Charitable Bingo in Texas

Bingo is The Most Charitable Game in Texas! In 2006 alone, charitable bingo players in Texas won over $489 million in prizes and Texas charities received over $31.7 million from charitable bingo proceeds. Bingo, the oldest form of legalized gambling in Texas, has been approved by voter referendum in 157 of the state’s 254 counties. There are 1,263 nonprofit or charitable organizations conducting charitable bingo in Texas. These organizations are required to distribute a minimum of 35 percent of their adjusted gross receipts from bingo activities for the charitable purposes of the organization. Since 1982, when the first licenses to conduct bingo were issued in Texas, through 2006, charitable bingo distributions exceed $844 million.

 

What is Charitable Bingo?

Charitable bingo is a regulated fundraising activity conducted by charities, fraternal organizations, or other nonprofit entities qualifying under the Bingo Enabling Act. All proceeds from charitable bingo activities must be spent for the charitable purposes and objectives of the organization.

 

Why is bingo regulated by the state and who does the regulating?

Charitable bingo is a form of legalized gambling. In 1981 the playing of bingo was authorized by the Texas Legislature, subject to local jurisdiction approval. State oversight of charitable bingo activity is required by state laws and regulations intended to prevent fraud and protect the public. The Charitable Bingo Operations Division of the Texas Lottery Commission regulates the licensing, accounting and audit operations of charitable bingo activities based upon the Bingo Enabling Act and Charitable Bingo Administrative Rules.

 

Who can conduct bingo games in Texas ?

Only licensed, authorized organizations can conduct bingo games in Texas. These organizations may include religious societies, nonprofit organizations, fraternal organizations, veterans organizations and volunteer fire departments.

 

Is a license required to conduct bingo in Texas ?

Yes. With only a few exceptions, the conduct of bingo without a license in the state of Texas is a third degree felony punishable by imprisonment of two to 10 years and a fine not to exceed $10,000.

 

What types of bingo licenses are issued in Texas ?

There are six types of licenses issued in accordance with the Bingo Enabling Act: Conductor License—a license to conduct charitable bingo (Note: annual and temporary conductor licenses areissued to authorized organizations), Commercial Lessor License—a license to lease a location forthe purpose of conducting a charitable bingo game, Distributor License—a license to distributebingo supplies, devices and equipment to organizations licensed to conduct charitable bingo inTexas, Manufacturer License—a license issued to an individual or organization that manufacturesbingo supplies, devices and equipment and sells these items to licensed distributors in Texas, System Service Provider License—a license issued to an individual or organization that provides integratedelectronic systems for automated bingo services to be used by a licensed, authorized organization, Unit Manager License--provide services to licensed authorized organizations that form a unit. More information on charitable bingo licensing, including licensing applications, is available on the Web site of the Charitable Bingo Operations Division at www.txbingo.org or by contacting our office at 1-800-246-4677 (BINGO77) and asking to speak to a licensing examiner.

 

What is the Bingo Advisory Committee (BAC) and what do they do?

The BAC is a group of nine individuals, appointed by the Texas Lottery Commission (Commission) to advise the Commission on the needs and problems of the state’s charitable bingo industry. Members of the BAC represent a balance of interests related to the charitable bingo industry in Texas and is comprised of:

• Three members representing organizations that conduct charitable bingo games.

• One member representing licensed authorized organizations that lease premises for the conduct of charitable bingo.

• Two members that represent commercial lessors that lease premises for the conduct of charitable bingo.

• One member that represents manufacturers/distributors licensed to manufacture/distribute bingo supplies, devices and equipment for sale in Texas.

• One member representing system service providers.

• One member of the general public.

 

The BAC meets quarterly or at the call of the Commission. BAC members do not receive compensation or reimbursement for travel expenses.

 

Where does the money spent by charitable bingo players go?

A minimum of 35 percent of adjusted gross receipts must be disbursed, on a quarterly basis, from an authorized organization’s bingo account for the charitable purpose and objectives of the organization. All net proceeds from an authorized organization’s bingo account shall be devoted to the organization’s charitable purpose and objectives.

