Committee advances bill to allow online raffles for certain colleges, questions remain on geofencing

The Senate Government Organization Committee voted to report House Bill 2,491 to the full Senate with the recommendation that it do pass. The bill would allow qualifying colleges and universities to hold online raffles with proceeds directed to athletic departments and would remove a state requirement that raffle operators use geofencing to ensure patrons are physically inside West Virginia.

The bill’s sponsor and committee counsel told members the measure makes several changes: it limits eligibility to institutions with NCAA Division I or II athletic departments; it allows affiliated nonprofits, trusts and NIL collectives to benefit; it expands the definition of charitable activity to include fostering collegiate or international sports competition; it removes a statutory requirement that licensees host servers inside the state; and it clarifies that charitable raffles are not sports wagering or interactive wagering under state gaming law. The bill also requires net proceeds to be spent on specified institutional or charitable purposes within one year unless an extension is granted and prohibits using raffle proceeds for construction or property acquisition unless directly tied to the stated charitable purpose.

The bill drew questions about the removed geolocation language. Derek Wilker, Assistant Deputy Commissioner for Compliance and Enforcement with the tax department, told the committee that “our agency, doesn't have a strong position on the bill, except for the fact of the the geofencing location portion that gets removed from the bill. It makes it inconsistent with law.” Wilker said he could not speak to why the House struck the geofencing requirement.

John Myers, the state Lottery Director, told the committee federal law matters in determining what online activity is permitted. “We have 2 laws that would be of concern. The Wire Act being 1 only if there was some sports wagering activity attached to that raffle ticket,” Myers said. He added that the Unlawful Internet Gambling Enforcement Act “tends to go more towards the Internet side of things. It requires that somebody be geolocated in the state in order to wager on those things,” and that some programs also required servers to be in-state under current practice.

Myers said the department’s main concern is ensuring an online raffle is a raffle and not a sports bet or an internet wagering game. He told senators that, if an online raffle does not involve sports-wagering mechanics — for example, picking a winning team to determine winners — it likely would not trigger the Wire Act.

A senator who identified herself as the Junior Senator from the sixteenth said she would speak in support of the bill, adding that testimony from the Lottery Director made her comfortable that the Wire Act does not apply to the charitable raffles as drafted. Committee leadership then moved that the bill be reported to the full Senate with the recommendation that it do pass; the chair ruled the ayes had it and the motion was adopted.

Why it matters: supporters said the bill would allow volunteer fire departments and other nonprofit groups connected to qualifying colleges to raise funds using online raffle tools already used in nearby states. Opponents and some staff urged care to ensure the activity does not cross into sports wagering or unlawful internet gaming.

Votes at a glance: Vice Chair moved that House Bill 2,491 be reported to the full Senate with the recommendation it do pass; the chair ruled the ayes had it and the motion was adopted.

The committee moved on after adopting the motion; additional technical or drafting questions raised by staff and the Lottery Director remained on the record.