Administrative Code

Virginia Administrative Code
12/2/2022

Part III. Suppliers

Article 4
Rent

11VAC15-40-120. Suppliers of charitable gaming supplies: application, qualifications, suspension, revocation or refusal to renew permit, maintenance, and production...

A. Prior to providing any charitable gaming supplies, a supplier shall submit an application on a form prescribed by the department and receive a permit. A $1,000 application fee payable to the Treasurer of Virginia is required. In addition, a supplier must be authorized to conduct business in the Commonwealth of Virginia, which may include, but not be limited to, registration with the State Corporation Commission, the Department of Taxation, and the Virginia Employment Commission. The actual cost of background investigations for a permit may be billed by the department to an applicant.

B. The department may refuse to issue a permit or may suspend or revoke a permit if an officer, director, employee, agent, or owner:

1. Is operating without a valid license, permit, or certificate as a supplier, network bingo provider, or manufacturer in any state in the United States;

2. Fails or refuses to recall a product as directed by the department;

3. Conducts business with unauthorized entities or is not authorized to conduct business in the Commonwealth of Virginia;

4. Has been convicted of or pleaded nolo contendere to any crime as specified by § 18.2-340.34 B of the Code of Virginia; has had any license, permit, certificate, or other authority related to activities defined as charitable gaming in the Commonwealth suspended or revoked in the Commonwealth or in any other jurisdiction; has failed to file or has been delinquent in excess of one year in the filing of any tax returns or the payment of any taxes due the Commonwealth; or has failed to establish a registered office or registered agent in the Commonwealth if so required by § 13.1-634 or 13.1-763 of the Code of Virginia. As this provision relates to employees or agents, it shall only apply to individuals involved in sales to or solicitations of customers in the Commonwealth of Virginia;

5. Fails to notify the department within 20 days of the occurrence, knowledge, or receipt of the filing of any administrative or legal action relating to charitable gaming or the distribution of charitable gaming supplies involving or concerning the supplier, any officers or directors, employees, agent, or owner during the term of its permit;

6. Fails to provide to the department upon request a current Letter for Company Registration on file with the U.S. Department of Justice, if required in accordance with the Gambling Devices Act of 1962 (15 USC 1171-1178) for any device that it sells, distributes, services, or maintains in the Commonwealth of Virginia; or

7. Has been engaged in conduct that would compromise the department's objective of maintaining the highest level of integrity in charitable gaming.

C. A supplier shall not sell, offer to sell, or otherwise provide charitable gaming supplies for use by anyone in the Commonwealth of Virginia other than to an organization with a permit from the department or another permitted supplier. However, a supplier may:

1. Sell charitable gaming supplies to an organization that expects to gross the amount set forth in § 18.2-340.23 of the Code of Virginia or less in any 12-month period, providing that the amount of such purchase would not be reasonably expected to produce more than the amount set forth in § 18.2-340.23 of the Code of Virginia in gross sales. For each such organization, the supplier shall maintain the name, address, and telephone number. The supplier shall also obtain a written and signed statement from an officer or game manager of such organization confirming that gross receipts are expected to be the amount set forth in § 18.2-340.23 of the Code of Virginia or less. Such statement shall be dated and kept on file for a minimum of three years from the close of a fiscal year.

2. Sell bingo cards and paper to persons or entities other than qualified organizations provided such supplies shall not be sold or otherwise provided for use in charitable gaming activities regulated by the department or in unlawful gambling activities. For each such sale, the supplier shall maintain the name, address, and telephone number of the purchaser. The supplier shall also obtain a written statement from the purchaser verifying that such supplies will not be used in charitable gaming or any unlawful gambling activity. Such statement shall be dated and kept on file for a minimum of three years from the close of a fiscal year. Payment for such sales in excess of $50 shall be accepted in the form of a check.

3. Sell pull-tabs, seal cards, and electronic pull-tabs to organizations for use only upon the premises owned or exclusively leased by the organization and at such times as the portion of the premises in which the pull-tabs, seal cards, or electronic pull-tabs are sold is open only to members and their guests as authorized by § 18.2-340.26:1 of the Code of Virginia. Each such sale shall be accounted for separately and the accompanying invoice shall be clearly marked: "For Use in Social Quarters Only."

