Are raffles legal in California? Yes, but only for eligible nonprofits that follow the state’s raffle rules, and the details matter more than most event planners expect. The line between a lawful charitable raffle and an illegal lottery turns on who is running it, how tickets are distributed, how proceeds are used, and whether the organization registers before selling a single ticket. In practice, I treat this as a compliance issue, not a casual fundraiser idea, because one overlooked step can change the legal status of the whole event.
What matters most before planning a raffle in California
- California allows charitable raffles only as a narrow exception to its general ban on lotteries.
- Only eligible nonprofit organizations can run them; individuals and for-profit businesses cannot.
- Most raffles require prior registration, written confirmation, and an annual report.
- At least 90% of gross ticket receipts must support charitable or public benefit purposes in California.
- Online raffle conduct is prohibited, but online advertising is allowed.
- Silent auctions are not raffles, and most 50/50 raffles are not allowed outside the major league sports program.
The narrow exception that makes nonprofit raffles possible
California starts from a simple rule: lotteries are generally banned. The exception is narrower than many people assume. State guidance from the California Department of Justice says charities and certain other private nonprofit organizations may hold fundraising raffles for beneficial or charitable purposes in California, but only if they fit the statute and the related regulations.That means a raffle is not legal just because it supports a good cause. If participants must pay for a chance to win, California treats the event as a raffle, and the organization has to satisfy the state’s requirements. A truly free drawing is a different animal, but once a donation becomes part of the ticket exchange, the legal analysis changes quickly.
I would not label an event a raffle until I had checked the structure carefully. The next question is who actually qualifies to use this exception, because that is where many fundraisers go wrong.
Who can run one and who cannot
| Organization type | Can it usually run a raffle? | Why it matters |
|---|---|---|
| Eligible California nonprofit | Yes, if registered and compliant | Must be tax-exempt and in good standing |
| Religious organization, educational institution, or hospital | Often exempt from raffle registration and reporting | Still must follow the rest of Penal Code section 320.5 |
| Individual, corporation, or partnership | No | They cannot hold a financial interest in the raffle |
| Out-of-state chapter without its own California status | Usually no, or fact-specific | California qualification and FTB exemption are critical |
To qualify, the organization generally has to be a private nonprofit that has been qualified to do business in California for at least one year and has the right California tax exemption. An IRS letter by itself does not solve that problem. The state looks for California Franchise Tax Board exemption status, not just federal nonprofit status.
That distinction trips up chapters and auxiliaries all the time. If a national nonprofit wants a local chapter to run a raffle, the California facts matter: who controls the entity, who files taxes, and whether the local group has its own qualifying status. When those details are fuzzy, the safest answer is usually that the chapter is not ready to run the raffle on its own.
What a compliant raffle has to look like
Once an organization qualifies, the raffle still has to be structured correctly. The most important rule is the 90/10 requirement: at least 90% of gross ticket receipts must be used for charitable or public benefit purposes in California. In practical terms, if ticket sales bring in $1,000, at least $900 has to support the nonprofit’s charitable mission, and only $100 can be used for raffle-related expenses and operating costs tied to the event.
There are a few other rules that matter just as much:
- The drawing must be supervised by a natural person who is at least 18 years old.
- The raffle cannot be operated online, even though the organization may advertise it online.
- Prize awards cannot be made through a gaming machine, slot-style apparatus, or similar device.
- Any paid compensation connected to the raffle has to follow the statute and cannot swallow the charitable share of the proceeds.
- Raffle money is expected to support charitable purposes in California, not simply flow to another jurisdiction.
- A 50/50 raffle is generally illegal unless it falls under the separate major league sports raffle program.
That is why I tell event teams to think in terms of fundraising design, not just ticket sales. A legal raffle is not the same thing as “a fun prize event with a donation bucket.” The structure has to be clean from the start, or the entire fundraiser can drift into prohibited territory.