 

Who benefits from charitable bingo distributions?

Distributions from organizations conducting charitable bingo in Texas benefit a wide range of charitable causes, including local libraries, veterans organizations, museums, women’s shelters, needy children, the disabled, homeless shelters, churches, schools, addiction treatment programs, medical treatment and research programs, volunteer fire departments and senior citizens groups, just to name a few.

 

Are minors allowed to play bingo in Texas ?

Individuals under the age of 18 years may play bingo only if accompanied by a parent or guardian.

However, an operator may prohibit minors from entering the premises by posting a written notice to that effect. Individuals under the age of 18 years may not conduct or assist in the conduct of bingo.

 

How many days of the week may a licensed authorized organization conduct bingo?

Each licensed authorized organization may conduct three bingo occasions per calendar week not to exceed four hours during a 24-hour period. There is no limit on the number of bingo games that can be conducted within a four-hour occasion; however, they must stay within the authorized prize payout limitation.

 

Is there a limit to the value of the prizes offered in bingo games?

Yes, a bingo prize may not have a value of greater than $750 for a single game. For a regular bingo occasion (excluding pull-tab bingo), a person may not offer or award prizes with an aggregate value of more than $2,500.

 

The PTA at my child’s school is planning to hold a one-time bingo game as a fundraiser for school activities. Is this legal?

This would only be legal if the organization obtained a temporary license prior to conducting the game.

 

How much would it cost to obtain an annual bingo conductor license and start a game?

Initial costs will vary, but include: license fees, a bond, inventory (bingo paper, etc.), facility costs (rent, etc.), payroll and prizes.

 

License Fees :

The fee for the first annual conductor license is based on the organization’s estimated annual gross receipts from the conduct of bingo. The license class and amount of fee are calculated using a formula that includes: estimated amount of prizes to be awarded per occasion; number of occasions per week; number of weeks in a month bingo will be played; amount of prizes to be awarded in a month. There are 10 classes of fees ranging from $100 to $2,500 per year. At the end of an organization’s first annual license period, the amount of estimated gross receipts reported in the original application is compared to organization’s reported gross receipts for the license period. If the organization’s gross receipts for the license period fall within another license class, adjustments are made. If the organization’s reported gross receipts for the license period fall within a higher license class than originally paid, the difference between the fees must be paid prior to renewal. Conversely, if the organization’s reported gross receipts for the license period fall within a lower license class than originally paid, any excess will be credited to the organization’s account.

License fees for the subsequent period will be based on reported gross receipts for the previous period.

 

Bond:

Each application for an annual license to conduct bingo occasions must be accompanied by a bond or other security. The Commission will determine the amount or bond or security sufficient to protect the state against failure to pay prize fees. The amount of the bond or security required will be three times the average prize fee of two identified conductors either in the playing location indicated on the application or two identified conductors in the same city or county, whichever is applicable. A list of bonding companies is available on our Web site.

 

Facility Costs:

Rent —the rent charged by a licensed commercial lessor to a licensed, authorized organization to conduct bingo is limited by statute and may not exceed $600 for each bingo occasion .

 

Other Expenses —the cost of utilities, janitorial, security, advertising, bookkeeping, legal, or accounting services related to bingo, repairs and maintenance of premises or equipment, and debit card transaction fees should be necessary and reasonable.

 

Payroll —cashiers, ushers and floor workers and caller – some organizations pay for these services and others use volunteers.

Inventory —the cost of bingo paper, pull-tabs, pull-tab dispensers, consoles, flash boards, bingo balls, bingo blowers and lease of card minding devices vary and may only be purchased from distributors licensed to supply these products in Texas.

Prizes —prize are set by statute and cannot exceed $750 per game or $2,500 per occasion, excluding pull-tabs. There is no set minimum on prize amounts.

 

How much would it cost to obtain a temporary license to conduct a single bingo occasion?

Costs will vary, but include: a license fee of $25, inventory (bingo paper, etc.), facility costs (rent, etc.), payroll and prizes.