All such sales shall be documented pursuant to subsection H of this section and reported to the department pursuant to subsection J of this section. This provision shall not apply to the sale to landlords of equipment and video systems as defined in this chapter.

D. A supplier shall not sell, offer to sell, or otherwise provide charitable gaming supplies to any individual or organization in the Commonwealth of Virginia unless the charitable gaming supplies are purchased or obtained from a manufacturer or another permitted supplier. Suppliers may take back for credit and resell supplies received from an organization with a permit that has ceased charitable gaming or is returning supplies not needed.

E. No supplier, supplier's agent, or employee may be involved in the management, operation, or conduct of charitable gaming in the Commonwealth of Virginia. No member of a supplier's immediate family or person residing in the same household as a supplier may be involved in the management, operation, or conduct of charitable gaming of any customer of the supplier in the Commonwealth of Virginia. No supplier, supplier's agent, or employee may participate in any charitable gaming of any customer of the supplier in the Commonwealth of Virginia. For the purposes of this regulation, servicing of electronic bingo devices or electronic pull-tab devices shall not be considered conduct or participation.

F. The department shall conduct a background investigation prior to the issuance of a permit to any supplier. The investigation may include, but shall not be limited to, the following:

1. A search of criminal history on all officers, directors, and owners; and

2. Verification of current compliance with Commonwealth of Virginia tax laws.

If the officers, directors, or owners are domiciled outside of the Commonwealth of Virginia, or have resided in the Commonwealth of Virginia for fewer than five years, a criminal history search conducted by the appropriate authority in any state in which they have resided during the previous five years shall be provided by the applicant.

G. Appropriate information and authorizations shall be provided to the department to verify information cited in subsection F of this section.

H. Suppliers shall document each sale or rental of charitable gaming supplies to an organization in the Commonwealth of Virginia on an invoice, which reflects the following:

1. Name, address, and organization number of the organization;

2. Date of sale or rental and location where charitable gaming supplies are shipped if different from the billing address;

3. Name, form number, and serial number of each deal of instant bingo, pull-tabs, seal cards, electronic pull-tabs, or bundles and the quantity of cards in each deal;

4. Quantity of deals sold, the cost per deal, the selling price per card, the cash take-in per deal, and the cash payout per deal;

5. Serial number of the top sheet in each pack of disposable bingo paper, the quantity of sheets in each pack or pad, the cut and color, and the quantity of packs or pads sold;

6. Serial number for each series of uncollated bingo paper and the number of sheets sold;

7. Detailed information concerning the type, quantity, and individual price of any other charitable gaming supplies or related items including, but not limited to, concealed face bingo cards, hard cards, markers or daubers and refills, or any other merchandise. For concealed face bingo cards, the quantity of sets, price per set, and the serial number of each set shall be included;

8. Serial number of each electronic pull-tab device, a description of the physical attributes of the electronic pull-tab device, the quantity of electronic pull-tab devices sold or rented, and the physical address to which each electronic pull-tab device is shipped or delivered;

9. Serial number and description of any other equipment sold or rented that is used to facilitate the distribution, play, and redemption of electronic pull-tabs and the physical address to which the equipment is shipped or delivered; and

10. Any type of equipment, device, or product manufactured for or intended to be used in the conduct of charitable games including, but not limited to, designators, designator receptacles, number display boards, selection devices, dispensing machines, and verification devices.

I. Suppliers shall ensure that two copies of the detailed invoice are provided to the customer for each sale of charitable gaming supplies.

