2012 North Dakota Century Code Title 53 Sports and Amusements Chapter 53-06.1 Games of Chance
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CHAPTER 53-06.1
GAMES OF CHANCE
53-06.1-01. Definitions.
As used in this chapter:
1. "Adjusted gross proceeds" means gross proceeds less cash prizes, cost of
merchandise prizes, gaming tax, and federal excise tax imposed under section 4401 of
the Internal Revenue Code [26 U.S.C. 4401].
2. "Charitable organization" means an organization whose primary purpose is for relief of
poor, distressed, underprivileged, diseased, elderly, or abused persons, prevention of
cruelty to children or animals, or similar condition of public concern.
3. "Civic and service organization" means an organization whose primary purpose is to
promote the common good and social welfare of a community as a sertoma, lion,
rotary, jaycee, kiwanis, or similar organization.
4. "Closely related organization" means an organization that controls, is controlled by, or
is under common control with another organization. Control exists when an
organization has the authority or ability to elect, appoint, or remove a majority of the
officers or directors of another organization or, by policy, contract, or otherwise, has
the authority or ability to directly or indirectly direct or cause the direction of the
management or policies of another organization.
5. "Distributor" means a person that sells, markets, or distributes equipment designed for
use in the conduct of games.
6. "Educational organization" means a nonprofit public or private elementary or
secondary school, two-year or four-year college, or university.
7. "Eligible organization" means a veterans, charitable, educational, religious, fraternal,
civic and service, public safety, or public-spirited organization domiciled in North
Dakota or authorized by the secretary of state as a foreign corporation under chapter
10-33, incorporated as a nonprofit organization, and which has been regularly and
actively fulfilling its primary purpose within this state during the two immediately
preceding years. However, an educational organization does not need to be
incorporated or be in existence for two years. An organization's primary purpose may
not involve the conduct of games. The organization may be issued a license by the
attorney general. For purposes of this section, a foreign corporation authorized under
chapter 10-33 is not an eligible organization unless authorized to conduct a raffle
under chapter 20.1-04 or 20.1-08 and may not conduct a game other than a raffle
under chapter 20.1-04 or 20.1-08.
8. "Fraternal organization" means an organization, except a school fraternity, which is a
branch, lodge, or chapter of a national or state organization and exists for the common
business, brotherhood, or other interests of its members. The organization must have
qualified for exemption from federal income tax under section 501(c)(8) or 501(c)(10)
of the Internal Revenue Code.
9. "Games" means games of chance.
10. "Gross proceeds" means all cash and checks received from conducting games.
11. "Licensed organization" means an eligible organization licensed by the attorney
general.
12. "Manufacturer" means, for a pull tab or bingo card, a person who designs, prints,
assembles, or produces the product. For a pull tab or bingo card dispensing device or
bingo card marking device, a manufacturer means the person who directly controls
and manages development of and owns the rights to the proprietary software encoded
on a processing chip that enables the device to operate.
13. "Net income" means gross proceeds less cash prizes, cost of merchandise prizes, and
expenses to conduct the gaming activity.
14. "Net proceeds" means adjusted gross proceeds less allowable expenses and gaming
tax.
15. "Permit" means a local permit or charity local permit issued by a governing body of a
city or county to a nonprofit organization or group of people domiciled in North Dakota.
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17.
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20.
21.
"Person" means any person, partnership, corporation, limited liability company,
association, or organization.
"Prize board" means a board used with pull tabs to award cash or merchandise prizes.
"Public safety organization" means an organization whose primary purpose is to
provide firefighting, ambulance service, crime prevention, or similar emergency
assistance.
"Public-spirited organization" means an organization whose primary purpose is for
scientific research, amateur sports competition, safety, literary, arts, preservation of
cultural heritage, educational activities, educational public service, youth, economic
development, tourism, community medical care, community recreation, or similar
organization, which does not meet the definition of any other type of eligible
organization. However, a nonprofit organization or a group of people recognized as a
public-spirited organization by a governing body of a city or county for obtaining a
permit does not need to meet this definition.
"Religious organization" means a church, body of communicants, or group gathered in
common membership whose primary purpose is for advancement of religion, mutual
support and edification in piety, worship, and religious observances.
"Veterans organization" means any congressionally chartered post organization, or
any branch or lodge or chapter of a nonprofit national or state organization whose
membership consists of individuals who are or were members of the armed services or
forces of the United States. The organization must have qualified for exemption from
federal income tax under section 501(c)(19) of the Internal Revenue Code.
53-06.1-01.1. Gaming commission.
1. The state gaming commission consists of the chairman and four other members
appointed by the governor, with the consent of the senate. The members serve
three-year terms and until a successor is appointed and qualified. If the senate is not
in session when the term of a member expires, the governor may make an interim
appointment, and the interim appointee holds office until the senate confirms or rejects
the appointment. A member appointed to fill a vacancy arising from other than the
natural expiration of a term serves only for the unexpired portion of the term. The
terms of the commissioners must be staggered so that one term expires each July
first.
