Virginia Law

Part II. Charitable Gaming Organizations

Article 1
Permits

11VAC20-20-20. Eligibility for permit to conduct charitable gaming; when valid; permit requirements.

A. The conduct of charitable gaming is a privilege that may be granted or denied by the department. Except as provided in § 18.2-340.23 of the Code of Virginia, every eligible organization, volunteer fire department, and rescue squad with anticipated gross gaming receipts that exceed the amount set forth in § 18.2-340.23 of the Code of Virginia in any 12-month period shall obtain a permit from the department prior to the commencement of charitable gaming activities. To be eligible for a permit, an organization must meet all of the requirements of § 18.2-340.24 of the Code of Virginia.

B. Pursuant to § 18.2-340.24 B of the Code of Virginia, the department shall review a tax exempt request submitted to the IRS for a tax exempt status determination and may issue an interim certification of tax-exempt status solely for the purpose of charitable gaming, conditioned upon a determination by the IRS. The department shall charge the fee set forth in § 18.2-340.24 B of the Code of Virginia for this review. The fee shall be payable to the Treasurer of Virginia.

C. A permit shall be valid only for activities, locations, days, dates, and times as listed on the permit. A permit alone does not authorize an organization to conduct electronic gaming. An organization that conducts electronic gaming must have a separate electronic gaming authorization on its permit.

D. In accordance with § 18.2-340.19 A 1 of the Code of Virginia, as a condition of receiving a charitable gaming permit or authorization to conduct electronic gaming, an organization shall use a minimum percentage of its charitable gaming receipts for those lawful religious, charitable, community, or educational purposes for which the organization is specifically chartered or organized as follows:

1. For all charitable gaming other than electronic gaming, the minimum percentage shall be 10% of its gross receipts.

2. For electronic gaming, the minimum percentage shall be 20 % of its electronic gaming adjusted gross receipts.

E. If an organization fails to meet the minimum use of proceeds requirement for charitable gaming other than electronic gaming, its permit may be suspended or revoked; however, the department shall not suspend or revoke the permit for charitable gaming of any organization solely because of its failure to meet the required percentage without having first provided the organization with an opportunity to implement a remedial business plan.

F. An organization may request a temporary reduction in the predetermined percentage specified in subsection D of this section from the department. In reviewing such a request, the department shall consider such factors appropriate to and consistent with the purpose of charitable gaming, which may include (i) the organization's overall financial condition; (ii) the length of time the organization has been involved in charitable gaming; (iii) the extent of the deficiency; and (iv) the progress that the organization has made in attaining the minimum percentage in accordance with a remedial business plan pursuant to subsection E of this section.

G. An organization whose permit is revoked for failure to comply with provisions set forth in subsection D of this section shall be eligible to reapply for a permit at the end of one year from the date of revocation. The department, at its discretion, may issue the permit if it is satisfied that the organization has made substantial efforts toward meeting its remedial business plan.

H. If an organization fails to meet the minimum use of proceeds requirement for electronic gaming:

1. The social organization's authorization to conduct electronic gaming may be revoked or suspended.

2. The qualified organization's permit for the conduct of electronic gaming only may be revoked or suspended.

3. If an organization becomes dissolved for any reason, then the department shall either suspend or revoke its authorization to conduct electronic gaming.

4. If the permit or authorization is suspended, the department shall set the terms of the suspension, which shall include the length of the suspension and a requirement that prior to reinstatement of the permit or authorization, the organization shall submit a remedial business plan approved by the department to address the conditions that resulted in the suspension.

5. If an organization fails to meet the minimum use of proceeds requirement after having been suspended, the organization's authorization shall be revoked. An organization whose permit is revoked shall be eligible to reapply at a date determined by the department. If the permit is revoked, the organization is required to reapply for an authorization, and if the authorization was revoked fewer than 18 months prior to reapplying for a permit, then the organization shall submit a remedial business plan approved by the department to address the conditions that resulted in the revocation. The department, at its discretion, may issue the authorization if it is satisfied that the organization's remedial business plan will result in meeting the use of proceeds requirement.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

11VAC20-20-30. Charitable gaming permit application process for raffles, bingo, paper pull-tabs, network bingo, paper instant bingo,  paper seal cards, and poker tournaments.

A. Any organization (i) anticipating gross gaming receipts from raffles that exceed the amount set forth in § 18.2-340.23 of the Code of Virginia or (ii) intending to operate and conduct bingo, electronic gaming, instant bingo, seal cards, pull-tabs, a poker tournament, or network bingo shall complete a department-prescribed application to request issuance or renewal of an annual permit to conduct charitable gaming. Organizations shall submit a nonrefundable fee payable to the Treasurer of Virginia in the amount of $200 with the application, unless the organization is exempt from such fee pursuant to § 18.2-340.23 of the Code of Virginia.

B. The department may initiate action against any organization exempt from permit requirements when it reasonably believes the organization is not in compliance with the provisions of Charitable Gaming Law or regulations adopted pursuant thereto.

C. Permits shall be valid for a period of one year from the date of issuance or for a period specified on the permit. The department may issue permits for periods of less than one year.

D. Permits shall be granted only after a background investigation of an organization, interested persons, or both to ensure public safety and welfare as required by § 18.2-340.25 of the Code of Virginia. Investigations shall consider the nature, the age and severity, and the potential harm to public safety and welfare of any criminal offenses. The investigation may include the following:

1. A search of criminal history records for the chief executive officer and chief financial officer of the organization, game manager, or charitable host representative. Information and authorization to conduct these records checks shall be provided in the permit application. In addition, the department shall require that the organization provides assurances that all other members involved in the management, operation, or conduct of charitable gaming meet the requirements of subdivision 12 of § 18.2-340.33 of the Code of Virginia. Applications may be denied if:

a. Any person participating in the management of any charitable gaming has ever been:

(1) Convicted of a felony; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years.

b. Any person participating in the conduct of charitable gaming has been:

(1) Convicted of any felony in the preceding 10 years; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years;

2. An inquiry as to whether the organization has been granted tax-exempt status pursuant to § 501(c) by the Internal Revenue Service and is in compliance with IRS annual filing requirements;

3. An inquiry as to whether the organization has entered into any contract with, or has otherwise employed for compensation, any persons for the purpose of organizing or managing, operating, or conducting any charitable gaming activity, excluding a written contract with an operator to administer a qualified organization's poker tournament;

4. Inquiries into the finances and activities of the organization and the sources and uses of funds;

5. Inquiries into the level of community or financial support to the organization and the level of community involvement in the membership and management of the organization; and

6. An inquiry as to whether the organization operates in accordance with the provisions of or is in violation of any provision of the Charitable Gaming Law or regulations promulgated pursuant thereto.

E. The permit application for an organization that has not previously held a permit shall include:

1. A copy of the articles of incorporation, bylaws, charter, constitution, or other appropriate organizing document;

2. A copy of the determination letter issued by the IRS under § 501(c) of the Internal Revenue Code, if appropriate, or a letter from the national office of an organization indicating the applicant organization is in good standing and is currently covered by a group exemption ruling. A letter of good standing is not required if the applicable national or state office has furnished the department with a listing of member organizations in good standing in the Commonwealth as of January 1 of each year and has agreed to promptly provide the department any changes to the listing as they occur;

3. A copy of the written lease or proposed written lease agreement and all other agreements between the organization and the landlord if the organization rents or intends to rent a facility where bingo, a poker tournament, or electronic gaming is or will be conducted. Information on the lease shall include name, address, and telephone number of the landlord; maximum occupancy of the building; the rental amount per session; and if the landlord that leases a facility where a poker tournament will be conducted is an entity, the name of each of the entity's owners, members, managers, officers, and directors;

4. An authorization by an officer or other appropriate official of the organization to permit the department to determine whether the organization has been investigated or examined by the IRS in connection with charitable gaming activities during the previous three years; and

5. Any contracts or any other agreements with landlords, suppliers, network bingo providers, social organizations, operators, or manufacturers to which the organization is or may be a party.