Registration, fees, and reporting deadlines
California does not treat raffle registration as optional paperwork. A nonprofit must receive written confirmation from the Registry of Charities and Fundraisers before conducting any raffle activity, including selling tickets. The state also requires a separate annual raffle report, even if the organization already files charity registration paperwork for other purposes.
- Confirm that the organization is eligible and in good standing.
- Complete Form CT-NRP-1 and attach proof of California Franchise Tax Board exempt status.
- Pay the raffle registration fee. The DOJ forms page currently lists it at $30.
- Wait for written confirmation before selling any tickets.
- If the raffle is after January 1 and ticket sales start earlier, register for both years.
- File the annual raffle report, Form CT-NRP-2, by February 1 for raffles conducted in the prior year.
- Renew the registration each year the organization plans to conduct raffles.
The timing matters more than most people realize. The DOJ’s raffle page says registration covers the calendar year, and applications should be filed on or before January 1. If the raffle is added later, the organization should still file at least 60 days before the scheduled drawing. There is no expedited lane, so planning early is the difference between a smooth event and a compliance scramble.
When I review event plans, I start with eligibility and timing because those are the first failure points. Once those are solid, the rest of the paperwork becomes much easier to manage.
Common mistakes that turn a fundraiser into a legal problem
Most raffle problems are not dramatic. They are administrative, sloppy, or based on a bad assumption. The event looks charitable on the surface, but the structure does not match California law.
- Calling the event an “opportunity drawing” and assuming the label changes the rules.
- Starting ticket sales before the written confirmation arrives.
- Forgetting that raffle registration is separate from charity registration.
- Treating the 90% rule as a guideline instead of a hard line.
- Assuming that a free drawing is exempt even when donations are tied to ticket distribution.
- Using raffle proceeds as general event money instead of keeping the charitable purpose clear.
- Trying to run a raffle through the internet instead of advertising it and conducting it offline.
There is also a practical issue many organizers miss: the Attorney General’s office does not give legal advice to the public. If the structure is borderline, or if the organization is operating through a chapter, parent, or affiliate arrangement, it is safer to get private legal counsel before selling tickets.
How raffles differ from silent auctions and 50/50 drawings
Event planners often blur raffles, silent auctions, and 50/50 drawings together because they all raise money at the same gala or community night. Legally, they are very different. A silent auction is a sale to the highest bidder, not a game of chance, so it is not treated as a raffle. A 50/50 drawing is a different kind of game altogether and is generally illegal unless it falls within the separate major league sports raffle framework.
| Format | How it works | California treatment |
|---|---|---|
| Raffle | People pay for a chance to win a prize | Allowed only for eligible nonprofits that register and follow the rules |
| Silent auction | The highest bidder wins an item | Not a raffle, though tax and event rules may still apply |
| Free prize drawing | Entry is genuinely free and not tied to a donation | May be exempt if all statutory conditions are met |
| 50/50 draw | Half the pot goes to the winner, half to the organizer | Generally illegal except under the major league sports raffle program |
For community-minded events, the distinction is useful because silent auctions are often simpler to administer. If the goal is to raise money for social impact without adding gambling-style compliance, an auction may fit better than a raffle. The legal burden is lighter, but it is still smart to check local tax and licensing rules before the event.
What I would check before the first ticket is sold
Before any ticket goes on sale, I would run through a short compliance list and treat every unanswered item as a stop sign rather than a formality.
- Does the organization have the right California tax-exempt status and at least one year of qualification to do business in the state?
- Is the raffle already registered, and has written confirmation arrived?
- Are ticket sales starting only after confirmation, not before?
- Will at least 90% of gross receipts support charitable or public benefit purposes in California?
- Is the drawing being conducted offline, with an adult supervisor and no prohibited gaming device?
- Is the annual report calendar already set so the February 1 deadline is not missed?
- Has the team ruled out any structure that looks like a disguised 50/50 draw or donation-linked free-for-all?
If the answer to any of those questions is uncertain, I would not treat the event as ready. California gives nonprofits a real fundraising tool here, but it is a regulated one, and the organizations that stay out of trouble are the ones that plan around the law instead of trying to work around it.