2. A person is ineligible for appointment to the commission if that person has not been a
resident of this state for at least two years before the date of appointment. A person is
also ineligible if that person is not of such character and reputation as to promote
public confidence in the administration of gaming in this state. A person is also
ineligible if that person has been convicted of a felony criminal offense or has pled
guilty or been found guilty of any violation of chapter 12.1-06, 12.1-08, 12.1-09,
12.1-10, 12.1-11, 12.1-12, 12.1-22, 12.1-23, 12.1-24, 12.1-28, 53-06.1, or 53-06.2, or
has pled guilty or been found guilty of any violation of section 6-08-16 or 6-08-16.2, or
has pled guilty or been found guilty of any offense or violation that has a direct bearing
on the person's fitness to be involved in gaming, or who has committed an equivalent
offense or violation of the laws of another state or of the United States. A person who
has a financial interest in gaming or is an employee or a member of the gaming
committee of a licensed organization or distributor cannot be a member of the
commission. For the purpose of this subsection, a financial interest includes the
receiving of any direct payment from an eligible organization for property, services, or
facilities provided to that organization.
3. Commission members are entitled to seventy-five dollars per day for compensation for
each day spent on commission duties and mileage and expense reimbursement as
allowed to other state employees.
4. The commission shall adopt rules in accordance with chapter 28-32, to administer and
regulate the gaming industry, including methods of conduct, play, and promotion of
games; minimum procedures and standards for recordkeeping and internal control;
requiring tax returns and reports from organizations or distributors; methods of
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competition and doing business by distributors and manufacturers; acquisition and use
of gaming equipment; quality standards or specifications for the manufacture of pull
tabs, paper bingo cards, pull tab and bingo card dispensing devices, and bingo card
marking devices; to ensure that net proceeds are used for educational, charitable,
patriotic, fraternal, religious, or public-spirited uses; to protect and promote the public
interest; to ensure fair and honest games; to ensure that fees and taxes are paid; and
to prevent and detect unlawful gambling activity.
53-06.1-01.2. Duty of attorney general to participate in certain hearings - Employment
of private counsel by commission.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-02. Organizations eligible - Use of net proceeds.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-02.1. Waiver of two-year active requirement - Local permit.
Repealed by S.L. 1995, ch. 484, § 35.
53-06.1-03. Permits, site authorization, and licenses.
1. Except as authorized by the attorney general, an organization that has its license
suspended or revoked, or has relinquished or not renewed its license and not
disbursed its net proceeds, is ineligible for a license or permit. Only one of two or more
closely related organizations may have a license or permit at one time. A college or
university fraternity, sorority, or club is not closely related to an educational
organization. An organization shall apply for a permit as follows:
a. An organization recognized as a public-spirited organization by the governing
body of a city or county may apply for a local permit to conduct only raffles, bingo,
or sports pools, or a charity local permit to conduct only raffles, bingo, sports
pools, paddlewheels, twenty-one, and poker. The organization or closely related
organizations as a whole may only award a primary prize that does not exceed
six thousand dollars, except that a raffle cash prize may not exceed the limits of
section 53-06.1-10.1, and total prizes of all games do not exceed twelve
thousand dollars per year. These maximum prize amounts do not apply to raffles
conducted under chapter 20.1-08. The determination of what is a "public-spirited
organization" is within the sole discretion of the governing body. An organization
shall disclose on the application its intended use of the net income from the
gaming activity. A governing body may issue a permit for games to be held at
designated times and places.
b. An organization shall apply to the governing body of the city or county in which
the proposed site is located. Application must be made on a form prescribed by
the attorney general. Approval may be granted at the discretion of the governing
body. A governing body may establish a fee not to exceed twenty-five dollars for
each permit. A permit must be on a fiscal year basis from July first to June
thirtieth or on a calendar-year basis.
c. Except for the restriction of subsection 1 of section 53-06.1-11.1, an organization
that has a local permit may use the net income from the gaming activity for any
purpose that does not violate this chapter or gaming rules.
d. An organization that has a charity local permit is restricted to one event per year
and:
(1) May not pay remuneration to employees for personal services;
(2) Shall use chips as wagers;
(3) Shall redeem a player's chips for merchandise prizes or cash;
(4) Shall disburse net income to eligible uses referenced by subsection 2 of
section 53-06.1-11.1; and
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(5)
2.
3.
4.
5.
Shall file a report prescribed by the attorney general with the governing body
and attorney general.
An eligible organization shall apply for a license to conduct only bingo, raffles,
calcuttas, pull tabs, punchboards, twenty-one, paddlewheels, poker, or sports pools
by:
a. First securing approval for a site authorization from the governing body of the city
or county in which the proposed site is located. Approval, which may be granted
at the discretion of the governing body, must be recorded on a site authorization
form that is to accompany the license application to the attorney general for final
approval. A governing body may not require an eligible organization to donate net
proceeds to the city, county, or related political subdivision or for community
programs or services within the city or county as a condition for receiving a site
authorization from the city or county. A governing body may limit the number of
tables for the game of twenty-one per site and the number of sites upon which a
licensed organization may conduct games within the city or county. A governing
body may charge a one hundred dollar fee for a site authorization; and
b. Annually applying for a license from the attorney general before July first on a
form prescribed by the attorney general and remitting a one hundred fifty dollar
license fee for each city or county that approves a site authorization. However,
the attorney general may allow an organization that only conducts a raffle or
calcutta in two or more cities or counties to annually apply for a consolidated
license and remit a one hundred fifty dollar license fee for each city or county in
which a site is located. An organization shall document that it qualifies as an
eligible organization. If an organization amends its primary purpose as stated in
its articles of incorporation or materially changes its basic character, the
organization shall reapply for licensure.
