California Raffle Laws for Nonprofits 2026: Registration, Ticket Sales & 90/10 Rules

Raffles can be an effective way for nonprofits to raise money while giving supporters the chance to win a prize. But if you're planning a raffle in California, there are some important rules to understand before you start selling tickets.

California allows certain private nonprofit organizations to conduct charitable raffles under Penal Code § 320.5, but the rules are quite specific. Your organization must meet California's eligibility requirements, and most organizations must register with the California Attorney General before conducting a raffle.

California also has a 90/10 rule that determines how raffle-ticket revenue can be used. At least 90% of the gross receipts from ticket sales for each drawing must be used for qualifying charitable or beneficial purposes in California.

There's another important point for nonprofits planning a digital fundraising campaign: standard California charitable raffle tickets cannot be sold online. California allows organizations to promote raffles through their websites and other online channels, but the actual raffle-ticket transaction must take place offline.

This means a traditional online raffle platform can't simply be used to sell California raffle tickets or select the winner.

The good news is that the rules become much easier to navigate once you understand the key requirements. Start by confirming that your organization qualifies, then check whether you need to register, prepare the required paper tickets and make sure your raffle budget works with the 90/10 rule.

This guide explains the California raffle rules nonprofits need to know, including who can conduct a raffle, how registration works, the 90/10 rule, ticket and drawing requirements, online sales restrictions, 50/50 raffles, prize limits and federal tax reporting.

Important: This guide summarises California law and official guidance from the California Attorney General and Internal Revenue Service reviewed in August 2026. It is provided for general informational purposes and is not legal or tax advice. Confirm the current requirements before conducting a raffle.

Planning a California raffle? Start here.

Who can conduct a raffle?

Not every nonprofit automatically qualifies to run a raffle in California.

Under Penal Code § 320.5, an eligible organization must be a private nonprofit organization that has been qualified to conduct business in California for at least one year before conducting the raffle.

It must also be exempt from California taxation under one of the specific sections of the Revenue and Taxation Code listed in the statute.

Eligible organizations can include certain:

• charitable organizations;
• religious organizations;
• educational organizations;
• fraternal organizations;
• veterans' organizations;
• civic and social welfare organizations; and
• other organizations that meet the specific requirements in the legislation.

Is 501(c)(3) status enough?

No.

This is an important point for nonprofits based outside California or organizations that are familiar with federal 501(c)(3) requirements.

Having federal tax-exempt status doesn't automatically make an organization eligible to conduct a California raffle. The organization must have the required California tax-exempt status.

The California Attorney General recommends checking your organization's exemption documentation or obtaining an Entity Status Letter from the California Franchise Tax Board to confirm its status.

What about local chapters of national organizations?

A local chapter can't necessarily rely on the tax-exempt status of its national organization.

Whether a chapter qualifies can depend on its relationship with the parent organization, including how the organizations are structured, funded and managed.

If you're unsure whether your organization qualifies, it's worth resolving that question before you start planning ticket sales.

What legally counts as a California raffle?

California's definition of a raffle is important because it determines whether your fundraiser falls under the state's raffle rules.

In simple terms, a standard raffle involves people paying for paper tickets that give them a chance to win a prize.

The tickets need to meet specific requirements:

• Each ticket must have a detachable coupon or stub.
• The ticket and its coupon or stub must have a unique matching identifier.
• The winner must be selected from the coupons or stubs detached from the tickets sold for the drawing.
• The drawing must take place in California.
• A natural person who is at least 18 years old must supervise the drawing.

California also prohibits a standard raffle from using a gaming machine, apparatus or device to conduct the raffle. (California Legislature)

Why does the paper-ticket requirement matter?

It means a standard California raffle isn't simply a list of digital entries sitting in an online database.

The law specifically describes raffle tickets as paper tickets with detachable, matching stubs or coupons.

So if you're considering an online raffle platform, don't assume that an electronic ticket or digital entry is an acceptable replacement for the paper-ticket process.

How does California's 90/10 rule work?

The 90/10 rule is one of the most important things to understand before running a California raffle.

At least 90% of the gross receipts from ticket sales for each drawing must be used for beneficial or charitable purposes in California.

The remaining 10% can be used to help cover the costs of conducting the raffle.

For example, if your organization raises $10,000 from raffle-ticket sales:

• at least $9,000 must be used for qualifying charitable or beneficial purposes in California; and
• no more than $1,000 of those ticket receipts can be used to cover raffle expenses.

It's based on gross ticket receipts

This is an important distinction.

You can't simply subtract your raffle expenses from the $10,000 and then calculate 90% of what's left.

The 90% requirement applies to the gross receipts from ticket sales.

Can other money be used to pay raffle expenses?

Yes. An organization can use money from other sources to cover raffle expenses.

The California Attorney General recommends that organizations take care when using charitable assets for this purpose, particularly where funds are restricted.

Does the 90% have to be spent in California?

Yes.

The portion of raffle receipts subject to the 90% requirement must be used for qualifying beneficial or charitable purposes in California.

Beneficial purposes also cannot be intended to benefit the organization's officers, directors or members.

