50/50 raffles are not legal in California for most organizations. State law requires at least 90% of raffle ticket revenue to go toward charitable purposes, which leaves no room for a prize that pays out half the pot. The only groups that can legally run a true 50/50 raffle are nonprofit foundations affiliated with certain major league sports teams, operating under a separate statute with its own licensing through the Bureau of Gambling Control.
Why the 90/10 Rule Rules Out 50/50 Raffles
California treats any scheme that distributes prizes by chance to people who paid to enter as a lottery, and lotteries are illegal by default.1California Legislative Information. California Penal Code PEN 319 – Lotteries A raffle checks every box: a prize, a random draw, and a ticket price.
Penal Code Section 320.5 carves out an exception for qualifying nonprofits, but attaches a condition that a 50/50 format cannot satisfy. At least 90% of gross ticket receipts must be used for beneficial or charitable purposes in California. Prizes and every cost of running the raffle combined cannot exceed 10% of what the raffle brings in.2California Legislative Information. California Penal Code PEN 320.5 – Raffle Conducted by Eligible Organization
The math is simple. Sell $10,000 in tickets and the prize plus expenses must stay at or under $1,000. A 50/50 payout would hand the winner $5,000, five times what the law permits. The statute also blocks the workaround of counting officers, directors, or members as “beneficiaries” of the charitable spend.2California Legislative Information. California Penal Code PEN 320.5 – Raffle Conducted by Eligible Organization
An organization can pay administrative costs from other funds, so the full 10% could theoretically go to the prize. It still doesn’t get anywhere near half.
The Major League Sports Exception
Penal Code Section 320.6, enacted in 2015, is the only route to a legal 50/50 raffle in the state. It lets nonprofit foundations tied to professional sports teams run raffles that award exactly half of gross ticket receipts to the winner, with the other half going to charity.3State of California – Department of Justice – Office of the Attorney General. Major League Sports Raffle Program
Who Qualifies
The exception covers 501(c)(3) nonprofits affiliated with teams in Major League Baseball, the National Hockey League, the National Basketball Association, the National Football League, the Women’s National Basketball Association, and Major League Soccer. It also extends to nonprofits established by the PGA, LPGA, and NASCAR. The organization must have been qualified in California for at least a year.4California Legislative Information. California Penal Code PEN 320.6
How the Raffle Has to Run
These raffles can only happen at home games, and each home game allows only one. Winners are picked by a manual draw; random number generators are prohibited. The full drawing must be video recorded and supervised by a registered person affiliated with the eligible organization. Winners don’t need to be present.5Cornell Law Institute. California Code of Regulations Title 11 Section 2097 – Winner Determination
Electronic devices can sell tickets in the stadium, but internet sales are banned outright. Organizations can advertise online and post downloadable entry forms, as long as those forms come back in person rather than over the internet.4California Legislative Information. California Penal Code PEN 320.6
The Cost of Entry
Licensing runs through the Bureau of Gambling Control in the Department of Justice, not the Attorney General’s Registry of Charitable Trusts that handles standard nonprofit raffles.3State of California – Department of Justice – Office of the Attorney General. Major League Sports Raffle Program The Department may charge a minimum annual registration fee of $10,000, plus $200 for each individual raffle held at a home game.4California Legislative Information. California Penal Code PEN 320.6 The program is priced for pro sports foundations, not community groups.
What Standard Nonprofits Can Do Instead
If you run a school, hospital, religious organization, or other charitable nonprofit, you can hold a raffle, just not a 50/50. You need to be registered with the Attorney General’s Registry of Charitable Trusts, hold a California tax exemption, and have been qualified to do business in the state for at least a year. For-profit companies, individuals, and political organizations cannot run raffles at all.6California Department of Justice. Application for Registration Nonprofit Raffle Program
Registration happens before ticket sales by filing form CT-NRP-1 and waiting for a written confirmation letter. Registration runs on the calendar year, and an aggregate financial report (CT-NRP-2) covering every raffle held is due by February 1 of the following year.7State of California – Department of Justice – Office of the Attorney General. Nonprofit Raffles
Tickets must be paper with a detachable stub, and both pieces need to carry the same unique identifier. The draw happens in California, from those detached stubs, supervised by someone at least 18. Because the law requires physical paper tickets with matching stubs, online ticket sales are effectively impossible for standard nonprofit raffles.2California Legislative Information. California Penal Code PEN 320.5 – Raffle Conducted by Eligible Organization
What Happens if You Run One Anyway
A raffle that misses any statutory requirement drops back into being an illegal lottery. Under Penal Code Section 320, anyone who sets up or conducts a lottery is guilty of a misdemeanor.8California Legislative Information. California Penal Code PEN 320 – Lotteries The standard misdemeanor punishment is up to six months in county jail, a fine of up to $1,000, or both.9California Legislative Information. California Penal Code PEN 19 – Misdemeanor Punishment Local district attorneys and city attorneys can investigate and prosecute, and both the organization and the individuals running the event are exposed.