Arizona Statewide Rule
Arizona Charitable Raffle and Bingo Licensing Law
Key Facts
- Raffle exemption basis
- 501(c) status + 1-yr AZ existence, § 13-3302(B)
- Raffle operators
- Only bona fide local members may run it
- Civic/booster club cap
- $10,000 total annual benefit, § 13-3302(D)
- Bingo license required
- Class A, B or C from Dept. of Revenue, § 5-413
- Class A bingo cap
- $75,000/yr receipts, taxed 2.5%
- Class B bingo cap
- $500,000/yr receipts, taxed 1.5%
- Bingo violation penalty
- Class 3 misdemeanor; false report is class 6 felony
Summary
Arizona lets a nonprofit with federal 501(c) tax-exempt status run a raffle without a gambling license under A.R.S. Section 13-3302(B), so long as it has operated in-state for a full year, keeps no insider pecuniary benefit, and lets only local members run the drawing. Bingo works differently: any organization that wants to deal cards must first get a Class A, B or C license from the Department of Revenue, taxed 1.5% to 2.5% of receipts under Sections 5-413 and 5-414.
B. An organization that has qualified for an exemption from taxation of income under section 501 of the internal revenue code may conduct a raffle that is subject to the following restrictions:
1. The nonprofit organization shall maintain this status and no member, director, officer, employee or agent of the nonprofit organization may receive any direct or indirect pecuniary benefit other than being able to participate in the raffle on a basis equal to all other participants.
2. The nonprofit organization has been in existence continuously in this state for a one-year period immediately before conducting the raffle.
3. No person except a bona fide local member of the sponsoring organization may participate directly or indirectly in the management, sales or operation of the raffle.
Full Breakdown
Arizona's gambling code carves raffles run by tax-exempt nonprofits out of its criminal gambling prohibition. Under A.R.S. Section 13-3302(B), an organization that already holds a federal Section 501 tax exemption can run a raffle if it has existed continuously in Arizona for one year, no insider takes a pecuniary benefit beyond an equal shot at winning, and only bona fide local members handle sales, management or the drawing. Historical societies get the same deal in subsection C but must show five years of continuous existence rather than one. Subsection D extends the exemption to booster, civic and political clubs, but caps the total annual benefit the club can pull from all of its raffles combined at $10,000, and still requires local-member operation and no personal payout to officers or staff. A narrow carve-out in paragraph 4 lets a licensed hospital, a cardiovascular-research foundation, or a longtime child-abuse prevention charity hire an outside agent to run the raffle -- capped at three raffles a year and a 15% fee of net proceeds -- when the nonprofit itself qualifies under Section 501(c)(3).
Bingo sits in a separate title and runs on a license, not an exemption. A.R.S. Section 5-401 defines a "qualified organization" as a homeowners association or a bona fide charitable, fraternal, religious, social, veterans' or volunteer firefighters' organization that has existed continuously in Arizona for two years before applying. Section 5-413 sets three license tiers by yearly gross receipts: Class A tops out at $75,000, Class B at $500,000, and Class C covers anything above $500,000. Section 5-414 prices each tier -- a $5 to $50 local governing body fee, a $10 to $200 state license fee -- and taxes Class A at 2.5% of adjusted gross receipts, Class B at 1.5% of gross receipts, and Class C at 2.0% of gross receipts, all payable to the Department of Revenue, which is the licensing and enforcement authority for the whole bingo article.
Violations & Penalties
Running a raffle outside Section 13-3302(B)'s restrictions, or holding bingo without a Department of Revenue license, falls back into Arizona's general unlawful-gambling statutes. A.R.S. Section 5-410 makes a knowing violation of the bingo licensing article a class 3 misdemeanor by default, and elevates filing a false statement or receipts report to a class 6 felony. The Department of Revenue administers, licenses and enforces the bingo article statewide.
Frequently Asked Questions
Can a nonprofit in Arizona run a raffle without a gambling license?
Do bingo games in Arizona need a state license?
How much can a booster or civic club raise through raffles?
What happens if a bingo operator breaks the rules?
Sources
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