A licensed organization or organization that has a permit shall conduct games as
follows:
a. Only one licensed organization or organization that has a permit may conduct
games at an authorized site on a day, except that a raffle may be conducted for a
special occasion by another licensed organization or organization that has a
permit when one of these conditions is met:
(1) When the area for the raffle is physically separated from the area where
games are conducted by the regular organization.
(2) Upon request of the regular organization and with the approval of the
alcoholic beverage establishment, the regular organization's license or
permit is suspended for that specific time of day by the attorney general.
b. Except for a temporary site authorized for fourteen or fewer consecutive days for
not more than two events per quarter, a licensed organization may not have more
than twenty-five sites unless granted a waiver by the attorney general. If the
attorney general finds that there is no other licensed organization interested in
conducting gaming at a site for which a waiver is being sought, the attorney
general may approve the waiver for no more than five sites.
c. Games of pull tabs, punchboards, twenty-one, paddlewheels, poker, and sports
pools may be conducted only during the hours when alcoholic beverages may be
dispensed according to applicable regulations of the state, county, or city.
d. An organization may not permit a person under twenty-one years of age to
directly or indirectly play pull tabs, punchboards, twenty-one, calcuttas, sports
pools, paddlewheels, or poker. An organization may not permit a person under
eighteen years of age to directly or indirectly play bingo unless the person is
accompanied by an adult, bingo is conducted by an organization that has a
permit, or the game's prize structure does not exceed that allowed for a permit.
A permit, or site authorization and license, must be displayed at a site.
The attorney general may issue a conditional license to an eligible organization whose
regularly issued license has expired or been suspended, revoked, or relinquished. The
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attorney general shall designate the time period for which the conditional license is
valid and may impose any conditions.
A governing body or local law enforcement official may inspect a site's gaming
equipment and examine or cause to be examined any gaming-related books and
records of a licensed organization or organization that has a permit.
53-06.1-03.1. Bingo sites - Limit on rent.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-03.2. Twenty-one sites - Limit on rent.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-03.3. Pull tab sites - Limit on rent.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-03.4. Electronic video gaming devices - Limit on rent.
Disapproved by R.M. December 5, 1989, S.L. 1991, ch. 744.
53-06.1-04. College fraternities and sororities allowed to conduct raffles, sports
pools, and bingo - Use of proceeds.
Repealed by S.L. 1995, ch. 484, § 35.
53-06.1-05. Local permit for educational organizations, college fraternities, and
sororities for raffles, sports pools, and bingo.
Repealed by S.L. 1995, ch. 484, § 35.
53-06.1-05.1. Regulation by city or county of number of twenty-one tables per site and
number of sites per licensed organization.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-06. Persons permitted to conduct games - Equipment.
1. No person, except a member, volunteer, an employee of a licensed organization or an
organization that has a permit, or an employee of a temporary employment agency
who provides services to a licensed organization, may manage, control, or conduct
any game. "Member" includes a member of an auxiliary organization. In conducting
pull tabs, prize boards, or bingo through a dispensing device, selling raffle tickets, or
conducting sports pools, the attorney general may allow an employee of an alcoholic
beverage establishment to provide limited assistance to an organization.
2. Except when authorized by the attorney general or allowed by the gaming rules, an
eligible organization shall procure gaming equipment only from a licensed distributor.
No equipment or prizes may be purchased at an excessive price.
3. An organization shall maintain complete, accurate, and legible bank and accounting
records in North Dakota for all gaming activity and establish a system of internal
control as prescribed by rule. The governing board of an eligible organization is
primarily responsible and may be held accountable for the proper determination and
use of net proceeds. If an organization does not renew its license or its license is
denied, relinquished, or revoked and it has not disbursed all of its net proceeds, the
organization shall file an action plan as prescribed by the gaming rules with the
attorney general.
4. The value of a merchandise prize awarded in a game is its retail price, excluding sales
tax.
5. A person is restricted from being involved in gaming and the attorney general shall
conduct a criminal history record check as follows:
a. (1) A person who has pled guilty to or been found guilty of a felony offense as
defined by the laws of this state, other states, or the federal government, or
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7.
has pled guilty to or been found guilty of a violation of this chapter, a gaming
rule, chapter 12.1-28 or 53-06.2, or offenses of other states or the federal
government equivalent to offenses defined in these chapters, regardless of
whether the person has completed or received a deferred imposition of
sentence, deferred prosecution, or suspended sentence, may not be a
licensed distributor, be an investor in or board member or consultant to a
licensed distributor, or be employed by a licensed distributor, and may not
be employed by a licensed organization to conduct games, for five years
from the date of conviction, release from incarceration, or expiration of
parole or probation, whichever is the latest.