J. Each supplier shall provide a report to the department by March 1 of each year on sales of charitable gaming supplies for the fiscal year ending December 31 of the previous year to each organization in the Commonwealth of Virginia. This report shall be provided to the department via a department-approved electronic medium. The report shall include the name, address, and organization number of each organization and the following information for each sale or transaction:

1. Bingo paper sales including purchase price, description of paper to include quantity of sheets in pack and quantity of faces on sheet, and quantity of single sheets or packs shipped;

2. Deals of instant bingo, pull-tabs, seal cards, electronic pull-tabs, or any other raffle sales including purchase price, deal name, deal form number, quantity of tickets in deal, ticket price, cash take-in per deal, cash payout per deal, and quantity of deals;

3. Electronic bingo device sales including purchase or rental price and quantity of units;

4. Equipment used to facilitate the distribution, play, and redemption of electronic pull-tabs including purchase or rental price, description of equipment, quantity of units of each type of equipment, and the physical address to which the equipment is shipped or delivered; and

5. Sales of miscellaneous items such as daubers, markers, and other merchandise including purchase price, description of product, and quantity of units.

K. The department shall set manufacturing and testing criteria for all electronic bingo devices and other equipment used in the conduct of charitable gaming. An electronic bingo device shall not be sold, leased, or otherwise furnished to any person in the Commonwealth of Virginia for use in the conduct of charitable gaming until an identical sample device containing identical proprietary software has been certified by a testing facility that has been formally recognized by the department as a testing facility that upholds the standards of integrity established by the department. The testing facility must certify that the device conforms, at a minimum, to the restrictions and conditions set forth in these regulations. Once the testing facility reports the test results to the department, the department will either approve or disapprove the submission and inform the manufacturer of the results. If any such equipment does not meet the department's criteria, it shall be recalled and shall not be distributed in the Commonwealth of Virginia. The cost of testing shall be borne by the manufacturer of such equipment.

L. Department employees shall have the right to inspect all electronic and mechanical equipment used in the conduct of charitable gaming.

M. Suppliers, their agents and employees, members of the supplier's immediate family, or persons residing in their household shall not make any loan directly or indirectly to any organization or officer, director, game manager, or entity involved in the management, operation, or conduct of charitable gaming of a supplier's customer located in the Commonwealth of Virginia.

N. No supplier, supplier's agent, or employee shall directly or indirectly provide a rebate, discount, or refund to any person other than an organization that purchases supplies or leases or purchases equipment from the supplier. All such transactions shall be recorded on the supplier's account books.

O. A supplier shall not rent, sell, or otherwise provide electronic bingo devices or equipment used to distribute, play, or redeem electronic pull-tabs unless the supplier possesses a valid permit in the Commonwealth of Virginia.

P. A written agreement specifying the terms of lease or rental shall be required for any electronic bingo devices or equipment used to distribute, play, or redeem electronic pull-tabs provided to an organization.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 29, Issue 3, eff. November 7, 2012; amended, Virginia Register Volume 33, Issue 4, eff. November 17, 2016.

11VAC15-40-130. Construction and other standards for bingo, instant bingo, pull-tabs, seal cards, raffles, electronic bingo devices, and instant bingo, pull-tab....

A. No supplier shall knowingly sell or otherwise provide to an organization and no organization shall knowingly use charitable gaming supplies unless they conform to the following construction standards:

1. Disposable paper sold shall be of sufficient weight and quality to allow for clearly readable numbers and to prevent ink from spreading, bleeding, or otherwise obscuring other numbers or cards.

2. Each sheet of disposable bingo paper shall be comprised of cards bearing a serial number. No serial number shall be repeated on or in the same style, series, and color of cards within a three-year period.

3. Disposable bingo paper assembled in books or packs shall not be separated except for single-sheet specials. This provision does not apply to two-part cards on which numbers are filled by players and one part is separated and provided to an organization for verification purposes.

4. Each unit of disposable bingo paper shall have an exterior label listing the following information:

a. Description of product;

b. Number of packs or loose sheets;

c. Series numbers;

d. Serial number of the top sheet;

e. Number of cases;

f. Cut of paper; and

g. Color of paper.

5. "Lucky Seven" bingo cards or electronic facsimiles thereof shall have a single face where seven numbers shall be chosen. "Lucky Seven" sheets or electronic facsimiles thereof shall have multiple faces where seven numbers shall be chosen per face.

