2006 Code of Virginia § 18.2-340.33 - Prohibited practices

18.2-340.33. Prohibited practices.

In addition to those other practices prohibited by this article, thefollowing acts or practices are prohibited:

1. No part of the gross receipts derived by a qualified organization may beused for any purpose other than (i) reasonable and proper gaming expenses,(ii) reasonable and proper business expenses, (iii) those lawful religious,charitable, community or educational purposes for which the organization isspecifically chartered or organized, and (iv) expenses relating to theacquisition, construction, maintenance, or repair of any interest in the realproperty involved in the operation of the organization and used for lawfulreligious, charitable, community or educational purposes. For the purposes ofclause (iv), such expenses may include the expenses of a corporation formedfor the purpose of serving as the real estate holding entity of a qualifiedorganization, provided (a) such holding entity is qualified as a tax exemptorganization under 501 (c) of the Internal Revenue Code and (b) themembership of the qualified organization is identical to such holding entity.

2. Except as provided in 18.2-340.34:1, no qualified organization shallenter into a contract with or otherwise employ for compensation any personfor the purpose of organizing, managing, or conducting any charitable games.However, organizations composed of or for deaf or blind persons may use apart of their gross receipts for costs associated with providing clericalassistance in the management and operation but not the conduct of charitablegaming.

The provisions of this subdivision shall not prohibit the joint operation ofbingo games held in accordance with 18.2-340.29.

3. No person shall pay or receive for use of any premises devoted, in wholeor in part, to the conduct of any charitable games, any consideration inexcess of the current fair market rental value of such property. Fair marketrental value consideration shall not be based upon or determined by referenceto a percentage of the proceeds derived from the operation of any charitablegames or to the number of people in attendance at such charitable games.

4. No building or other premises shall be utilized in whole or in part forthe purpose of conducting charitable gaming more frequently than two calendardays in any one calendar week. However, no building or other premises ownedby (i) a qualified organization which is exempt from taxation pursuant to 501 (c) of the Internal Revenue Code or (ii) any county, city or town shallbe utilized in whole or in part for the purpose of conducting bingo gamesmore frequently than four calendar days in any one calendar week.

The provisions of this subdivision shall not apply to the playing of bingogames pursuant to a special permit issued in accordance with 18.2-340.27.

5. No person shall participate in the management or operation of anycharitable game unless such person is and, for a period of at least 30 daysimmediately preceding such participation, has been a bona fide member of theorganization. For any organization that is not composed of members, a personwho is not a bona fide member may volunteer in the conduct of a charitablegame as long as that person is directly supervised by a bona fide officialmember of the organization.

The provisions of this subdivision shall not apply to (i) persons employed asclerical assistants by qualified organizations composed of or for deaf orblind persons; (ii) employees of a corporate sponsor of a qualifiedorganization, provided such employees' participation is limited to themanagement, operation or conduct of no more than one raffle per year; (iii)the spouse or family member of any such bona fide member of a qualifiedorganization provided at least one bona fide member is present; or (iv)persons employed by a qualified organization authorized to sell pull tabs orseal cards in accordance with 18.2-340.16, provided (a) such sales areconducted by no more than two on-duty employees, (b) such employees receiveno compensation for or based on the sale of the pull tabs or seal cards, and(c) such sales are conducted in the private social quarters of theorganization.

6. No person shall receive any remuneration for participating in themanagement, operation or conduct of any charitable game, except that:

a. Persons employed by organizations composed of or for deaf or blind personsmay receive remuneration not to exceed $30 per event for providing clericalassistance in the management and operation but not the conduct of charitablegames only for such organizations;

b. Persons under the age of 19 who sell raffle tickets for a qualifiedorganization to raise funds for youth activities in which they participatemay receive nonmonetary incentive awards or prizes from the organization;

c. Remuneration may be paid to off-duty law-enforcement officers from thejurisdiction in which such bingo games are played for providing uniformedsecurity for such bingo games even if such officer is a member of thesponsoring organization, provided the remuneration paid to such member is inaccordance with off-duty law-enforcement personnel work policies approved bythe local law-enforcement official and further provided that such member isnot otherwise engaged in the management, operation or conduct of the bingogames of that organization, or to private security services businesseslicensed pursuant to 9.1-139 providing uniformed security for such bingogames, provided that employees of such businesses shall not otherwise beinvolved in the management, operation, or conduct of the bingo games of thatorganization;

d. A member of a qualified organization lawfully participating in themanagement, operation or conduct of a bingo game may be provided food andnonalcoholic beverages by such organization for on-premises consumptionduring the bingo game provided the food and beverages are provided inaccordance with Board regulations; and

e. Remuneration may be paid to bingo managers or callers who have a currentregistration certificate issued by the Department in accordance with 18.2-340.34:1. Such remuneration shall not exceed $100 per session.

