Verdict: California is one of the strictest raffle states in the country. Running a raffle is legal for eligible nonprofits, but online ticket sales are flatly prohibited under Penal Code 320.5(f)(2). No exceptions, no digital workarounds.
What works: Registered nonprofits with at least one year of California tax-exempt status; register with the AG on Form CT-NRP-1 before selling any ticket; at least 90% of gross ticket proceeds must go to charitable purposes; drawing must be held in California; file CT-NRP-2 by February 1 after the raffle.
What doesn't: Selling, trading, or redeeming raffle tickets over the internet. No platform (Zeffy, PayPal, Venmo, or otherwise) can legally sell California raffle tickets online.
Best for: Nonprofits with the volunteer capacity to sell paper tickets in person at events, services, or community gatherings, and to handle registration and post-raffle reporting.
Worth considering if: You'd otherwise run this online. An opportunity drawing (free entry, no purchase) or a peer-to-peer donation campaign may raise more per volunteer hour than a paper raffle, and both are legal to accept online in California.
Table of contents
Running a raffle in California? The rules are strict: registration, the 90% rule, no online ticket sales. Get it wrong and you can face fines or lose your ability to fundraise here at all.
This guide walks through what it actually takes to host a legal California raffle, alongside raffle laws by state for context and how to plan and run a raffle fundraiser once you're compliant. We'll cover the types of raffles allowed, the ban on online ticket sales, and answer the honest question every California nonprofit asks: can Zeffy help?
California Raffle Laws: Quick Reference
If you just need the key rules at a glance, here's what matters most.
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| 90% Rule | At least 90% of gross ticket sales must go to charitable purposes |
| Registration Required | File Form CT-NRP-1 with the Attorney General before holding a raffle |
| Registration Fee | A fee applies. Check the current amount on the Attorney General's raffle page before filing |
| No Online Sales | Tickets cannot be sold, traded, or redeemed online |
| Drawing Location | Your raffle drawing must take place in California |
| Supervision | The drawing must be supervised by someone 18 or older |
| Restricted Locations | You cannot hold raffles at casinos, racetracks, or gambling establishments |
| Annual Report Deadline | Form CT-NRP-2 is due by February 1 (even if no raffle was held) |
| Who Can Host | Eligible nonprofits operating in California for at least one year |
For a small nonprofit: the rules aren't complicated, but they are strict. If you don't have a plan to sell paper tickets in person, the raffle is not the right fundraiser to start with.
California Raffles Overview
The state of California defines a nonprofit raffle this way:
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 defines raffles in its own words. 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 California 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
For a small nonprofit: the takeaway is simple. California's raffle law was written for a paper-ticket world, and the digital workarounds you'd use anywhere else don't exist here.
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. Your organization must:
- 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 here, even if you're registered in another state.
Raffle registration exemptions (who doesn't need to register?)
Some organizations are exempt from filing Form CT-NRP-1, but still have to follow every other raffle rule, 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 still have to file the annual Nonprofit Raffle Report (CT-NRP-2) by February 1 of the following year.
For a small nonprofit: exempt from registration doesn't mean exempt from the rules. Assume everything else still applies.
Opportunity drawings vs. raffles (what's the difference?)
Before you go further, make sure you know whether you're running a raffle or an opportunity drawing. The rules are completely different.
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| 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.
If you offer a paid entry option alongside a free entry option, the entire drawing may be reclassified as a raffle. The distinction has to be clean.
For a small nonprofit that wants to run something online: an opportunity drawing is usually the honest answer. You can collect entries through a web form, keep it free for everyone, and skip California's raffle regime entirely.
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:
- 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
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 conducting the raffle
- 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 serving as tickets. The ticket has to be a physical piece of paper.
Step 4: Sell tickets and follow the rules
Once you're registered and your tickets are printed, you can start selling. But there are strict rules:
- No online sales. Tickets cannot be sold, traded or redeemed over the internet. The statute addresses the internet and nothing else, so it does not bar taking an order by phone or by post
- 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 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.
You'll need:
- 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
For a small nonprofit: the reporting is the part that most often gets skipped, and it's exactly what the AG uses to decide whether to renew your registration. Keep clean records from day one.
Types of raffles and their California regulation
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, at least 90% of the nonprofit's remaining half must go to charitable purposes. Your operating costs have to be very low.
