Administrative Code

Virginia Administrative Code
5/20/2024

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.

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