Why should you think about this before setting up the raffle?

The 90/10 rule can affect your entire raffle budget.

Before you set your ticket price or commit to raffle expenses, work out how much you expect to raise and make sure the planned use of the ticket revenue will satisfy the 90% requirement.

Do you need to register your raffle?

For most eligible organizations, yes.

California requires organizations conducting charitable raffles to register with the California Attorney General's Registry of Charities and Fundraisers, unless they fall within one of the specific exemptions.

The registration is made using Form CT-NRP-1.

Importantly, raffle registration is separate from an organization's general charitable registration requirements.

When do you need to register?

Raffle registration operates on a calendar-year basis, from January 1 through December 31.

Organizations can apply for the following year's registration from November.

If you haven't registered by January 1 but decide to conduct a raffle later in the year, the Attorney General advises submitting the application at least 60 days before the scheduled raffle to allow time for processing.

However, simply submitting the application isn't enough.

You must receive your registration confirmation before conducting raffle activities, including selling tickets.

What if the raffle crosses two calendar years?

If you begin selling tickets in one calendar year but don't hold the drawing until the next, you'll need to consider the registration requirements for both years.

This is particularly important for raffles that run over the end of December.

Do you have to file a raffle report?

Generally, yes.

Registered organizations file an aggregate raffle report using Form CT-NRP-2. The report covers the organization's raffles during the calendar year and is due by February 1.

You'll need to keep records of your raffles so that you can complete the report accurately.

Which organizations don't need to register?

California exempts certain organizations from the Attorney General's raffle registration and reporting requirements, including:

• religious organizations;
• educational institutions; and
• hospitals.

This exemption is limited.

Being exempt from raffle registration does not mean the organization is exempt from the other California raffle rules.

For example, the organization still needs to comply with applicable requirements concerning ticket sales, the 90/10 rule and online raffles.

Can raffle tickets be sold online in California?

No.

This is one of the clearest rules in California's raffle legislation.

A standard charitable raffle cannot be operated or conducted over the Internet, and raffle tickets cannot be sold, traded or redeemed over the Internet.

So while your organization can promote the raffle online, you can't use your website or an online fundraising platform to complete the raffle-ticket purchase.

What can you put online?

California allows organizations to provide information about their raffle online, including:

• prize descriptions;
• photographs and videos of prizes;
• raffle rules;
• drawing information;
• details of previous winners;
• frequently asked questions;
• contact information; and
• entry forms that supporters can download and complete manually.

However, a completed entry form cannot be submitted to the organization online.

What does that look like in practice?

You could have a webpage saying:

Enter our charity raffle
View the prizes, read the rules and download an entry form.

But the supporter couldn't complete the ticket purchase through an online checkout.

The ticket would need to be purchased through a permitted offline process.

Can I promote the raffle on social media?

Yes. The restriction is on conducting the raffle and handling raffle tickets online, not on using digital channels to promote it.

Your organization can use its website, email marketing and social media to tell supporters about the raffle, explain the prizes and provide information about how to participate.

Can you use online raffle software?

For a standard California charitable raffle, online raffle software cannot be used to sell raffle tickets or conduct the raffle over the Internet.

This is important because a platform may technically be capable of handling online raffle sales without those sales being legally permitted in California.

What about GalaBid?

GalaBid should not be used to sell tickets or select the winner for a standard California charitable raffle.

If your organization wants to use an online fundraising platform, consider a different fundraising format that can legally be conducted online, such as a silent auction or nonprofit event ticketing, provided the activity complies with the relevant rules.

For example, a nonprofit could use online event ticketing to sell admission to a fundraising event. But an admission ticket shouldn't be presented as a raffle entry simply to get around California's raffle restrictions.

The important distinction is:

You can use digital tools to promote and support your fundraising, but you can't turn a standard California raffle into an online raffle.

Ticket sales and drawing rules

Once you've confirmed that your organization is eligible and completed any required registration, there are several rules governing how the raffle itself is run.

Use qualifying paper tickets

Each raffle ticket needs:

• a detachable coupon or stub; and
• a unique identifier that matches the ticket to its coupon or stub.

The winning entry is selected from the detached coupons or stubs from the tickets sold for the drawing.

The drawing must take place in California

The drawing must be held in California and supervised by a natural person who is at least 18 years old.

Keep the drawing offline

The winner must be selected through the required paper-ticket process rather than using a gaming machine, apparatus or device.

This is another reason an electronic raffle platform isn't a straightforward solution for California nonprofits.

Where can't you conduct the raffle?

California prohibits raffles and raffle-ticket sales inside:

• licensed gambling establishments;
• operating satellite wagering facilities; and
• licensed racetrack enclosures.

These restrictions apply in addition to the rules governing online raffles.

Are 50/50 raffles permitted?

Generally, no.

In a typical 50/50 raffle, half of the money raised goes to the winner and half goes to the organization.

That structure doesn't fit California's standard charitable raffle rules because at least 90% of gross ticket receipts must be used for qualifying charitable or beneficial purposes in California.

California does have a separate Major League Sports Raffle Program under Penal Code § 320.6.

