# Online and Electronic Raffles for Booster Clubs: What to Check

> Why many states restrict online booster club raffles, how federal law treats ticket sales across state lines, and what to check before using a raffle platform.

- URL: https://boosterclub.org/raffles/online-raffles/
- Section: Raffles
- Updated: 2026-10-08

An online raffle, where the booster club sells chances through a website, app, or card reader that issues electronic tickets, is legal only if the club's state allows that method, and some states do not. Charitable raffle laws such as California's were written around paper tickets with stubs, and a sales method the law does not authorize falls outside the exception. The president and treasurer confirm the state rule before the club signs up with any platform.

Online raffles raise a second problem that paper raffles rarely do: buyers in other states. A link shared on social media reaches grandparents in states where the raffle would be illegal.

## Why States Restrict Online Raffles

1. **The exception is narrow.** A charitable raffle is an exception to the state's lottery ban, and anything outside its terms is illegal gambling. California requires paper tickets with a detachable stub and states that "operating or conducting a raffle via the Internet is also prohibited," although the club "may advertise the raffle on the Internet."
2. **Geographic limits.** Some states limit where tickets may be sold. Texas prohibits selling or offering tickets statewide and limits statewide promotion to the club's own website and communications sent only to previously identified supporters. Tennessee requires the event to be held in a county where the organization has a physical presence or a neighboring county.
3. **Age and identity.** In-person sales let a seller see the buyer. Online sales depend on the platform to verify age and location, a method the state's raffle law may not address.
4. **Oversight.** A physical drawing from a drum can be witnessed. An electronic drawing depends on software the club cannot inspect.

## Federal Law and Buyers in Other States

Federal law does not prohibit a charitable raffle that is legal where it takes place, but it adds risk when sales cross state lines:

- **Internet gambling.** The Unlawful Internet Gambling Enforcement Act defines a "bet or wager" to include "the purchase of a chance or opportunity to win a lottery or other prize." It defines unlawful Internet gambling as a bet placed or received over the Internet that is unlawful "under any applicable Federal or State law in the State or Tribal lands in which the bet or wager is initiated, received, or otherwise made" (31 U.S.C. § 5362). The law in the buyer's state matters, not only the club's.
- **Mail.** 18 U.S.C. § 1302 prohibits mailing lottery tickets and related materials. Section 1307 exempts advertising and information about a nonprofit's lottery that is authorized or not prohibited by the state where it is conducted. That exemption covers advertising and information; it does not mention tickets.

The practical rule: sell only to buyers located in a state where the raffle is legal, and get advice before mailing tickets or selling to out-of-state buyers.

## What Is Usually Allowed

- **Online advertising** of a raffle that is otherwise legal, where the state permits it (California expressly allows it).
- **In-person ticket sales with online promotion,** directing families to a game, event, or sales table.
- **Online sales where the state expressly authorizes electronic raffles,** under that state's conditions. Whether a state has written rules for electronic raffles varies by state and was not surveyed for this page. Check the club's [state page](https://boosterclub.org/states/#raffles-gaming).

## Questions to Ask Before Using a Raffle Platform

| Question | Why it matters |
|---|---|
| Does the state expressly allow online or electronic raffle sales for this kind of organization? | Without authorization, the raffle may fall outside the charitable exception |
| Does the state require the platform or its random drawing method to be approved or certified? | Some states regulate the equipment, not only the organization |
| Does the platform block buyers located outside the state (geolocation) and verify age? | Out-of-state and underage sales create federal and state exposure |
| How does the platform charge: flat fee or percentage of ticket sales? | Internal Revenue Service (IRS) Publication 3079 lists an operator paid "a percentage of the total wagers" as an example of private benefit that can subject a drawing to federal wagering excise tax. Some states also bar paying anyone to conduct a raffle (Texas). |
| Can the club export a full ticket register (ticket numbers, buyer names, contact information, amount, date)? | The treasurer needs it to reconcile sales, file state reports, and contact winners |
| How is the winner drawn, and what record does the platform produce? | The club needs a drawing record it can show a regulator or a skeptical parent |
| Does the club's payment processor allow raffle sales? | Processor terms of service can restrict games of chance; a frozen account can strand the proceeds |
| What happens to buyer data, including data about minors? | Parents expect the club to protect it |

Whether a percentage fee causes the wagering excise tax to apply has not been addressed in IRS guidance located for this page. A club considering a percentage-fee platform asks its tax preparer first.

