California Raffle Laws: Complete Guide for Nonprofits, Schools & Fundraisers

What are the California Raffle Laws? Quick Answer: Only qualified nonprofits can legally run raffles in California.You must register with the California Department of Justice and follow strict rules. At least 90% of proceeds must support your charitable mission and not prizes or admin costs. Online raffles are mostly off limits. Break the rules, and you could face fines, lose your nonprofit status or face legal action.

Quick points to remember:
• Only eligible nonprofits can hold raffles.
• Registration is required before selling tickets.
• 90% of funds must go to a charitable purpose.
• Online raffles are heavily restricted.
• Violations can bring serious penalties.

Why Understanding California Raffle Laws Matters

If you’re running a school fundraiser, nonprofit event or a community raffle in the state of California, here’s something you need to know right from the start, raffles are tightly regulated. This is because in the state of California raffles are legally defined as gambling activities. That means there are clear rules and regulations on who can run them, how they’re run and where the money goes, even if your a nonprofit or school.

The state of California considers raffles as gambling due to three stipulations, there’s a prize, a payout and there’s chance. But luckily the state does give qualified nonprofits that want to use a raffle as a fundraising tool for their mission a bit of a break, but only if they follow specific rules set by the California Department of Justice. But this only goes for nonprofit entities, no other business is allowed to hold a raffle legally.

So you might be wondering why raffles, which seem harmless and fun are under such strict scrutiny. The answer is because raffles can be abused and the funds can be easily stolen or mismanaged. Without strict oversight it’s easy for shady characters to pocket the money or mislead their donors. California’s raffle laws are designed to make sure money raised goes where it’s supposed to go and not into someone’s personal bank account!

This is where compliance becomes crucial in order to stay out of hot water. If your organization ignores or even misunderstands the rules and does something the state deems illegal, the penalties can be steep and even harsh. We’re talking about fines, suspension of your nonprofit status or even criminal charges. That’s the kind of headache no good cause needs.

The point is, in California a raffle is regulated fundraising and only organizations with nonprofit status are allowed to use them in their fundraising, and even then there are still many rules and stipulations. Our article is set up so you’ll get a clear step-by-step guide to California raffle laws as well as understanding who can run a raffle legally, how to register, what the 90% rule really means and what to avoid if you don’t want a letter from the DOJ. Think of this information as your outline for running a smooth, legal and successful fundraiser without tripping over state law.

Who Can Legally Hold a Raffle in California

Bottom line? Only qualified nonprofits can legally hold raffles in California, period. That means your organization must be recognized as a nonprofit and officially registered with the California Department of Justice before you even think about printing tickets or announcing prizes. It also means that your local PTA can’t hold a raffle or they’re literally breaking the law, although there are some certain stipulations we’ll walk through later if your a religious organization or school, but even then there are even more rules to follow.

To qualify in order to run a raffle legally your organization needs to:

• Be a nonprofit entity like a charity like a religious group, school foundation or booster club.
• Register with the DOJ using the state’s official raffle registration form.
• Be in good standing as a charitable trust meaning your nonprofit status is active and compliant.

If you’re an individual, a business or a for-profit group, raffles are simply off-limits. There’s no workaround here. Even if you’re a local group looking to fundraise in order to give kids school supplies in September, it doesn’t matter. You’re breaking the law unless you’re running the raffle through a legitimate nonprofit organization, and even then, you seriously need to be careful.

Registration Requirements & Annual Filing

If your nonprofit wants to run a raffle in California you’ll need to register your raffle with The California Department of Justice before holding the raffle, not after the fact! This step is not optional. Failure to register before the event can lead to loosing your 501(c) nonprofit status as well as accruing fines and even jail time. So please take this step seriously.

Here’s how to get it done without feeling buried in red tape.

First you need to be eligible, a brand new nonprofit can not hold a raffle until it has existed in California for at least one year. You’ll also need to have tax-exempt status under California law, more below. Next verify your status via an Entity Status Letter from the Franchise Tax Board (FTB).