F. If the organization wishes to conduct a poker tournament, the organization must provide the following information and documentation with its permit application in addition to the documents listed in subsection E of this section:

1. House rules that govern how the poker tournament will be played. All house rules shall be preapproved by the department and shall be consistent with the Charitable Gaming Law, this chapter, 11VAC20-30, and the official rules for poker tournaments established by the Poker Tournament Directors Association;

2. If the organization uses or intends to use an operator to administer its poker tournament, the identity of the organization's charitable host representative and a copy of a current photo identification of the charitable host representative, such as a driver's license or other government-issued identification;

3. If the organization uses or intends to use an operator to administer its poker tournament, a copy of the operator's internal control policies that comply with criteria established in 11VAC20-30-60 O;

4. If the organization intends to manage, operate, and conduct or manages, operates, and conducts its own poker tournament, the designation and identity of the organization's game manager who shall be responsible for the operation and conduct of the poker tournament for the qualified organization and a copy of a current photo identification of the game manager, such as a driver's license or other government-issued identification; and

5. A sample of the badge that meets the criteria established in 11VAC20-30-60 Q.

G. Copies of minutes of meetings of the organization may be requested by the department prior to rendering a permitting decision.

H. Organizations applying to renew a permit previously issued by the department shall submit articles of incorporation, bylaws, charter, constitution, or other organizing document; IRS determination letter; any new contract or agreement with a landlord, supplier, network bingo provider, social organization, operator, or manufacturer to which the organization is or may be a party; and a copy of any lease with any landlord or social organization if there are any amendments or changes to these documents.

I. Organizations may request permits to conduct joint bingo games as provided in § 18.2-340.29 of the Code of Virginia.

1. In the case of a joint bingo game, each organization shall file a permit application.

2. The nonrefundable permit fee for joint bingo games shall be a total of $200. However, no permit application fee is due if each of the organizations is exempt from the application fee pursuant to § 18.2-340.23 of the Code of Virginia.

3. A single permit may be issued in the names of all the organizations conducting a joint bingo game. All restrictions and prohibitions applying to single organizations shall apply to qualified organizations jointly conducting bingo games pursuant to § 18.2-340.29 of the Code of Virginia.

4. No joint bingo game shall be conducted prior to the issuance of a joint permit.

5. Applications for joint bingo games shall include an explanation of the division of manpower, costs, and proceeds for the joint bingo game.

J. An organization wishing to change dates, times, or locations of its charitable gaming shall request an amendment to its permit. Amendment requests shall be made in writing on a form prescribed by the department in advance of the proposed effective date.

K. An organization may cancel its charitable gaming due to inclement weather, disasters, or other circumstances outside the organization's control without an amendment to its permit.

L. An organization may sell raffle tickets for a drawing to be held outside of the Commonwealth of Virginia in the United States provided:

1. The raffle is conducted by the organization in conjunction with a meeting outside the Commonwealth of Virginia or with another organization that is licensed to conduct raffles outside the Commonwealth of Virginia;

2. The raffle is conducted in accordance with this chapter and the laws and regulations of the state where the drawing is to be held; and

3. The portion of the proceeds derived from the sale of raffle tickets in the Commonwealth is reported to the department.

M. Any permitted organization that ceases to conduct charitable gaming shall immediately notify the department in writing and provide the department a report as to the disposition of all unused charitable gaming supplies or electronic gaming devices on a form prescribed by the department.

Statutory Authority

§ 18.2-340.19 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023; amended, Virginia Register Volume 40, Issue 17, eff. May 9, 2024.

11VAC20-20-40. Charitable gaming authorization for electronic gaming.

A. The operation and conduct of electronic gaming is a privilege that may be granted or denied by the department. A social organization desiring to operate and conduct electronic gaming shall obtain a permit to conduct charitable gaming and an authorization to operate and conduct electronic gaming from the department prior to the commencement of any electronic gaming. To be eligible for a permit or an authorization, a social organization must meet all of the requirements of the Charitable Gaming Law and regulations adopted pursuant thereto.

B. A social organization desiring to operate and conduct electronic gaming shall complete a department-prescribed application to request a new or to renew an existing authorization. The social organization must provide the quantity of electronic gaming devices it intends to operate on the premises at the time when the authorization is issued to the organization. In accordance with §§ 18.2-340.23 and 18.2-340.26:3 of the Code of Virginia, a social organization shall submit a nonrefundable application fee payable to the Treasurer of Virginia in the amount of $200 in addition to the fee prescribed for the charitable gaming permit.

C. If an organization's charitable gaming permit is denied pursuant to 11VAC20-20-20 and 11VAC20-20-50, then its request for a new or renewal authorization to operate and conduct electronic gaming shall be denied by the department.

D. An authorization to operate and conduct electronic gaming shall be valid for one year from the date of issuance. The department may issue an authorization that is valid for less than one year or up to two years when it determines that such is necessary. Authorizations shall be noted on the charitable gaming permit, and the expiration date for the authorization shall be the same as the charitable gaming permit expiration date.

E. An authorization to operate and conduct electronic gaming shall be valid only for the operation and conduct of electronic gaming at the primary location; on the days of the week, dates, and times; and for the quantity of electronic gaming devices listed on the permit.

1. A social organization shall designate a contiguous area within its primary location as its social quarters. A social organization's social quarters shall not include any area that is included in the public space leased to a qualified organization so that the qualified organization may operate and conduct electronic gaming.

2. A social organization shall designate a contiguous area within its primary location as its public space. A social organization's public space shall not include any area that is included in its social quarters. A social organization may lease its public space to a qualified organization so that the qualified organization may operate and conduct electronic gaming.

3. The primary location shall have a unique physical address established by the United States Postal Service and a certificate of occupancy issued by the city, county, or town where the building is physically located.

4. The social organization's principal place of business as registered with the State Corporation Commission shall be its primary location so long as the principal place of business is where the organization conducts its business. The operation and conduct of electronic gaming alone does not constitute the conduct of business for the purpose of determining a social organization's primary location. If the social organization is not registered with the State Corporation Commission, then the social organization's primary location shall be (i) the location where the organization conducts its business and (ii) if requested by the department, confirmed by the affiliated national or state organization as the social organization's primary location.

5. Upon request of the department, the social organization shall provide sufficient documentation to identify its primary location. If the social organization is unable or unwilling to provide such documentation, then the department shall deny the social organization's application for authorization to operate and conduct electronic gaming in accordance with 11VAC20-20-50.

F. A social organization authorized to operate and conduct electronic gaming that wishes to change dates, times, primary location, or the quantity of electronic gaming devices identified on its authorization shall request an amendment to its authorization. Amendment requests shall be made in writing on a form prescribed by the department. The social organization must receive an amended authorization prior to implementing the requested amendment. At no time shall a social organization's authorization reflect a number of devices that is inconsistent with the number of electronic gaming devices at their location.

G. A social organization shall notify on a form prescribed by the department when it purchases or leases any additional distributed pull-tab system or electronic gaming device beyond the quantity already identified on its authorization.

H. A social organization may cancel its scheduled electronic gaming session due to inclement weather, disaster, or other circumstance outside the organization's control without an amendment to its authorization. The social organization shall immediately notify the department of the cancellation.

