You'll need to use a laser anyways, a LED would have such a wide beam that you wouldn't even have to point it in the general direction of the person to score a heat.
RED laser modules are cheap, you can gut one from a 5 dollar laser pointer. You'll get 100meters out of that more than likley.
Here's an excerpt from "The Complete Tagger" PDF by Dave Bodger circa Jan '06.
There are now some quite reasonably priced units available from suppliers such as Maplins, which may make
them appear appealing. If you have ever thought of fitting one to your tag gun for use as a real targeting laser -
PLEASE DO NOT. Because of the widespread use of telescopic sights on many guns, even a low powered
laser is hazardous to people's eyes. Once the beam has been concentrated another 10 or more times by a scope,
the intensity is enough to do permanent damage to someone's retina. A 1mW Class II laser, the weakest sold by
Maplins, is NOT eye safe!
As far as I am aware, ALL lasers are BANNED in all LRP tag games. Even if someone produced what they
thought was an "eye safe" laser, the game organisers would have no way of determining the safety of such a
device on the day. Unfortunately the standard method of checking the safety of LRP weapons (being hit with it
yourself) is not acceptable here. (Hmm - let's just shine this laser in your eyes for a few minutes and see if you
go blind !)
The lasers used in games such as Quasar and Laser Quest are Class I, and so low powered that you can hardly
see them in anything other than total darkness; also telescopic sights are not used in those games and the
targeting area is the chest, not the head as it is in LRP tag games so the risk of prolonged eye exposure and
consequent damage is reduced.
The word "Laser" in the name "Laser Tag" is there just for effect. The infra red beams we use are thousands of
times less concentrated than a real laser beam and are little more dangerous than a TV remote controller at a
distance.