How to Run a Raffle or Charitable Gambling Operation in Minnesota: Gambling Control Board License

If you are researching how to start a charitable gambling business in Minnesota, the first thing to understand is that lawful gambling is not a business in the usual sense. The Minnesota Gambling Control Board licenses nonprofit organizations to run bingo, pull-tabs, and similar games. A for-profit LLC or corporation cannot hold that license, and neither can a sole proprietor. The license belongs to an organization that has existed for years, has real members, and exists for a purpose beyond gambling.

This guide covers who qualifies, what you need to gather, the order to take each step, and the mistakes that cost organizations their license or their money. It is informational content, not legal or tax advice. Chapter 349 of Minnesota Statutes is the governing law, and the Gambling Control Board is the agency that applies it.

Materials and Documents You Need

Gather these before you file anything. Missing documents are the most common reason applications stall.

• Proof of nonprofit status. Either a registration as a Minnesota nonprofit corporation or a determination that the organization is tax-exempt with the IRS. You can check Minnesota registration status in the Secretary of State's business search at mblsportal.sos.mn.gov.
• Evidence of three years of existence. The organization must have existed for the three years before it applies. Keep meeting minutes, prior tax filings, or charter records that show the dates.
• Bylaws and a written statement of purpose. The organization cannot exist solely to conduct gambling. Your mission should be visible in the documents.
• A member roster. You need at least 15 active members at the time you apply. Record each member's name, address, and membership start date.
• A qualified gambling manager. Under section 349.16, the organization must name a qualified gambling manager. Have that person's name and background ready before you apply.
• Board forms. Download the current application and premises permit forms from the Gambling Control Board. Forms change, so do not rely on a copy from a colleague or an older file.
• The license fee. The organization license costs $350 per year. If you expect gross receipts under $100,000, you can request a waiver. Confirm the waiver request process with the board.
• Local contacts. Know which city or county you are in. Local governments handle premises approval and may charge an investigation fee.
• A separate bank account and bookkeeping system. You will track gross receipts, prizes, and the monthly regulatory fee. Confirm the board's accounting and bank account rules before you open accounts.

Step 1: Confirm Your Organization Qualifies

Start with the eligibility test, because a missing requirement here stops everything else. Under chapter 349, the organization must be a nonprofit. It must have existed for the three years before the application, either as a registered Minnesota nonprofit corporation or as an IRS tax-exempt organization. It must have at least 15 active members when it applies. It cannot exist solely to run gambling.

If your group was formed last year, you will likely need to wait before you can apply. If your group is a registered nonprofit but has been dormant, verify its current status before you count on the three-year history.

Step 2: Decide Whether You Need a License at All

Many organizations run raffles without a board license. Under the exemption, a raffle needs no Gambling Control Board registration if the prizes awarded in a calendar year total $1,500 or less. For a 501(c)(3) organization, the threshold is $5,000 or less at one event. The exact conditions matter. Confirm with the board that your raffle fits before you sell a single ticket.

If you plan to run bingo, pull-tabs, or raffles above these limits, you need the full license. Do not structure a single large raffle into several smaller ones to stay under a threshold. Ask the board how it treats related events.

Step 3: Verify or Register Your Nonprofit Status

If your organization is already a registered Minnesota nonprofit corporation, search for it in the Secretary of State's business search and confirm the status shows as active. If it is not registered, the corporation filing is made with the Secretary of State through Business Filings Online (MBLS), at sos.mn.gov. A filing with the Secretary of State is a filing, not a license. It does not satisfy the Gambling Control Board requirement by itself.

If you rely on IRS tax-exempt status instead, keep the determination letter on file. Confirm that your organization's name on the IRS letter matches the name you will use with the board. If you operate under a different name, you may need a Certificate of Assumed Name. That certificate is filed with the Secretary of State, costs $50 online or in person or $30 by mail, and must be published for two consecutive issues in a qualified legal newspaper in the county of your principal place of business. Failure to publish may render the certificate invalid.

Step 4: Build Your Member Roster and Name a Gambling Manager

Membership is the step most organizations underestimate. You need at least 15 active members at application, and the board expects at least 13 voting members afterward. If your roster drops below that number, you have a compliance problem that can grow quickly, so track membership as carefully as you track money.

Choose a gambling manager who understands the rules and can keep records. This person is responsible for the game operation, not a figurehead. Put the appointment in your board minutes so the record shows the organization made a deliberate choice.

Step 5: Choose Your Premises and Get Local Approval

Lawful gambling takes place at a specific location, and that location needs approval. Premises permits are handled through the board and the local government, so check with the Gambling Control Board on the premises permit forms and with your city or county on local requirements. Ask whether the location must be approved before you file your state application or after.

