Raffles, housie nights, prize draws and sweepstakes are some of the most common ways community groups raise money. They are also gambling under the law, and the rules that apply depend on how much is on offer. Getting the class right, choosing permitted prizes and running a clean draw all matter for compliance, and the cash and prizes involved raise insurance questions that many groups have never put to their insurer.
Raffles Are Gambling
The Department of Internal Affairs (DIA) regulates gambling under the Gambling Act 2003. Its page on the rules for running a gambling activity states that lotteries include raffles and sweepstakes, and that each activity must follow the relevant game rules. The same page says gambling can be run by societies and, in very limited circumstances, by individuals, and that the money raised must go to authorised purposes. DIA describes authorised purposes as non-commercial, and either charitable or of benefit to the community.
Which Class Is Your Raffle?
DIA's classes of gambling page sets out three classes that cover raffles and similar activities.
- Class 1: prizes or potential turnover for one session do not exceed $500. No licence is needed.
- Class 2: prizes for one session do not exceed $5,000 and potential turnover does not exceed $25,000. No licence is needed, but the activity must only be run by a society, the proceeds must go to authorised purposes, and details such as the society's name, the number of tickets, the closing date and the prizes must be clearly described at the point of sale.
- Class 3: prizes exceed $5,000. A licence is required, the activity may only be run by a society, and DIA must be satisfied that it is financially viable.
DIA notes that non-cash prizes count at their retail value. A donated car, holiday or handmade quilt is valued at what it would cost to buy, not what it cost the donor, so a raffle with a generous donated prize can move into class 3 without anyone on the committee noticing. New Zealand Police's page on housie, raffles and games of chance sets out the same thresholds and adds that, for housie, at least 70 percent of turnover must be paid out as prizes. DIA states that a housie licence can only be granted to a corporate society.
Prizes You Cannot Offer
DIA lists prohibited prizes, including firearms, alcohol, tobacco, taonga tūturu and vouchers for commercial sexual services. The alcohol rule is the one most likely to matter to a community fundraiser, because a bottle of wine or a hamper with beer in it is a common donated prize. DIA also states that second-hand goods and non-residential land can be offered as prizes, and that the nature of prizes must be fully disclosed.
Food prizes have their own trap. The Ministry for Primary Industries states that selling homekill, or wild food you have caught or hunted yourself, is illegal, including using it as a prize or for fundraising.
Running the Draw
DIA's lottery game rules include requirements that apply across classes 1 to 3. Where tickets are sold to the general public, the date, time and location of the draw must be publicly notified and the draw must be open to the public. Ticket sellers must collect enough details to identify and contact each buyer. Prizes may only go to the winners, must be delivered within three months of the draw (with exceptions such as a winner who cannot be found or who declines the prize), cannot carry any charge beyond the cost of entry, and cannot be changed once the lottery has started.
Class 3 lotteries carry further rules. The draw must be supervised by a person of standing in the community who is independent of the society, and the result must be notified publicly within one week. The society must provide an independently audited Audit and Prize Statement, completed by a chartered accountant in public practice who is not connected to the lottery, within three months of the draw. Ticket butts, unsold tickets, invoices, statements and other documents must be kept for six months after the draw.
Where Insurance Comes In
None of these rules are about insurance, but a raffle or housie programme creates several exposures that a standard not-for-profit policy may or may not pick up.
Cash and takings
Ticket sales are often in cash, collected by many volunteers over several weeks and held at someone's home until banked. Where money cover is included in a policy, it usually carries separate limits for cash on premises, cash in transit and cash held in a private residence, and conditions such as the use of a locked safe. Check those limits against your largest realistic total, not your average one.
Theft by insiders
Raffle and housie money is a common setting for internal theft, because records are thin and few people check them. Fidelity or crime cover is designed to respond to dishonesty by people inside the organisation, but insurers expect basic controls in return: numbered ticket books issued and reconciled, two people counting takings, and prompt banking. Our article on fraud in the charitable sector covers this in more detail.
Prizes in your care
A donated vehicle, boat, artwork or holiday is the society's responsibility until it reaches the winner, and DIA's rules can require a class 3 prize to be held for at least three months if the winner cannot be found. Ask whether your contents or property policy covers prizes held for a draw, including when they are displayed off-site, and whether a vehicle prize needs its own motor cover while it is parked at events or driven to the handover.
Draw nights and housie sessions
A public draw at a fundraising dinner, or a weekly housie session, is an event with members of the public on your premises. Public liability is the cover that responds to third-party injury or property damage claims, so the activity should fall within what you have described to your insurer. Our charity event insurance page sets out what to check.
Committee decisions
A raffle run in the wrong class, with a prohibited prize, or with proceeds used for something other than authorised purposes, is a governance problem as well as a compliance one. Trustee or management liability cover may respond to some claims arising from committee decisions, but policies commonly exclude fines and deliberate breaches, so good process remains the main protection.
A Short Checklist
Before tickets go on sale, total the retail value of every prize to confirm the class, and check the turnover limit if you plan to sell a large number of tickets. Remove any prohibited prizes. Decide who will supervise the draw and publish the date, time and place. Issue numbered ticket books, record who holds each one, and reconcile every book against the cash banked. Keep your records for at least six months after the draw. Then check that your insurance covers the cash, the prizes, the event and the people handling the money.
Get Your Cover Checked
If raffles or housie have become a regular part of your fundraising, it is worth having your money, fidelity and liability cover reviewed against what you actually do. charityinsurance.co.nz passes enquiries to Registered Financial Service Providers who place cover for not-for-profit organisations. Get a Quote and a specialist will be in touch within one business day.
Sources: Department of Internal Affairs, Classes of Gambling, The Rules for Running a Gambling Activity, and Lottery Game Rules; New Zealand Police, Housie, raffles and games of chance; Ministry for Primary Industries, Fundraising, social and community event Food Act requirements. Checked 1 November 2026.
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