This program allows certain qualifying organizations associated with professional sports teams to conduct 50/50 raffles under a separate set of rules.

It isn't a general exception that ordinary nonprofits can use.

For most California charities, a standard 50/50 raffle isn't permitted.

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Prize limits and other restrictions

California does not set a general maximum prize value for a standard charitable raffle.

That doesn't mean there are no rules around prizes. Your organization should accurately describe the prize, follow its published raffle rules and make sure the overall raffle complies with Penal Code § 320.5.

There are also restrictions around who can have a financial interest in conducting the raffle.

In general, an outside individual or legal entity cannot hold a financial interest in the conduct of the raffle, apart from the organizations permitted under the statute.

Can people be paid to work on the raffle?

California has specific restrictions around compensation.

A person receiving compensation in connection with operating the raffle must be an employee of the eligible organization conducting it.

Compensation also cannot be paid from the portion of raffle receipts that must be used for beneficial or charitable purposes.

This is another reason to distinguish between an outside business providing a legitimate service to a nonprofit and an outside party effectively operating the raffle.

What about free drawings and "opportunity drawings"?

Calling something an "opportunity drawing" doesn't automatically mean California's raffle rules don't apply.

If people have to pay for their chance to win, the activity may be treated as a raffle regardless of what you call it.

California does provide an exception where:

1. tickets are distributed generally and indiscriminately;
2. free tickets are offered on the same terms as tickets for which a donation is given; and
3. nobody is required to pay for a chance to win.

The key question is therefore whether payment is required to participate.

If you're planning a free-entry or donation-based drawing, check the exact statutory requirements before assuming that it is outside the raffle rules.

Federal tax reporting and withholding

California's raffle requirements are only part of the picture.

Your organization may also have federal tax reporting and withholding responsibilities when it awards a raffle prize.

For payments made during 2026, the IRS generally requires Form W-2G reporting for qualifying lottery and raffle winnings when the winnings meet the applicable reporting threshold and the 300-times-the-wager test.

The general reporting threshold for these winnings is $2,000 for 2026. (IRS)

Federal withholding is a separate issue.

For lottery and raffle winnings, regular federal gambling withholding generally applies when the winnings minus the wager exceed $5,000. The withholding rate is generally 24%.

Backup withholding can also apply in certain circumstances, including where a winner does not provide a valid taxpayer identification number.

The rules can depend on the value and type of prize, the amount wagered and information provided by the winner.

For that reason, if you're awarding a significant prize, check the current IRS Form W-2G instructions before the drawing rather than waiting until the prize has been awarded.

California raffle checklist

Planning a California raffle? Work through these steps before selling tickets.

1. Confirm your organization is eligible

Check that your organization is a qualifying private nonprofit and has the required California tax-exempt status.

2. Check whether you need to register

Determine whether your organization is required to register its raffle activities with the California Attorney General.

3. Register before selling tickets

If registration is required, submit Form CT-NRP-1 and wait for your confirmation letter before starting raffle activities.

4. Check the calendar year

Make sure you have the required registration for every calendar year in which you conduct raffle activities.

5. Prepare your paper tickets

Use tickets with detachable matching stubs or coupons and unique identifiers.

6. Check your 90/10 calculation

Make sure at least 90% of gross ticket-sale receipts for each drawing will be used for qualifying charitable or beneficial purposes in California.

7. Keep ticket sales offline

Don't sell, trade or redeem raffle tickets online. Your website and social media can be used to promote the raffle and provide information.

8. Plan the drawing

Make sure the drawing takes place in California and is supervised by someone aged 18 or older.

9. Check your raffle expenses

Make sure compensation and other raffle expenses comply with California's rules and don't improperly reduce the amount that must be used for charitable purposes.

10. Keep good records

Track ticket receipts, expenses, prizes and how the proceeds are used.

11. File the raffle report

If your organization is required to report, submit Form CT-NRP-2 by February 1.

12. Check federal tax requirements

Before awarding a significant prize, determine whether federal reporting or withholding applies.

Official California raffle resources

The California Attorney General's Office provides the primary guidance for nonprofit raffles.

California Attorney General — Nonprofit Raffles

The California Legislature provides the underlying statutory requirements.

California Legislature — Penal Code § 320.5

California's separate Major League Sports Raffle Program is governed by Penal Code § 320.6.

California Attorney General — Major League Sports Raffle Program

For federal raffle-prize reporting and withholding:

IRS — Instructions for Forms W-2G and 5754

The bottom line

California allows eligible nonprofits to run charitable raffles, but the rules are quite different from states that allow online raffle ticket sales.

‍The biggest thing to remember is simple:

You can promote a California raffle online, but you can't sell the raffle tickets online.

If your fundraising strategy depends on digital ticket sales, a different fundraising format may be a better fit than trying to adapt a standard California raffle to an online platform.

This article summarises California law and official California Attorney General and IRS guidance reviewed in August 2026. It is provided for general informational purposes and is not legal or tax advice. Raffle, registration and tax requirements can change. Confirm the current requirements before selling raffle tickets or conducting a drawing.

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