(2) Paragraph 1 does not apply if the offense to which the person pled guilty or
has been found guilty is a misdemeanor and the person has received a
deferred imposition of sentence or deferred prosecution and has fully
complied with the terms of the deferral.
b. A person who has pled guilty to or been found guilty of a misdemeanor offense in
violation of section 6-08-16.1 or chapter 12.1-06, 12.1-23, or 12.1-24 or offenses
of other states, the federal government, or a municipality equivalent to these
offenses, regardless if the person has completed or received a suspended
sentence, may not be a licensed distributor or be employed by a licensed
distributor, and may not be employed by a licensed organization to conduct
games, for two years from the date of conviction, release from incarceration, or
expiration of parole or probation, whichever is the latest, unless the person has
received a deferred imposition of sentence or deferred prosecution and has fully
complied with the terms of the deferral.
c. Unless an employee is exempt by the gaming rules or attorney general, the
attorney general shall conduct a criminal history record check of each employee
of a licensed organization or distributor and charge a fee prescribed by section
12-60-16.9. The fee may be waived by the attorney general if a federal agency or
local law enforcement agency has done a record check. The attorney general
may require advance payment of any additional fee necessary to pay the cost of
a record check of a person for whom adequate background information sources
are not readily available. The advance payment must be placed in the attorney
general's refund fund. The unused funds must be returned to the person within
thirty days of the conclusion of the record check. Unless a federal or local law
enforcement agency conducts the record check, the attorney general shall notify
the organization or distributor and person of the result. The attorney general shall
keep the information confidential except in the proper administration of this
chapter or any gaming rule or to provide to an authorized law enforcement
agency.
For a site where bingo is the primary game or a site that is leased by a licensed
organization, the organization may not pay bingo prizes in which the total bingo prizes
exceed total bingo gross proceeds for a period prescribed by gaming rule. However, if
bingo is the primary game at the site, a bingo prize that equals or exceeds ten
thousand dollars is excluded from the total of the bingo prizes.
A city or county may require a person conducting games to obtain a local work permit,
charge a reasonable fee, and conduct a criminal history record check.
53-06.1-06.1. Local work permits.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-07. Games allowed.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-07.1. Limitations on hours and participation.
Repealed by S.L. 1997, ch. 428, § 21.
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53-06.1-07.2. Poker.
Poker may be conducted on not more than two occasions per year. An organization may
supply the dealer. The maximum single bet is one dollar. Not more than three raises, of not
more than one dollar each, may be made among all the players in each round of bets. For
nontournament activity, an organization shall charge each player a fee not to exceed two dollars
per one-half hour of playing time, collected in advance. For a tournament, an organization shall
charge each player an entry fee and the amount of prizes may not exceed ninety percent of the
gross proceeds.
53-06.1-07.3. Calcuttas.
A calcutta may only be conducted for a professional or amateur sporting event held in this
state but not for elementary, secondary, or postsecondary education sports events. Only one
wager per competitor may be allowed in a calcutta pool. The amount of prizes may not exceed
ninety percent of the gross proceeds. A player may not place a wager on a competitor in a
calcutta sporting event unless the competitor is eighteen years of age or older.
53-06.1-07.4. Paddlewheels.
A paddlewheel is a mechanical vertical wheel marked off into equally spaced sections that
contain numbers or symbols, and which after being spun, uses a pointer to indicate the winning
number or symbol. The maximum price per paddlewheel ticket or chip is two dollars. A table and
chips must be used to register a player's wager when a prize is a variable multiple of the wager.
Otherwise, a ticket must be used. A player may not place wagers totaling more than twenty
dollars on each spin of the paddlewheel. Cash, chips, or merchandise prizes may be awarded.
No single cash prize, value of chips, or the retail value of the merchandise prize to be awarded
for a winning ticket or chip may exceed one hundred dollars.
53-06.1-08. Punchboards and pull tabs.
Unless all top tier winning pull tabs or punchboard punches of a game have been
redeemed, or unless otherwise permitted by a gaming rule or the attorney general, a person or
organization may not close the game after it has been placed in play. The maximum sales price
per pull tab and punchboard punch is two dollars. The maximum prize value of a top tier winning
pull tab or punchboard punch is five hundred dollars. The game of pull tabs may only be
conducted by commingling deals.
53-06.1-08.1. Limitation on pull tab prizes.
Repealed by S.L. 1995, ch. 484, § 35.
53-06.1-09. Sports pools.
A sports pool must be for a professional sport only. The maximum wager is five dollars. The
amount of prizes may not exceed ninety percent of the gross proceeds.
53-06.1-10. Twenty-one.
The organization shall provide playing chips of various denominations to players although
the organization may use a metal coin rather than a fifty-cent chip. The maximum limit per
wager may be set by the organization at not more than twenty-five dollars and original wagers in
increments of one dollar must be accepted up to the maximum limit. However, if there is more
than one table that is active at a site, the organization may set a minimum wager on no more
than one-half of the active tables. A player may not play more than two hands at the same time.
Only the player actually playing a hand may place a wager on that hand. Each player plays the
player's hand against the dealer's hand. Any requirement to pool tips is within the sole discretion
of each organization. Except for a site that has twenty-one gross proceeds averaging less than
ten thousand dollars per quarter, an organization may not conduct twenty-one at the site with
wagers exceeding two dollars unless the organization has first installed video surveillance
equipment as required by rules and the equipment is approved by the attorney general.