B. No supplier shall knowingly sell or otherwise provide to an organization and no organization shall knowingly use instant bingo, pull-tab, or seal cards unless they conform to the following construction standards:

1. Cards shall be constructed so that concealed numbers, symbols, or winner protection features cannot be viewed or determined from the outside of the card by using a high intensity lamp of 500 watts, with or without utilizing a focusing lens.

2. Deals shall be designed, constructed, glued, and assembled in a manner to prevent determination of a winning or losing ticket without removing the tabs or otherwise uncovering the symbols or numbers as intended.

3. Each card in a deal shall bear the same serial number. Only one serial number shall be used in a deal. No serial number used in a deal shall be repeated by the same manufacturer on that same manufacturer's form within a three-year period. The flare of each deal shall accompany the deal and shall have affixed to it the same serial number as the tickets in such deal.

4. Numbers or symbols on cards shall be fully visible in the window and shall be placed so that no part of a number or symbol remains covered when the tab is removed.

5. Cards shall be glued on all edges and around each window. Glue shall be of sufficient strength and type to prevent the undetectable separation or delamination of the card. For banded tickets, the glue must be of sufficient strength and quality to prevent the separation of the band from the ticket.

6. The following minimum information shall be printed on a card:

a. Break open pull-tab and instant bingo cards:

(1) Name of the manufacturer or its distinctive logo;

(2) Name of the game;

(3) Manufacturer's form number;

(4) Price per individual card or bundle;

(5) Unique minimum five-digit game serial number printed on the game information side of the card; and

(6) Number of winners and respective winning number or symbols and specific prize amounts unless accompanied by a manufacturer's preprinted publicly posted flare with that information.

b. Banded pull-tabs:

(1) Manufacturer;

(2) Serial number;

(3) Price per individual card or bundle unless accompanied by a manufacturer's preprinted publicly posted flare with that information; and

(4) Number of winners and respective winning numbers or symbols and prize amounts or a manufacturer's preprinted publicly posted flare giving that information.

7. All seal card games sold to organizations shall contain the sign-up sheet, seals, and cards packaged together in each deal.

C. Raffle tickets used independent of a session must conform to the following construction standards:

1. Each ticket shall have a detachable section and shall be consecutively numbered.

2. Each section of a ticket shall bear the same number. The section retained by the organization shall provide space for the purchaser's name, complete address, and telephone number.

3. The following information shall be printed on the purchaser's section of each ticket:

a. Dates and times of drawings;

b. Locations of the drawings;

c. Name of the charitable organization conducting the raffle;

d. Price of the ticket;

e. Charitable gaming permit number; and

f. Prizes.

Exceptions to these construction standards are allowed only with prior written approval from the department.

D. Electronic bingo.

1. The department, at its discretion, may require additional testing of electronic bingo devices at any time. Such additional testing shall be at the manufacturer's expense and shall be a condition of the continued use of such device.

2. All electronic bingo devices shall use proprietary software and hardware or commonly available software and hardware and shall be enabled for play on the premises where the game is to be played.

3. Each electronic bingo device shall have a unique identification number securely encoded into the software of the device. The unique identification number shall not be alterable by anyone other than the manufacturer of the electronic bingo device. Manufacturers of electronic bingo devices shall employ sufficient security safeguards in designing and manufacturing the devices such that it may be verified that all proprietary software components are authentic copies of the approved software components and all functioning components of the device are operating with identical copies of approved software programs. The electronic bingo device must also have sufficient security safeguards so that any restrictions or requirements authorized by the department or any approved proprietary software are protected from alteration by unauthorized personnel. The electronic bingo device shall not contain hard-coded or unchangeable passwords. Security measures that may be employed to comply with these provisions include, but are not limited to, the use of dongles, digital signature comparison hardware and software, secure boot loaders, encryption, and key and callback password systems.

4. A firewall or equivalent hardware device configured to block all inbound and outbound traffic that has not been expressly permitted and is not required for the continued use of the electronic bingo system must exist between the electronic bingo system and any external point of access.

5. Electronic bingo devices shall not allow a player to create a card by the input of specific numbers on each card. Manufacturers shall ensure that an electronic bingo device does not allow for the play of any bingo card faces other than those verifiably purchased by the patron.