 

Facility Costs:

 

Rent —the rent charged by a licensed commercial lessor to a licensed, authorized organization to conduct bingo is limited by statute and may not exceed $600 for each bingo occasion . Generally, organizations conducting a single occasion on a temporary license do so at the organization’s location, which does not require a rental fee for bingo purposes.

 

Other Expenses —the cost of utilities, janitorial, security, advertising, bookkeeping, legal, or accounting services related to bingo, repairs and maintenance of premises or equipment, and debit card transaction fees should be necessary and reasonable.

 

Payroll —cashiers, ushers and floor workers and caller – some organizations pay for these services and others use volunteers. Generally, for single occasions conducted on a temporary license, organizations use volunteers that are not paid for their services.

 

Inventory —the cost of bingo paper, pull-tabs, pull-tab dispensers, consoles, flash boards, bingo balls, bingo blowers and lease of card-minding devices vary and may only be purchased from distributors licensed to supply these products in Texas.

 

Prizes —prize are set by statute cannot exceed $750 per game or $2,500 per occasion, excluding pull-tabs. There is no set minimum on prize amounts.

 

What is the difference between an annual bingo conductor license and a temporary license to conduct a single bingo occasion?

An annual conductor license is issued for one year, calculated from the date of issue. An authorized organization that holds an annual conductor license may conduct three bingo occasions per calendar week not to exceed more than four hours during a 24-hour period.

 

A temporary license is issued to an authorized organization to conduct bingo for one four-hour occasion on a specific day.

 

Authorized conductor organizations holding annual licenses may conduct no more than 12 temporary occasions of bingo within their annual licensed period.

 

An authorized organization that does not hold an annual conductor license may conduct no more than six temporary occasions of bingo within one calendar year.

 

How long does the process take?

Application processing time depends upon several variables, including the completeness and accuracy of the submitted application and supplemental documentation as required by the Bingo Enabling Act. On average, it takes 90 days to process an original annual conductor license application and 30 days to process an original temporary conductor license application.

 

How often do I need to renew?

Generally, an annual bingo license expires one calendar year from date of issuance. The Charitable Bingo Operations Division also has the authority to issue a two-year license. Each licensee is solely responsible for the timely renewal of its license.

 

What are the penalties for holding an unlicensed bingo game?

The penalty for the conduct of an unlicensed bingo game is a third degree felony punishable by imprisonment of two to 10 years and a fine not to exceed $10,000.

 

Who can I contact for assistance in obtaining a license to conduct bingo in Texas ?

Contact our office 1-800-246-4677 (BINGO77) and ask to speak to a licensing examiner.

 

My organization just started conducting bingo. How do I learn how to keep accurate records?

Please read the Bingo Enabling Act, the Charitable Bingo Administrative Rules, the Bingo Operations Manual, and review the Quarterly Report forms before you start gaming. All are available on this Website, as well as forms and applications, and training schedules. Or you can contact our office 1-800-246-4677 (BINGO77) for more information.

 

What other things should our organization consider before applying for a bingo license?

1. Bingo is a business—as such, it takes a well-thought-out business plan, professional, detailed and accurate record keeping, employee payroll management and close supervision and the hard work of your members. The success or failure of your licensed bingo operation will be a result of the attendance at your games, prize amounts awarded, overhead costs and other normal everyday business-related decisions.

2. Bingo is a regulated activity—where organizations licensed by the state are subject to game observations, financial reporting requirements and audits to ensure compliance with the Bingo Enabling Act and Charitable Bingo Administrative Rules.

3. Bingo requires the effort of your entire organization—not just a few memebers. Your membership must initially vote to conduct bingo. Your organization is the one that is licensed and responsible for all activities that occur under the license.

4. Bingo halls and other licensed charities offer a chance to observe licensed operations in action.

Most will be willing to assist your organization in getting organized and will share start-up secrets as well as pitfalls to avoid, and explain the reports that are required to be maintined by all licensed conductors. To locate a bingo hall or a licensed authorized organization conducting bingo in your area, go to the Bingo Hall Locator section of our website. “The Bingo Hall Locator” provides robust search capabilities that allows the user to customize searches using a variety of parameters and a mapping feature.