I. A social organization that ceases to operate and conduct electronic gaming shall immediately notify the department in writing and provide a report to the department as to the disposition of any distributed pull-tab system or electronic gaming devices.

J. A social organization authorized to operate and conduct electronic gaming shall not use an electronic gaming device that does not bear a device tag affixed by the department.

K. If an organization determines at any point prior to the close of the fiscal year that it may not meet the requirement established in 11VAC20-20-20 D, an organization may request a temporary reduction in the percentage specified in 11VAC20-20-20 D from the department. In reviewing such a request, the department may consider such factors appropriate to and consistent with the purpose of charitable gaming, which may include (i) the organization's overall financial condition; (ii) the length of time the organization has been involved in charitable gaming and electronic gaming; and (iii) the extent of the deficiency. The department may grant a temporary reduction at its discretion; however, the department will not grant a temporary reduction after the close of the fiscal year.

L. A social organization authorized to operate and conduct electronic gaming shall:

1. Maintain a valid charitable gaming permit. If the department suspends or revokes a social organization's charitable gaming permit, the department shall take the same action against the social organization's authorization to operate and conduct electronic gaming;

2. Maintain its federal tax exempt status;

3. Maintain eligibility for its federal tax exempt status by continuing to meet the IRS criteria for that tax exemption;

4. Not possess more electronic gaming devices at its primary location than the quantity of such devices listed on its authorization;

5. Operate only electronic gaming devices that have a device tag affixed by the department;

6. Acquire, lease, obtain, purchase, rent, or use a distributed pull-tab system or electronic gaming device from a manufacturer or supplier that has a current permit issued by the department pursuant to § 18.2-340.34 of the Code of Virginia;

7. Not inure any part of its electronic gaming adjusted gross receipts to benefit a private shareholder or individual; and

8. Not violate a provision of or fail to meet a requirement of the Charitable Gaming Law or a regulation adopted pursuant thereto.

M. In addition to the requirements established in subsection L of this section, a social organization authorized to operate and conduct electronic gaming that is a fraternal organization shall:

1. Serve a fraternal purpose;

2. Have a substantial program of fraternal activities, as defined by the IRS;

3. Be distinguishable from its chartering parent organization; and

4. Be largely self-governing and have its own officers, bylaws, or other governing documents and its own general financial independence from its parent organization.

N. In addition to the requirements established in subsection L of this section, a qualified organization that is a social organization as defined in subdivision 4 of the definition of "social organization" in § 18.2-340.16 of the Code of Virginia and is authorized to operate and conduct electronic gaming must continue to be substantially composed of past or present members of the U.S. Armed Forces.

O. The department may suspend or revoke the authorization to operate and conduct electronic gaming of a social organization that does not comply with subsection L, M, or N of this section.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

11VAC20-20-50. Suspension, revocation, or denial of permit and authorization.

A. Pursuant to § 18.2-340.20 of the Code of Virginia, the department may suspend, revoke, or deny (i) the permit to conduct charitable gaming or to contract with an operator to administer a poker tournament or (ii) the authorization to operate and conduct electronic gaming of any organization for cause, including any of the following reasons:

1. The organization is found to be in violation of or has failed to meet any of the requirements of the Charitable Gaming Law or regulations governing the management, operation, and conduct of charitable gaming or electronic gaming in the Commonwealth.

2. The organization is found to be not in good standing with its state or national organization.

3. The IRS revokes or suspends the organization's federal tax-exempt status.

4. The organization willfully and knowingly provides false information in its application for a permit to conduct charitable gaming.

5. The organization is found to have a member involved in the management, operation, or conduct of its charitable gaming who has been convicted of any felony or any misdemeanor as follows:

a. For any person participating in the management or operation of any charitable gaming:

(1) Convicted of a felony; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years.

b. For any person participating in the conduct of charitable gaming:

(1) Convicted of any felony within the preceding 10 years; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years.

6. The organization is found to have managed, operated, or conducted a poker tournament or to have contracted with an operator or any person to administer a poker tournament on its behalf without a permit issued to the organization to do so.

7. If the qualified organization uses or intends to use an operator to administer its poker tournament, the qualified organization fails to submit or provide to the department (i) a written contract that complies with 11VAC20-30-180, (ii) a new or amended written contract with its operator within the 20 days following the date on which that contract is signed by all parties to the contract, or (iii) a new or amended written contract with its operator that complies with 11VAC20-30-180.

8. The qualified organization, member of the qualified organization, person affiliated or associated with the qualified organization, or immediate family member or person residing in the household of a member of the qualified organization or of a person affiliated or associated with the qualified organization directly or indirectly has any interest or ownership in an operator with which the qualified organization contracts to administer its poker tournament.

9. A member of the qualified organization; person affiliated or associated with the qualified organization; or immediate family member or person residing in the household of a director, officer, owner, partner, employee, independent contractor, or member of the qualified organization or of a person affiliated or associated with the qualified organization receives compensation from an operator with which the qualified organization contracts to administer its poker tournament.

10. If the qualified organization conducts a poker tournament or contracts with an operator to administer its poker tournament, the qualified organization, member of the qualified organization, person affiliated or associated with the qualified organization, or immediate family member or person residing in the household of a member of the qualified organization or of a person affiliated or associated with the qualified organization directly or indirectly receives any payment from the landlord of the facility where the poker tournament occurs or from the agents, employees, immediate family members, or persons residing in the household of the landlord unless such payment is directly related to a written contract to lease a facility for use to hold a poker tournament as required by 11VAC20-20-120 A and such payment is made by check or electronic fund transfer from the landlord directly to the qualified organization's charitable gaming account.

B. The failure to meet any of the requirements of § 18.2-340.24 of the Code of Virginia shall cause the denial of the permit, and no organization shall conduct any charitable gaming until the requirements are met and a permit is obtained.

C. The failure to meet the definition of a social organization or the requirements in § 18.2-340.26:1 shall cause the denial of the authorization to conduct electronic gaming, and no organization shall conduct electronic gaming until the requirements are met and an authorization is obtained.

D. Except when an organization fails to meet any of the requirements of § 18.2-340.24 of the Code of Virginia or fails to file a financial report as required by § 18.2-340.30 of the Code of Virginia or when a manufacturer fails to file a financial report as required by § 18.2-340.30:2 of the Code of Virginia, in lieu of suspending, revoking, or denying a permit to conduct charitable gaming; an authorization to operate and conduct electronic gaming; or a permit to distribute a distributed pull-tab system or electronic gaming devices, the department may afford an organization or manufacturer, at the department's discretion, an opportunity to enter into a compliance agreement specifying additional conditions or requirements as it may deem necessary to ensure an organization's or a manufacturer's compliance with the Charitable Gaming Law and regulations adopted pursuant thereto and may require that an organization or manufacturer participates in such training as is offered by the department.

E. If the premises on which a social organization operates and conducts electronic gaming is deemed a common nuisance pursuant to § 18.2-258 of the Code of Virginia, then the department may suspend, revoke, or deny the social organization's authorization to operate and conduct electronic gaming.

F. If a permit or authorization to operate and conduct electronic gaming is suspended, the department shall set the terms of the suspension, which shall include the length of the suspension and a requirement that, prior to reinstatement of the permit or authorization, the organization shall submit a remedial business plan to address the conditions that resulted in the suspension. The remedial business plan must be approved by the department prior to reinstatement of the permit or authorization.

