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Running a raffle in California? The rules are strict — registration requirements, the 90% rule, and restrictions like no online ticket sales. Getting it wrong can lead to fines or even losing your ability to fundraise.
This guide walks you through exactly what's required to host a raffle while staying compliant with California raffle laws by state. We'll break down how to host a raffle, the types of raffles allowed, and clear up common misconceptions so you can move forward with confidence.
⚡TL;DR — California Raffle Laws at a Glance
Raffles are legal in California for nonprofits operating for at least one year with state tax-exempt status.
Register with the Attorney General (Form CT-NRP-1, $30 fee) before holding a raffle.
At least 90% of gross ticket sales must go to charitable purposes.
Online ticket sales are strictly prohibited. Promote online, transact offline.
Schools, hospitals, colleges, and religious organizations may be exempt from registration but still follow core rules.
File Form CT-NRP-2 by February 1 after your raffle — even if you didn't hold one.
Violations can mean fines, misdemeanor charges, and loss of future raffle eligibility.
No payment required to enter? That's an opportunity drawing, not a raffle — different rules apply.
"A raffle is a type of lottery in which prizes are awarded to people who pay for a chance to win. Each person enters the game of chance by submitting a detachable coupon or stub from the paper ticket purchased."
In other words, if someone pays money, gets a physical ticket, and a winner is drawn at random — that's a raffle under California law. And it's heavily regulated.
What California law actually says (Penal Code § 320.5)
Before getting into logistics, it helps to see how California law defines raffles in its own words. Here are the key excerpts from Penal Code § 320.5:
"A raffle conducted under this section is not a lottery."
"At least 90 percent of the gross receipts from the sale of raffle tickets for any given raffle shall be used directly for the benefit of, or to provide support for, beneficial or charitable purposes."
"No raffle tickets shall be sold via the Internet, by telephone, or by mail. No raffle tickets shall be sold, traded, or redeemed for value through any online or mobile application or any other electronic means."
"The raffle shall be conducted in California by an eligible organization that has been in existence for at least one year prior to conducting the raffle."
What this means in practice
If people pay to enter, it's a raffle (and must follow raffle laws)
At least 90% of proceeds must go to charitable purposes
Online ticket sales aren't allowed, even through nonprofit platforms
If entry is truly free and equal for everyone, it may qualify as an opportunity drawing instead
Who can host a raffle in California?
Not just any organization can hold a raffle. California law limits who qualifies as an "eligible organization" under Penal Code § 320.5. To host a raffle in California, your organization must:
Be a nonprofit organization with 501(c)(3) status or equivalent state tax-exempt status
Have been in existence and operating in California for at least one year
Be organized and operated for charitable, educational, civic, or similar purposes
If your organization doesn't meet these requirements, you cannot legally hold a raffle — even if you're a registered nonprofit in another state. California's nonprofit eligibility requirement is specific and strictly enforced.
Raffle Registration Exemptions (Who Doesn't Need to Register?)
Some types of organizations are exempt from the registration requirement (Form CT-NRP-1) but must still follow all other raffle rules, including the 90% rule and the ban on online ticket sales.
Exempt organizations include:
Private K-12 schools and public schools
Colleges and universities
Hospitals and healthcare foundations
Religious organizations and churches
Even if you're exempt from registering, you're still required to file the annual Nonprofit Raffle Report (CT-NRP-2) by February 1 of the following year.
Opportunity Drawings vs. Raffles (What's the Difference?)
One of the most common sources of confusion: not every drawing is a raffle. California law draws a clear distinction.
Feature
Raffle
Opportunity Drawing
Payment required?
Yes — must purchase a ticket
No — free and equal entry for all
Registration needed?
Yes (Form CT-NRP-1)
No registration required
90% rule applies?
Yes
No
Annual report required?
Yes (Form CT-NRP-2)
No
Online entry allowed?
No
Yes — since no purchase is required
Who can hold one?
Eligible nonprofits only
Any organization or business
What is an opportunity drawing?
An opportunity drawing (sometimes called a "free drawing" or "no-purchase-necessary sweepstakes") is a prize giveaway where no payment is required to enter. Everyone has a free and equal chance to participate.
Because there's no purchase involved, opportunity drawings are not considered raffles under California law and don't require registration, the 90% rule, or annual reporting.
However, if you offer a paid entry option alongside a free entry option, the entire drawing may be reclassified as a raffle — so the distinction must be clean and clear.
How to legally host a raffle in California: A step-by-step guide
Here's the step-by-step process to make sure your raffle is fully compliant with California law.
Step 1: Confirm your nonprofit eligibility
Before anything else, verify that your organization meets California's definition of an "eligible organization" under Penal Code § 320.5:
You must be a registered nonprofit (501(c)(3) or equivalent state tax-exempt status)
Your organization must have been operating in California for at least one year
Your organization must be organized for charitable, educational, civic, or similar purposes
You can request an Entity Status Letter from the California Franchise Tax Board to confirm your tax-exempt standing.