5. The Statewide Financial Reports section of our Web-site provides a number of reports that provide financial information on organizations conducting charitable bingo in Texas.

6. The Operator Training Program is a free, eight-hour training session required of all licensed authorized organizations holding a conductor license. It provides an excellent overview of the structure and regulation of charitable bingo in Texas. A schedule of upcoming Operator Training Programs is available on our Web site. The Operator Training Program is also available and may be taken on-line through our website.

 

Definitions

Amendment – The application used by an organization to amend their current conductor's or lessor's license. May include changes in playing days, times, place, organization location or members/officers/primary operator.

Bingo – A specific game of chance in which prizes are awarded on the basis of designated numbers or symbols conforming to randomly selected numbers or symbols to complete lines or other patterns. Includes regular or "traditional" bingo, electronic bingo and instant or "pull-tab" bingo.

Bingo Enabling Act – 1981 legislation, passed as a result of a voter approved amendment to the state constitution that allows legal bingo games to be conducted in Texas so long as the games are fairly conducted and all net proceeds derived from the games are used for a charitable purpose.

Conductor – An organization that conducts bingo. Typically, all conductors in Texas must be licensed; however, there are certain organizations that can be granted an exemption from licensing.

Distributor – An individual or organization that leases, sells, distributes or supplies equipment to licensed charitable bingo conductors. All distributors doing business in Texas must be licensed.

Electronic Bingo – Electronic card-minding devices, which interface with equipment used to conduct a Bingo game, allow a player to store, display and mark multiple (up to 66) bingo card faces.

“Pull-tab” Bingo – A form of bingo played using tickets with perforated break-open tabs, made of paper or paper products, the face of which is covered or otherwise hidden from view to conceal numbers, letters, or symbols, some of which have been designated in advance as prize winners.

Lessor – An individual or organization that leases a location for the purpose of conducting a charitable bingo game. All lessors in Texas must be licensed.

Local jurisdiction – Typically the county or city in which a bingo game is conducted. Local jurisdictions may receive quarterly allocations derived from charitable bingo prize fees. A county that imposed a gross receipts tax on the conduct of bingo as of January 1, 1993, is entitled to 50 percent of the prize fee collected under Section 2001.502 of the Bingo Enabling Act, on a prize awarded at a game conducted in the county. Likewise, a city that imposed a gross receipts tax on the conduct of bingo as of January 1, 1993, is entitled to 50 percent of the fee collected under Section 2001.502 of the Bingo Enabling Act on a prize awarded at a game conducted in the municipality. If a county and city are both entitled to a share of the fee imposed by Section 2001.502 of the Bingo Enabling Act the county is entitled to 25 percent of the fee on a prize awarded at a game conducted in the county and the city is entitled to 25 percent of the fee on a prize awarded at a game conducted in the municipality.

Manufacturer – An individual or organization that manufactures bingo equipment and leases or sells to licensed distributors. All manufacturers doing business in Texas must be licensed.

Occasion(s) – A single gathering or session during which successive bingo games are conducted. A bingo occasion shall not last longer than four hours in a 24-hour period and an organization may not conduct more than three bingo occasions in a calendar week.

Operator – An individual identified by the charitable organization as being responsible for conducting, promoting, or administering bingo. The individual must be an active member of the organization.

Prize fee – A five percent fee collected and passed on to the Commission by a licensed, authorized organization from a person who wins a bingo prize. Fifty percent of these fees may be allocated on a quarterly basis to local jurisdictions.

Regular Bingo – "Traditional" bingo game in which players cover spaces on paper cards which correspond to letters and numbers called by a bingo operator.

Rental Tax – A tax (three percent of the gross rentals received by a licensed commercial lessor or other licensed authorized organization) that is imposed on the rental of premises for the conduct of Bingo games.

Temporary License – Also known as “temporaries,” an authorized organization may receive a temporary license to conduct bingo by filing an application, accompanied by a $25 license fee. A temporary license is valid for one four-hour occasion on a specific day and an organization without an annual license may not receive more than six temporary licenses in a calendar year.