Your city or county may also charge an annual investigation fee. The maximum amounts are up to $500 in first-class cities, up to $250 in second-class cities, up to $100 in other cities, and up to $375 for counties. The amount you pay depends on where your premises are, so confirm the figure with the local office. Minneapolis and St. Paul license by category, and neither issues a general business license, so a gambling-related local approval should be requested under the correct category.

Step 6: File the Gambling Control Board Application

Assemble the application package with your nonprofit proof, bylaws, member roster, gambling manager information, premises details, and the $350 fee. Review every page for a complete name, a correct address, and matching dates. Inconsistencies between the roster and the bylaws slow reviews, and the board may ask follow-up questions that delay your start date.

This guide does not state a board turnaround time, so do not promise your members a launch date until you have confirmed the timing with the board directly. Keep copies of everything you submit.

Step 7: Set Up Monthly Reporting and the Regulatory Fee

Once licensed, you must file a monthly tax return and pay a monthly regulatory fee of 0.125 percent of gross receipts. The fee is paid with the monthly return. Build a simple monthly close: total gross receipts, total prizes, net proceeds, and the fee. Reconcile the totals against your bank deposits before the return is due.

Registering with the Department of Revenue for a Minnesota Tax ID is not a license, and the board's monthly return is a separate obligation. Ask your CPA how the return interacts with your federal and state filings. This is a place where an accountant who knows nonprofits is worth the fee.

Step 8: Keep the License Active

A lawful gambling license is perpetual unless it is revoked, suspended, or lapses. It can lapse in two common ways: no gambling activity for seven months, or unpaid fees. Set calendar reminders for activity and payments, and keep an activity log that shows you ran games in the last seven months.

Fee and Threshold Summary

Item	Amount or threshold	Who sets it
Organization license	$350 per year (waiver on request if expected gross receipts are under $100,000)	Gambling Control Board
Monthly regulatory fee	0.125 percent of gross receipts, paid with the monthly tax return	Gambling Control Board
Local investigation fee	Up to $500 first-class cities, $250 second-class cities, $100 other cities, $375 counties	City or county
Raffle exemption	$1,500 or less in prizes per calendar year, or $5,000 or less at one event for a 501(c)(3)	Gambling Control Board rules
Certificate of Assumed Name	$50 online or in person, $30 by mail	Secretary of State

Confirm every figure with the agency that sets it before you budget around it.

Tips for a Smoother Application

• Start the membership drive first. Membership is the slowest part to fix.
• Keep one master folder with every document, date stamped, so you can answer board questions quickly.
• Ask the board for a pre-application conversation if your situation is unusual, such as a recently merged organization or a group with a name change.
• Name your gambling manager early and document the appointment in your minutes.
• Calendar your seven-month activity window and your fee due dates on the same page.

Common Mistakes to Avoid

• Trying to license a for-profit business. Only nonprofits can hold the license. Forming an LLC to run bingo will not work.
• Treating the Secretary of State filing as the license. Nonprofit registration and the board license are separate. You need both.
• Miscounting raffle prizes. The $1,500 threshold is a calendar-year total, not a per-raffle figure. Track it all year.
• Letting membership slip. Falling from 15 at application to fewer than 13 voting members creates a problem you can see coming.
• Skipping the local investigation fee. Budget for the city or county charge before you set a launch date.
• Going dormant without noticing. The seven-month inactivity rule can cost you the license, so track your activity dates.
• Using a name you have not filed. If you operate under an assumed name, file and publish the certificate correctly.

What You Can Expect When It Works

Organizations that prepare carefully often find the process is manageable, though the time it takes will vary with the completeness of the file and the board's workload. A well-run lawful gambling program may provide a steady fundraising stream for the organization's mission, and the monthly reporting discipline may improve the group's bookkeeping overall. Results depend on your membership, your location, and how your games are run, so treat any fundraising projection as an estimate rather than a promise.

If you are unsure whether your organization qualifies, whether your raffle fits the exemption, or how the monthly return applies to your situation, contact the Gambling Control Board directly and consider a consultation with an attorney or CPA who works with Minnesota nonprofits. Complex situations, including mergers, name changes, or organizations with prior compliance issues, deserve professional review before you file.

Next Steps

1. Confirm your nonprofit status in the Secretary of State's business search.
2. Count your active members and confirm you have at least 15.
3. Name a qualified gambling manager and record the appointment.
4. Download the current Gambling Control Board forms and confirm the premises process.
5. Call your city or county about the investigation fee and local approval.
6. File the application and budget the $350 license fee.

Disclaimer: This article is informational only. It is not legal, tax, or accounting advice, and it does not create an attorney-client or CPA-client relationship. Gambling laws and agency fees change. Confirm every requirement with the Minnesota Gambling Control Board and the relevant city or county before you act.