Can a 501(c)(3) nonprofit give away college football tickets as door prizes at a fundraiser without breaking Arkansas gambling law?

Plain-English summary

Sonia Fonticiella asked whether a 501(c)(3) nonprofit could donate college football tickets as door prizes at a fundraising event. The AG said the answer depends on whether someone must pay or give other consideration specifically to have a chance to win.

Arkansas generally prohibits gambling and gaming. The Arkansas Supreme Court has defined gambling as “the risking of money between two or more persons, on a contest or chance of any kind, where one must be loser and the other gainer.” The opinion identifies limited exceptions for bingo and raffles conducted by certain licensed entities, the Scholarship Lottery conducted by the State, and certain games conducted by authorized casinos.

The opinion distinguishes a lottery from a raffle. A door-prize scheme is a lottery if consideration is paid directly or indirectly to participate, the result is controlled by chance rather than skill or judgment, and a prize is awarded. The opinion says a nonprofit cannot conduct a lottery because the only authorized lotteries are those conducted by the State under the Scholarship Lottery Act.

A raffle is an exempted type of lottery when conducted under the applicable requirements. The opinion describes a raffle as selling a ticket to win a prize awarded through a random drawing. An authorized organization must be a nonprofit tax-exempt organization that has been in continuing existence in Arkansas for at least five years immediately before conducting the raffle, and net receipts above the actual cost of conducting it must be used only for charitable, religious, or philanthropic purposes.

For the proposed door prize, no payment specifically for a chance to win means there is no risking of money in a contest or chance. The AG says that conclusion remains the same when attendees pay to attend the event itself. An additional amount paid over the entrance fee for a chance to win would be risking money and would constitute gambling. A random drawing funded by ticket sales could fall within the raffle exception if the organization meets the requirements, but the AG said that determination depended on facts not provided.

What this means for you

Nonprofit event organizers

The opinion separates the event admission charge from a payment specifically for a chance to win. A free chance to win can remain outside the gambling definition even when attendees pay to attend. An additional amount paid for the chance changes the analysis and constitutes gambling under the opinion's application of the definition.

Organizations considering a raffle

The opinion identifies two requirements for the organization and proceeds that are central to its analysis: the organization must have been a nonprofit tax-exempt organization in continuing existence in Arkansas for at least five years immediately before the raffle, and net receipts above the actual cost of conducting the raffle must be used only for charitable, religious, or philanthropic purposes. The opinion says other required raffle steps also apply.

Prosecuting attorneys and legal researchers

The opinion says the application depends on details that were not conveyed to the AG. The relevant factual questions include whether anyone paid or gave other consideration specifically for a chance to win, whether the result was controlled by chance, whether a prize was awarded, and whether an organization conducting a random drawing meets the raffle requirements.

Common questions

Q: Is a free door prize gambling if attendees paid to attend the fundraiser?

The AG says no, on the facts described. Attendees paying to attend the event are not necessarily risking money for a chance to win the prize. The payment must be specifically for the chance to win before the AG's analysis treats it as risking money in a contest or chance.

Q: What if attendees pay an extra amount for a chance to win?

The AG says the additional amount paid over the entrance fee is risking money for a chance to win and constitutes gambling. If tickets are sold for a random drawing, the organization could fall within the raffle exception only if it meets the applicable requirements.

Q: What makes a door-prize scheme a lottery under the opinion?

The opinion lists three requirements: consideration paid directly or indirectly to participate, a scheme controlled by chance rather than skill or judgment, and a prize. If all three are met, the opinion treats the scheme as a lottery that must be conducted by the State under the Scholarship Lottery Act.

Q: Who can conduct a raffle?

The opinion describes an authorized organization as a certain nonprofit tax-exempt organization that has been in continuing existence as a nonprofit tax-exempt organization in Arkansas for at least five years immediately before conducting the raffle. Net receipts above actual raffle costs must be used only for charitable, religious, or philanthropic purposes.

Q: Does this opinion decide whether a particular nonprofit's event is lawful?

No. The AG said the application depended on details that had not been conveyed to him. He described the framework and said whether an organization meets the raffle requirements depends on facts not provided.

