A true 50/50 raffle is not legal in California for the vast majority of organizations. State law requires at least 90% of raffle ticket sales to go to charitable purposes, which leaves only 10% for the prize and every expense combined — well short of the 50% payout a 50/50 raffle promises. The one carve-out is for nonprofit foundations affiliated with major league professional sports teams, which can run genuine 50/50 raffles at home games under a separate licensing program.
Why a 50/50 Split Fails California’s Raffle Law
California treats any scheme that distributes prizes by chance to people who paid to enter as a lottery, and lotteries are illegal unless they fit a statutory exception.1California Legislative Information. California Penal Code PEN 319 – Lotteries Penal Code Section 320.5 creates the exception that lets charities run raffles at all, but it attaches a hard financial condition: at least 90% of gross ticket receipts must be used for beneficial or charitable purposes in California.2California Legislative Information. California Penal Code PEN 320.5 – Raffle Conducted by Eligible Organization
That 90% is the ceiling for everything else combined. The prize, printing, staffing, and any other administrative cost have to fit inside the remaining 10% of ticket revenue.3State of California – Department of Justice – Office of the Attorney General. Nonprofit Raffles A 50/50 payout gives the winner half of ticket sales by definition, so it fails the test the moment the drawing happens. Sell $10,000 in tickets and the law caps the prize-plus-expenses figure at $1,000, not $5,000.
Costs paid from other sources, like an existing event budget, do not have to come out of the raffle’s 10% slice. But the prize itself is funded by ticket sales, and no accounting trick turns a 50% prize into a 10% one.
The Professional Sports Exception
Penal Code Section 320.6, enacted in 2015, is the only route to a legal 50/50 raffle in the state. It authorizes qualifying nonprofit foundations tied to professional sports teams to run raffles where exactly half of gross ticket receipts goes to the winner and the other half goes to charity.4State of California – Department of Justice – Office of the Attorney General. Major League Sports Raffle Program
The eligible leagues are specific: 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. The statute also reaches nonprofits established by the PGA, LPGA, and NASCAR.5California Legislative Information. California Penal Code PEN 320.6 The foundation must be 501(c)(3) tax-exempt and have been qualified to do business in California for at least a year.
Operationally, these raffles can only be held at home games, one raffle per game. Winners are picked by a manual draw, not a random number generator, and the entire drawing must be video recorded and supervised by someone registered with the organization.6Cornell Law Institute. California Code of Regulations Title 11 Section 2097 – Winner Determination Internet ticket sales are banned outright, though the raffle can be advertised online.
Licensing runs through the Bureau of Gambling Control inside the Department of Justice, not the Attorney General’s charitable trust registry that handles standard nonprofit raffles. The Department may charge a minimum annual registration fee of $10,000 plus $200 per raffle conducted at a home game.5California Legislative Information. California Penal Code PEN 320.6 The program is built for professional sports foundations, not community groups.
What a Legal Nonprofit Raffle Looks Like Instead
If a 50/50 raffle is off the table, a conventional charity raffle is still available to eligible organizations. The nonprofit must 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 one year.7California Department of Justice. Application for Registration Nonprofit Raffle Program Private nonprofit schools, colleges, hospitals, religious organizations, and other charitable groups can qualify. For-profit companies, individuals, and political organizations cannot.
Before any tickets go on sale, the organization files registration form CT-NRP-1 with the Attorney General’s office and waits for a written confirmation letter. Registration covers one calendar year. After year-end, the organization files an aggregate financial report (CT-NRP-2) by February 1 covering every raffle it held that year.3State of California – Department of Justice – Office of the Attorney General. Nonprofit Raffles
The raffle itself has to use paper tickets with detachable stubs carrying a matching unique identifier, winners get drawn from those stubs by someone at least 18 years old, and the drawing must take place in California.2California Legislative Information. California Penal Code PEN 320.5 – Raffle Conducted by Eligible Organization Because the stubs have to be physical paper, selling tickets online is effectively impossible for standard nonprofit raffles. And the “beneficial purposes” that receive the 90% cannot include benefits to the organization’s own officers, directors, or members.
Penalties for Running One Anyway
A raffle that misses any of the statutory requirements is just an illegal lottery. Under Penal Code Section 320, anyone who sets up or conducts a lottery commits a misdemeanor.8California Legislative Information. California Penal Code PEN 320 – Lotteries California’s 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 handle enforcement, and liability can reach both the organization and the individuals who ran the event.
The practical takeaway for a nonprofit considering a 50/50 raffle in California: unless you are a foundation affiliated with a major league sports team licensed through the Bureau of Gambling Control, the format is not legal. A properly registered raffle with a smaller, fixed prize is the compliant path.