What You Need to Know About Conducting Nonprofit Raffles in California

In California, certain nonprofit organizations are permitted to conduct raffles to raise funds for charitable purposes. This exception to the general prohibition against lotteries is governed by California Penal Code section 320.5.

To qualify, organizations must adhere to specific eligibility, registration, operational, and reporting requirements, discussed here. Note that for-profit companies are never allowed to run raffles.

Who can legally run a raffle in California?

To conduct a raffle legally in California, an organization must:

• Be a tax-exempt nonprofit: Eligible organizations are those that have been granted tax-exempt status by the California Franchise Tax Board (FTB) under the following Revenue and Taxation Code sections: 23701a (labor, agricultural, or horticultural organizations other than cooperative organizations); 23701b (fraternal orders); 23701d (corporations, community chests, or trusts operating exclusively for religious, charitable, or educational purposes); 23701e (business leagues, chambers of commerce); 23701f (civic leagues, social welfare organizations, or local employee organizations); 23701g (social organizations); 23701k (religious or apostolic corporations); 23701l (domestic fraternal societies); 23701t (homeowners’ associations); and 23701w (veterans’ organizations).
• Have operated in California for at least one year: The organization must have been qualified to conduct business in California for at least one year prior to conducting the raffle.
• Maintain good standing: Organizations that are delinquent, suspended, or revoked in their registration status will be denied raffle registration.
• Register and obtain a raffle permit number with the California Attorney General: See below.

Are nonprofits required to register before running a raffle?

Most nonprofits (with some exceptions below) must register with the CA Attorney General before running a raffle. Before conducting a raffle, eligible nonprofits must:

1. Register with the Attorney General’s Registry of Charities and Fundraisers by submitting Form CT-NRP-1 and the required fee.
2. Submit the application at least 60 days before the raffle to allow time for processing.
3. Wait for confirmation from the Registry before selling tickets or conducting raffle activities.

The registration period is January 1 through December 31. Form CT-NRP-1 is accepted starting November 1 for raffles to be conducted the following year.

Nonprofit religious organizations, educational institutions, and hospitals are exempt from the registration and reporting requirements, but must still comply with all other provisions of Penal Code section 320.5.

What are the rules for conducting raffles?

When organizing and conducting a raffle, nonprofits must:

• Sell only paper-based tickets with detachable stubs; online ticket sales are not allowed, although online advertising is permitted.
• Use at least 90% of gross receipts for charitable purposes in California (aka “90/10 rule”)
• Not use gaming machines or conduct raffles over the Internet.
• Maintain good records for later reporting requirements: ticket sales, expenses, and prize distributions to complete this report.

What are 50/50 raffles and are they allowed?

50/50 raffles are those in which the prize winner receives 50% of ticket-sale revenue and the other 50% of goes to the organization conducting the raffle. 50/50 raffles are illegal unless the organization qualifies under Penal Code section 320.6, which established the 50/50 Major League Sports Raffle Program, regulated by the Bureau of Gambling Control, not the Registry of Charities and Fundraisers.

Do nonprofits need to report on the raffles they conduct?

Yes, for all raffles conducted in the prior year, organizations must file an annual report (Form CT-NRP-2) by February 1 covering all raffles conducted during the previous year.

Are any types of raffles exempt from registration?

Yes, a raffle is exempt from registration with the California Attorney General’s Office if all of the following are true:¹Penal Code section 320.5, subdivision (m)

• Tickets are handed out freely to anyone, with no distinction in who gets them;
• Free tickets are offered the same way as tickets given to those who donate (donors do not get preferential treatment); and
• No one has to pay to enter for a chance to win.

Are opportunity drawings or silent auctions subject to raffle requirements?

“Opportunity drawings” requiring a purchase for entry are considered raffles and must be registered. However, if they meet the conditions described above, they are exempt from registration.

Silent auctions are not raffles and do not require registration.

Can an individual (rather than a organization) ever conduct a raffle?

No, individuals may not conduct raffles, even for charitable causes.

Are employees and volunteers of the nonprofit allowed to purchase raffle tickets?

Yes, employees and volunteers of the nonprofit may purchase raffle tickets.

What happens if the rules for raffles are violated?

Violating Penal Code section 320.5 is a misdemeanor and may result in investigation, prosecution, or legal action under nonprofit laws. Raffle registration may also be suspended or revoked for violations.

Further Resources

For official guidance and forms, visit the California Attorney General’s website on charities: oag.ca.gov/charities/raffles.

Find a lawyer who works with nonprofits through our Guide to Getting Legal Help

How Do Nonprofits Work in California

Non-profits vs For-profits: What are the Differences?

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