Background and statutory framework

The opinion begins with Arkansas's general prohibition on gambling and gaming and identifies limited authorization for bingo and raffles, the Scholarship Lottery, and certain casino games. It focuses on the lottery and raffle provisions because of the fundraising door-prize question.

Under the opinion's lottery analysis, consideration, chance, and a prize are the three required elements. Under its raffle analysis, a random-drawing ticket is a raffle, and the Charitable Bingo and Raffles Enabling Act implements Amendment 84 for qualifying organizations. The opinion also refers to the Scholarship Lottery Act and the Arkansas Casino Gaming Amendment of 2018.

The opinion's application section is fact dependent. It concludes that an admission payment for the event itself is different from an additional payment specifically for a chance to win, while leaving the organization's qualification for the raffle exception to facts not provided.

Citations and references

• Ark. Const. amend. 84, § 1
• Ark. Const. amend. 87
• Ark. Const. amend. 100, §§ 1–11
• Ark. Const. art. 19, § 14
• A.C.A. §§ 23-114-101 to -706
• A.C.A. § 23-114-102(1)(A)
• A.C.A. § 23-114-102(16)(A)
• A.C.A. § 23-114-102(16)(B)
• A.C.A. § 23-114-103(a)
• A.C.A. §§ 23-115-101 to -1101
• Sharp v. State, 350 Ark. 529, 534, 88 S.W.3d 848, 851–52 (2002)
• Portis v. State, 27 Ark. 360, 362 (1872)
• Cox v. Daniels, 374 Ark. 437, 450, 288 S.W.3d 591, 600 (2008)
• Ark. Att’y Gen. Ops. 2016-073, 2009-123, 2007-247, 2005-217, 2004-091, 2002-240, 95-393, 86-599

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

TIM GRIFFIN
ATTORNEY GENERAL

Opinion No. 2025-022

August 15, 2025

Ms. Sonia Fonticiella
Prosecuting Attorney, Second Judicial District
Post Office Box 49
Marion, Arkansas 72364

Dear Ms. Fonticiella:

I am writing in response to your request for my opinion on whether a 501(c)(3) nonprofit organization may donate college football tickets as door prizes at a fundraising event without “infringing Arkansas law.”1

RESPONSE

Under facts you have provided, the answer to your question depends on whether someone must pay or give other consideration specifically to have a chance to win the prize.

DISCUSSION

Generally, “gambling” and “gaming” are prohibited in Arkansas. Although neither word is defined by statute, the Arkansas Supreme Court uses these words interchangeably and has defined them as “the risking of money between two or more persons, on a contest or chance of any kind, where one must be loser and the other gainer.”2

But specific types of “gambling” or “gaming” are exempt and authorized in limited circumstances: bingo and raffles conducted by certain licensed entities;3 the Scholarship Lottery conducted by the

1
For purposes of this opinion, I will assume that “infringing Arkansas law” concerns the various applicable gambling laws. 2 Sharp v. State, 350 Ark. 529, 534, 88 S.W.3d 848, 851–52 (2002) (quoting Portis v. State, 27 Ark. 360, 362 (1872)); see also Ark. Att’y Gen. Ops. 2016-073 (“[A]bsent the risking of money or other valuable property in the outcome of a contest, there is no gambling.”), 2009-123 (opining that the phrase “the risking of money” means that “the key component of gambling is betting”). 3 See Ark. Const. amend. 84, § 1; A.C.A. §§ 23-114-101 to -706.

BOB R. BROOKS JR. JUSTICE BUILDING
101 WEST CAPITOL AVENUE
LITTLE ROCK, ARKANSAS 72201
Ms. Sonia Fonticiella
Prosecuting Attorney, Second Judicial District
Opinion No. 2025-022
Page 2

State under the Scholarship Lottery Act;4 and certain games conducted by authorized casinos under the Arkansas Casino Gaming Amendment of 2018.5 Thus, a nonprofit could not offer a door prize that is a “lottery” or “casino game.”