Eligibility Requirements

To conduct a raffle in California your 501(c) nonprofit must meet these criteria under Penal Code Section 320.5:

• Be a private nonprofit organization qualified to conduct business in California for at least one year prior to the raffle.
• Hold tax-exempt status under California law (e.g., Sections 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701l, 23701t, or 23701w of the Revenue and Taxation Code). Federal 501(c)(3) status is not strictly required but is commonly used to qualify for these exemptions. You need to verify your status via an Entity Status Letter from the Franchise Tax Board (FTB).
• Use raffle proceeds for beneficial or charitable purposes in California with at least 90% of gross receipts going directly to these purposes (the remaining 10% can cover costs).
• Exceptions to full eligibility rules apply to certain entities like professional sports affiliated nonprofits may have adjusted percentage requirements while standard 501(c) groups follow the 90/10 rule which we will explain in detail below.

Note: Only nonprofits can conduct raffles. For-profit entities or individuals cannot!

Now that you know you’re eligible, the first thing you’ll need to do is grab the state’s official raffle registration form CT-NRP-1 here. This is what will give you the legal right to hold your raffle. You’ll need your organization’s basic info, proof of nonprofit status and a clear charitable purpose for holding your raffle. Once the form is complete, submit it to the DOJ and wait for confirmation. Don’t start selling tickets until you have that approval in hand. Here’s a more detailed process:

1. Submit Form CT-NRP-1 (Nonprofit Raffle Annual Registration) at least 60 days before your first raffle. Include:
   • Organizational details include name, address, EIN and FTB exemption confirmation.
   • Planned raffle dates for the year as raffles run September 1 through August 31 annually.
   • A copy of your federal 501(c) determination letter or FTB exemption documents.
2. File via mail or online through the Registry of Charitable Trusts (no fee). Approval is typically required before proceeding.
3. Registration covers all raffles in the fiscal year and you need to renew annually.

Timing matters. Nonprofits must register at least 60 days before their first raffle of the year using Form CT-NRP-1. Registration covers raffles conducted within the raffle year which is defined as September 1 to August 31 of the following year. For example, September 1, 2027 to August 31, 2028. You can submit your registration form at any time during the year as long as it's at least 60 days before your planned raffle.

Once your event is over, the paperwork isn’t done. You’ll also need to file CT-NRP-2, the state’s Nonprofit Raffle Report form. This tells the DOJ how much money was raised throught the year through raffles and how it was spent and whether it followed the 90% charitable use rule.

Even if your raffle didn’t make a dime, you still have to file the report. Think of it as closing the loop, registration gets you in the door and reporting keeps you in good standing. The annual raffle report (Form CT-NRP-2) is due by September 1 of the following year.

Reporting and Record-Keeping

• Annual Report: Submit Form CT-NRP-2 (Nonprofit Raffle Annual Report) by September 1 following the raffle year (covering September 1–August 31). Include:
  • Gross receipts, expenses, and net proceeds per raffle.
  • Breakdown of how funds were used which must show that 90%+ went to charity.
  • If you ran multiple raffles you must file an aggregate report.
• Records: Keep detailed financial records (tickets, receipts, winner lists) for 4 years for audits.
• Failure to report can result in fines, suspension of registration, or referral to district attorneys for prosecution.

You can find the official forms and deadlines directly on the DOJ’s website: oag.ca.gov/charities

Key Rules and Restrictions

California’s raffle laws are quite specific, so you need to be sure you’re doing everything correctly and each box is ticked. Just one mistake, intentional or not, and you can find yourself in deep trouble and even shut down. Here’s what you need to know before selling your first ticket.

First off you need to appoint a supervisor that is at least 18 years of age to oversee all aspects of your raffle. This is the person that is legally bound to your raffle and will be contacted if the state finds any problems in the way it was conducted or problems with reporting or fund disbursement. So make sure this is a responsible adult and they’re willing to take on this responsibility.

You must also print their name and contact information on all of your tickets. Yes, if you don’t you can be fined for not supplying this information! This also means all tickets must be paper ones. You are not allowed to host an electronic raffle.

Next up is the 90% rule. What this rule basically says is that your 90% of the money your raffle generates must be used to support your charitable purpose. That means only 10% can be used to cover the costs of your raffle or administration fees. So to be clear, if your school raffle brings in $10,000 to build a new playground, at least $9,000 needs to go directly toward that playground. The state isn’t flexible on this!

Raffles must be conducted within the state California can’t cross state lines which means you can’t sell them online or through a national mailing list. Furthermore tickets must be purchased in person by people physically in the state. They do not need residency, but they must be within the sate.

