70)

NEW APPLICATION: All questions must be completed. The department reserves the right to request additional information or deny the application. Definitions of the five types of nonprofits may be found in the statutes. The organization must inform the department within 30 days of any changes in the information supplied in its most recent application filed with the department.

Line 1. This basic information regarding the organization is necessary for communications with the applicant.

Line 2. If you are unsure of the EIN you may contact customer service 785-291-3968.

Line 3. The person we may contact to answer questions regarding your license. All questions must be completed.

Line 4. Only check one type of non-profit organization. If you are uncertain which category best suits your organization check raffle statutes.

Line 5. If the organization is in the process of applying to the IRS for this status please check PENDING. If the organization does not have letter from the IRS with a non- profit status check NO.

Line 6. Please indicate the by-law status for the organization.

Line 7. Check yes or no.

Line 8. Include the name of the bank, credit union or financial institution used by the organization.

Line 9. All three positions and information must be included in this section. If there is not a Raffle Coordinator at the time of application then another officer or staff member working with the raffle must be listed.

Line 10. This information is required by statute.

Line 11. If the estimate goes over or under the gross receipts and a change in the licensee fee occurs the application must be amended by the organization. If a refund is in order the amount will be applied to the next year on the license fee. If the organization does not expect to conduct a raffle the following year and a refund is in order the request must be made in writing to the Kansas Department of Revenue. This information may either be amended immediately after the raffle or by the end of the fiscal year. Renewals will not be processed unless all information is current.

Signature: This must be completed with the knowledge and consent of both the Organization Officer and the Secretary of the organization.

Renewals

  • Licenses expire annually June 30. Enter only changes in the raffle application that have changed. This includes new dates of raffles, estimated gross receipts, and officers or coordinator.
  • Be sure to update the signature portion of the license application.
  • If the organization has not made the decision to host raffles in the preceding fiscal year they may wait until that decision has been made before renewing the application. All information must be updated at least 30 days prior to the selling of the first raffle ticket.

Raffle return and reconciliation

The organization may complete the return and reconciliation after each raffle and amend as necessary. However, all raffle gross receipts must be documented on the Raffle Return and Reconciliation form by June 30 of the license fiscal year. Any adjustments in the annual fee structure must be completed by June 30. Renewals will not be approved until the reconciliation has been completed.

If an organization exceeds or falls short of the projected gross receipts those results must be amended on the return. If an overpayment for the licensee fee has occurred the amount will be applied to the renewal. If an organization desires to have a refund issued they must make their request in writing to the Kansas Department of Revenue within 60 days. The license number must be included on the request.

History:

Kansas voters approved a state constitutional amendment during the November 2014 election which allowed the Kansas legislature to authorize the licensing and conduct of charitable raffles by certain nonprofit organizations. The constitutional amendment provided:

Regulation of “raffles” authorized. Notwithstanding the provisions of section 3 of article 15 of the constitution of the state of Kansas, the legislature may authorize the licensing, conduct and regulation of charitable raffles by nonprofit religious, charitable, fraternal, educational and veterans organizations. A raffle means a game of chance in which each participant buys a ticket or tickets from a nonprofit organization with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing. Such organizations shall not use an electronic gaming machine or vending machine to sell tickets or conduct raffles. No such nonprofit organization shall contract with a professional raffle or other lottery vendor to manage, operate or conduct any raffle. Raffles shall be licensed and regulated by the Kansas department of revenue, office of charitable gaming or successor agency. (Kansas Constitution, Article 15, Section 3d)

In response to the constitutional amendment, the 2015 Kansas Legislature passed 2015 Senate Substitute for House Bill 2155 which can be accessed here. This legislation provides that charitable raffles are an important method of raising money for charitable purposes and are in the public interest.

Licensing Requirements:

A charitable raffle license shall be required for any nonprofit religious, charitable, fraternal, educational, or veterans’ organization which conducts raffles and in which the annual (July-June) gross receipts are more than $25,000. Gross receipts shall mean the total number of raffle tickets sold and given away multiplied by the selling price of a single raffle ticket. The following table provides the annual fee for obtaining a license for charitable raffles.

Gross Receipts Annual Fee
Annual gross receipts exceed $25,000 but do not exceed $50,000 $25
Annual gross receipts exceed $50,000 but do not exceed $75,000 $50
Annual gross receipts exceed $75,000 but do not exceed $100,000 $75
Annual gross receipts exceed $100,000 $100

You may apply for charitable raffle license by clicking here.

Any nonprofit religious, charitable, fraternal, educational, or veterans’ organization that conducts raffles and the annual (July-June) gross receipts do not exceed $25,000, shall not be required to register for a charitable raffle license.

Conduct of Raffle:

These procedures shall apply to only to those nonprofit organizations that conduct charitable raffles for which the annual gross receipts of the nonprofit organization exceed $25,000.

Each nonprofit organization must apply for and receive a charitable raffle license at least 30 days prior to selling raffle tickets. Raffle licenses may not be transferred to another nonprofit group.

Each licensee shall be responsible for accountability of ticket sales. Each raffle ticket placed in the raffle container shall have an equal opportunity to win.

The licensed nonprofit organization shall not participate in the raffle as a player.