However, a nonprofit could offer a door prize that is a “raffle” if the nonprofit meets and complies with certain statutory requirements. Based on the information you submitted with your opinion request, I will focus on raffles and lotteries.

1. Lottery. Under the Arkansas Constitution, the only authorized lotteries are those conducted by
   the State under the Scholarship Lottery Act.6 Consequently, a nonprofit cannot conduct a lottery. Door prizes at a fundraising event qualify as a “lottery” if each of the following requirements are met:7 (1) consideration, whether directly or indirectly, is paid to participate; (2) the scheme in question “is controlled by chance such that winning is not influenced by the skill or judgment of those participating”; and (3) a prize is awarded. If each requirement is met, the door-prize scheme would be a lottery and, therefore, must be conducted by the State under the Scholarship Lottery Act.8

2. Raffles. While raffles are a type of lottery,9 they are exempted under the Arkansas Constitution
   from the prohibition of lotteries discussed above, if they are conducted in a certain way. 10 When someone sells a ticket “to win a prize awarded through a random drawing,” that is a “raffle.”11 Raffles do not “include any game played through the use of a machine or electronic device.”12 The Charitable Bingo and Raffles Enabling Act implements Amendment 84 (a constitutional initiative) to the Arkansas Constitution, authorizing raffles by an “authorized … [raffles] organization”13— if the net receipts over and above the actual cost of conducting the raffle are used only for

4
See Ark. Const. art. 19, § 14; A.C.A. §§ 23-115-101 to -1101.
5
See Ark. Const. amend. 100, §§ 1–11.
6
Ark. Const. art. 19, § 14. Amendment 87 to the Arkansas Constitution and its enabling legislation, the Arkansas Scholarship Lottery Act, give the State its authority to offer lottery and instant ticket games. 7 See Ark. Att’y Gen. Ops. 2016-073, 2007-247, 2005-217, 2002-240, 86-599. See Cox v. Daniels, 374 Ark. 437, 450, 288 S.W.3d 591, 600 (2008). 8 Ark. Att’y Gen. Op. 2016-073.
9
Ark. Att’y Gen. Op. 2004-091, 95-393 (noting that “a raffle, as commonly conducted, meets the definition of a ‘lottery’”). 10 See Ark. Const. amend. 84, § 1.
11
Ark. Const. amend. 84, § 1(a)(3); A.C.A. § 23-114-102(16)(A).
12
A.C.A. § 23-114-102(16)(B).
13
Id. § 23-114-102.
Ms. Sonia Fonticiella
Prosecuting Attorney, Second Judicial District
Opinion No. 2025-022
Page 3

charitable, religious, or philanthropic purposes.14 An “authorized organization” is a certain “nonprofit tax-exempt” organization15 that “has been in continuing existence as a nonprofit tax- exempt organization” in Arkansas for at least five years immediately prior to conducting” the raffle.16

3. Application. The application of the foregoing law to the situation you describe depends on some
   details that have not been conveyed to me. If, in the scenario you have in mind, no one pays any money specifically for a chance to win the tickets, then no one has engaged in the “risking of money” in a “contest” or “chance of any kind.” Therefore, under that scenario, the chance to win the tickets would not qualify as “gambling” under the Arkansas Supreme Court’s definition discussed above. That conclusion would still be correct even if the attendees at the event where the tickets were given away paid to attend. In that scenario, the attendees are paying to attend the event itself—not “risking” money for a chance to win something. But the conclusion would be different if the attendees paid some additional amount over and above their entrance fee for a chance to win the tickets. In that case, the additional amount paid would be “risking” money for a chance to win the tickets and would constitute gambling. If tickets are sold to win the football tickets through a random drawing, an organization holding the drawing could fall under the authorized type of gambling—a raffle—if they meet definition of “nonprofit tax-exempt organization” discussed above and follow the required steps for conducting a raffle. But whether the organization holding such a drawing meets the requirements for a raffle depends on facts that have not been conveyed to me.

Assistant Attorney General William R. Olson prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

14
Id. § 23-114-103(a).
15
Id. § 23-114-102(1)(A).
16
A.C.A. § 23-114-102(1)(A).