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Texas Bingo Laws (Monday, March 31, 2014)

BINGO!

After losing your best friend to Lupus, you decide to start a nonprofit organization to help combat this terrible disease.  Your biggest concern is fundraising.

 

You decide to open a Bingo Hall in order to raise funds.  What steps do you have to take for approval from the state?  Do you have to purchase special equipment?  What can you do with the proceeds? 

 

Who Can Operate a Bingo Hall?

Only an organization authorized by the Texas Lottery Commission may be granted a license to conduct Bingo.  Additionally, the organization is required to have existed in Texas for at least three years. 

 

This prevents fly-by-night scammers from frauding the system, and ensures that only legitimate, community conscious organizations benefit from this fundraising opportunity.

 

The statute recognizes only six authorized organizations: (1) religious society; (2) nonprofit organization; (3) fraternal organization; (4) veterans organization; (5) volunteer fire department; and (6) volunteer emergency medical services provider. 

 —See Authorized Organization—Tex. Occ. Code § 2001.101

 

How Do I Apply for a License?

An organization that qualifies as one of the groups mentioned above is required to apply for a license from the Texas Lottery Commission.  The application for a license must include several things; including the applicant’s name and address, the address and times in which Bingo will be conducted, and information necessary to conduct criminal background checks on officers and directors of the organization.  

—See License Application—Tex. Occ. Code § 2001.102

 

The Charitable Bingo division of the Texas Lottery Commission has standardized forms for first time applicants on its website.  As you will notice, there are applications for regular licenses as well as for temporary licenses.

 

What is the Difference between a Regular and Temporary License?

A temporary license is better for the once or twice a year fundraising initiatives, whereas a regular license is more equipped to handle weekly Bingo games for year round fundraising.  A temporary license is only valid for four hours a day, and an organization may not receive more than six temporary licenses in a calendar year. 

—See Temporary License—Tex. Occ. Code § 2001.103

 

An organization with a regular (or annual) license can conduct up to three bingo events during a calendar week.  Like the temporary license, the Bingo event each day may not exceed four hours.  Also, no more than two Bingo events can be conducted at the same location during one day and each Bingo event must be separately announced; the events may not overlap. 

—See Bingo Occasions—Tex. Occ. Code § 2001.419

 

What Prizes Can be Awarded?

For a single game of Bingo, no more than $750.00 may be awarded as the winning prize.  For a single Bingo occasion (a single gathering or session which a bingo game or series of bingo games are conducted on the day and times listed on the license issued to an authorized organization), the limit is an aggregate value of less than $2,500.00. 

 

However, this $2,500.00 limit excludes pull tab Bingo or Bingo games which award individual prizes of $50.00 or less.  An organization also may not award or even offer to award a door prize with a value of more than $250.00. 

-See Prizes—Tex. Occ. Code § 2001.420

-See “Bingo Occasion”—Tex. Occ. Code § 2001.002(6)

 

Are Prizes Subject to a Fee or Tax?

A gross rentals tax rate of three percent of the gross rentals received by either a licensed commercial lessor or other licensed organization is imposed on the rental of the premises for conducting Bingo.

-See Gross Rentals Tax—Tex. Occ. Code § 2001.501

 

The organization is also required to collect a fee of 5% of the amount or value of the prize from a player who wins an amount greater than $5.00.  This fee collected from all winnings must be reported and remitted to the Texas Lottery Commission quarterly on or before the 25th day of the month succeeding each calendar quarter.  This report must be filed under oath on the forms specified by the Texas Lottery Commission.  Ultimately, the Texas Lottery Commission deposits this revenue to the credit of the general revenue fund.

-See Prize Fee—Tex. Occ. Code § 2001.502

-See Payment and Reporting of Tax or Fee—Tex. Occ. Code § 2001.504

 

Are There Any Exceptions for Bingo?

There are exceptions for you to conduct Bingo in other settings than was discussed here.  These include small events in your home, senior citizens’ homes and organizations, and limited business exceptions.  However, hosting a game of unlicensed Bingo which does not fall under an exception can bring about a serious charge of a third degree felony (punishable by two to ten years in prison as well as a possible $10,000 fine). 

-See Unlawful Bingo—Tex. Occ. Code § 2001.551

-See Third Degree Felony Punishment—Tex. Pen. Code § 12.34

 

Before you decide to engage in Bingo gaming, play it safe and speak with an attorney to discuss countless other nuances in the Texas Occupational Code which may affect your decision.  While Bingo is a great way to raise funds for good causes, it may not be the best way for your organization to raise funds.  If engaged in illegally, you could lose not only precious funds for your cause, but your credibility as well.

 

--Authored by Carrie A. Harris, B.A.,

 

Matthew Harris Law, PLLC  - Business Law Division

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