G. An organization whose permit or authorization to operate and conduct electronic gaming is revoked shall be eligible to reapply for an authorization one year from the date of revocation. If the authorization was revoked fewer than 18 months prior to the organization reapplying for an authorization, the organization shall submit a remedial business plan for approval by the department to address the conditions that resulted in the revocation. The remedial business plan must be approved by the department prior to reinstatement of the permit or authorization. The department at its discretion may issue the authorization if it is satisfied that the organization's remedial business plan will result in compliance with the requirements of the Charitable Gaming Law and regulations adopted pursuant thereto.

H. If a permit or authorization to operate and conduct electronic gaming is suspended, the department shall set the terms of the suspension, which shall include the length of the suspension and a requirement that prior to reinstatement of the authorization, the organization shall submit a remedial business plan approved by the department to address the conditions that resulted in the suspension. The remedial business plan must be approved by the department prior to reinstatement of the permit or authorization.

I. If an organization fails to meet the minimum use of proceeds requirement after having been suspended, the organization's authorization to operate and conduct electronic gaming shall be revoked. An organization whose authorization is revoked shall be eligible to reapply for an authorization at the end of one year from the date of revocation. If the authorization is revoked, the organization is required to reapply for an authorization, and if the authorization was revoked less than 18 months prior to reapplying for an authorization, then the organization shall submit a remedial business plan approved by the department to address the conditions that resulted in the revocation. The department at its discretion may issue the authorization if it is satisfied that the organization's remedial business plan will result in meeting the use of proceeds requirement.

Statutory Authority

§ 18.2-340.19 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023; amended, Virginia Register Volume 40, Issue 17, eff. May 9, 2024.

Article 2
Conduct of Games, Rules of Play, Electronic Bingo

11VAC20-20-60. Conduct of bingo, paper instant bingo, paper pull-tabs, paper seal cards, event games, network bingo, electronic gaming, and raffles.

A. Organizations subject to this chapter shall post their charitable gaming permit or authorization to operate and conduct electronic gaming at all times on the premises where charitable gaming is conducted.

B. No individual shall provide any information or engage in any conduct that alters or is intended to alter the outcome of any charitable game or electronic game.

C. Individuals younger than 18 years of age may play bingo provided such persons are accompanied by a parent or legal guardian. It shall be the responsibility of the organization to ensure that such individuals are eligible to play. An organization's house rules may further limit the play of bingo or purchase of raffle tickets by minors.

D. Individuals younger than 18 years of age may sell raffle tickets for a qualified organization raising funds for activities in which they are active participants.

E. No individual younger than 18 years of age may participate in the management or operation of bingo games. Individuals 14 through 17 years of age may participate in the conduct of a bingo game provided the organization permitted for charitable gaming obtains and keeps on file written parental consent from the parent or legal guardian and verifies the date of birth of the minor. An organization's house rules may further limit the involvement of minors in the conduct of bingo games. No individual younger than 21 years of age may participate in the management, operation, or conduct of electronic gaming.

F. No qualified organization shall sell any network bingo cards, paper instant bingo, paper pull-tab, or paper seal card to any individual younger than 18 years of age. No individual younger than 18 years of age shall play or redeem any network bingo cards, paper instant bingo, paper pull-tab, or paper seal card. No individual younger than 21 years of age shall play any electronic gaming device or electronic game or redeem anything from the play of such a device or game.

G. Unless otherwise prohibited by the Code of Virginia or this chapter, nonmembers who are under the direct supervision of a bona fide member may participate in the conduct of bingo or electronic gaming.

H. All game workers shall have in their possession a photo identification, such as a driver's license or other government-issued identification, and shall make the photo identification available for inspection upon request by a department agent while participating in the management, operation, or conduct of a bingo game or electronic gaming.

I. A game manager who is a bona fide member of the organization and is designated by the organization's management as the person responsible for the operation of the bingo game during a particular session shall be present any time a bingo game is conducted.

J. A game manager who is a bona fide member of the qualified organization and is designated by the organization's management as a person responsible for the operation of the electronic games shall be present at the facility where the electronic gaming occurs any time electronic gaming is available to the public. For electronic gaming conducted by the social organization for its members only, the game manager or responsible representative must be available by telephone at all times and must be physically present at the facility within 30 minutes of a request by the department. Failure to provide the department access to the facility may result in the revocation or suspension of the organization's electronic gaming authorization.

K. Organizations shall ensure that all charitable gaming equipment, a distributed pull-tab system, and any electronic gaming device are in working order before charitable gaming activities commence.

L. Each electronic gaming device must have a device tag affixed indicating that such device is authorized and approved by the department. All organizations shall notify the department of any new distributed pull-tab system or electronic gaming devices they purchase or lease.

M. Any organization selling bingo, paper instant bingo, paper pull-tabs, paper seal cards, or network bingo supplies or conducting electronic gaming shall:

1. Maintain a supplier's, network bingo provider's, or manufacturer's invoice or a legible copy thereof at the location where the gaming is taking place and cards are sold. The original invoice or legible copy shall be stored in the same storage space as the gaming supplies. All gaming supplies shall be stored in a secure area that has access limited only to bona fide members of the organization;

2. Pay for all charitable gaming supplies except electronic gaming supplies, only by a check drawn on the charitable gaming account of the organization ; and

3. Pay for all electronic gaming supplies, including the use of the electronic gaming device, by check or electronic fund transfer drawn from the charitable gaming account of the organization. Any electronic fund transfer shall be agreed to in writing between the qualified or social organization and the licensed manufacturer or supplier.

A complete inventory of all charitable gaming supplies shall be maintained by the organization on the premises where the gaming is being conducted.

N. A bingo session game worker may receive complimentary food and nonalcoholic beverages provided on premises, as long as the retail value of such food and beverages does not exceed $15 for each session.

O. Permitted organizations shall not commingle records, supplies, or funds from permitted activities with those from paper instant bingo, paper pull-tabs, paper seal cards, or electronic gaming sold in social quarters.

P. Individuals who are not members of an organization or are members who do not participate in any charitable gaming activities may be paid reasonable fees for preparation of quarterly and annual financial reports.

Q. Except as allowed pursuant to § 18.2-340.34:1 of the Code of Virginia, no free packs, free electronic bingo devices, free electronic pull-tabs, free network bingo cards, discounts, or remuneration in any other form shall be provided directly or indirectly to game workers, members of their family, or individuals residing in their household. The reduction of tuition, dues, or any fees or payments due as a result of a member or shareholder or anyone in their household working bingo games, electronic gaming, or raffles is prohibited.

R. Individuals providing security for an organization's charitable gaming activity shall not participate in the charitable gaming activity and shall not be compensated with charitable gaming supplies, free electronic pull-tabs, or network bingo cards or with rentals of electronic bingo devices or electronic gaming devices.

S. No organization shall award any prize money or any merchandise valued in excess of the amounts specified by the Code of Virginia.

T. Multiple sessions shall be permitted in a single premises as long as the sessions are distinct from one another and are not used to advertise or do not result in the awarding of more in prizes than is permitted for a single qualified organization. All leases for organizations to conduct charitable gaming or electronic gaming in a single premises shall ensure each session is separated by an interval of at least 30 minutes. Bingo sales for the subsequent session may take place during the 30-minute break once the building is cleared of all patrons and workers from the previous session. No other sales of charitable gaming supplies or electronic gaming may occur during the 30-minute break.

U. All bingo and instant bingo, pull-tabs, seal card, or electronic gaming sales, play, and redemption must occur within the time specified on the charitable gaming permit or authorization to operate and conduct electronic gaming. Network bingo card sales must occur within the time specified on the charitable gaming permit.