7. No landlord shall, at bingo games conducted on the landlord's premises,(i) participate in the conduct, management, or operation of any bingo games;(ii) sell, lease or otherwise provide for consideration any bingo supplies,including, but not limited to, bingo cards, instant bingo cards, or othergame pieces; or (iii) require as a condition of the lease or by contract thata particular manufacturer, distributor or supplier of bingo supplies orequipment be used by the organization.

The provisions of this subdivision shall not apply to any qualifiedorganization conducting bingo games on its own behalf at premises owned by it.

8. No qualified organization shall enter into any contract with or otherwiseemploy or compensate any member of the organization on account of the sale ofbingo supplies or equipment.

9. No organization shall award any bingo prize money or any merchandisevalued in excess of the following amounts:

a. No bingo door prize shall exceed $50 for a single door prize or $250 incumulative door prizes in any one session;

b. No regular bingo or special bingo game prize shall exceed $100;

c. No instant bingo, pull tab, or seal card prize for a single card shallexceed $599; and

d. No bingo jackpot of any nature whatsoever shall exceed $1,000, nor shallthe total amount of bingo jackpot prizes awarded in any one session exceed$1,000.

10. The provisions of subdivision 9 shall not apply to:

a. Any bingo game, commonly referred to as "winner-take-all" games, inwhich all the gross receipts from players for that game, up to $1,000, arepaid as prize money back to the players, provided (i) there is no more thanone such game per session of play, (ii) the prize money from any such gamedoes not exceed the lesser of the gross receipts directly attributable to thesale of bingo cards or sheets for such game or $1,000, (iii) the bingo cardsor sheets used for such games are sold separately from the bingo cards orsheets used for any other bingo games, and (iv) the organization separatelyaccounts for the proceeds from such sales; or

b. Any bingo game, commonly referred to as "Lucky Seven" games, in which(a) a regular or special prize, not to exceed $100, is awarded on the basisof seven predetermined numbers selected at random and (b) a progressiveprize, not to exceed $500 for the initial progressive prize and $5,000 forthe maximum progressive prize, is awarded if the seven predetermined numbersare covered when a certain number of numbers is called, provided (i) there isno more than one such game per session per organization, (ii) the amount ofincrease of the progressive prize per session is no more than $100, (iii) thebingo cards or sheets used in such games are sold separately from the bingocards or sheets used for any other bingo games, (iv) the organizationseparately accounts for the proceeds from such sale, and (v) such games areotherwise operated in accordance with the Department's rules of play.

11. No organization shall award any raffle prize valued at more than $100,000.

The provisions of this subdivision shall not apply to a raffle conducted nomore than once per calendar year by a qualified organization qualified as atax-exempt organization pursuant to 501 (c) of the Internal Revenue Codefor a prize consisting of a lot improved by a residential dwelling where 100percent of the moneys received from such a raffle, less deductions for thefair market value for the cost of acquisition of the land and materials, aredonated to lawful religious, charitable, community, or educationalorganizations specifically chartered or organized under the laws of theCommonwealth and qualified as a 501 (c) tax-exempt organization.

12. No qualified organization composed of or for deaf or blind persons whichemploys a person not a member to provide clerical assistance in themanagement and operation but not the conduct of any charitable games shallconduct such games unless it has in force fidelity insurance, as defined in 38.2-120, written by an insurer licensed to do business in the Commonwealth.

13. No person shall participate in the management or operation of anycharitable game if he has ever been convicted of any felony or if he has beenconvicted of any misdemeanor involving fraud, theft, or financial crimeswithin the preceding five years. No person shall participate in the conductof any charitable game if, within the preceding 10 years, he has beenconvicted of any felony or if, within the preceding five years he has beenconvicted of any misdemeanor involving fraud, theft, or financial crimes. Inaddition, no person shall participate in the management, operation or conductof any charitable game if that person, within the preceding five years, hasparticipated in the management, operation, or conduct of any charitable gamewhich was found by the Department or a court of competent jurisdiction tohave been operated in violation of state law, local ordinance or Boardregulation.

14. Qualified organizations jointly conducting bingo games pursuant to 18.2-340.29 shall not circumvent any restrictions and prohibitions whichwould otherwise apply if a single organization were conducting such games.These restrictions and prohibitions shall include, but not be limited to, thefrequency with which bingo games may be held, the value of merchandise ormoney awarded as prizes, or any other practice prohibited under this section.

15. A qualified organization shall not purchase any charitable gamingsupplies for use in the Commonwealth from any person who is not currentlyregistered with the Department as a supplier pursuant to 18.2-340.34.

16. Unless otherwise permitted in this article, no part of an organization'scharitable gaming gross receipts shall be used for an organization's socialor recreational activities.

(1995, c. 837; 1996, c. 919; 1997, cc. 777, 838; 1998, cc. 57, 398; 1999, c.534; 2000, c. 1000; 2001, c. 754; 2002, c. 282; 2003, c. 884; 2004, c. 275;2005, cc. 776, 826; 2006, c. 644.)