'96 Flag Rally is a top-down racing game set in maze-like environments similar to the concept of New Rally-X. The player chooses between different girls and a selection of cars or motorcycles. Set across multiple stages the player rides or drives around to collect flags while avoiding hazards and opponents Pac-Man style. When crashing a life is lost immediately.
A map on the right side of the screen shows remaining flags through yellow squares. There is only a limited amount of time, represented through a green bar gradually filled up with red as time passes. Two additional actions are possible: a boost with additional speed and leaving behind smoke against opponents. Every now and then there is a special stage as well.