V. Paper instant bingo, paper pull-tabs, or paper seal cards shall only be sold in conjunction with a bingo session, except as authorized by § 18.2-340.26:1, 18.2-340.26:2, or 18.2-340.26:3 of the Code of Virginia. No paper instant bingo, paper pull-tab, or paper seal card sales shall take place more than two hours before the selection of the first ball for the first bingo game or more than two hours after the selection of the last ball for the last bingo game. If multiple sessions are held at the same location for either bingo or electronic gaming, no paper instant bingo, paper pull-tab, paper seal card, or electronic pull-tab sales shall be conducted during the required 30-minute break between sessions. The department may take action if it believes that a bingo session is not legitimate or is being conducted in a manner such that paper instant bingo, paper pull-tabs, or paper seal cards are not being sold in conjunction with a bingo session.

W. Only a game worker for a qualified organization may rent, exchange, or otherwise provide electronic bingo devices or electronic gaming devices to players.

X. A qualified organization shall conduct only bingo games, network bingo, and raffles listed on a game program for that session. The program shall list all prize amounts. If the prize amounts are determined by attendance or at the end of a game, the game program shall list the attendance required for the prize amount or disclose that prizes shall be determined at the end of a game and the method for determining the prize amount. In such a case, the organization shall announce the prize amount at the end of the game. The percentage of the gross receipts from network bingo cards allocated to the prize pool shall be listed on the game program along with the maximum allowable prize amount for network bingo.

Y. A qualified organization selling paper instant bingo, paper pull-tabs, or paper seal cards or conducting electronic gaming shall post a flare provided by the manufacturer at the location where such cards or electronic pull-tabs are sold. All such sales and prize payouts shall be in accordance with the flare for that deal.

Z. Only qualified organizations, facilities in which qualified organizations play bingo, network bingo providers, and suppliers permitted by the department shall advertise a bingo game. Providing players with information about network bingo or bingo games through printed advertising is permitted, provided the name of the qualified organization shall be in a type size equal to or larger than the name of the premises, the hall, or the word "bingo." Printed advertisements shall identify the use of proceeds percentage reported in the past quarter or fiscal year.

AA. Advertisements for electronic gaming are prohibited.

BB. Raffles that award prizes based on a percentage of gross receipts shall use prenumbered tickets.

CC. The following rules shall apply to mechanical dispensing devices used to dispense paper instant bingo, paper pull-tabs, or paper seal cards:

1. A mechanical dispensing device shall only be used at a location and time during which a qualified organization holds a permit to conduct charitable gaming. Only instant bingo, paper pull-tab, or paper seal cards purchased by an organization to be used during the organization's charitable gaming activity shall be in the mechanical dispensing device.

2. Keys to the dispensing area and coin box or cash box shall be in the possession and control of the game manager or designee of the organization's board of directors at all times. Keys shall at all times be available at the location where the mechanical dispensing device is being used.

3. The game manager or designee shall provide access to the mechanical dispensing device to the department, its employees, or its agents for inspection upon request.

4. Only a game worker of an organization may stock the mechanical dispensing device, remove cash, or pay winners' prizes.

DD. Organizations shall only acquire, lease, obtain, purchase, rent, or use charitable gaming supplies from a supplier; network bingo supplies from a network bingo provider; distributed pull-tab system or electronic gaming devices from a manufacturer or supplier who has a current permit issued by the department pursuant to § 18.2-340.34 of the Code of Virginia.

EE. An organization shall not tamper with bingo paper or any other charitable gaming supplies received from a supplier or distributed pull-tab system or electronic gaming devices received from a manufacturer or supplier.

FF. The total amount of all discounts given by any organization for bingo games during any fiscal year shall not exceed 1.0% of the organization's gross receipts.

GG. A social organization may place the same electronic gaming device in its social quarters that it places in the public space in its primary location when operating and conducting electronic gaming. A social organization shall notify the department and manufacturer prior to moving the device between its social quarters and the public space in its primary location and shall only move the device after the manufacturer ensures its system accurately reflects the qualified organization to which the electronic gaming sales must be attributed. The social organization shall ensure no cash is located in the device's bill acceptor prior to moving the device between its social quarters and the public space in its primary location.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

11VAC20-20-70. Rules of play.

A. Each organization shall adopt "house rules" regarding conduct of the session. The "house rules" for the network bingo game shall be adopted by a mutual agreement among all of the organizations participating in a particular network bingo or by the network bingo provider. Such rules shall be consistent with the provisions of the Charitable Gaming Law and regulations adopted pursuant thereto. "House rules" shall be conspicuously posted or printed on the game program.

B. All players shall be physically present at the location where the bingo numbers for a bingo game are drawn to play the game or to claim a prize, except when the player, who has purchased a network bingo card, is participating in network bingo. Seal card prizes that can only be determined after a seal is removed or opened must be claimed within 30 days of the close of a deal. All other prizes , except prizes for electronic gaming, must be claimed on the game date.

C. The following rules of play shall govern the sale of instant bingo, pull-tabs, and seal cards:

1. No cards that have been marked, defaced, altered, tampered with, or otherwise constructed in a manner that tends to deceive the public or affect the chances of winning or losing shall be placed into play.

2. Winning cards shall have the winning symbol or number defaced or punched immediately after redemption by the organization's authorized representative.

3. An organization may commingle unsold instant bingo cards and pull-tabs with no more than one additional deal. The practice of commingling deals shall be disclosed to the public via house rules or in a similar manner. Seal card deals shall not be commingled.

4. If a deal is not played to completion and unsold cards remain, the remaining cards shall be sold at the next session the same type of ticket is scheduled to be sold. If no future date is anticipated, the organization shall, after making diligent efforts to sell the entire deal, consider the deal closed or completed. The unsold cards shall be retained for a minimum of three years following the close of the fiscal year and shall not be opened.

5. All seal card games purchased shall contain the sign-up sheet, the seals, and the cards packaged together in each deal.

6. Progressive seal card prizes not claimed within 30 days shall be carried forward to the next progressive seal card game in progress and paid to the next progressive seal card game prize winner.

D. No one involved in the conduct of bingo may play bingo, play network bingo, or purchase network bingo cards at any session they have worked or intend to work. No one involved in the sale or redemption of any instant bingo, pull-tabs, seal cards, or electronic gaming may purchase directly or through others instant bingo, pull-tab, seal card, or electronic gaming products from organizations they assist on the day they have worked or from any deal they have helped sell or redeem, whichever occurs later.

E. Electronic bingo.

1. Electronic bingo devices may be used by bingo players in the following manner:

a. Players may input into the device each number called or the device may automatically daub each number as the number is called;

b. Players must notify the game operator or caller of a winning pattern of bingo by a means other than use of the electronic bingo device;

c. Players are limited to playing a maximum of 54 card faces per device per game;

d. Electronic bingo devices shall not be reserved for players. Each player shall have an equal opportunity to use the available electronic bingo devices on a first come, first served basis;

e. Each electronic bingo device shall produce a player receipt with the organization name, date, time, location, sequential transaction or receipt number, number of electronic bingo cards loaded, cost of electronic bingo cards loaded, and date and time of the transaction. Images of cards or faces stored in an electronic bingo device must be exact duplicates of the printed faces if faces are printed;

f. Department agents may examine and inspect any electronic bingo device and related system. Such examination and inspection shall include immediate access to the electronic bingo device and unlimited inspection of all parts and associated systems and may involve the removal of equipment from the game premises for further testing;

g. All electronic bingo devices must be loaded or enabled for play on the premises where the game will be played;

h. All electronic bingo devices shall be rented or otherwise provided to a player only by an organization and no part of the proceeds of the rental of such devices shall be paid to a landlord or the landlord's employee, agent, or member of the landlord's immediate family; and

i. If a player's call of a bingo is disputed by another player or if a department agent makes a request, one or more cards stored on an electronic bingo device shall be printed by the organization.

