# Booster Club Raffle Alternatives When Raffles Are Not Allowed

> What a booster club can do when a raffle is not allowed: free-entry drawings done correctly, silent and live auctions, fixed-price sales, and other options.

- URL: https://boosterclub.org/raffles/opportunity-drawings-and-alternatives/
- Section: Raffles
- Updated: 2026-10-08

When a booster club cannot legally hold a raffle, it can still raise money with events that remove one of the three legal elements of a lottery: a free-entry drawing removes the payment, and an auction or fixed-price sale removes the chance. The president decides which alternative fits and confirms it with the state rules; the event chair runs it; the treasurer handles the different tax reporting each one requires.

A raffle has three elements: a prize, chance, and consideration (payment for the chance to win). Changing the name does not change the elements. California's Attorney General answers the question directly: "If participants are required to purchase a ticket in order to have a chance to win a prize, the drawing is subject to" the raffle statute, whatever it is called.

## When a Raffle Is Off the Table

| Situation | Example |
|---|---|
| The state prohibits charitable raffles | Alabama, Hawaii, Utah. See [Are Booster Club Raffles Legal](https://boosterclub.org/raffles/are-raffles-legal/) |
| The club is too new | Texas and Tennessee require three years of existence; California requires one year plus a state tax exemption |
| The club missed the application window | Tennessee accepts applications only from July 1 to January 31 |
| The district prohibits games of chance at school events | Check the [district policy](https://boosterclub.org/fundraising/district-policies/) |
| The plan depends on online sales the state does not allow | California prohibits conducting a raffle via the Internet. See [Online and Electronic Raffles](https://boosterclub.org/raffles/online-raffles/) |

## Option 1: A Free-Entry Drawing Done Correctly

"Opportunity drawing" and "no purchase necessary" are labels, not legal categories. A drawing avoids raffle law only if entry is genuinely free. California's statute (Penal Code § 320.5(m)) is a useful model. It exempts a drawing only when all three are true:

1. There is a "general and indiscriminate distribution of the tickets."
2. Free tickets "are offered on the same terms and conditions as the tickets for which a donation is given."
3. The drawing "does not require any of the participants to pay for a chance to win."

California adds that registration is not required when "all tickets for a drawing are free, solicitations of voluntary donations to the organization are in no way connected to distribution of tickets, and this is made clear to all participants." Tennessee warns that if a payment is required, "it does not matter that the payment is called a 'donation.'"

### Designing a genuinely free drawing

- Offer free entries at the same tables, on the same website, and at the same times as entries given with a donation.
- Give free entrants the same number of entries and the same odds. Do not cap free entries more tightly than donated ones.
- State "No donation required to enter" on every sign, form, and post, as prominently as the donation request.
- Train volunteers not to pressure entrants or steer them toward donating first.
- Keep entry forms for free and donated entries identical and in the same container.

### States that ban raffles

Whether a free drawing is safe in a state that bans raffles depends on that state's definitions. Utah defines a lottery as distribution of property by chance "among persons who have paid or promised to pay any valuable consideration," so a genuinely free drawing does not fit that definition. Hawaii and Alabama were not confirmed for this page. In any of these states, the club confirms the design against the state page, and gets local advice if the state's rule is unclear, before announcing it. See [Alabama](https://boosterclub.org/states/alabama/), [Hawaii](https://boosterclub.org/states/hawaii/), and [Utah](https://boosterclub.org/states/utah/).

### Tax treatment

- **Not gambling winnings.** No wager means no Form W-2G. A prize of $2,000 or more (2026 threshold) paid to the winner of a drawing that does not involve a wager is reported on Form 1099-MISC, box 3. The club collects Form W-9 from that winner.
- **Gifts are contributions.** The Form 990-EZ instructions report as contributions "the proceeds of solicitation campaigns in which the names of contributors and other respondents (who weren't required to make a minimum payment) are entered in a drawing for prizes."
- **Acknowledgments.** Gifts of $250 or more get the standard written acknowledgment. See [Donation Receipts and Acknowledgment Letters](https://boosterclub.org/taxes/donor-acknowledgments/).

## Option 2: Silent and Live Auctions

An auction has a prize and a payment but no chance: the highest bidder wins. California's Attorney General states that "a silent auction is not considered a raffle" and does not require raffle registration. Auctions are the most common replacement for a raffle.

- **Display the fair market value** of each item, so bidders and the treasurer know it.
- **Disclosure over $75.** When a winning bid exceeds $75 and is partly a contribution, the club gives a written disclosure with a good-faith estimate of the item's value; the buyer can deduct only the amount paid above that value, as explained in Publication 1771 from the Internal Revenue Service (IRS).
- **Sales tax** on auction sales varies by state. See [Sales Tax for Booster Clubs](https://boosterclub.org/taxes/sales-tax/).
- **Reporting.** Auction income is fundraising event income, not gaming (Form 990-EZ line 6b). Schedule G Part II applies when fundraising event income and contributions exceed $15,000.

