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Iowa Raffle Laws for Nonprofits: Are Raffles Legal? [2025]
March 20, 2025
Raffles are an exciting and easy way to raise money for your nonprofit, but navigating Iowa’s raffle rules can feel overwhelming. The last thing you want is to run into legal issues that could derail your fundraiser.
That’s where this guide comes in! We’ll walk you through everything you need to know—from getting the correct permits to handling taxes and keeping proper records—so you can focus on raising funds and making an impact. Let’s dive in!
Fundraising raffles are legal in Iowa with a valid license. Raffles aren’t a one-size-fits-all in the state however and raffle laws differ by the size of the event or fundraiser for a charitable organization.
Raffle categories are based on the value of cash or merchandise prizes:
Very small raffle: Under$1,000
Small raffle: $1,001- $10,000
Large raffle: $10,001- $100,000
Very large raffle: $100,001-$200,000
A raffle license is awarded by the Iowa Department of Inspections, Appeals, & Licensing for qualified organizations interested in:
Charitable gambling
Social gambling
Amusement concession gambling
Selling bingo or electronic raffle equipment or supplies
Most charitable gaming activities and nonprofit organizations hosting events for charitable purposes will be approved by Iowa raffle laws.
What are the different types of raffles allowed in Iowa?
Traditional raffles: The classic go-to where supporters buy tickets, and you draw a winner for a fun prize (like a gift basket or a weekend getaway).
50/50 raffles: The winner can take home half the total ticket sales while the other half goes to your cause (imagine raising $2,000 and giving a lucky winner $1,000 while supporting your mission).
Prize raffles (like merchandise raffles): Instead of cash, you're raffling off cool prizes ( concert tickets, signed memorabilia, or unique experiences) for events with sponsors or donated items.
Online raffles: Going digital opens up new opportunities, but be aware of the extra rules that come with it. Some states have strict regulations around online raffles, so double-check your local laws before launching.
Iowa raffle laws for nonprofits
Iowa Code 2025, Section 99B governs raffles, outlining the following key rules and other regulations we’ll talk to in this article:
A license must be in effect before promotions begin.
Raffles are only valid during the license period.
Raffles begin when the first ticket sells and ends when a winner is chosen.
Calendar raffles are not allowed.
Cash prizes and merchandise can't exceed $10,000.
Winners do not need to be present.
Prizes can be one item or multiple.
There are no limitations on ticket cost.
Do you need a gambling license for a raffle in Iowa?
Yes, you do need a gambling license to conduct a raffle in Iowa unless your organization qualifies for a very small raffle exemption. (≤ $1,000 total value or ≤ $5,000 in donated merchandise)
Here are the raffle permit options for qualified organizations:
License Type
Cost
Raffles Allowed
Duration
Notes
14-Day License
$15
One large raffle per year
14 days
90-Day License
$40
One large raffle per year
90 days
180-Day License
$75
One large raffle per year
180 days
One-Year Licence
$150
Eight large raffles per year
1 year
Each raffle must be in a different county
Two-Year Licence
$150
Eight large raffles per year
2 years
Same as the One-Year License, but for a longer duration
Very Large Raffle License
$100
Required if raffle value exceeds $100,000
Matches One- or Two-Year License
Must be purchased in addition to a One- or Two-Year License
Learn more from the Iowa Department of Inspections, Appeals, & Licensing (DIAL) here.
What to know about online raffles in Iowa
Iowa raffle laws allow nonprofit organizations to use online raffle software under the following regulations:
A raffle license is required; only two-year qualified organizations can conduct electronic raffles and charitable gaming.
The Iowa Savages 7v7 is a nonprofit example of a well-run online raffle that allows participants to have fun while supporting team fees, travel expenses, and player development. Using Zeffy’s 100% free raffle platform, every cent went right to the cause and was easily tracked for reporting.
Here’s what we loved:
Clear timeline and promotion: This raffle was well-advertised, with a clear start and end date to pull in more support for the team.
High-value and compliant prizes: A mix of cash, signed jerseys, and premium gifts boosted ticket sales while staying within the regulations set by the state.
Live engagement: – A Facebook Live drawing increased excitement and transparency to blend the raffle as a hybrid experience that still met Iowa rules.
Flexible ticket options – Supporters knew their contributions directly benefited young athletes, and saw many options to participate.
Step-by-step guide to apply for an Iowa raffle license
Step 1: Determine your organization’s eligibility
Before applying, ensure your organization qualifies as a charitable, community or nonprofit organization permitted to conduct raffles under Iowa law.
Step 2: Choose the correct license type
Depending on your raffle's scale and duration, Iowa offers different license durations and types. Consider where you fall, consulting with the state to ensure you fill out the correct application and don’t hit any snags.
Step 3: Gather required information
Here’s what you’ll need to have ready to go for your application: Organization details (name, address, nonprofit status)
Pay the non-refundable application fee (outlined above by license type).
Step 5: Submit and await approval
DIAL must issue your license before you begin advertising or selling tickets.
Processing time can be up to 30 days, so it’s smart to apply well in advance.
How to legally run a raffle: Common mistakes to avoid
Organizations can make costly mistakes when hosting a raffle, even with the best intentions. Here are some of the most common errors and how to avoid them:
1. Failing to obtain a license before you sell tickets
Iowa law requires all qualified organizations to obtain a raffle license before selling any tickets or advertising the event. Beyond the 30-day approval window, consider adding a buffer month so you can get started selling and raising as much as possible with your promotional window.
2. Misreporting prize values
Raffles must follow strict prize value limits based on the type of license obtained. That said, as long as you accurately document the retail value of all cash and merchandise prizes, you are in the best position to stay compliant.
3. Hosting prohibited raffle types
Certain types of raffles are illegal in Iowa, including:
Calendar raffles: Recurring daily or weekly drawings with raffle tickets tied to specific dates.
Build-up or pyramid raffles: Prizes accumulate over time instead of being awarded in a single raffle drawing.
Stick to approved raffle formats, ensuring the winner is chosen randomly and notified promptly after your drawing. If you have any questions, you can always contact DIAL and ask ahead of time instead of placing yourself at risk for fines after the raffle concludes.
4. Worrying about reporting after the raffle
Iowa requires organizations to track and report raffle revenue, expenses, and prize distribution. For very large raffles, organizations must submit a report within 60 days of the drawing and pay 1% of gross receipts for a state audit.
This process can feel stressful and daunting if you don't think ahead. We suggest using raffle software or a database that records all ticket sales, prizes awarded, and financial transactions in one place with someone dedicated to updating it throughout.
Plan your timeline carefully. Set your ideal ticket sales period to determine how much time you’ll need for promotion. Then, plan to apply for your license beforehand so you can get started without roadblocks.
Price tickets strategically: People love options, so offer multiple ticket pricing choices (e.g., 1 for $10, 3 for $25) to encourage bulk purchases.
Be transparent with participants: State prize details, raffle rules, and drawing date in your promotional materials so you can remain compliant and accountable while building transparency.
In Iowa, raffle laws designate that if nonprofit organizations get approval and obtain a valid raffle permit, they may be able to sell tickets online for their charitable gaming activities. It's best to check in with the Iowa Department of Inspections, Appeals, & Licensing.
You can promote a raffle online in Iowa, using channels like your website, social media, email, and others to attract supporters to your raffle form or in-person sale. This is a great way to attract your donors and expand your community.
Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
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