Raffle Ticket Requirements:

Each licensed nonprofit organization that conducts raffles, must include the following information on each raffle ticket:

  • Name of the licensed nonprofit organization;
  • Kansas raffle license number of the licensed nonprofit organization;
  • The word “Raffle”;
  • Date, time, and location of the raffle drawing;
  • Price of the raffle ticket;
  • A statement indicating if the participant must be present to win; and
  • A unique sequential identification number on the raffle ticket and the raffle ticket stub.

Each raffle ticket shall be offered for the same price as that for every other raffle ticket being sold for the same charitable raffle. However any licensed organization may offer a discount for the purchase of two or more raffle tickets if that discount is offered to all persons wanting to participate in the raffle.

Each raffle ticket to participate in a charitable raffle shall be paid for in advance by cash, check, or credit card. Credit may not be extended for the purchase of tickets.

Reporting Requirements:

Each licensed nonprofit organization shall annually report all raffle winners of any prize for which the retail value is $1,199 or more on a form to be designed by the Kansas Department of Revenue.

Each licensed nonprofit organization shall also maintain detailed information for each raffle conducted that may include: date of raffle; total gross receipts; total number of tickets available for sale; number of tickets sold; number of tickets given away; number of tickets not sold and returned to the licensee; raffle ticket price; value of all tickets sold and given away; name and address of all raffle winners of any prize; receipts for the purchase of prizes awarded or a statement indicating the fair market value of the prizes donated for each raffle; and deposit records indicating that the proceeds from the charitable raffle have been deposited into the licensee’s bank account.

Kansas Administrative Regulations:

The Kansas Department of Revenue is currently in the process of adopting administrative regulations to implement and interpret the charitable raffle legislation. Our proposed administrative regulations will be available soon and will be published on our website for a public comment period.

Charitable Raffle Definitions:

“Charitable raffle” means a raffle conducted by a nonprofit religious, charitable, fraternal, educational or veterans’ organization. (2015 Senate Substitute for House Bill 2155, New Section 3(g))

“Raffle” means a game of chance in which each participant buys a ticket or tickets from a nonprofit organization with each ticket providing an equal chance to win a prize and the winner being determined by a random drawing. (2015 Senate Substitute for House Bill 2155, New Section 3(y))

“Nonprofit charitable organization” means any organization which is organized and operated for:
(1) The relief of poverty, distress, or other condition of public concern within this state;
(2) financially supporting the activities of a charitable organization as defined in paragraph (1); or
(3) conferring direct benefits on the community at large; and of which no part of the net earnings inures to the benefit of any private shareholder or individual member of such organization and has been determined by the administrator to be organized and operated as a bona fide charitable organization and which has been exempted from the payment of federal income taxes as provided by sections 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6) and 501(c)(7) of the federal internal revenue code of 1986, as amended, or determined to be organized and operated as a bona fide nonprofit charitable organization by the administrator. (2015 Senate Substitute for House Bill 2155, New Section 3(r))

“Nonprofit educational organization” means any public or private elementary or secondary school or institution of higher education which has been determined by the administrator to be organized and operated as a bona fide educational organization and which has been exempted from the payment of federal income taxes as provided by section 501(c)(3) of the federal internal revenue code of 1986, as amended, or determined to be organized and operated as a bona fide nonprofit educational organization by the administrator. (2015 Senate Substitute for House Bill 2155, New Section 3(t))

“Nonprofit fraternal organization” means any organization within this state which exists for the common benefit, brotherhood, or other interests of its members and is authorized by its written constitution, charter, articles of incorporation or bylaws to engage in a fraternal, civic or service purpose within this state and has been determined by the administrator to be organized and operated as a bona fide fraternal organization and which has been exempted from the payment of federal income taxes as provided by section 501(c)(8) or section 501(c)(10) of the federal internal revenue code of 1986, as amended, or determined to be organized and operated as a bona fide nonprofit fraternal organization by the administrator. (2015 Senate Substitute for House Bill 2155, New Section 3(s))

“Nonprofit religious organization” means any organization, church, body of communicants, or group, gathered in common membership for mutual support and edification in piety, worship, and religious observances, or a society of individuals united for religious purposes at a definite place and of which no part of the net earnings inures to the benefit of any private shareholder or individual member of such organization, and which religious organization maintains an established place of worship within this state and has a regular schedule of services or meetings at least on a weekly basis and has been determined by the administrator to be organized and created as a bona fide religious organization and which has been exempted from the payment of federal income taxes as provided by section 501(c)(3) or section 501(d) of the federal internal revenue code of 1986, as amended, or determined to be organized and operated as a bona fide nonprofit religious organization by the administrator. (2015 Senate Substitute for House Bill 2155, New Section 3(q))

“Nonprofit veterans’ organization” means any organization within this state or any branch, lodge or chapter of a national or state organization within this state, the membership of which consists exclusively of individuals who qualify for membership because they were or are members of the armed services or forces of the United States, or an auxiliary unit or society of such a nonprofit veterans’ organization, the membership of which consists exclusively of individuals who were or are members of the armed services or forces of the United States, or are cadets, or are spouses, widows or widowers of individuals who were or are members of the armed services or forces of the United States, and of which no part of the net earnings inures to the benefit of any private shareholder or individual member of such organization, and has been determined by the administrator to be organized and operated as a bona fide veterans’ organization and which has been exempted from the payment of federal income taxes as provided by section 501(c)(4) or 501(c)(19) of the federal internal revenue code of 1986, as amended, or determined to be organized and operated as a bona fide nonprofit veterans’ organization by the administrator. (2015 Senate Substitute for House Bill 2155, New Section 3(u))

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