The drawing itself also needs to happen in California. So you can’t announce the winners online if you’re drawing the tickets in New York. Everything about the raffle from ticket sales to picking a winner must happen within California’s borders, period. And the drawing must be open to all ticket holders during an in person event.

The one thing you do totally control is ticket pricing. Whether you want to price tickets at $5 or $50, or create bundles that offer discounts for buying in bulk, all of these decisions are your to make and don’t have any rules or regulations attached to them.

And the last major concern is recordkeeping. The California Department of Justice requires nonprofits to hold onto raffle records including ticket logs, sales totals, prize details and any financial reports for at least four years for audits. Think of it as a paper trail that proves you followed the rules if anyone ever asks.

Operational Rules

Here’s a clear and quick bullet point list of each of these steps:

• Appoint a supervisor: Must be at least 18 years old and oversee all aspects of your raffle like sales, drawings and reporting. Disclose their name and contact info on your tickets.
• Ticket sales:
  • Use paper tickets only (no electronic or online sales allowed).
  • Tickets must include: Nonprofit's name and address, raffle date, time, location, prize description, ticket price, supervisor details and a statement that it's a raffle under Penal Code 320.5.
  • Sales must occur in California and only to California residents.
  • No sales in gambling venues..
• Drawing and prizes:
  • Conduct the drawing in public and open to ticket buyers at the stated time and location.
  • Use a random method like a manual draw. You can not use any type of gambling devices.
  • Clearly disclose your prizes upfront and award them as promised. There can be no substitutions without prior notice.
  • Winners need not be present.
• Prohibitions:
  • No financial interest by individuals, for-profits or outsiders (only the nonprofit and supported eligible nonprofits can benefit).
  • Limit to fundraising for charitable purposes only.
  • Comply with local city and county ordinances as some areas have additional venue or noise rules.

Reporting and Record-Keeping

• Annual Report: Submit Form CT-NRP-2 (Nonprofit Raffle Annual Report) by September 1 following the raffle year (covering September 1–August 31). Include:
  • Gross receipts, expenses, and net proceeds per raffle.
  • Breakdown of how funds were used (must show 90%+ to charity).
  • If multiple raffles, file an aggregate report.
• Records: Keep detailed financial records (tickets, receipts, winner lists) for 4 years for audits.
• Failure to report can result in fines, suspension of registration, or referral to district attorneys for prosecution.

Potential Penalties for Non-Compliance

Violations like unregistered raffles or improper fund use are considered misdemeanors under Penal Code 320.5. Penalties include fines up to $10,000, imprisonment up to 1 year or civil actions by the Attorney General for fiduciary breaches. Always consult a lawyer for your specific situation to make sure your staying compliant.

For official forms and FAQs visit the California Attorney General's raffle page: oag.ca.gov/charities/raffles. Verify FTB status at ftb.ca.gov.

Online and Remote Raffles: What’s Allowed and What’s Not

Under California’s laws regrading raffle, both online or remote raffles are illegal. That means you ca not accept payments through your website, an app or Venmo or distribute tickets online, period. If you do it’s considered a gambling venture and you will face legal prosecution. The state draws a hard line between promoting a raffle online and actually running one online. And the difference matters. The state limits ticket sales only to in-person transactions that happen within California’s borders.

Now that doesn’t mean your online tools are completely useless. You can still use your website, social media channels and email list to promote the raffle. Sharing your mission, showing off the prizes and getting people excited about your event are all acceptable and totally legal. You just can’t process the transaction online. Think of it like inviting people to a fundraiser dinner, you can talk it up online but they have to show up in person to actually buy a plate.

So what does “online raffle” actually mean in legal terms? If you’re taking payment or issuing tickets over the internet, that’s an online raffle and it’s not allowed. Posting your flyer on Instagram with a “Tickets available at the school office” note? Totally fine.

Special Rules for Schools, PTAs and Churches

Although strictly speaking PTAs and schools can’t hold a raffle, there is a way to bypass the law and still hold one legally, it’s just requires an extra step. The same goes for churches that do not hold a valid 501 (c) designation. If it is however, it’s possible you won’t even need to fill out the usual forms other nonprofits need to.