2. Players may exchange a defective electronic bingo device for another electronic bingo device provided a disinterested player verifies that the device is not functioning. A disinterested player shall also verify that no numbers called for the game in progress have been keyed into the replacement electronic bingo device prior to the exchange.

F. The following rules of play shall govern the conduct of raffles:

1. Before a prize drawing, each stub or other detachable section of each ticket sold shall be placed into a receptacle from which the winning tickets shall be drawn. The receptacle shall be designed so that each ticket placed in it has an equal chance to be drawn.

2. All prizes shall be valued at fair market value.

G. The following rules shall apply to decision bingo games:

1. Decision bingo shall be played on bingo cards in the conventional manner.

2. Players shall enter a game by paying a predetermined amount for each card face in play.

3. Players shall pay a predetermined fee for each set of three bingo numbers called for each card in play.

4. The prize amount shall be the total of all fees not to exceed the prize limit set forth for regular bingo in § 18.2-340.33 of the Code of Virginia. Any excess funds shall be retained by the organization.

5. The predetermined amounts in subdivisions 2 and 3 of this subsection shall be printed in the game program. The prize amount for a game shall be announced before the prize is paid to the winner.

H. The following rules shall apply to treasure chest games:

1. The organization shall list the treasure chest game on the bingo game program as a "Treasure Chest Raffle."

2. The organization shall have house rules posted that describe how the game is to be played.

3. The treasure chest participant shall only be selected through some other authorized charitable game at the same bingo session.

4. The organization shall account for all funds as treasure chest/raffle sales on the session reconciliation form.

5. If the player does not open the lock on the treasure chest, the game manager or the game manager's designee shall proceed to try every key until the correct key opens the treasure chest lock to show all players that one of the keys will open the lock.

I. The following rules shall apply to progressive bingo games:

1. Bingo paper sold for use in progressive bingo games shall conform to the standards set forth in 11VAC20-20-140.

2. Organizations shall not include in admission packs the bingo paper intended for use in progressive bingo games.

3. Any progressive bingo game, its prize, and the number of bingo numbers to be called shall be clearly announced before the progressive bingo game is played and shall be posted on the premises where the progressive bingo game is played during each session that a progressive bingo game is played.

4. Pricing for a progressive bingo game card or sheet shall be listed on the game program.

5. If the predetermined pattern is not covered within the predetermined number of bingo numbers to be called, then the number of bingo numbers called will increase by one number for each subsequent session the progressive bingo game is played.

6. If the predetermined pattern is not covered within the predetermined number of bingo numbers to be called for that progressive bingo game, then the game will continue as a regular bingo game until the predetermined pattern is covered and a regular bingo prize is awarded.

7. The prize for any progressive bingo game shall be in accordance with the provisions of subdivision 8 of § 18.2-340.33 of the Code of Virginia.

J. The following rules shall apply to WINGO:

1. WINGO shall be played only for the hearing-impaired players.

2. WINGO shall utilize a visual device such as an oversized deck of cards in place of balls selected from a blower.

3. A caller must be in an area visible to all players and shall randomly select cards or other visual devices one at a time and display them so that all players can see them.

4. The organization must have house rules for WINGO, and the rules shall identify how players indicate that they have won.

5. All financial reporting shall be consistent with reporting for a traditional bingo game.

K. The following rules of play shall apply to event games:

1. No instant bingo cards or pull-tabs that have been marked, defaced, altered, tampered with, or otherwise constructed in a manner that tends to deceive the public or affect the chances of winning or losing shall be placed into play.

2. Instant bingo cards and pull-tabs used in an event game shall not be offered for sale or sold at a purchase price other than the purchase price indicated on the flare for that particular deal.

3. The maximum prize amount for event games shall not exceed the amount set forth in subdivision 8 of § 18.2-340.33 of the Code of Virginia for instant bingo, pull-tab, or seal card.

4. A sign-up sheet is not required for event games in which the winners are determined using a seal card.

5. Organizations shall determine the winners of event games during the same bingo session in which the instant bingo cards or pull-tabs are sold.

6. An authorized representative of the organization shall deface or punch the winning instant bingo cards or winning pull-tabs immediately after redemption.

7. If unsold bingo cards or unsold pull-tabs remain, the unsold cards shall be retained for a minimum of three years following the close of the fiscal year and shall not be opened.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

Article 3
Bank Accounts, Recordkeeping, Financial Reporting, Audits, Fees

11VAC20-20-80. Bank accounts.

A. A qualified organization shall maintain a charitable gaming bank account that is separate from any other bank account, and all gaming receipts, except receipts from electronic gaming, shall be deposited into the charitable gaming bank account.

B. Disbursements for expenses other than prizes and reimbursement of meal expenses shall be made by check directly from a charitable gaming bank account or a bank account authorized pursuant to subsection A of this section. However, expenses related to a network bingo game, distributed pull tab system, or operator may be disbursed through an electronic fund transfer to the network bingo provider, the permitted manufacturer or supplier providing the distributed pull-tab system, or operator, provided that such an arrangement is agreed upon by both (i) the qualified or social organization and (ii) the network bingo provider, permitted manufacturer or supplier, or operator. A written agreement specifying the terms of this arrangement shall be required prior to any electronic fund transfer occurring between the two parties.

C. All records related to the charitable gaming bank account or the other bank account, authorized pursuant to subsection A of this section, including monthly bank statements, canceled checks or facsimiles thereof, and reconciliations, shall be maintained for a minimum of three years following the close of a fiscal year.

D. All receipts from each session of bingo games, network bingo games, raffles, instant bingo, pull-tabs, or seal cards shall be deposited by the second business day following the session at which they were received. All receipts from electronic gaming shall be deposited at least once every seven calendar days.

E. All receipts from a poker tournament shall be deposited by the second business day following the poker tournament at which they were received. However, receipts received by an operator for administering a poker tournament for a qualified organization may be deposited through an electronic fund transfer into the qualified organization's charitable gaming account provided that such an arrangement is agreed upon by both the qualified organization and the operator. A written agreement specifying the terms of this arrangement is required prior to any electronic fund transfer occurring between the two parties.

F. Raffle proceeds unrelated to a session shall be deposited into the qualified organization's charitable gaming bank account or a bank account authorized pursuant to subsection A of this section no later than the end of the calendar week following the week during which the organization received the proceeds.

G. A social organization operating and conducting electronic gaming or a qualified organization renting a premises from a social organization for the purpose of electronic gaming shall maintain a separate bank account for all receipts rebates, discounts, or refunds from electronic gaming.

Statutory Authority

§ 18.2-340.19 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023; amended, Virginia Register Volume 40, Issue 17, eff. May 9, 2024.

11VAC20-20-90. Recordkeeping.