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53-06.1-10.1. Raffles.
A prize for a raffle may be cash or merchandise but may not be real estate. No single cash
prize may exceed four thousand dollars and the total cash prizes in one day may not exceed
four thousand dollars. However, on not more than two occasions per year a licensed
organization may, at the request of a winning player, exchange a merchandise prize valued at
not more than twenty-five thousand dollars for a cash prize.
53-06.1-11. Gross proceeds - Allowable expenses - Rent limits.
1. All money received from games must be accounted for according to the gaming rules.
Gaming activity for a quarter must be reported on a tax return form prescribed by the
attorney general. Unless otherwise authorized by the attorney general, the purchase
price of a merchandise prize must be paid from a gaming bank account by check. No
check drawn from a gaming or trust bank account may be payable to "cash" or a
fictitious payee. A cash prize that exceeds an amount set by rule must be accounted
for by a receipt prescribed by the gaming rules.
2. Allowable expenses may be deducted from adjusted gross proceeds. The allowable
expense limit is sixty percent of the adjusted gross proceeds per quarter.
3. Cash shorts incurred in games and interest and penalty are classified as expenses.
4. For a site where bingo is conducted:
a. If bingo is the primary game, the monthly rent must be reasonable.
b. If bingo is not the primary game, but is conducted with twenty-one, paddlewheels,
or pull tabs, no additional rent is allowed.
5. For a site where bingo is not the primary game:
a. If twenty-one or paddlewheels is conducted, the monthly rent may not exceed two
hundred dollars multiplied by the necessary number of tables based on criteria
prescribed by gaming rule. For each twenty-one table with a wager greater than
five dollars, an additional amount up to one hundred dollars may be added to the
monthly rent. If pull tabs is also conducted involving a jar bar or dispensing
device, but not both, the monthly rent for pull tabs may not exceed an additional
one hundred seventy-five dollars. If pull tabs is conducted involving both a jar bar
and dispensing device, the monthly rent for pull tabs may not exceed an
additional two hundred dollars.
b. If twenty-one and paddlewheels are not conducted but pull tabs is conducted
involving a jar bar or dispensing device, but not both, the monthly rent may not
exceed two hundred seventy-five dollars. If pull tabs is conducted involving both a
jar bar and dispensing device, the monthly rent for pull tabs may not exceed three
hundred dollars.
53-06.1-11.1. Restricted use of money in certain political activities - Eligible uses of
net proceeds.
1. A licensed organization or an organization that has a permit may not use money from
any source for placing an initiated or referred measure on a ballot or for a political
campaign to promote or oppose a person for public office. Except for a use related to
an organization's primary purpose, a licensed organization or organization that has a
permit may not use net proceeds to influence legislation or promote or oppose
referendums or initiatives. Any funds expended by a licensed organization or an
organization that has a permit to promote or oppose an initiated or referred measure
that is on the ballot or for any activities of a lobbyist under section 54-05.1-02, that are
not compensation or expenses paid to a lobbyist, and that are not required to be
reported under section 54-05.1-03 must be reported to the attorney general as
prescribed by the attorney general. A violation of this subsection subjects an
organization to a suspension of its license or permit for up to one year.
2. A licensed organization or an organization that has a charity local permit shall disburse
net proceeds within the period prescribed by rule and for only these educational,
charitable, patriotic, fraternal, religious, or public-spirited uses:
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a.
b.
c.
d.
e.
f.
g.
h.
i.
Uses for stimulating and promoting state and community-based economic
development programs within the state which improve the quality of life of
community residents.
Uses for developing, promoting, and supporting tourism within a city, county, or
the state.
Uses benefiting an indefinite number of persons by bringing them under the
influence of education, cultural programs, or religion which include disbursements
to provide:
(1) Scholarships for students, if the disbursement is deposited in a scholarship
fund for defraying the cost of education to students and the scholarships are
awarded through an open and fair selection process.
(2) Supplementary assistance to a public or private nonprofit educational
institution registered with or accredited by any state.
(3) Assistance to libraries and museums.
(4) Assistance for the performing arts and humanities.
(5) Preservation of cultural heritage.
(6) Youth community, social welfare, and athletic activities.
(7) Adult amateur athletic activities within the state, including team uniforms and
equipment.
(8) Maintenance of places of public worship or support of a body of
communicants, gathered in common membership for mutual support and
edification in piety, worship, or religious observances.
(9) Scientific research.
Uses benefiting an indefinite number of persons by relieving them of disease,
suffering, or constraint which include disbursements to provide:
(1) Assistance to an individual or family suffering from poverty or
homelessness.
(2) Encouragement and enhancement of the active participation of the elderly in
our society.
(3) Services to the abused.
(4) Services to persons with an addicted behavior toward alcohol, gambling, or
drugs.
(5) Funds to combat juvenile delinquency and rehabilitate ex-offenders.
(6) Relief for the sick, diseased, and terminally ill and their physical well-being.
(7) Funds for emergency relief and volunteer services.
(8) Funds to nonprofit nursing homes, nonprofit day care centers, and nonprofit
medical facilities.
(9) Social services and education programs aimed at aiding emotionally and
physically distressed, handicapped, elderly, and underprivileged persons.
