Friday, September 25, 2009

New California Raffle Law Allows for Internet Advertising

California Senate Bill 200 was approved by the Governor on August 5, 2009. This bill amends Penal Code Section 320.5 to permit  nonprofit and other eligible organizations to advertise their fundraising raffles over the Internets. The law that raffles cannot be conducted and tickets cannot be sold over the Internet remains in effect, but the new law provides that an eligible organization is not deemed to operate or conduct a raffle over the Internet, or sell raffle tickets over the Internet, if the it advertises its raffle on the Internet. The law provides that certain information that may be posted on a web site without violation of 320.5, including a) Lists, descriptions, photographs, or videos of raffle prizes, b) List of the prize winners. c)The rules of the raffle d) Frequently asked questions and their answers, e) Raffle entry forms, which may be downloaded from the website but still may not be submitted through the Internet, and f) Raffle contact information, including the eligible organization's name, address, telephone number, facsimile number, or e-mail address.  All the other provisions of Pen.C 320.5 remain in effect, including the requirement that at least 90% of gross receipts must be used by the eligible organization "to benefit or provide support for beneficial or charitable purposes" (for itself or another eligible organization). But, expenses of the raffle can be paid from other funds not derived from the raffle itself, if the organization has such unrestricted funds, which would include expenses for prizes.


Commercial Mediation & Arbitration Center said...

nice, thanks for the info. great blog

Maureen Diaz said...

I hope you don't mind my posing a related question here, as I am wading through various web pages trying to understand the law in California pertaining to raffles, which is the most restrictive and difficult I have experienced so far.
I run a bag raffle for a non-profit which I belong to. It is always conducted at the annual conference, which in Nov. 2012 will be in northern Ca. We raffle off a large number of items and services, all of which are donated. The proceeds cover the expenses of the auction first, and then all of the rest (the vast majority) go directly to the organization, and a sister non-profit. I am compensated for my work by the main organization, which is something I can change or even forgo; the other work which I do is all on a volunteer basis.
We do not sell any tickets, nor conduct the raffle, over the internet. It is all done on the spot, at the conference over a period of 3 days.
So I understand I need to register with the AG, apparently Sept. 1st for the Nov. event, and that I will need to file a report by the end of that fiscal year. But I am wondering if everything else will be legal. We auction hundreds of items divided between 3 days, all of them donated. The organization is based in Washington DC, but is actually international. Does this change things?
I appreciate any advice or responses which you can give, as this is a wee bit more than I bargained for, in terms of submitting to California law!
Thank you,
Maureen Diaz