draffles

Effective July 1, 2001

**Non-Profit Raffle Program Requirements**
Beginning July 1, 2001, charities and certain other private nonprofit organizations may conduct raffles to raise funds for beneficial or charitable purposes in California. This exception to the general constitutional prohibition against lotteries requires that at least 90 percent of the gross receipts from these raffles go directly to beneficial or charitable purposes in California. Additionally, a nonprofit organization, unless specifically exempted, must register with the Attorney General's Registry of Charitable Trusts prior to conducting the raffle and file financial disclosure reports on each raffle event. What organizations qualify and how the raffles must be conducted are governed by Penal Code Section 320.5, which was added by Senate Bill 639 (McPherson, Chapter 778, Stats. of 2000). Additional information is available in Frequently Asked Questions.
Registration Form et-NRP-1 You must fill out the 1-page nonprofit raffle registration form and include a fee of $20. The information needed on this form include: the name, address, phone, fax, and email address of the organization, the Federal Tax identification number, the Corporate number assigned by the California Secretary of State, the California Charitable Trust Identification number, and the name and title of a fiduciary, which is a person such as an officer or other individual occupying a position of responsibility in the organization. The registration is good for one year, from September 1 through August 31 (Since this new policy is effective July 1 2001, for this year only, the effective date will be July 1, 2001 through August 31, 2002). A new registration form must be filed by September 1 of each year that you expect to conduct a raffle.
Nonprofit Raffle Report Form et-NRP-2 After each raffle, you must submit a 2-page Nonprofit Raffle Report. The records you need to fill out this report include: the date and location of the raffle, the total funds received from the raffle, the total expenses for conducting the raffle, and the purpose for which the raffle proceeds were used or the amount and the organization to which proceeds were directed. A separate report must be filled out for each raffle conducted. All reports must be filed no later than September 1 of each year for activities in the current registration period.

Raffle Requirements for Nonprofit Organizations
BILL NUMBER: SB 639, CHAPTER 778 For the complete bill, click here.
Penal Code Section 320.5
To reach the homepage for detailed raffle information, click here.

FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2000
APPROVED BY GOVERNOR SEPTEMBER 27, 2000

INTRODUCED BY Senator McPherson FEBRUARY 24, 1999

An act to add Section 320.5 to the Penal Code, relating to charitable gaming.

LEGISLATIVE COUNSEL'S DIGEST

SB 639, McPherson. Gambling: charitable raffles.
Existing law generally prohibits lotteries, but provides for the operation of the California State Lottery and authorizes bingo games to be conducted for charitable purposes pursuant to local ordinances.

The California Constitution, as amended by initiative, also empowers the Legislature to authorize private, nonprofit, eligible organizations, as defined, to operate raffles to provide funding for beneficial and charitable works, subject to specified requirements.

This bill would implement that latter authority, and would provide that a raffle conducted by an eligible organization, as defined, for the purpose of directly supporting specified beneficial or charitable purposes in California, or financially supporting another private, nonprofit, eligible organization that performs those purposes, is not prohibited if, among other requirements,

each ticket is sold with a detachable coupon or stub with identifying numbers,
the draw is conducted in California under the supervision of a natural person who is 18 years of age or older, and
at least 90% of the gross receipts generated from the sale of raffle tickets are used to benefit or provide support for beneficial or charitable purposes, as defined.

The bill would limit the use of raffle funds to purposes in California.

This bill would provide that an eligible organization is a private, nonprofit organization that has been qualified to conduct business in California for at least one year prior to conducting a raffle and is exempt from taxation pursuant to specified provisions of California law.

The bill would provide that any person receiving compensation in connection with the operation of a raffle shall be an employee of the eligible organization that is conducting it, that in no event may compensation be paid from dedicated funds, and that no person or entity shall hold a financial interest in the conduct of a raffle except the eligible organization itself and other eligible organizations receiving funds as described.

The bill would provide that an employee of an eligible organization who is a direct seller of raffle tickets shall not be treated as an employee for workers' compensation purposes or unemployment insurance purposes if certain requirements are met.

The bill would provide that no raffle may be conducted by means of, or otherwise utilize, any
gaming machine, apparatus, or device, and would provide that no raffle may be advertised, operated, or conducted, nor may raffle tickets be sold, traded, or redeemed, over the Internet, or within an operating racetrack inclosure or satellite wagering facility, or within a gambling
establishment, as specified.

This bill would also provide that no eligible organization shall conduct or participate in a raffle without first having obtained and thereafter maintained a registration from the Department of Justice, as specified.

This bill would authorize the department to issue regulations to enforce these provisions, to assess an annual registration fee of $10 to be deposited in the General Fund to cover the actual costs of establishing and operating this registration system, and would require the department to maintain a data base of registrants, with specified exemptions, and conduct specified proceedings in compliance with the Administrative Procedure Act. (As soon as we receive information on this registration, we will add it to this page.)

This bill would require the Department of Justice to conduct a study and report to the Legislature by December 31, 2003, on specified issues concerning the impact of these provisions on raffles.

These provisions would become operative on July 1, 2001.

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