(10) Funds for crime prevention, fire protection and prevention, and public safety.
(11) Funds to relieve, improve, and advance the physical and mental conditions,
care and medical treatment, and health and welfare of injured or disabled
veterans.
Uses that perpetuate the memory and history of the dead.
Uses increasing comprehension of and devotion to the principles upon which the
nation was founded, not of direct benefit to the eligible organization or any
member thereof which include disbursements to aid in teaching the principles of
liberty, truth, justice, and equality. However, beauty pageants do not qualify.
The erection or maintenance of public buildings, facilities, utilities, or waterworks.
Uses lessening the burden of government which include disbursements to an
entity that is normally funded by a city, county, state, or United States government
and disbursements directly to a government entity or its agency.
Uses benefiting a definite number of persons who are the victims of loss of home
or household possessions through explosion, fire, flood, or storm and the loss is
not covered by insurance.
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j.
3.
Uses benefiting a definite number of persons suffering from a seriously disabling
disease or injury causing severe loss of income or incurring extraordinary medical
expense which is not covered by insurance.
k. Uses, for community service projects, by chambers of commerce exempt from
federal income tax under section 501(c)(6) of the Internal Revenue Code. A
project qualifies if it develops or promotes public services, including education,
housing, transportation, recreation, crime prevention, fire protection and
prevention, safety, tourism, and health. Uses that directly benefit a chamber of
commerce do not qualify.
l. Uses for or of benefit to efforts in support of the health, comfort, or well-being of
the community which include disbursements to provide:
(1) Funds for adult bands, including drum and bugle corps.
(2) Funds for trade shows and conventions conducted in this state.
(3) Funds for nonprofit organizations that operate a humane society, zoo, or fish
or wildlife reproduction and habitat enhancement program.
(4) Funds for public transportation, community celebration, and recreation.
(5) Funds for preservation and cleanup of the environment.
m. To the extent net proceeds are used toward the primary purpose of a charitable,
educational, religious, public safety, or public-spirited organization, or are used for
a veterans or public cemetery by a veterans organization, that has obtained a
final determination from the internal revenue service as qualifying for exemption
from federal income tax under section 501(c)(3) or 501(c)(19) of the Internal
Revenue Code, the organization may establish a special trust fund or foundation
as a contingency for funding or maintaining the organization's future program
services should the organization discontinue conducting games or dissolve.
n. Uses for a fundraising activity unrelated to an organization's primary purpose
provided that the gross revenue from the activity is disbursed to uses prescribed
by this subsection.
The uses in subsection 2 do not include the erection, acquisition, improvement,
maintenance, or repair of real or personal property owned or leased by an organization
unless it is used exclusively for an eligible use. A licensed organization or recipient of
net proceeds may not use net proceeds for administrative or operating expenses
involving the conduct of games.
53-06.1-12. Gaming tax - Deposits and allocations.
1. A gaming tax is imposed on the total gross proceeds received by a licensed
organization in a quarter and it must be computed and paid to the attorney general on
a quarterly basis on the tax return. This tax must be paid from adjusted gross proceeds
and is not part of the allowable expenses. The tax rate for a licensed organization with
gross proceeds:
a. Not exceeding five hundred thousand dollars is one percent of gross proceeds.
b. Exceeding five hundred thousand dollars but not exceeding one million dollars is
one and one-half percent of gross proceeds.
c. Exceeding one million dollars but not exceeding one million five hundred
thousand dollars is two percent of gross proceeds.
d. Exceeding one million five hundred thousand dollars is two and one-half percent
of gross proceeds.
2. The tax must be paid to the attorney general at the time tax returns are filed.
3. Except as provided in subsection 4, the attorney general shall deposit gaming and
excise taxes, monetary fines, and interest and penalties collected in the general fund
in the state treasury.
4. The attorney general shall deposit six percent of the total taxes, less refunds, collected
under this section into a gaming and excise tax allocation fund. Pursuant to legislative
appropriation, moneys in the fund must be distributed quarterly to cities and counties
in proportion to the taxes collected under this section from licensed organizations
conducting games within each city, for sites within city limits, or within each county, for
Page No. 10
sites outside city limits. If a city or county allocation under this subsection is less than
two hundred dollars, that city or county is not entitled to receive a payment for the
quarter and the undistributed amount must be included in the total amount to be
distributed to other cities and counties for the quarter.
53-06.1-12.1. Deposits.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-12.2. Pull tab excise tax.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-12.3. Interest, penalty, and estimated tax.
1. Assessment of interest. If a licensed organization does not pay tax due by the original
date of a tax return, or if additional tax is due based on an audit or math verification of
the return and it is not paid by the original due date of the return, the organization shall
pay interest on the tax at the rate of twelve percent per annum computed from the
original due date of the return through the date the tax is paid.
2. Assessment of penalty. If a licensed organization does not pay tax due on a tax return
by the original or extended due date of the return, or if additional tax is due based on
an audit or math verification of the return and it is not paid by the original or extended
due date of the return, the organization shall pay a penalty of five percent of the tax, or
twenty-five dollars, whichever is greater. If an organization does not file a tax return by
the original or extended due date of the return, the organization shall pay a penalty of
five percent of the tax, or twenty-five dollars, whichever is greater, for each month or
fraction of a month during which the return is not filed, not exceeding a total of
twenty-five percent.
