Nonprofits often look for engaging ways to raise funds, and bingo and other games of chance can be great options. However, they’re also highly regulated at both state and local levels. Before hosting a bingo game, raffle, or casino night, it’s essential to understand the rules and regulations that apply. This guide will walk you through the basics of what bingo and games of chance are, the steps for finding your state’s requirements, and how to ensure your nonprofit stays compliant.
What Are Bingo and Games of Chance?
Bingo: A game where players mark numbers on cards as they are drawn randomly. It’s popular at nonprofit events because it’s straightforward, accessible, and enjoyable for diverse audiences.
Games of Chance: These games rely mainly on luck, not skill, to determine a winner. Examples include raffles, lotteries, card games, and casino-style games like poker and roulette. They add excitement and can attract a wide range of supporters.
Why Are There Regulations?
Games of chance are subject to regulation due to their gambling-like nature. Many states have special laws to prevent potential misuse, protect players, and ensure fair play. Some regulations also protect the integrity of nonprofit fundraising by requiring funds raised to be used for charitable purposes.
Finding Your State and Local Regulations
Step 1: Check Your State’s Charitable Gaming Laws
State Attorney General or Secretary of State: Many states provide information on charitable gaming rules through the Attorney General or Secretary of State's office. Look for sections on "Charitable Gaming" or "Nonprofit Fundraising."
State Gaming Commission: Some states have gaming or lottery commissions with sections dedicated to charitable or nonprofit gaming.
Department of Revenue: In some cases, the state’s Department of Revenue oversees gaming for charitable purposes.
Step 2: Identify Local (County/City) Regulations
Even if your state allows bingo and games of chance, local counties and cities may have additional restrictions. Contact your local city or county government offices to confirm local regulations.
Step 3: Review Requirements for Permits and Licensing
Most states and municipalities require a permit or license for nonprofits to host games of chance. Typical requirements may include:
Nonprofit Status Verification: Many states require proof of your 501(c)(3) status.
Permit Application: Completing a detailed application that specifies the type of games you’ll be offering and where they’ll be held.
Fees: Some states charge application fees or a percentage of the proceeds.
Step 4: Understand Fund Allocation Rules
Most states require that the proceeds from games of chance go directly toward the nonprofit’s charitable mission. There may also be rules about prize limits, the percentage of funds that must go to the cause, and record-keeping to track funds raised and distributed.
Key Considerations and Compliance Tips
Age Limits: Most states mandate that participants be 18 or older for games involving monetary prizes.
Prize Limitations: Be aware of any prize cap rules, as some states limit the value of cash or non-cash prizes.
Record-Keeping: Proper records of funds raised and distributed are often required and may need to be submitted to state or local authorities.
Tax Implications: In some cases, nonprofits may be required to report winnings to the IRS if prizes exceed a certain amount. Consult with a tax professional for guidance.
Resources for Nonprofits
State Nonprofit Associations: These organizations frequently have resources or can provide guidance on state requirements.
Consulting with an Attorney: For more complex gaming setups or events involving larger prizes, consult a legal professional experienced in nonprofit law.
Example of States with Specific Bingo & Games of Chance Rules
California: Permits bingo only if conducted by a charitable organization and with a maximum prize limit per game.
New York: Requires nonprofits to register with the New York Gaming Commission and provides detailed reporting requirements.
Texas: Has strict regulations on how funds from games of chance can be used and monitored.
Wrapping Up
Bingo and games of chance can be powerful fundraising tools when done legally and responsibly. By following these steps to understand and comply with your state and local regulations, your nonprofit can enjoy a successful event that aligns with the rules and enhances your mission.
Planning ahead and ensuring compliance with state and local laws can make bingo and games of chance rewarding options for your nonprofit’s fundraising efforts. By respecting these regulations, you create a fair and enjoyable experience that supports your cause and builds trust with your community.