For a small nonprofit: if your operating costs can't fit inside 10% of the remaining half, a 50/50 raffle will fail the 90% rule. Run the math before you print tickets.
Car raffles
Car raffles are high-ticket fundraisers where the grand prize is a vehicle. They generate significant buzz and justify higher ticket prices ($50 to $100+).
California compliance note: If you buy the car, its cost comes out of gross receipts and counts against the 10% non-charitable spend limit. If a dealership donates the car, it doesn't count against the 90% rule, but you still have to report it. The rule that trips people up isn't about who donates the prize. It's that the raffle itself cannot be operated by a third party for profit. The nonprofit has to run it. Also make sure the winner understands they're responsible for taxes, registration, and insurance on the vehicle.
For a small nonprofit: a donated vehicle removes the biggest math problem, but you still need enough ticket sales volume to cover printing, staffing, and any other costs inside that 10% ceiling. Know your numbers before you commit to the prize.
Vacation raffles
Vacation raffles offer travel packages (hotel stays, cruises, resort weekends) as prizes. They're aspirational and drive strong ticket sales.
California compliance note: Same rules apply. Purchased packages count against the 90% rule. Donated packages don't, but still have to be reported. Make sure all travel terms and blackout dates are clearly communicated.
For a small nonprofit: a donated travel package is the safer path. If you're buying the package, confirm the math works before you go to print.
Experience-based raffles
Experience-based raffles offer prizes like backstage passes, private dinners, sports tickets, or exclusive tours. They feel unique and personal.
California compliance note: Donated experiences don't count against the 90% rule. Purchased ones do. Either way, clearly describe what the winner receives, including expiration dates or restrictions.
For a small nonprofit: experience prizes are often the easiest to source through community relationships. A donated dinner or tour keeps costs out of the 10% ceiling entirely and makes compliance simpler.
High-value cash prizes
Some nonprofits offer large cash prizes ($5,000, $10,000, or more) to drive ticket sales. The simplicity is universally appealing.
California compliance note: Cash prizes come directly out of gross receipts, so they count against the 90% rule. A $10,000 cash prize needs at least $100,000 in gross ticket sales to stay compliant. Prizes of $600 or more require the nonprofit to file IRS Form W-2G and report winnings to the IRS.
For a small nonprofit: large cash prizes are mathematically demanding. You need significant ticket volume to make the 90% rule work. Unless you have a reliable in-person sales network, a smaller prize or a donated item is a lower-risk starting point.
Luxury item raffles
Luxury item raffles feature high-end prizes like designer handbags, electronics, jewelry, or premium gift baskets.
California compliance note: Same 90% rule applies. Donated items don't count against it; purchased ones do. For high-value prizes, keep documentation of fair market value for reporting.
For a small nonprofit: donated luxury items are the smart play. They keep your cost basis low, give you a clean 90% calculation, and let you set ticket prices that actually raise money.
For a small nonprofit: whatever prize category you pick, the honest work is the same. Sell paper tickets in person, keep receipts, and file CT-NRP-2 on time. Whatever type of raffle you run, you can record offline raffle ticket sales and manage buyer info in Zeffy's free donor CRM for zero fees.
Online raffles in California: Breaking it down
This is the most misunderstood area of California raffle law. Let's be direct: you cannot sell raffle tickets online in California.
Penal Code 320.5(f)(2) 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 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 (still 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 record buyer information, track ticket stubs, and send winner notifications after the in-person sale
What about opportunity drawings?
If you want to run something online, an opportunity drawing is the honest alternative. Because no purchase is required, opportunity drawings are not classified as raffles and can be conducted online. You can collect donations online for the same cause (donations, unlike raffle tickets, are legal to process online in California) alongside a free-entry drawing.
What about alcohol at raffle events?
If you plan 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 rules around how alcohol is served, sold, and distributed. Check with the ABC well in advance.
For a small nonprofit: the practical takeaway is that the internet is only for promotion. Every dollar has to change hands in person, on paper.
Penalties for non-compliance
California takes raffle compliance seriously. Violations carry real consequences.
Failure to file CT-NRP-2
Missing the February 1 CT-NRP-2 deadline is one of the most common violations. It can trigger fines and can put your registration renewal at risk.