Why Schools and PTAs Need to Pay Attention

Schools often run raffles to fund things like playground upgrades, art programs or sports gear. But strictly speaking in the state of California, a school itself can’t just decide to sell raffle tickets since public schools aren’t considered eligible nonprofit organizations under the state’s raffle law. The workaround to this is usually to work through a parent booster club or a supporting nonprofit that has the proper registration in place.

A PTA or booster group that’s registered as a 501(c)(3) and has filed with the California Department of Justice can legally host a raffle. The school can benefit from the funds it just can’t be the entity running the game.

Example:
Say your registered nonprofit PTA raises $5,000 by raffling off a donated e-bike. The PTA handles the registration, ticketing and the prize distribution. The school in turn receives the funds for new lab equipment. Everyone wins and it’s fully legal.

Churches Have Different Rules (But Not a Free Pass)

Religious organizations sometimes qualify for a special exemption. Your church still needs to be recognized as a nonprofit religious organization, but if it is it may be able to conduct a raffle without filing the same registration as other charities. But here’s the catch, the raffle still must meet the 50/90 rule meaning that at least 90% of the gross receipts must support the organization’s charitable purpose. This is not a loophole to run commercial raffles, rather it’s meant to support genuine community and charitable work.

Keep It Clean: Coordinate and Document Everything

For schools and PTAs the biggest legal mistakes happen when multiple groups overlap. Think like when a school, PTA and a booster club all try to “help” with a raffle without clearly deciding who’s actually running it. That’s where things can get messy fast.

To stay compliant:

• Decide which one legal entity is hosting the raffle.
• Make sure that entity is registered with the state.
• Track where every dollar goes.
• Put everything in writing.

A Few Smart Safeguards to Remember

• File your registration early in the year so you’re clear to host raffles anytime.
• Post clear terms so parents and donors know how the raffle works.
• Keep records for at least four years in case of an audit.
• If multiple groups are involved, put it in writing. Only one entity takes the legal responsibility.

Final Thought

Schools, PTAs, and churches can still benefit from raffles, even if they aren’t legally considered a nonprofit organization. But it does require extra steps, so be careful to do everything legally and always keep written records of every aspect of your event if problems should appear.

Raffle Law Alternatives: Legal Ways to Fundraise Without a Raffle

Raffles can raise a lot of money, but they also come with a lot of legal strings attached in the state of California. This is why many organizations, even nonprofits, choose to go with raffle alternatives that are less restricted but still pack the same fundraising opportunities raffles offer. Here are a few ways to raise funds without ever printing a raffle ticket.

1. Sweepstakes: Simple and Legal (If You Follow the Rules)

A sweepstakes looks and acts similar to a raffle with one major difference that takes away all legal problems, sweepstakes do not charge a fee to enter. This subtle difference makes a sweepstakes not only legal, but they also aren’t restricted as far as electronic sign ups that cross state borders. That single change makes it legal in all 50 states, including California, because it removes the element of gambling.

Example:
A youth sports club runs a sweepstakes for a weekend getaway at a donated cabin. People can enter for free or decide to donate $10 to support the team when they enter the sweepstakes. The difference is they can still give a donation, but they aren’t required. So the sports club still ends up rasing funds while bypassing California’s strict raffle rules.

2. Silent Auctions: Big Energy and No Legal Landmines

Silent auctions are still a major part of most charity’s fundraising strategies because they work. Plus in California there are no legal strings attached to an auction. There’s no chance, no ticket drawing, just people bidding what they’re willing to give for items they really want. That keeps things squarely outside California’s raffle laws. Plus you can host silent auctions in person, online or both.

And because bids often go higher than ticket prices do, they can often bring in way more revenue than a traditional raffle. And the real kicker, if you did decide you’re willing to go through all the raffle red tape, you could do both at the same event as long as your raffle still follows all the rules.

3. Online Giving Campaigns: Tap Into Your Community Anywhere

The best part of running an online campaign is that people can give to your cause from anywhere in the world with an internet connection. Online giving campaigns are simple to set up, easy to promote and don’t involve any of the legal restrictions that raffles do.

You can go the route of themed campaigns like “Playground Project Week” or “Sponsor a Student Day” simply by setting up a donation page either here on Paybee or on your own website and watch the donations roll in. Do some story posts with a few personal stories and add a live tracker and you should be hitting your goals in no time.

