*NOTE: This act does not pertain to professional sports teams. Proposition 5 is the relevant document for researching rules and regulations around professional sports team foundations requirements. It can be found here.
The Charitable Raffle Enabling Act, effective January 1, 1990, permits "qualified organizations" to hold up to two raffles per calendar year, with certain specified restrictions.
A raffle is defined 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.
In general, a qualified organization is:
A nonprofit association organized primarily for religious purposes that has been in existence in Texas for at least 10 years;A nonprofit volunteer emergency medical service that does not pay its members other than nominal compensation;A nonprofit volunteer fire department that operates fire-fighting equipment, provides fire-fighting services, and does not pay its members other than nominal compensation; orA nonprofit organization that has existed for at least three preceding years and is exempt from federal income tax under Section 501(c), Internal Revenue Code; does not distribute any of its income to its members, officers or governing body; does not devote a substantial part of its activities to attempting to influence legislation; and does not participate in any political campaign.
The language of the law is very technical. If your organization is considering holding a raffle you should check the full statute to be sure it qualifies. I have cut out the part of the statue at the end of the article however for reference.
Definitions
(1) "Qualified religious society" means a church, synagogue, or other organization or association organized primarily for religious purposes that:
(a) has been in existence in this state for at least 10 years; and
(b) does not distribute any of its income to its members, officers, or governing body, other than as reasonable compensation for services or for reimbursement of expenses.
(2) "Qualified volunteer emergency medical service" means an association that:
(a) is organized primarily to provide and actively provides emergency medical, rescue, or ambulance services;
(b) does not pay its members compensation other than nominal compensation; and
(c) does not distribute any of its income to its members, officers, or governing body other than for reimbursement of expenses.
(3) "Qualified volunteer fire department" means an association that:
(a) operates fire-fighting equipment;
(b) is organized primarily to provide and actively provides fire-fighting services;
(c) does not pay its members compensation other than nominal compensation; and
(d) does not distribute any of its income to its members, officers, or governing body, other than for reimbursement of expenses.
Relevant Excerpt from Statute
Sec. 2002.003. QUALIFIED NONPROFIT ORGANIZATION. (a) An organization incorporated or holding a certificate of authority under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) is a qualified nonprofit organization for the purposes of this chapter if the organization:
(1) does not distribute any of its income to its members, officers, or governing body, other than as reasonable compensation for services;
(2) has existed for the three preceding years;
(3) does not devote a substantial part of its activities to attempting to influence legislation and does not participate or intervene in any political campaign on behalf of any candidate for public office in any manner, including by publishing or distributing statements or making campaign contributions;
(4) qualifies for and has obtained an exemption from federal income tax from the Internal Revenue Service under Section 501(c), Internal Revenue Code of 1986; and
(5) does not have or recognize any local chapter, affiliate, unit, or subsidiary organization in this state.
(b) An organization that is formally recognized as and that operates as a local chapter, affiliate, unit, or subsidiary organization of a parent organization incorporated or holding a certificate of authority under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) is a qualified nonprofit organization if:
(1) neither the local organization nor the parent organization distributes any of its income to its members, officers, or governing body, other than as reasonable compensation for services;
(2) the local organization has existed for the three preceding years and during those years has been formally recognized as a local chapter, affiliate, unit, or subsidiary organization of the parent organization;
(3) neither the local organization nor the parent organization:
(A) devotes a substantial part of its activities to attempting to influence legislation; or
(B) participates or intervenes in any political campaign on behalf of any candidate for public
office in any manner, including by publishing or distributing statements or making campaign contributions; and
(4) either the local organization or the parent organization qualifies for and has obtained an exemption from federal income tax from the Internal Revenue Service under Section 501(c), Internal Revenue Code of 1986.
(b-1) An organization that is formally recognized as and that operates as a local chapter, affiliate, unit, or subordinate lodge of a grand lodge or other institution or order incorporated under Title 32, Revised Statutes, as authorized by Article 1399, Revised Statutes, is a qualified nonprofit organization if:
(1) neither the local organization nor the incorporated grand lodge or other institution or order distributes any of its income to its members, officers, or governing body, other than as reasonable compensation for services;
(2) the local organization has existed for the three preceding years and during those years:
(A) has had a governing body or officers elected by a vote of its members or by a vote of delegates elected by its members; or
(B) has been formally recognized as a local chapter, affiliate, unit, or subordinate lodge of the grand lodge or other institution or order;
(3) neither the local organization nor the incorporated grand lodge or other institution or order:
(A) devotes a substantial part of its activities to attempting to influence legislation; or
(B) participates or intervenes in any political campaign on behalf of any candidate for public office in any manner, including by publishing or distributing statements or making campaign contributions; and
(4) either the local organization or the incorporated grand lodge or other institution or order qualifies for and has obtained an exemption from federal income tax from the Internal Revenue Service under Section 501(c), Internal Revenue Code of 1986, or other applicable provision.
(c) An unincorporated organization, association, or society is a qualified nonprofit organization if it:
(1) does not distribute any of its income to its members, officers, or governing body, other than as reasonable compensation for services;
(2) for the three preceding years has been affiliated with a state or national organization organized to perform the same purposes as the unincorporated organization, association, or society;
(3) does not devote a substantial part of its activities to attempting to influence legislation and does not participate or intervene in any political campaign on behalf of any candidate for public office in any manner, including by publishing or distributing statements or making campaign contributions; and
(4) qualifies for and has obtained an exemption from federal income tax from the Internal Revenue Service under Section 501(c), Internal Revenue Code of 1986.
(d) An organization, association, or society is considered to devote a substantial part of its activities to attempting to influence legislation for purposes of this section if, in any 12-month period in the preceding three years, more than 10 percent of the organization's expenditures were made to influence legislation.
(e) A nonprofit wildlife conservation association and its local chapters, affiliates, wildlife cooperatives, or units are qualified nonprofit organizations under this chapter if the parent association meets the eligibility criteria under this section other than the requirement prescribed by Subsection (a)(3), (b)(3), (b-1)(3), or (c)(3), as applicable. An association or a local chapter, affiliate, wildlife cooperative, or unit that is eligible under this subsection may not use any proceeds from a raffle conducted under this chapter to attempt to influence legislation or participate or intervene in a political campaign on behalf of a candidate for public office in any manner, including by publishing or distributing a statement or making a campaign contribution. A nonprofit wildlife conservation association may conduct two raffles each year and each local chapter, affiliate, wildlife cooperative, or unit may conduct two raffles each year under this chapter. For purposes of this section, a nonprofit wildlife conservation association includes an association that supports wildlife, fish, or fowl.