3. The attorney general may require a licensed organization to make monthly estimated
gaming tax payments if the attorney general determines that the organization is in poor
financial condition. If an organization fails to pay any tax or estimated tax, interest, or
penalty by the original due date or date set by the attorney general, the attorney
general may bring court action to collect it and may suspend the organization's license.
The attorney general may for good cause waive all or part of any interest or penalty
and may waive any minimal tax.
4. If a licensed organization has failed to file a tax return, has been notified by the
attorney general of the delinquency, and refuses or neglects within thirty days after the
notice to file a proper return, the attorney general shall determine the adjusted gross
proceeds and gaming tax due according to the best information available and assess
the tax at not more than double the amount. Interest and penalty also must be
assessed.
5. The attorney general may authorize a licensed organization to pay any delinquent tax,
interest, or penalty on an installment plan and may set any qualifying conditions.
53-06.1-13. Examination of books and records.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-13.1. Financial statements.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-14. Distributors and manufacturers.
1. A manufacturer of pull tabs, bingo cards, or bingo card marking devices shall apply
annually for a license and pay a license fee of four thousand dollars. A manufacturer of
pull tab dispensing devices shall apply annually for a license and pay a license fee of
one thousand dollars. A distributor shall apply annually for a license and pay a license
fee of one thousand five hundred dollars. Application must be made before the first
day of April in each year on a form prescribed by the attorney general.
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2.
3.
4.
5.
6.
A licensed distributor may not sell, market, or distribute gaming equipment except to a
licensed distributor, licensed organization, organization that has a permit, or other
person authorized by gaming rule or the attorney general. A manufacturer of a pull tab
dispensing device, pull tab, bingo card marking device, or bingo card may only sell,
market, or distribute the manufacturer's pull tab dispensing device and processing chip
encoded with proprietary software, pull tab, bingo card marking device, or bingo card
to a licensed distributor. A licensed distributor may purchase or acquire a pull tab
dispensing device and processing chip encoded with proprietary software, pull tab,
bingo card marking device, or bingo card only from a licensed manufacturer or
licensed distributor. However, a distributor may purchase or acquire a used pull tab
dispensing device from a licensed organization. A distributor may not duplicate a
manufacturer's processing chip encoded with proprietary software. No gaming
equipment or prize may be sold or leased at an excessive price.
A licensed distributor shall affix a North Dakota gaming stamp to each deal of pull tabs
and bingo cards, punchboard, sports pool board, calcutta board, and series of
paddlewheel ticket cards sold or otherwise provided to a licensed organization and
shall purchase the stamps from the attorney general for thirty-five cents each. Ten
cents of each stamp sold by the attorney general, up to thirty-six thousand dollars per
biennium, must be credited to the attorney general's operating fund to defray the costs
of issuing and administering the gaming stamps.
A licensed organization, organization that has a permit, licensed manufacturer, or
North Dakota wholesaler of liquor or alcoholic beverages may not be a distributor or
stockholder of a distributor. A distributor may not be a stockholder of a manufacturer.
In addition to the license fee, the attorney general may require advance payment of
any fee necessary to pay the cost of a record check of an applicant according to
subdivision c of subsection 5 of section 53-06.1-06.
A licensed manufacturer may not refuse to sell deals of pull tabs or paper bingo cards
to a licensed distributor unless:
a. A specific deal of pull tabs is sold on an exclusive basis;
b. The manufacturer does not sell deals of pull tabs or paper bingo cards to any
distributor in the state;
c. A gaming law or rule prohibits the sale;
d. The distributor has not provided the manufacturer with proof of satisfactory credit
or is delinquent on any payment owed to the manufacturer; or
e. The distributor has not met the manufacturer's standard minimum order quantity
and freight terms.
53-06.1-15. Form and display of license and local permit.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-15.1. Authority of the attorney general.
The attorney general may:
1. Inspect all sites in which gaming is conducted or inspect all premises where gaming
equipment is manufactured or distributed. The attorney general may require a licensed
manufacturer to reimburse the attorney general for the reasonable actual cost of
transportation, lodging, meals, and incidental expenses incurred in inspecting the
manufacturer's facility.
2. Inspect all gaming equipment and supplies.
3. Seize, remove, or impound any gaming equipment, supplies, games, or books and
records for the purpose of examination and inspection.
4. Demand access to and inspect, examine, photocopy, and audit all books and records
of applicants, organizations, lessors, manufacturers, distributors, and affiliated
companies concerning any income, expense, or use of net proceeds, and determine
compliance with this chapter or gaming rules.
5. Permit the commissioner or proper representative of the internal revenue service of
the United States to inspect a tax return or furnish a copy of the tax return, or
Page No. 12
6.
7.
8.
9.
10.
11.
12.
13.
information concerning any item contained in the return, or disclosed by any audit or
investigation report of the gaming activity of any organization or player, or
recordkeeping information. However, information cannot be disclosed to the extent that
the attorney general determines that the disclosure would identify a confidential
informant or seriously impair any civil or criminal investigation. Except when directed
by judicial order, or for pursuing civil or criminal charges regarding a violation of this
chapter or a gaming rule, or as is provided by law, the attorney general may not
divulge nor make known, to any person, any income or expense item contained in any
tax return or disclosed by an audit or investigative report of any taxpayer provided to
the attorney general by the internal revenue service.
