By Brian Skinner, Esq.
Not only can raffles be fun, they can be a terrific way to generate revenue for a non-profit organization or charity. Most of us have had the experience of buying an inexpensive raffle ticket for a local nonprofit, perhaps a high school band, church, or volunteer fire department. In the age of the internet, online raffles would seem like an easy and convenient way to generate interest in a charitable raffle. But most of the states that permit charitable raffles do not permit online raffles and Alabama, Hawaii, and Utah prohibit raffles entirely.
Ultimately, any “raffle” is a game of chance, or more clearly and legally defined as gambling. West Virginia has a long history of banning gambling by its Constitution going back to the state’s first constitution in 1863. In 1984, the state Constitution was changed to create a narrow exception to the ban. Article VI, § 36 of the West Virginia Constitution was amended to allow the state to authorize “state-regulated bingo games and raffles for the purpose of raising money by charitable or public service organizations.”
Soon afterwards, the West Virginia legislature enacted the Charitable Raffle Act (W.Va. Code §§ 47-21-1 et seq.) that recognizes the need of charitable and public service organizations to have a practicable way of raising funds. The State Tax Commissioner administers the Act, including the licensing of charitable raffle operations. State oversight guarantees that raffles are operated in good faith with declared prizes existing and actually being awarded.
So, while there is specific legislation granting charitable and public service organizations the privilege of holding raffles, there are also strict rules that must be followed when doing so. One of those rules is that a raffle may only be conducted by selling or distributing paper tickets. Under current law, a non-profit that conducts an online raffle would be in violation of West Virginia law that prohibits an “electronic or mechanical raffle ticket system of whatever design or function” other than a hand-cranked or motorized drum mixer, or a mechanical or electronic paper ticket dispenser system.
As a result of this restriction, a raffle cannot be conducted online in West Virginia.
Not all states have this restriction. Colorado allows licensees to sell raffle tickets online and in 2017 New York enacted legislation to authorize the purchase of raffle tickets via the internet or mobile application with a credit or debit card. In Pennsylvania, legislation was recently introduced to permit community fundraisers to conduct games online during the COVID-19 pandemic because restrictions on in-person gatherings have hurt nonprofits’ ability to raise funds.
Raffles conducted by non-profits and charitable organization provide vital financial support to many worthwhile community programs, and recent technological advances can enhance the ability of the public at large to participate. West Virginia should consider joining Colorado and New York by updating current restrictions on the use of the internet to conduct a charitable raffle so that non-profit organizations can reach more potential ticket-buyers in a convenient, safe, and secure manner.
Brian J. Skinner is the former counsel to the West Virginia House of Delegates Committee on the Judiciary and counsel to the West Virginia Senate Minority Caucus. He has over a decade of experience as an adviser to legislators on legal and political issues related to pending legislation; providing research and legal analysis services to legislative committees; and preparing bills, resolutions, amendments, and other documents for the West Virginia Legislature.