The bingo landscape for charitable organizations was significantly altered recently when Gov. John Kasich signed House Bill 386. The legislation, which attracted much attention for the many provisions affecting casinos and video lottery terminals at race tracks, opened the possibility of bingo as a fund development tool for thousands of charitable organizations across the state.
The legislation, which became effective immediately because of the emergency provisions included in the bill, opens up the availability of bingo licenses for all 501(c)(3) organizations meeting certain requirements, such as having been in existence for at least two years. Previously, only 14 specifically defined types of organizations qualified for bingo licenses. Other types of organizations also eligible to apply for licenses include volunteer rescue service organizations, volunteer firefighter organizations, veterans’ organizations, and fraternal and sporting organizations exempt under the IRS 501(c)(4), (c)(7), (c)(8), (c) (10), or (c)(19).
The law change also expanded the types of organizations that can hold raffles. Although licenses are not required for raffles, the law previously limited raffles to organizations that qualified for bingo licenses. Now all 501 (c)(3)s that have been in existence at least two years can hold raffles, which still do not require a license.
To apply for a bingo license, organizations should file an application online at www.OhioAttorneyGeneral.gov
. A range of bingo-related services and information is available under the Services tab.
Bingo is a licensed activity, and organizations need to be aware of the various recordkeeping and other requirements. The Attorney General’s Office provides training on these provisions at its Bingo Schools throughout the state. Groups considering applying for bingo licenses may register for bingo schools through the Attorney General’s website.
“We expect a number of new organizations to apply for bingo licenses,” said Pete Thomas, chief of the Ohio Attorney General’s Charitable Law Section. The section licenses and regulates bingo. “Bingo can be a wonderful opportunity for some organizations to raise funds. But it takes a lot of work and a lot of volunteers to do things properly. And, unfortunately, many scam artists are able to take advantage of charitable organizations that do not adequately track and monitor bingo proceeds.”
While most people think of bingo as a traditional board game with numbers, instant bingo is a significant activity that also is licensed. These tickets can be sold in conjunction with traditional bingo or at other locations approved as part of the license. The legislation made multiple changes to the instant bingo provisions, including allowing a charitable organization to reimburse owners of a Type III instant bingo location for certain expenses. For instance, a bar can seek limited expense reimbursements from a charity when it sells instant tickets on behalf of the organization. All of this must be outlined in the application and included in reports.
The Attorney General’s Office has created a model invoice to be used in conjunction with these expense payments. It is available at www.OhioAttorneyGeneral.gov
. The legislation also removes limitations on the number of premises where instant tickets can be sold, but all locations must be located in the same county as the sponsoring organization.
“As much as $2 billion a year can change hands through Ohio bingo activities,” Thomas said. “It is generally an all-cash business with constantly changing volunteers and staff. So there is a great risk that charitable funds can be compromised if there aren’t sufficient controls in place. Bingo makes a significant contribution to Ohio’s charitable community, and we want to be certain that organizations understand that responsibility.”
Thomas urges lawyers with questions about advising charitable clients in the bingo area to contact the section at 614-466-3181. Bingo provisions can be found in Ohio Revised Code Section 2915.
In addition to bingo, the bill contained many provisions affecting casinos and video lottery operations at Ohio’s race tracks. It also included a moratorium on opening new sweepstakes/Internet café establishments. All such businesses were required to file an affidavit of existence with the Charitable Law Section by mid-July. A listing of all such establishments can be found at www.OhioAttorneyGeneral.gov
. Local officials will be monitoring the list to ensure that new establishments don’t open during the moratorium period. Lawmakers are expected to study the issue of Internet cafes and decide if additional legislation is needed.