4. Donation Challenges and Giving Games: Fun Without the Risk

Remember the ice bucket challenge that took the internet by storm a few years back, imagine getting that kind of viral reach. That’s why donation challenges and giving games can do extremely well if you have an exciting idea that people will be willing to share. Tie a cause they care about to the challenge and you’re half way home.

Think “last donor standing,” team-based fundraising, or milestone unlocks where each donation triggers something fun. Add a few small incentives and really watch things heat up. Plus you can run these challenges online or during live events.

Why Some Nonprofits Ditch Raffles Entirely

For many it isn’t that raffles don’t work because they definitely do, it’s more about the legal requirements in California as they can be a real pain, especially if you’re a new nonprofit or your working with limited staff and money. Registering, reporting, tracking revenue, meeting the 90/50 rule and making sure everything is perfect takes time and energy and resources. So it’s sometimes simply feasible.

Yet with sweepstakes, auctions, giving campaigns, and challenges, organizations can raise just as much and often more without worrying about violations or loosing your nonprofit status. So if your goal is simply to raise some quick funds, then we wholeheartedly suggest you give these alternatives a try.

FAQs About California Raffle Laws

Can individuals hold a raffle in California?

No. Individuals and for-profit businesses cannot legally run raffles no matter what. Only qualified nonprofits are allowed to host them.

Can I sell raffle tickets online in California?

No. California law prohibits selling raffle tickets online even if it is only within the state. You can promote the raffle online, but all ticket transactions must happen in person using paper printed tickets.

What is the 90% rule for California raffles?

At least 90% of the gross receipts must go to your organization’s charitable purpose and no more than 50% can be used for prizes.

Are 50/50 raffles legal in California?

No. Traditional 50/50 raffles don’t meet the 90% charitable use requirement since 50% of the takings go to the winner.

Do schools need a permit to run a raffle?

Yes. If the raffle benefits the school it must be run through a qualified nonprofit PTA, booster club or other nonprofit entity that’s registered with the state.

Resources and Official Links

When it comes to California raffle laws you need to be painfully clear you’re following every single one. The fastest way to stay compliant is to go straight to the source which is why we’ve included all of the official state resources you’ll actually use to register, report and get help if something isn’t clear.

California Department of Justice Raffle Registration Portal

This is where every legal raffle in California begins. Eligible nonprofits must register here before selling a single ticket.

https://oag.ca.gov/charities/raffles

Registration and Reporting Forms

You’ll need to submit two different proper forms to the DOJ:

• CT-NRP-1 – Raffle Registration Form (file before your first raffle of the year)
• CT-NRP-2 – Annual Nonprofit Raffle Report (file after the raffle ends)

You can find and download both forms here:

https://oag.ca.gov/charities/raffles/forms

Attorney General’s Official Raffle Rules

If you want to double check the fine print or clear up gray areas this is the official guidance from the California Attorney General's Office.

https://oag.ca.gov/charities/raffles/faqs

Helplines and Support

Not everything can be solved with a PDF. If your situation involves multiple organizations, religious exemptions or gray areas around fundraising you should be seeking answers directly from the source.

• Phone: (916) 210-6400
• Email: CharitableTrusts@doj.ca.gov
• Hours: Monday–Friday, 8:00 a.m. to 4:30 p.m. PT

Why These Links Matter

Every raffle leaves a paper trail. If something ever gets questioned, these are the exact resources the state will point to. Registering correctly, filing the right reports and keeping your records organized doesn’t just protect your organization legally, it builds trust with your donors and community.

Final Thoughts

Raffles are a great way to raise money for a nonprofit, it’s just California’s rules are pretty strict when it comes to holding one. So you'll need to first understand all of the red tape and guidelines that must be followed, and then decide for yourself if the raffle is still the best option for your specific fundraiser.

The good news is that compliance isn’t complicated when you break it down and follow each step we’ve written about above. Start by registering with the California Department of Justice, follow the 90% rule, track every ticket and file your reports in a timely manner and you should be fine. And don’t forget to keep all of those records for at least fours years according to California’s DOJ’s website.

And if after reading this article you feel a raffle in California is just too much hassle, then try one of our alternatives. There are plenty of event ideas you can use to raise funds for your nonprofit. It doesn’t need to be a raffle as there are plenty of creative and fully legal alternatives. Even a silent auction feels like a raffle but you can also hold an auction online and reach people not residing in Cali.