Yes, you can offset the raffle winnings with other gambling losses (see below).
The church should not have reported this as Box 7 income on Form 1099-MISC. It is highly unlikely they would be willing to correct the 1099-MISC or issue a 1099-G. Enter it as it was issued (see below)
Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos.
You may deduct gambling losses only if you itemize your deductions on Form 1040, Schedule A (PDF), and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as an "Other Miscellaneous Deduction" (line 28) that's not subject to the 2% limit. You will have a place to describe this deduction. Enter "Gambling losses, winnings rptd on Line 21"
See IRS Tax Topic 419 - Gambling
Income and Losses