A. In addition to the records required by § 18.2-340.30 D of the Code of Virginia, qualified organizations conducting a session of bingo or electronic gaming; managing, operating, and conducting a poker tournament; or contracting with an operator to administer a poker tournament shall maintain a system of records for a minimum of three years following the close of the fiscal year, unless otherwise specified, for each session on forms prescribed by the department or reasonable facsimiles of those forms approved by the department that include:

1. Charitable gaming supplies, including electronic gaming supplies, network bingo supplies, or poker tournament supplies purchased and used;

2. A session reconciliation form or an instant bingo, pull-tab, seal card, or poker tournament reconciliation form completed and signed within 48 hours of the end of the session by the game manager. For electronic gaming, an electronic gaming reconciliation form completed and signed within 48 hours of the deposit of receipts in accordance with 11VAC20-20-80 D;

3. All discounts provided;

4. A reconciliation to account for (i) cash received from floor workers for the sale of extra bingo sheets for any game or network bingo cards or (ii) cash received from dealers or game workers as payment from players for entry into the poker tournament or for add-ons;

5. The summary report that electronic bingo systems are required to maintain pursuant to 11VAC20-20-140 D 11;

6. An admissions control system that provides a cross-check on the number of players in attendance and admission sales. This may include a ticket control system, cash register, or any similar system. The requirements of this subdivision shall not apply to the operation and conduct of electronic gaming;

7. All operating expenses, including rent, advertising, and security. Copies of invoices for all such expenses shall also be maintained;

8. Expected and actual receipts from games played on hard bingo cards and number of games played on hard bingo cards;

9. A record of the name and address of each winner for all seal cards and poker tournaments. The winning ticket and seal card shall be maintained for a minimum of 90 days after the session;

10. For poker tournaments, an itemized record of all receipts and expenses associated with a poker tournament, including rent, advertisement, and security as well as an itemized record of all use of proceeds disbursements. Copies of invoices and other documentation for all such expenses shall also be maintained;

11. For poker tournaments, any other operating expenses for which receipts from a poker tournament were disbursed. Copies of invoices and other documentation for all such other expenses shall also be maintained;

12. A record of all door prizes awarded; and

13. For any prize or jackpot of a value that meets or exceeds the reporting requirements in the Internal Revenue Service's Publication 3079, the name and address of each individual to whom any such prize or jackpot is awarded and the amount of the award.

B. Qualified organizations conducting raffles unrelated to a session shall have a recordkeeping system to account for cash receipts, cash disbursements, raffle tickets purchased or sold, and prizes awarded. All records shall be maintained for a minimum of three years following the close of the fiscal year. The recordkeeping system shall include:

1. Invoices for the purchase of raffle tickets, which shall reflect the following information:

a. Name and address of supplier;

b. Name of purchaser;

c. Date of purchase;

d. Number of tickets printed;

e. Ticket number sequence for tickets printed; and

f. Sales price of individual ticket;

2. A record of cash receipts from raffle ticket sales by tracking the total number of tickets available for sale, the number issued to sellers, the number returned, the number sold, and reconciliation of all raffle sales to receipts;

3. Serial numbers of tickets for raffle sales initiated and concluded at a bingo game or sequentially numbered tickets, which shall state the name, address, and telephone number of the organization, the prize to be awarded, the date of the prize drawing or selection, the selling price of the raffle ticket, and the charitable gaming permit number;

4. For any raffle prize of a value that meets or exceeds the reporting requirements in the Internal Revenue Service's Publication 3079, receipts on which prize winners must provide printed name, residence address, and the amount and description of the prize received; and

5. Deposit records of the required weekly deposits of raffle receipts.

C. All raffle tickets shall have a detachable section; be consecutively numbered with the detachable section having the same number; provide space for the purchaser's name, complete address, and telephone number; and state (i) the name and address of the organization; (ii) the prize to be awarded; (iii) the date, time, and location of the prize drawing; (iv) the selling price of the ticket; and (v) the charitable gaming permit number. Winning tickets and unsold tickets shall be maintained for a minimum of three years following the close of the fiscal year.

D. All unused charitable gaming supplies, including network bingo supplies, shall either be returned for refund to the original supplier in unopened original packaging in resalable condition as determined by the supplier or destroyed following notification to the department on a form prescribed by the department. The organization shall maintain a receipt for all such supplies returned to the supplier or destroyed.

E. If a qualified organization uses an operator to administer its poker tournament, then the qualified organization and its operator shall each maintain independent records on each poker tournament. The qualified organization shall not have its records managed, maintained, or stored by an operator.

Statutory Authority

§ 18.2-340.19 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023; amended, Virginia Register Volume 40, Issue 17, eff. May 9, 2024.

11VAC20-20-100. Financial reporting, penalties, inspections, and audits.

A. Each holder of a charitable gaming permit or an authorization to operate and conduct electronic gaming shall file an annual report of receipts and disbursements by March 15 of each year on a form prescribed by the department. The annual report shall cover the activity for the fiscal year.

B. For all charitable gaming except electronic gaming, the annual report shall be accompanied by the audit and administration fee of 0.5% of the gross receipts and an additional fee of 0.25% for the fiscal year unless the fee has been remitted with quarterly reports, or the organization is exempt from payment of the fee pursuant to § 18.2-340.23 of the Code of Virginia.

C. For electronic gaming, the annual report shall be accompanied by the audit and administration fee of 0.5% of the adjusted gross receipts and an additional fee of 0.25% for the fiscal year unless the fee has been remitted with quarterly reports, remitted by the manufacturer pursuant to § 18.2-340.31 of the Code of Virginia. While the manufacturer may pay the audit and administration fee for the organization, it is the sole responsibility of the organization to ensure the fee is paid in full.

D. An organization desiring an extension to file its annual report for good cause shall, prior to the due date established in subsection A of this section, request the extension in writing on a form prescribed by the department and shall pay the projected audit and administration fee, unless remitted by the manufacturer pursuant to § 18.2-340.31 of the Code of Virginia or exempt from payment of the fee pursuant to § 18.2-340.23 of the Code of Virginia. The extension request and payment of projected fees shall be made in accordance with the provisions of § 18.2-340.30 of the Code of Virginia.

E. Unless exempted by § 18.2-340.23 of the Code of Virginia, qualified organizations realizing any gross gaming receipts in any calendar quarter shall file a quarterly report of receipts and disbursements on a form prescribed by the department as follows:

Qualified organizations shall submit quarterly reports with the appropriate audit and administration fee, as established in subsections B and C of this section, for the quarter unless remitted by the manufacturer pursuant to § 18.2-340.31 of the Code of Virginia, or the organization is exempt from payment of the fee pursuant to § 18.2-340.23 of the Code of Virginia. An annual financial report may substitute for a quarterly report if the organization has no further charitable gaming income during the remainder of the reporting period and the annual report is filed by the due date for the applicable calendar quarter.

F. An organization desiring an extension to file its quarterly report for good cause shall, prior to the due date as specified pursuant to subsection D of this section, request the extension in writing on a form prescribed by the department and shall pay the projected audit and administration fee, unless remitted by the manufacturer pursuant to § 18.2-340.31 of the Code of Virginia or exempt from payment of the fee pursuant to § 18.2-340.23 of the Code of Virginia. The extension request and payment of projected fees shall be made in accordance with the provisions of § 18.2-340.30 of the Code of Virginia.

G. Organizations failing to file required reports, request an extension, or make fee payments when due shall be charged a penalty of $25 per day from the due date until such time as the required report is filed.

H. Any qualified organization in possession of funds derived from charitable gaming or electronic gaming, including those who have ceased operations, regardless of when such funds may have been received or whether it has a valid permit or authorization to operate and conduct electronic gaming from the department, shall file an annual financial report on a form prescribed by the department on or before March 15 of each year until such funds are depleted. If an organization ceases the operation and conduct of charitable gaming or electronic gaming, it shall provide the department with the name of an individual who shall be responsible for filing financial reports. If no such information is provided, the president of an organization shall be responsible for filing reports until all charitable gaming or electronic gaming proceeds are depleted.

I. If an organization has been identified through inspection, audit, or other means as having deficiencies in complying with the Charitable Gaming Law and regulations adopted pursuant thereto or having ineffective internal controls, the department may impose restrictions or additional recordkeeping and financial reporting requirements.

