Can I run an online 50/50 raffle? That is where one buys tickets at a set price ($1) and write there name on them. Then they go in a hat and one is picked randomly. The winner gets half the money from all the tickets sold. What I was thinking is the person buys tickets with paypal and then at a set date, one of the paypal addresses is picked randomly from the database and I send them half of all the money. Is this legal to do?
Raffles are legal, but they are regulated if you are located in the United States. If so, you will need to check on the legalities within your individual state. http://rafflefaq.com/united-states-raffle-laws/
Whether you can make this legal or not, I think that you would have a difficult job in persuading people to buy a raffle, especially as there is the issue of trust - ie you get to pick the selected winner yourself.
That is the least of your problems. What you propose is illegal in most, if not all, of the United States. Simply, it is considered illegal gambling.