Step 2: Register with the Attorney General
Unless your organization is exempt (schools, hospitals, colleges, religious organizations), you must file the Raffle Annual Registration Form (CT-NRP-1) with the California Attorney General's Registry of Charitable Trusts before conducting a raffle.
Key details:
A $30 annual registration fee applies
Registration must be renewed each year
File by mail or in person — not online
Mail your completed form and fee to:
Registry of Charitable Trusts P.O. Box 903447 Sacramento, CA 94203-4470
Or deliver in person to:
1300 I Street Sacramento, CA 95814
Here's a glimpse at the Raffle Annual Registration form:
Step 3: Design and print your raffle tickets
California law requires that raffle tickets be physical, detachable tickets with a stub or coupon. Each ticket must include:
The name of the nonprofit organization conducting the raffle
The price of the ticket
The date, time, and location of the drawing
A description of the prize(s)
A detachable stub for the buyer to keep
No digital tickets, no email confirmations as entries, no QR codes that serve as tickets. The ticket itself must be a physical piece of paper.
Once you're registered and your tickets are printed, you can start selling. But there are strict rules about how tickets can be sold:
In-person sales only — tickets cannot be sold online, by phone, or by mail
No minors selling tickets — only adults (18+) may sell raffle tickets
No commission-based selling — sellers cannot be paid based on the number of tickets sold
No ticket sales at prohibited locations — casinos, racetracks, and gambling establishments are off-limits
You can promote your raffle online, through email, and on social media — just don't sell or accept payment for tickets through those channels.
Step 5: Hold the drawing
When it's time for the drawing, California law requires:
The drawing must take place in California
At least one person 18 or older must supervise the drawing
The drawing must be open to the public (or at least transparent and documented)
Winners don't need to be present to win (unless your rules state otherwise)
Step 6: File your post-raffle report
After the raffle, you must file the Nonprofit Raffle Report (CT-NRP-2) with the Attorney General by February 1 of the year following your raffle. This applies even if you registered but did not hold a raffle.
Here's a view into some of the information you'll need to prepare:
Total number of tickets sold
Gross receipts from ticket sales
Total prizes awarded and their values
Net proceeds and how they were used for charitable purposes
Confirmation that the 90% rule was met
Check out the checklist below for a comprehensive summary of everything you need to stay compliant:
Not all raffles look the same. Here's a breakdown of the most popular types and what you need to know about running each one in California.
50/50 Raffles
In a 50/50 raffle, half the proceeds go to the winner and the other half goes to the nonprofit. These are popular because there's no need to source prizes — the prize is cash.
California compliance note: The 90% rule still applies. Since half the proceeds go to the winner, the remaining 50% must still meet the 90% charitable use threshold. In practice, this means at least 90% of the nonprofit's half must go to charitable purposes — so your operating costs for the raffle must be very low.
Car Raffles
Car raffles are high-ticket fundraisers where the grand prize is a vehicle. These generate significant buzz and can justify higher ticket prices ($50–$100+).
California compliance note: The car's value counts toward the 10% non-charitable spend limit. If you buy the car, it comes out of gross receipts. If it's donated, it doesn't count against the 90% rule — but you must still report it. Also make sure the winner understands they're responsible for taxes, registration, and insurance on the vehicle.
Vacation Raffles
Vacation raffles offer travel packages — hotel stays, cruises, resort weekends — as prizes. These are aspirational prizes that drive strong ticket sales.
California compliance note: Same rules apply. If you purchase the travel package, it counts against the 90% rule. Donated packages don't count against it but still must be reported. Make sure all travel terms and blackout dates are clearly communicated to participants and winners.
Experience-Based Raffles
Experience-based raffles offer prizes like backstage passes, private dinners with local chefs, sports tickets, or exclusive tours. These are popular because they feel unique and personal.
California compliance note: Experiences donated by local businesses or individuals don't count against the 90% rule. If you purchase experiences, they do. Either way, clearly describe what the winner receives, including any expiration dates or restrictions.
High-Value Cash Prizes
Some nonprofits offer large cash prizes ($5,000, $10,000, or more) to drive ticket sales. The simplicity of cash prizes makes them universally appealing.
California compliance note: Cash prizes come directly out of gross receipts, so they count against the 90% rule. If you offer a $10,000 cash prize, you need at least $100,000 in gross ticket sales to stay compliant. Also, prizes of $600 or more require the nonprofit to file IRS Form W-2G and report winnings to the IRS.
Luxury Item Raffles
Luxury item raffles feature high-end prizes like designer handbags, electronics, jewelry, or premium gift baskets. These appeal to supporters who value exclusivity.
California compliance note: Same 90% rule applies. Donated luxury items don't count against it; purchased items do. For high-value prizes, make sure you have documentation of the item's fair market value for reporting purposes.
This is one of the most misunderstood areas of California raffle law. Let's be direct: you cannot sell raffle tickets online in California.