J. Any records deemed necessary to complete an inspection, audit, or investigation may be collected by the department, its employees, or its agents from the premises of an organization or any location where charitable gaming is conducted. The department shall provide a written receipt of such records at the time of collection.

K. An organization that meets the requirements of 11VAC20-20-20 D 2 may use electronic gaming revenue for salaries and wages of employees whose primary responsibility is to provide services for the principal benefit of an organization's members.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

11VAC20-20-110. Use of proceeds.

A. All payments by an organization intended as use of proceeds , except for payments made from electronic gaming receipts, must be made by check written from the organization's charitable gaming account or a bank account authorized pursuant to 11VAC20-20-80 A.

B. All payments by an organization intended as use of proceeds that are made from electronic gaming receipts must be made by check or electronic funds transfer from the organization's charitable gaming account or a bank account authorized pursuant to 11VAC20-20-80 A.

C. Use of proceeds payments may be made for scholarship funds or for religious, charitable, educational, or community purposes. In addition, an organization may obtain department approval to establish a special fund account or an irrevocable trust fund for special circumstances. Transfers to such an account or an irrevocable trust fund from the organization's charitable gaming account may be included as a use of proceeds if the payment is authorized by the organization's board of directors.

No payments made to such a special fund account shall be withdrawn for other than the specified purpose, unless prior notification is made to the department.

D. Expenditures of charitable gaming funds for social or recreational activities or for events, activities, or programs that are open primarily to an organization's members and their families shall not qualify as use of proceeds unless substantial benefit to the community is demonstrated.

E. Payments made to or on behalf of indigent, sick, or deceased members or their immediate families shall be allowed as use of proceeds provided they are approved by the organization's board of directors and the need is documented.

F. Payments made directly for the benefit of an individual member, member of an individual member's family, or person residing in an individual member's household shall not be allowed as a use of proceeds unless authorized by the Charitable Gaming Law or regulations adopted pursuant thereto.

G. Use of proceeds payments by an organization shall not be made for any activity that is not permitted by federal, state, or local laws or for any activity that attempts to influence or finance directly or indirectly political persons or committees or the election or reelection of any person who is or has been a candidate for public office.

H. Organizations shall maintain details of all use of proceeds disbursements for a minimum of three years following the close of the fiscal year and shall make this information available to the department upon request.

I. The department may disallow a use of proceeds payment to be counted against the minimum percentage referred to in 11VAC20-20-20 D. If any payment claimed as use of proceeds is subsequently disallowed, an organization may be allowed additional time as specified by the department to meet minimum use of proceeds requirements.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023.

Article 4
Rent

11VAC20-20-120. Requirements regarding renting premises, agreements, and landlord participation.

A. No qualified organization shall lease, rent, or use any premises to operate or conduct charitable gaming unless all terms and conditions for lease, rental, or use are set forth in a written agreement and signed by the parties thereto prior to the issuance of a permit to operate and conduct charitable gaming or authorization to operate and conduct electronic gaming.

B. Organizations shall not make payments to a landlord or a landlord's agent or employee except by check drawn on the organization's charitable gaming account.

C. No landlord, landlord's agent or employee, member of a landlord's immediate family, or person residing in a landlord's household shall make, directly or indirectly, a loan to any of the organization's officers, directors, game managers, or operators, or to any organization involved in the management, operation, or conduct of charitable gaming or electronic gaming of an organization in Virginia that leases its charitable gaming premises from the landlord.

D. No landlord, landlord's agent or employee, member of a landlord's immediate family, or person residing in a landlord's household shall make any direct or indirect payment to any qualified organization or the organization's officers, directors, or game managers involved in the management, operation, or conduct of charitable gaming or electronic gaming conducted on a premise leased from the landlord in Virginia unless the payment is authorized by the lease agreement and is in accordance with the law.

E. No landlord, landlord's agent or employee, member of a landlord's immediate family, or person residing in a landlord's same household shall do any of the following at charitable games or electronic games operated and conducted on the landlord's premises:

1. Participate in the management, operation, or conduct of any charitable games or electronic games;

2. Sell, lease, or otherwise provide any charitable gaming supplies, including bingo cards, pull-tab cards, distributed pull-tab systems, electronic gaming devices, network bingo cards, playing cards, poker chips, or other game pieces;

3. Require as a condition of the lease that a particular manufacturer, distributor, network bingo provider, supplier of charitable gaming supplies or electronic gaming device, or operator is used by the organization; or

4. Provide, advise, or direct the qualified organization or its operator to use any particular person to manage, operate, conduct, or administer a poker tournament that is to be held in the landlord's premises.

"Charitable gaming supplies" as used in this chapter shall not include glue, markers, or tape sold from concession stands or from a location physically separated from the location where charitable gaming supplies are normally sold.

F. No member of an organization involved in the management, operation, or conduct of charitable gaming or electronic gaming shall provide any services to a landlord or a landlord's agents or employees or be remunerated in any manner by the landlord of the premises or such landlord's agents or employees where an organization is operating or conducting its charitable gaming or electronic gaming.

G. For the purpose of operating and conducting electronic gaming, a qualified organization shall only lease or rent the premises of a permitted and authorized social organization that is operating and conducting electronic gaming pursuant to §§ 18.2-340.25:1 and 18.2-340.26:3 of the Code of Virginia. All terms and conditions for leasing or renting of the premises shall be set forth in a written agreement and signed by the parties. No qualified organization shall operate and conduct electronic gaming until the written agreement is submitted to the department for review and the department issues a permit authorizing the qualified organization to conduct and operate electronic gaming.

H. The lease agreement between a social organization authorized to operate and conduct electronic gaming and a qualified organization that intends to lease or rent the social organization's public space in order to operate and conduct electronic gaming:

1. Shall not require the qualified organization to acquire, lease, obtain, purchase, rent, or use an electronic gaming device from a specific manufacturer;

2. Shall not provide for the employment or compensation of any member of the social organization for the purpose of organizing, managing, or conducting electronic gaming;

3. Shall establish a fixed rental or lease payment amount that reflects the fair market rental value, as defined in § 18.2-340.16 of the Code of Virginia. The fixed rental or lease payment amount shall not be based on a percentage of the qualified organization's electronic gaming receipts or the number of players at its electronic gaming session;

4. Shall not include a clause or condition that restricts the qualified organization from operating and conducting electronic gaming at the premises of another social organization; and

5. Shall not authorize the qualified organization to operate and conduct electronic gaming in the social organization's social quarters.

I. A social organization that is permitted and authorized to operate and conduct electronic gaming that leases its premises to a qualified organization so that the qualified organization may operate and conduct electronic gaming:

1. Shall not restrict a qualified organization's ability to conduct electronic gaming at the premise of another social organization;

2. Shall not lease or rent its social quarters to a qualified organization for the purpose of operating and conducting electronic gaming;

3. Shall not enter into any agreement that employs or otherwise compensates any person from the qualified organization to participate in the management, operation, or conduct of electronic gaming; and

4. Shall only lease or rent its premises by means of a fixed rental or lease payment amount that is established in the written agreement and reflects the fair market rental value, as defined in § 18.2-340.16 of the Code of Virginia. The fixed rental or lease payment amount shall not be based on a percentage of the qualified organization's receipts from electronic gaming or the number of players at its electronic gaming session.

Statutory Authority

§ 18.2-340.19 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 39, Issue 14, eff. March 29, 2023; amended, Virginia Register Volume 40, Issue 17, eff. May 9, 2024.