Gees, talk about red tape!  I was going to say that non-profits
can hold raffles, provided you have a gaming license from the state (at least in NYS).  But as you say, LM is not a non-profit organization.
Can you hold the raffle (or aution) somewhere else, as someone above suggested?  Like outside of a busy grocery story - tickets $5 a piece?  Although I'm sure it's gorgeous, I'm not sure how many people "off the street" (as opposed to LM employees who know the cause) would be willing to pay $10 a ticket.
Sad.  Please keep us informed!  And... pictures?