## "Sweepstakes" and "Donation Drawings"

Some platforms describe their product as a sweepstakes or a donation drawing with a free way to enter. A properly designed free-entry drawing removes consideration and may not be a raffle at all, but the design must be real. California exempts a drawing only when tickets are distributed generally, free tickets are offered on the same terms as tickets given with a donation, and no one is required to pay for a chance to win. Tennessee warns that calling a required payment a "donation" does not change anything. Sweepstakes also have their own state rules. See [Alternatives When Raffles Are Not Allowed](https://boosterclub.org/raffles/opportunity-drawings-and-alternatives/).

## Tax Rules Do Not Change Online

An online raffle has the same federal rules as a paper one: no deduction for buyers, Form W-2G for a 2026 prize of $2,000 or more that is at least 300 times the ticket price, 24% withholding when the prize minus the ticket price exceeds $5,000, and gross ticket sales reported on the annual return. Platform fees are expenses; they do not reduce gross receipts. See [Federal Tax Rules for Raffles](https://boosterclub.org/raffles/federal-rules/).

> Online fundraising software can track ticket buyers and produce a sales register for the treasurer, but software settings do not determine whether a raffle is legal. State law does.

## Common Mistakes

- **Assuming that if a platform offers it, it is legal.** A platform that serves customers in many states may leave legality to the customer. The club carries the risk.
- **Sharing the ticket link everywhere.** Social posts reach buyers in states where the raffle is illegal. Restrict sales to in-state buyers or do not sell online.
- **Signing a percentage-of-sales contract without review.** It can raise state-law and federal excise tax questions, and it reduces what reaches students.
- **Skipping the ticket register.** Without an export, the treasurer cannot reconcile sales, prepare the state report, or contact a winner for Form W-9.
- **Calling a paid drawing a sweepstakes.** If a payment is required to enter, it is a raffle under most state laws regardless of the label.

## Checklist

- [ ] Confirm on the club's [state page](https://boosterclub.org/states/#raffles-gaming) whether online or electronic raffle sales are allowed (president)
- [ ] If not expressly allowed, plan in-person sales with online promotion only
- [ ] Confirm the state permit or registration covers electronic sales
- [ ] Confirm the platform restricts buyers to the club's state and verifies age
- [ ] Review the fee structure and ask the tax preparer about any percentage-of-sales fee (treasurer)
- [ ] Confirm the payment processor permits raffle sales
- [ ] Confirm the platform exports a full ticket register and a drawing record
- [ ] Remove "donation" and "tax-deductible" language from the sales page
- [ ] Reconcile the platform's register to deposits after sales close
- [ ] Keep the register, drawing record, and contract with the raffle file

## Related Pages

- [Are Booster Club Raffles Legal](https://boosterclub.org/raffles/are-raffles-legal/) the state rules online sales must satisfy
- [Online Fundraising for Booster Clubs](https://boosterclub.org/fundraising/online-fundraising/) platforms, fees, and charitable registration triggers
- [Accepting Online Payments as a Booster Club](https://boosterclub.org/finance/payment-processing/) processor terms, fees, and reconciliation
- [Alternatives When Raffles Are Not Allowed](https://boosterclub.org/raffles/opportunity-drawings-and-alternatives/) free-entry drawings and auctions
- [Federal Tax Rules for Raffles](https://boosterclub.org/raffles/federal-rules/) W-2G and withholding

---

*This page is general information for volunteer-run booster clubs. It is not legal,
tax, or accounting advice, and BoosterClub.org is not a law firm, accounting firm, or
government agency. Rules change and vary by state and district. Confirm current
requirements with the IRS, the relevant state agency, the school district, and a
qualified professional before acting. If a fact on this page is out of date, we want
to know.*

## Sources

1. California Attorney General: https://oag.ca.gov/charities/raffles
2. Texas Legislature: https://tcss.legis.texas.gov/resources/OC/htm/OC.2002.htm
3. Tennessee Secretary of State: https://sos.tn.gov/charities/guides/charitable-gaming-event-faqs
4. IRS: https://www.irs.gov/pub/irs-pdf/p3079.pdf
5. IRS: https://www.irs.gov/instructions/iw2g