Tip-Based Raffle Platform Fees: Compliance Considerations
Several major raffle platforms — Zeffy, Givebutter, and RallyUp Free — use tip-based or bonus-entry checkout models. In states with regulated charitable gaming, these models raise specific compliance questions that most nonprofits haven't been warned about.
In states that regulate charitable gaming, raffle ticket prices are typically required to be fixed and fully disclosed before the buyer commits to a purchase. Tip-based platforms (Zeffy, Givebutter, RallyUp Free) introduce a variable, opt-out fee at the final checkout screen — after the buyer has entered payment information. This structural difference between a pre-disclosed fixed charge and a variable checkout tip may create compliance questions in regulated states. Organizations running licensed raffles should verify their platform's checkout model with their state's charitable gaming office before ticket sales begin.
Fixed Price vs. Variable Tip: Why the Distinction Matters
Most states that regulate charitable gaming include language requiring that raffle tickets be sold at a stated, fixed price. The specific language varies by state, but the underlying principle is consistent: buyers should know exactly what they're paying before they commit.
The compliance question for tip-based platforms is whether a transaction where the buyer pays a variable amount — ticket price plus a pre-checked platform tip — meets the "fixed stated price" standard. This is not a settled question across all states, and it is not one the platforms have answered publicly.
What buyers see: Ticket price at selection → payment info entry → tip prompt at final checkout (17–29% pre-checked)
Compliance question: Is the "ticket price" the price shown during selection, or the total amount paid including the tip? If the tip is part of the transaction, was the full price disclosed before commitment?
What the platforms say: The tip is disclosed and removable. Neither platform addresses whether this meets state fixed-price requirements for licensed raffles.
What buyers see: Ticket price + 12% service charge shown during ticket selection, before any payment information is entered
Compliance posture: The total cost is fixed and fully disclosed before the buyer commits. The charge does not change at checkout. No decision prompt.
The structural difference: Known before commitment vs. introduced after commitment. Fixed vs. variable.
How Each Platform's Model Creates Different Risk Profiles
Zeffy — Tip is disclosed but variable and opt-out
Zeffy's tip prompt appears at the final checkout screen, after the buyer has selected tickets and entered payment information. The tip ranges from 17–29% and is pre-checked. Buyers can remove it, but must actively do so. Zeffy is transparent about the model — they explain it in their documentation.
When this matters most: Organizations running licensed raffles in states with active charitable gaming enforcement (California, New York, Illinois, Pennsylvania, Texas) should raise this question with their state gaming office before using Zeffy for licensed events.
When it matters less: Small, unlicensed events below the licensing threshold in your state, or states with minimal charitable gaming enforcement.
Givebutter — Tips can be disabled, which changes the risk profile
Givebutter's key advantage over Zeffy: the tip can be disabled per-campaign or platform-wide. When disabled, a flat 3% platform fee applies instead. A fixed, known 3% fee that is part of the transaction structure is a different compliance question than a variable tip prompt.
RallyUp Free — Bonus entries create a distinct and more serious compliance issue
RallyUp's Free tier doesn't just use a standard tip model. It offers additional raffle entries in exchange for tipping the platform at checkout. This creates a specific compliance problem distinct from the standard tip question.
This is not a gray area in the same way the standard Zeffy tip is. Entries derived from platform tips — not from ticket purchases — are directly inconsistent with how licensed raffles are structured in most regulated states.
Our recommendation: Do not use RallyUp Free tier for any licensed raffle event. Use RallyUp Flex (which has clean checkout and no tipping) or a different platform entirely.
The Language That Creates the Compliance Question
While every state's language differs, the pattern is consistent. Here are examples of the type of statutory language that makes this issue relevant:
| State category | Typical statutory language | Tip model relevance |
|---|---|---|
| Fixed price requirement | "Raffle tickets shall be sold at a uniform price stated on the ticket." (common formulation in multiple states) | High. If the price on the ticket is $10 but the buyer pays $12.50 including the tip, which is the "stated price"? |
| Equal chance requirement | "All participants shall have an equal chance of winning based on tickets purchased." (common formulation) | High for bonus-entry tipping. Two buyers paying the same ticket price have different odds if one tipped for extra entries. |
| Disclosure requirements | "The price of each ticket and the rules of the raffle shall be disclosed to purchasers." (common formulation) | Moderate. Zeffy discloses the tip — but is disclosure at checkout the same as disclosure "to purchasers" before sale? |
| Proceeds requirement | "Net proceeds from the raffle shall benefit the charitable organization." (nearly universal) | Moderate. Platform tips flow to the platform, not the org. In some states this may affect the proceeds calculation. |
Note: All statutory language above represents common formulations found across multiple state statutes, not quotes from any specific state's code. Verify your state's specific language with your state's charitable gaming division.
What to Do Before Launching on a Tip-Based Platform
Frequently Asked Questions
Are tip-based raffle platforms compliant with state charitable gaming laws?
It depends on the state. Many states require that raffle ticket prices be fixed and fully disclosed before the buyer commits. A pre-checked variable tip introduced at checkout may not meet this standard in regulated states. Organizations should consult their state's charitable gaming office and a qualified attorney before using tip-based platforms for licensed raffle events. This is not a settled legal question — it is an open compliance consideration.
Is Zeffy's tip model compliant for nonprofit raffles?
Zeffy's tip is disclosed and removable, which distinguishes it from a hidden fee. Whether it meets the fixed stated-price requirements of specific states is a question Zeffy's documentation does not address. Organizations in states with active charitable gaming enforcement should raise this question with their state's gaming office before use — in writing, with the specific checkout mechanics described accurately.
What is the difference between a fixed service charge and a tip for compliance purposes?
A fixed, pre-disclosed service charge (like Chance2Win's 12% shown during ticket selection) is known to the buyer before they commit to a purchase. The amount does not change. A pre-checked tip introduced at final checkout is variable and presented after the buyer has already entered payment information. In states requiring fixed, disclosed ticket pricing, this structural difference is material. One is disclosed before commitment; the other is introduced after.
Does RallyUp's bonus-entry tipping create compliance risk for licensed raffles?
Potentially significant risk, yes. RallyUp Free tier offers additional raffle entries in exchange for tipping the platform. In states where raffle drawings must be based solely on tickets purchased at the stated price, entries derived from platform tips are inconsistent with this requirement. Two buyers who paid the same ticket price would have different odds of winning based on whether they tipped — a fairness problem that is difficult to reconcile with standard licensed raffle requirements.
What does Chance2Win's compliance posture look like?
Chance2Win's Zero Fee plan charges a fixed 12% service charge shown during ticket selection — before the buyer enters any payment information. The charge is fixed, not variable, and fully disclosed before commitment. Chance2Win Premium charges a flat fee to the organization with $0 to supporters, or an org-controlled disclosed charge at any percentage the organization chooses. Neither model uses a tip prompt. This doesn't guarantee compliance in all states — compliance questions extend beyond the fee model — but it removes the tip-model compliance question from the evaluation.
Continue reading
- Raffle compliance overview — the full checklist
- Raffle laws by state — licensing thresholds and requirements
- Why free platforms fail at raffle events — the checkout friction data
- Zeffy full review — when free works and when it costs you
- RallyUp review — Free vs Flex and the compliance issue
- Platform pricing comparison — true cost analysis
Want a platform where the compliance question doesn't come up?
Chance2Win uses fixed, pre-disclosed pricing — shown before ticket selection, not introduced at checkout. No tip prompt. No variable amount. No compliance question about whether buyers knew what they were paying.
Questions about compliance? Call (813) 699-9325