New IRS Guide for Tax-Exempt Organizations Considering Gaming Activities

Silent Auction? Opportunity Drawing? Raffle? Casino Night? All of these are viable fundraising events for nonprofits and also considered to be gaming activities (i.e., gambling). In order for tax-exempt organizations to make sure they are compliant with the rules regarding such activities, the IRS has published a new guide at

The publication addresses the impact of gaming on tax-exempt status, recordkeeping, reporting and withholding requirements among other issues. Of particular note are the reporting and withholding requirements of someone who is working or “volunteering” at the gaming activity, especially if they accept tips. Income from gaming can even be taxed as unrelated business taxable income (UBTI), another topic address in the new IRS guide.

This new IRS guide is not all a non-profit needs to know about gaming. In addition to federal law, in most states gaming is tightly regulated and, in some cases, prohibited. In most states, registration is required and other requirements must be met. Before embarking on any gambling fundraiser, be sure to check the laws in your state and community. Here in California, you can learn about raffle rules at and poker nights at

If and when your nonprofit decides to embark on a gaming fundraiser, be sure to do it right. Register, keep good records, and follow the rules. . . . Unless you want to be the nonprofit equivalent of Bugsy Siegel.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Casey Summar, Partner, The Law Firm for Non-Profits,1812 W Burbank Blvd, #7445, Burbank, CA 91506

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