90/10 violations
Spending more than 10% of gross ticket receipts on non-charitable costs (prizes, printing, staffing) violates the 90% rule directly. This is what the AG looks at closely on CT-NRP-2.
Criminal penalties
Conducting an illegal raffle, or running a legal raffle without registration, can result in misdemeanor charges. Those charges apply to the individuals who organized the raffle, not just the organization.
Loss of good standing and raffle privileges
The Attorney General can revoke your ability to conduct future raffles and put your organization's registration in bad standing. For nonprofits that rely on raffles as a regular fundraiser, that's a serious blow.
Reputational damage
Beyond legal penalties, non-compliance damages your reputation with donors and the community. Trust is hard to rebuild once mishandling of funds is in the record.
For a small nonprofit: the registration and reporting aren't hard. The cost of skipping them is much higher than the cost of doing them.
Can you use Zeffy to run online raffles in California?
No. California Penal Code 320.5(f)(2) prohibits selling, trading, or redeeming raffle tickets over the internet. That rule applies to every platform, Zeffy included.
What Zeffy can help with in California is everything that surrounds the raffle:
- Record offline ticket sales and manage buyer info in a free donor CRM, so you can pull a clean buyer list, contact the winner, and file CT-NRP-2 from real records
- Send winner notifications and follow-up emails from the same dashboard, with delivery stats
- Collect donations online for the same cause (donations are legal to process online in California, raffle tickets are not)
- Sell event tickets to the raffle-night event itself. The paid event ticket is not a raffle ticket, and event ticketing is legal online
- Run peer-to-peer campaigns so volunteers can promote the raffle and drive online donations, even though the raffle tickets themselves must be sold in person
- Promote the raffle by email and newsletter from the dashboard. Promotion is legal; only paid ticket sales aren't
All of it is free. No platform fee, no transaction fee, no credit card fee. Ever. While you can't use Zeffy to sell raffle tickets online in California, you can use it to simplify everything else, keep 100% of every donation, and run the rest of your fundraising in one place.
FAQs - California Raffle Laws
Are raffles legal in California?
Yes, but only for eligible nonprofit organizations. Your nonprofit must have been operating in California for at least one year and hold tax-exempt status. You must also register with the Attorney General (Form CT-NRP-1) and follow every rule under Penal Code 320.5, including the 90% rule and the ban on online ticket sales.
Can you sell raffle tickets online in California?
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 a straight donation campaign.
What is the 90% rule for California raffles?
At least 90% of gross receipts from raffle ticket sales must be used for charitable purposes. Your total raffle expenses (prizes, printing, supplies) cannot exceed 10% of what you collected. Donated prizes don't count against the 90% threshold.
What's the difference between a raffle and an opportunity drawing?
A raffle requires payment to enter. An opportunity drawing is free to enter, no purchase necessary. Opportunity drawings aren't 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.
When is the California raffle report due?
The Nonprofit Raffle Report (Form CT-NRP-2) is due by February 1 of the year following your raffle. You must file even if you registered but did not hold a raffle that year. It goes to the Attorney General's Registry of Charitable Trusts.
Are there tax implications for raffle winners in California?
Yes. Raffle winnings are taxable income. If a prize is worth $600 or more, the nonprofit generally has to file IRS Form W-2G and report the winnings. For federal withholding, the IRS's flat 24% rate applies to certain gambling winnings over $5,000 (see IRS Publication 505). California also imposes state withholding of 7% on gambling winnings over $1,500 paid to nonresidents (see the California Franchise Tax Board). Winners are responsible for paying the federal and state income taxes owed on their prizes. Confirm current thresholds with the IRS and FTB before your event, and talk to a tax professional for your specific situation.
Can a car dealership donate a car for our raffle?
Yes. A dealership can donate a vehicle as a raffle prize (and typically claim a tax deduction for the donation). The California rule to watch is that the raffle itself cannot be operated or conducted by a third party for profit. The nonprofit has to run the raffle; a sponsor can donate the prize.
Can a for-profit business hold a raffle in California?
No. Only eligible nonprofit organizations can hold raffles in California. For-profit businesses cannot conduct raffles. A for-profit business can hold an opportunity drawing (free entry, no purchase) or sponsor a nonprofit's raffle by donating prizes or funding.
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