Penal Code § 320.5 explicitly prohibits the sale, trade, or redemption of raffle tickets via the internet, telephone, mail, mobile applications, or any other electronic means. There are no exceptions for nonprofits, no workarounds for "digital stubs," and no gray areas.
What you CAN'T do
Sell raffle tickets through your website
Accept payment for tickets via PayPal, Venmo, or any online platform
Use a mobile app to process ticket purchases
Send tickets via email or text in exchange for payment
Allow supporters to "reserve" tickets online and pay later (this is still considered a sale)
What you CAN do
Promote your raffle on social media, email, and your website
Share details about prizes, dates, and locations online
Direct people to in-person locations where they can buy tickets
Use online tools to manage ticket tracking, buyer information, and winner notifications after the in-person sale
If you want to run something online, consider an opportunity drawing instead. Because no purchase is required, opportunity drawings are not classified as raffles and can be conducted online. You can collect entries through a form on your website, social media, or email — as long as entry is completely free for everyone.
What about alcohol at raffle events?
If you're planning to serve or raffle alcohol at your event, you may need a special permit from the California Department of Alcoholic Beverage Control (ABC). Nonprofits can apply for a one-day special event license, but there are specific requirements around how alcohol is served, sold, and distributed. Check with the ABC well in advance of your event.
Penalties for Non-Compliance
California takes raffle compliance seriously. If your nonprofit violates raffle laws, the consequences can be significant.
Criminal penalties
Conducting an illegal raffle — or running a legal raffle without proper registration — can result in misdemeanor charges. This applies to the individuals who organized the raffle, not just the organization itself.
Fines and financial penalties
Violations may result in fines issued by the Attorney General's office. The amount depends on the severity and nature of the violation, but even minor infractions can lead to financial penalties that eat into your fundraising revenue.
Loss of raffle privileges
If your organization is found to be non-compliant, the Attorney General can revoke your ability to conduct future raffles. For nonprofits that rely on raffles as a regular fundraising tool, this can be a serious blow.
Reputational damage
Beyond legal penalties, non-compliance can damage your nonprofit's reputation with donors, supporters, and the community. Trust is hard to rebuild once lost — especially when it involves mishandling of funds or illegal activity.
The bottom line: follow the rules. The registration process and reporting requirements aren't complicated, and the cost of non-compliance far outweighs the effort of doing things right.
Yes — but only for eligible nonprofit organizations. To legally hold a raffle in California, your nonprofit must have been operating in the state for at least one year and hold tax-exempt status. You must also register with the Attorney General (Form CT-NRP-1) and follow all rules under Penal Code § 320.5, including the 90% rule and the ban on online ticket sales.
No. California law explicitly prohibits the sale of raffle tickets via the internet, telephone, mail, mobile apps, or any electronic means. You can promote your raffle online, but all ticket sales must happen in person with physical tickets.
If you want to run an online fundraiser, consider an opportunity drawing (no purchase required) or use a platform like Zeffy to manage your in-person raffle operations digitally. Get started with free raffle software from Zeffy.
At least 90% of the gross receipts from raffle ticket sales must be used for charitable purposes. This means your total raffle expenses — prizes, printing, supplies, and any other costs — cannot exceed 10% of what you collected in ticket sales. Donated prizes don't count against the 90% threshold.
No. Public and private K-12 schools, colleges, and universities are exempt from the registration requirement (Form CT-NRP-1). However, they must still follow all other raffle rules, including the 90% rule, the ban on online sales, and the annual reporting requirement (Form CT-NRP-2 by February 1). Check out over 30 fundraising ideas for schools.
A raffle requires payment to enter. An opportunity drawing is free to enter — no purchase necessary. Because opportunity drawings don't involve payment, they're not classified as raffles under California law and don't require registration, the 90% rule, or annual reporting. Any organization can hold one, and they can be conducted online.
The Nonprofit Raffle Report (Form CT-NRP-2) is due by February 1 of the year following your raffle. You must file this report even if you registered but did not hold a raffle that year. It's filed with the Attorney General's Registry of Charitable Trusts.
You can promote your raffle online — share prize details, event dates, and locations on social media, email, and your website. You just can't accept payment or process ticket sales digitally. After the in-person sale, you can use a donor management platform to track buyers, manage communications, and send winner notifications. Explore Zeffy's free donor management system.
Yes. Raffle winnings are considered taxable income by the IRS. If a prize is worth $600 or more, the nonprofit must file IRS Form W-2G and report the winnings. Winners are responsible for paying federal and state income taxes on their prizes — whether cash, a car, a vacation, or any other item of value.
No. Only eligible nonprofit organizations can hold raffles in California. For-profit businesses cannot conduct raffles. However, a for-profit business can hold an opportunity drawing (free entry, no purchase required) or sponsor a nonprofit's raffle by donating prizes or funding.
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Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
Look for people who attend related events, follow relevant Facebook groups, or subscribe to aligned newsletters.These aren’t just potential donors—they’re your future advocates.
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