6. Electronic bingo devices shall not accept cash, currency, or tokens for play.

7. Electronic bingo devices shall require the manual entry of numbers as they are called, the manual verification of numbers as they have been electronically transmitted to the device, or the full automatic daubing of numbers as each number is called. During the play of a bingo game, the transmission of data to electronic bingo devices shall be limited to one-way communication to the electronic bingo device and shall consist only of publicly available information regarding the current game.

8. A device shall not allow the play of more than 54 cards per device per game.

9. The electronic bingo device system shall record a sequential transaction number or audit tracking number for each transaction. The system shall not allow the manual resetting or changing of this number.

10. The system shall produce a receipt for each electronic bingo device rented or otherwise provided containing the following:

a. Organization name;

b. Location of bingo game;

c. Date and time of the transaction;

d. Sequential transaction or receipt number;

e. Description of each electronic bingo product loaded. The description must include the quantity of bingo card faces that appear on each electronic bingo product (i.e., 9 Jackpot) and the sales price of each electronic bingo product;

f. Quantity of each electronic bingo product loaded; and

g. Total sales price of the transaction.

11. The system shall maintain and make available on demand a summary report for each session that includes the following:

a. Organization name;

b. Location of bingo game;

c. Date and time of each transaction;

d. Sequential transaction or receipt number of each transaction;

e. Description of each electronic bingo product loaded each session. The description must include the quantity of bingo card faces that appear on each electronic bingo product and the sales price of each electronic bingo product;

f. Quantity of each electronic bingo product loaded;

g. Total sales price of each electronic bingo product loaded;

h. Total sales price for each transaction;

i. A transaction history correlating the sequential transaction number of each electronic bingo device sale to the unique identification number of the electronic bingo device on which the sale was played;

j. Sufficient information to identify voids and returns, including the date and time of each voided transaction and return, the sequential transaction number, and the cost of voided transactions and returns; and

k. Total gross receipts for each session.

12. Each electronic bingo device shall be programmed to automatically erase all stored electronic bingo cards at the end of the last game of a session, within a set time from their rental to a player, or by some other clearance method approved by the department.

13. All electronic bingo devices shall be reloaded with another set of electronic bingo cards at the beginning of each session if the devices are to be reused at the same location.

E. In instances where a defect in packaging or in the construction of deals or electronic bingo devices is discovered by or reported to the department, the department shall notify the manufacturer of the deals or electronic bingo devices containing the alleged defect. Should the department, in consultation with the manufacturer, determine that a defect exists, and should the department determine the defect affects game security or otherwise threatens public confidence in the game, the department may, with respect to deals or electronic bingo devices for use still located within the Commonwealth of Virginia, require the supplier to:

1. Recall the deals or electronic bingo devices affected that have not been sold or otherwise provided; or

2. Issue a total recall of all affected deals or electronic bingo devices.

F. No supplier shall knowingly sell or otherwise provide to an organization and no organization shall knowingly use an instant bingo, pull-tab, or seal card dispenser unless the dispenser conforms to the following standards:

1. Each dispenser shall be manufactured in a manner that ensures a pull-tab ticket is dispensed only after insertion of United States currency or coinage into the dispenser. Such ticket and any change due shall be the only items dispensed from the machine.

2. Each dispenser shall be manufactured in a manner that ensures the dispenser neither displays nor has the capability of displaying or otherwise identifying an instant bingo, pull-tab, or seal card winning or nonwinning ticket.

3. Each dispenser shall be manufactured in such a manner that any visual animation does not simulate or display rolling or spinning reels or produce audible music or enhanced sound effects.

4. Each dispenser shall be equipped with separate locks for the instant bingo, pull-tab, or seal card supply modules and money boxes. Locks shall be configured so that no one key will operate both the supply modules and money boxes.

G. The department may require testing of a dispensing device at any time to ensure that it meets construction standards and allows for fair play. Such tests shall be conducted at the cost of the manufacturer of such dispensing devices.

