The key to successful booster club fundraisers is encouraging participation and having fun. One of the easiest ways to do this is with a 50/50 game at fundraisers. 50/50 games incentivize supporters to donate by offering a prize and also help the organization meet its fundraising goals.
While it seems like a harmless activity, 50/50 games are often considered gambling, which can come along with a whole host of rules for your event. Your booster club responsibilities include ensuring that all activities are permitted under the laws of your state, so it is a good idea to familiarize yourself with the rules around gambling.
Gambling Laws
Under federal law, gambling is defined as “accepting, recording, or registering bets, or carrying on a policy game or any other lottery, or playing any game of chance, for money or other thing of value.”
Your state likely has its own gambling laws as well. Without a license, your event could be considered an illegal gambling activity, which can put your club and its officers at risk.
There are certain exceptions to these rules. Your raffle could be considered “charitable gaming,” in which case you do not need a full gambling license in most states.
In some jurisdictions, while a full gambling license is not required, there still may be local requirements. For example, some states require a raffle license issued by the local county sheriff’s office.
IRS Fundraising Gaming Rules
In addition to the possibility of violating gambling laws, holding a 50/50 raffle could also have tax implications. There are strict rules from the IRS about what is considered gambling. The agency offers guidance on this and considers the following activities gambling:
While it’s possible that your raffle could be considered to be a game amongst parents where the winner donates their proceeds, it can be a risky interpretation that opens your organization up to risk.
Things to Consider
If you are planning on hosting a 50/50 raffle at your next fundraiser, you need to make sure you are legally permitted to do so. Before moving forward with the plan, there are a few things you should consider:
Since booster club officers can be held personally responsible for illegal activity in the club, you should take extra care in doing your research before hosting the raffle.
Consult with a Professional
The best thing you can do to prepare for your raffle is consult with a professional. Most states have an accessible gaming commission that will be able to answer specific questions about your raffle. In addition, a tax professional can help walk you through the implications of the raffle at your event.
Planning an event with a raffle takes coordination of a lot of moving parts. Stay organized with a booster club software, like BoosterHub, which can help you manage documents, organize communication, and keep track of volunteers.
