Virginia Law

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.