## Option 3: Fixed-Price Sales

Selling a donated item or experience at a set price to the first buyer, such as a reserved parking space for the season or front-row seats at graduation, has no chance element. A "mystery" format, where everyone pays the same price for envelopes or bottles of different value, reintroduces chance. With a payment and a prize, it can meet the definition of a lottery, so the club treats it as a raffle.

## Option 4: Direct Asks

- **Fund-a-need or paddle raise:** at an event, guests pledge set amounts toward a specific purchase. No prize, no chance.
- **Matching challenge:** a business or family matches gifts up to a cap during a set period.
- **Sponsorships:** businesses fund a prize-free event or a specific need in exchange for recognition. See [Corporate Sponsorships for Booster Clubs](https://boosterclub.org/fundraising/sponsorships/).

## What Does Not Work

- **Calling the ticket price a "donation."** Consideration remains.
- **A door prize drawn only among people who paid admission,** unless free entry is equally available. The admission can be the payment for the chance.
- **A "free" entry that comes only with a purchase.** The purchase can be the consideration.
- **A parent running the raffle personally for the club.** California allows only eligible organizations to hold raffles and bars individuals from holding a financial interest in one.
- **Borrowing another group's permit.** Permits belong to the organization that holds them. In Tennessee, each organization in a joint event must apply and qualify.

> Event and donation software can collect pledges, auction bids, and free drawing entries in one place, which helps the treasurer separate contributions from auction purchases at year end.

## Common Mistakes

- **Treating "opportunity drawing" as a legal exemption.** It is a label. Without truly free entry, it is a raffle.
- **Offering free entry but hiding it.** Fine print and pressure at the table defeat the design and invite a complaint.
- **Using a "mystery" sale to get around a raffle ban.** Paying for a chance at a better prize is the definition of a lottery.
- **Treating auction purchases as fully deductible.** Buyers can deduct only the excess over the item's value, and bids over $75 need a written disclosure.
- **Skipping Form 1099-MISC for a large free-drawing prize.** No wager means no W-2G, but a prize of $2,000 or more still has to be reported.

## Checklist

- [ ] Identify why a raffle is not allowed (state ban, eligibility, timing, district policy, online limits) (president)
- [ ] Choose the alternative that removes the problem element: free entry, auction, fixed-price sale, or direct ask
- [ ] Confirm the chosen format against the club's [state page](https://boosterclub.org/states/#raffles-gaming) and the district policy
- [ ] For a free drawing, offer free entries on the same terms, same places, and same odds as donated entries
- [ ] Put "No donation required to enter" on every sign, form, and post
- [ ] For an auction, record and display each item's fair market value
- [ ] Give a written disclosure to every winning bidder who pays more than $75
- [ ] Collect Form W-9 from any free-drawing winner of a prize of $2,000 or more and file Form 1099-MISC (treasurer)
- [ ] Report gifts as contributions and auction sales as fundraising event income on the annual return

## Related Pages

- [Are Booster Club Raffles Legal](https://boosterclub.org/raffles/are-raffles-legal/) why the raffle may not be allowed
- [Running a Booster Club Fundraising Event](https://boosterclub.org/fundraising/events/) planning an auction night
- [Donation Receipts and Acknowledgment Letters](https://boosterclub.org/taxes/donor-acknowledgments/) acknowledgments and the $75 disclosure
- [Fundraising Rules for Booster Clubs](https://boosterclub.org/fundraising/rules/) rules every fundraiser must follow
- [Booster Club Fundraising Ideas](https://boosterclub.org/fundraising-ideas/) other fundraisers that do not involve chance

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*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. Tennessee Secretary of State: https://sos.tn.gov/charities/guides/charitable-gaming-event-faqs
3. Texas Legislature: https://tcss.legis.texas.gov/resources/OC/htm/OC.2002.htm
4. Utah Legislature: https://le.utah.gov/xcode/Title76/Chapter9/C76-9-S1401_2026050620260506.pdf
5. IRS: https://www.irs.gov/instructions/i990ez
6. IRS: https://www.irs.gov/instructions/i1099mec
7. IRS: https://www.irs.gov/instructions/iw2g
8. IRS: https://www.irs.gov/pub/irs-pdf/p1771.pdf
9. Alabama Legislature: https://alison.legislature.state.al.us/files/pdf/SearchableInstruments/2025RS/HB47-int.pdf
10. data.capitol.hawaii.gov: https://data.capitol.hawaii.gov/hrscurrent/Vol14_Ch0701-0853/HRS0712/HRS_0712-1220.htm