Our Booster Club Does a 50/50 Game at Our Fundraisers. Is This Gambling?
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.
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:
What are the booster club laws in your state?
Do booster club rules permit this type of activity?
Who is responsible for ensuring compliance with the laws?
Are all booster club officers in agreement?
Has the club hosted a raffle before?
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.
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Does My Booster Club Need to Collect Sales Tax?
When managing a booster club, one of your top goals is generating as much revenue as possible for the athletic team or fine arts group you are supporting. One way you can maximize your revenue is by taking advantage of any price breaks and tax exemptions offered in your state. This brings us to the topic at hand: booster clubs and sales tax. Sales tax is a fee imposed by state governments on transactions involving services or goods. Because these fees are primarily imposed at the state and not the federal level, tax percentages vary from state to state. So does your booster club have to collect sales tax? Let’s explore.
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BoosterHub – The #1 Booster Club Software
In an October 2022 press release, Yahoo! Finance recognized BoosterHub as the #1 booster club software in this emerging industry. Since it launched, BoosterHub has experienced championship-level growth. In just nine months, BoosterHub surpassed the $1 million gross merchandise volume threshold.
BoosterHub’s overnight success speaks to the fact that the dynamic platform fills a long-standing void in the school booster club space. As of the press release, BoosterHub has more than 5,000 members and facilitated over 45,000 transactions. Our platform has an incredibly low single-digit churn rate, which is undoubtedly due to the fact that our customers are extremely satisfied with the product.
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Does My Concession Stand Need a Food Service License?
A concession stand is one of the most effective ways for your booster club to raise money for sports teams. However, if you have never run a concession stand before, you undoubtedly have tons of questions about it. Running a successful concession stand is not quite as simple as it may appear. In order to do so, you need to familiarize yourself with food service requirements, explore state tax laws, and much more.
The good news is that there are great resources to jumpstart your efforts. In addition to creating this beginner’s guide, the team at BoosterHub frequently tackles important concession-related topics. In this post, we take a deep dive into food service licensing requirements for concession stands. Whether you are already running a successful concession stand or have recently taken over these responsibilities for your booster club, this playbook will help you comply with state and local guidelines.