Michigan State University
Controller's Office

Administration Bldg
426 Auditorium Rd, Rm 305
East Lansing, MI 48824
517 355-5020

SECTION 49: Raffle Policy

Last updated: January 2017

Michigan State University colleges/departments/units/organizations are permitted to conduct raffles in accordance with the procedures and requirements in this policy. However, other charitable gaming events requiring a State-issued license, such as bingo and millionaire parties, are not permitted.

Those wishing to hold a raffle as a fundraiser must meet the following requirements:

  1. State Requirements
    1. Carefully review and follow the State of Michigan’s raffle information and rules. Please note that tickets may only be sold to purchasers who are 18 years of age or older. After reviewing the rules, it is likely you will need to complete the Michigan Lottery's Raffle License Application (also located at the Raffle web site). The application requires two MSU executive signatures. (The State will reject the application if the proper signatures are not included.) On the form for item 7, you are required to add the Vice President for Finance and Treasurer and Vice President and Secretary for the Board of Trustees for the executive signatures. Include their names, titles, addresses, and phone numbers. For item 2, use “112301” as MSU’s organizational number. To route your application for the required signatures, complete the MSU Raffle Cover Letter and route as instructed. Allow a minimum of 6 weeks for the State to process the application once proper MSU signatures are obtained. (Allow at least two weeks for internal routing.) General information about raffles, rules and forms can be found at the State of Michigan Charitable Gaming site.
    2. After the raffle, you must complete a State of Michigan Raffle Financial Statement. (Blank Raffle Financial Statement forms are available at the Raffle web site.) You have until the 10th day of the month following the month that the licensed raffle took place to complete and return the Financial Statement to the State. Similar to the license application, the Raffle Financial Statement form requires MSU executive signatures. (The State will reject the form if the proper signatures are not included.) To route your form for the required signatures, complete the MSU Raffle Cover Letter and route as instructed.
  2. Tax Reporting Requirements – If a prize is valued at $600 or more, and the prize value is more than 300 times the wager (ticket price), certain Internal Revenue Service (IRS) requirements must be followed. Please contact the Accounting Manager, 355-5000, if you will be awarding a prize worth $600 or more to arrange logistics of Federal tax reporting, including:
    1. When the prize is awarded, you must obtain a Form W-9 from the prize winner along with the winner’s driver’s license number and the state that issued the license. The form can be found at http://www.irs.gov/pub/irs-pdf/fw9.pdf?portlet=3 . This information is used to report game winnings to the IRS.
    2. If the prize is $5,000 or more, MSU may be required to collect withholding tax from the prize winner. Generally, the Federal withholding rates are 25% with a completed W-9 (33.33% for certain non-cash payments) or 28% if the W-9 is not completed. The State of Michigan withholding rate is 4.25%.
  3. University Requirements
    1. If any of the raffle prizes were donated they will need to be reported to University Advancement, Carolyn Fountain founta52@msu.edu or 884-1028. University Advancement will require a Raffle Prize Donation Form be completed for each prize donated. University Advancement uses this information to formally acknowledge donor gifts if they meet certain requirements. The prize information also needs to be sent to the University Tax Manager (884-4279) if the prize is valued at or over $600. See (B) above.
    2. You may not mail raffle tickets to purchasers.
    3. You may not use MSU accounts or University funds to purchase raffle tickets.
    4. You must obtain permission from the Office of the General Counsel before you:
      1. Use the internet to sell raffle tickets.
      2. Sell raffle tickets over the phone to persons outside of Michigan.
      3. Sell raffle tickets at events outside of Michigan.
  4. Unrelated Business Income Tax Requirements – If a unit holds multiple raffles per year the IRS may seek federal unrelated business income tax (UBIT) on the net revenue from the activity. In order to meet the federal exclusion for UBIT on charitable gaming, the unit is required to keep accurate records reflecting the number of hours worked on the raffle by compensated and volunteer workers. The net revenue can be excluded if substantially all the work is performed by volunteers. The department’s records are subject to review by the University Tax Manager.

Please contact the University Tax Manager (884-4279) with any raffle questions.