Require a representative of a licensed organization or distributor to participate in
training or for good cause prohibit the person from being involved in gaming as an
employee or volunteer. The attorney general may for good cause prohibit a person
from providing personal or business services to an organization or distributor.
Prohibit a person from playing games if the person violates this chapter, chapter
12.1-28 or 53-06.2, or a gaming rule.
Require or authorize an organization to pay or prohibit an organization from paying a
bingo or raffle prize to a player on a dispute or based on a factual determination or a
hearing by the attorney general.
Based on reasonable ground or written complaint, suspend, deny, or revoke an
organization's permit or an organization's, distributor's, or manufacturer's application or
license for violation, by the organization, distributor, or manufacturer or any officer,
director, agent, member, or employee of the organization, distributor, or manufacturer,
of this chapter or any gaming rule.
Impose a monetary fine on a licensed organization, organization that has a permit,
distributor, or manufacturer for failure to comply with this chapter or any gaming rule.
The monetary fine for each violation by an organization is a minimum of twenty-five
dollars and may not exceed two percent of the organization's average quarterly gross
proceeds, or five thousand dollars, whichever is greater. The monetary fine for each
violation by a distributor is a minimum of one hundred dollars and may not exceed five
thousand dollars. The monetary fine for each violation by a manufacturer is a minimum
of five hundred dollars and may not exceed two hundred fifty thousand dollars. This
fine may be in addition to or in place of a license suspension or revocation.
At any time within three years after any amount of fees, monetary fine, interest,
penalty, or tax required to be paid pursuant to this chapter becomes due, bring a civil
action to collect the amount due. However, if for any reason there is a change in
adjusted gross proceeds or tax liability by an amount which is in excess of twenty-five
percent of the amount of adjusted gross proceeds or tax liability originally reported on
the tax return, any additional tax determined to be due may be assessed within six
years after the due date of the tax return, or six years after the tax return was filed,
whichever period expires later. An action may be brought although the person owing
the fees or tax is not presently licensed.
Institute an action in any district court for declaratory or injunctive relief against a
person, whether or not the person is a gaming licensee, as the attorney general
deems necessary to prevent noncompliance with this chapter or gaming rules.
For good cause, require a licensed organization to use the attorney general's
recordkeeping system for any or all games.
53-06.1-15.2. Attorney general may bring civil action for collection of fees and tax and
to force compliance.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-15.3. Exchange and secrecy of information regarding the internal revenue
service.
Repealed by S.L. 1997, ch. 428, § 21.
Page No. 13
53-06.1-15.4. Conditional license - Issuance.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-16. Violation of law or rule - Fraudulent scheme or technique to cheat or skim
unlawful - Penalty.
1. Except as otherwise provided by this chapter, a person who knowingly makes a false
statement on a request for record check form or in any application for a permit, or
license, or in any accompanying statement, knowingly signs a false record or report, or
who fails to maintain sufficient books and records or adequate internal control to
substantiate gross proceeds, prizes, cash profits, expenses, or disbursement of net
proceeds, or who falsifies any books or records, including any transaction involving the
direct or indirect conduct of games, or who violates this chapter, any gaming rule, or of
any term of a permit or license is guilty of a class A misdemeanor. If convicted, the
person forfeits any gaming license or permit issued to it and is ineligible to reapply for
a gaming license or permit for a period of time determined by the attorney general.
2. It is unlawful for a person:
a. To use bogus or counterfeit chips or pull tabs or to substitute or use any game,
cards, pull tabs, or game piece that have been marked or tampered with.
b. To employ or have on one's person any cheating device to facilitate cheating in
any game, or to attempt to commit or commit a theft, or to assist in committing
any other fraudulent scheme.
c. To willfully use any fraudulent scheme or technique, including when a person
directly or indirectly solicits, provides, or receives inside information of the status
of a game of pull tabs for the benefit of any person.
d. To alter or counterfeit a site authorization, license, or North Dakota gaming
stamp.
e. To knowingly cause, aid, abet, or conspire with another person or to cause any
person to violate this chapter or a gaming rule.
A person violating this subsection is guilty of a class A misdemeanor unless the total
amount gained through the use of these items, schemes, or techniques resulted in a
person obtaining over five hundred dollars, then the offense is a class C felony.
However, if a person knowingly uses a fraudulent scheme regarding soliciting,
providing, using, or receiving inside information involving the game of pull tabs or uses
a fraudulent scheme or technique to cheat or skim involving pull tabs, twenty-one,
paddlewheels, or bingo, regardless of the amount gained, the offense is a class C
felony.
53-06.1-16.1. Bogus chips, marked cards, cheating devices, or fraudulent schemes
unlawful - Penalty.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-16.2. License suspension or revocation - Ineligibility for local permit.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-17. Rules.
Repealed by S.L. 1997, ch. 428, § 21.
53-06.1-18. Compulsive gambling
rehabilitation, and treatment services.
Repealed by S.L. 2001, ch. 460, § 14.
prevention,
Page No. 14
awareness,
crisis
intervention,
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