Depending on your state, there are legal regulations on who may create, distribute, and offer prizes for raffle tickets. In certain states, only organizations that have state raffle license approval or have been cleared by a charitable gaming division of the state government are allowed to conduct raffles. Some states even have regulations prohibiting online raffles and credit card payments for raffle tickets.
You also must report raffle winnings on your taxes using IRS Form W-2 G under reportable winnings. Reportable winnings include sweepstakes prizes, lottery winnings, and even charity drawings.