Was this a raffle scam and what would you do?

Hi... need advice. I went to a local fundraiser in a small town where I grew up and there was a raffle for a Harley Fat Boy ($20 each ticket) I bought one and at the bottom it was has to be a minimum of 500 tickets sold (of course I didn't notice that until three days later after thinking omg I won a Harley!). Anyway they pulled the ticket and I won...very excited then told three days later "sorry, only 180 tickets sold" They admitted that they screwed up because they should not have pulled out a name because there wasn't enough sold and then offered to give me the $3600 that was collected in total... which I will not take because it was already given to the family of the very sick guy and I'm not going to take that from him. Someone else I know was the one who was raffling his bike (he was suppose to get $5k and give the other $5k to the family after the 500 tickets were sold)... anyway my question is what would you do and is what they did illegal seeing how they sold all these people $20 tickets for a chance to win a bike that never went to anyone? I even have a friend that called me to say she was going to buy a ticket and the guy at the door was a good friend and he wouldn't sell her one but wouldn't tell her why. I am so upset about this!