H. The face value of the instant bingo, pull-tab, or seal cards being dispensed shall match the amount deposited in the currency/coin acceptor less change provided.

I. A dispensing device shall only dispense instant bingo, pull-tab, or seal cards that conform to the construction standards established in subsection B of this section and the randomization standards established in 11VAC15-40-140.

J. Suppliers and manufacturers of instant bingo, pull-tab, or seal card dispensers shall comply with the requirements of the Gambling Devices Act of 1962 (15 USC §§ 1171-1178).

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 29, Issue 3, eff. November 7, 2012; amended, Virginia Register Volume 33, Issue 4, eff. November 17, 2016.

11VAC15-40-140. Instant bingo, pull-tabs, or seal card randomization standards.

All instant bingo, pull-tabs, or seal cards shall meet the following randomization standards:

1. Deals shall be assembled so that winning tickets are placed throughout each deal.

2. Deals shall be assembled and packaged in a manner that prevents isolation of winning cards due to variations in printing, graphics, colors, sizes, appearances of cut edges, or other markings of cards.

3. Winning cards shall be distributed and mixed among all other cards in a deal so as to eliminate any pattern between deals or portions of deals from which the location or approximate location of any winning card may be determined.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 29, Issue 3, eff. November 7, 2012.

11VAC15-40-143. Electronic random number generator standards.

A. Electronic random number generators shall not be sold, leased, or otherwise furnished to an organization for use in the conduct of bingo until an identical sample device containing identical proprietary software has been certified by a testing facility that has been formally recognized by the department as a testing facility that upholds the standards of integrity established by the department. The cost of testing shall be borne by the manufacturer of such equipment.

B. An electronic random number generator used in the conduct of bingo shall produce output that is statistically random.

1. Numbers produced by an electronic random number generator used in the conduct of bingo shall be statistically random individually and in the permutations and combinations used in the application under the rules of the game.

2. Numbers produced by an electronic random number generator used in the conduct of bingo shall pass the statistical tests for randomness to a 99% confidence level. Statistical tests for randomness may include:

a. Chi-square test;

b. Equi-distribution (frequency) test;

c. Gap test;

d. Poker test;

e. Coupon collector's test;

f. Permutation test;

g. Run test (patterns of occurrences shall not be recurrent);

h. Spectral test;

i. Serial correlation test potency and degree of serial correlation (outcomes shall be independent from the previous game); and

j. Test on subsequences.

C. An electronic random number generator used in the conduct of bingo shall produce output that is unpredictable.

1. It shall not be feasible to predict future outputs of a random number generator even if the algorithm and the past sequence of outputs are known.

2. Unpredictability shall be ensured by reseeding or by continuously cycling the random number generator and by a sufficient number or random number generator states for the applications supported.

3. Reseeding may be used where the reseeding input is at least as statistically random as, and independent of, the output of the random number generator being reseeded.

D. An electronic random number generator used in the conduct of bingo shall produce output that is nonrepeating. A random number generator shall not be initialized to reproduce the same output stream that it has produced before, nor shall any two instances of a random number generator produce the same stream as each other.

E. Software that calls an electronic random number generator used in the conduct of bingo to derive game outcome events shall immediately use the output returned in accordance with the game rules.

F. The outputs of an electronic random number generator used in the conduct of bingo shall not be arbitrarily discarded or selected.

G. Where a sequence of outputs is required, the whole of the sequence in the order generated shall be used in accordance with the game rules.

H. An electronic random number generator used in the conduct of bingo that provides output scaled to given ranges shall:

1. Be independent and uniform over the range;

2. Provide numbers scaled to the ranges required by game rules, and notwithstanding the requirements of subdivision 3 of this subsection, may discard numbers that do not map uniformly onto the required range, but shall use the first number in sequence that does map correctly to the range; and

3. Be capable of producing every possible outcome of a game according to its rules, and use an unbiased algorithm. A scaling algorithm is considered to be unbiased if the measured bias is no greater than 1 in 100 million.

I. An electronic random number generator that an organization is using to conduct bingo prior to November 7, 2012, is not required to be certified.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 29, Issue 3, eff. November 7, 2012.

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