Who may conduct gambling?

A charitable, religious, veterans, or other nonprofit organization may be licensed to conduct charitable gambling if it has at least 15 active members and has been in existence for at least three years.  About 1,400 Minnesota organizations are licensed to conduct gambling at about 3,300 different locations.

What kinds of games are allowed?

Licensed organizations may conduct bingo, raffles, and tipboards, sell pull-tabs, and operate paddlewheels.

Who regulates charitable gambling?

Charitable gambling is regulated by the seven-member Lawful Gambling Control Board.  It licenses organizations and gambling managers and makes rules for the conduct of gambling.  It also regulates bingo halls and the distributors and manufacturers of gambling equipment.

What can gambling proceeds be spent for?

Gross gambling profits (gross receipts less prizes) can only be spent for gambling expenses and lawful purposes.

Gambling expenses are all expenses directly related to the conduct of gambling.  Examples are gambling supplies, rent, license fees, and wages of gambling workers.  Expenses are limited to 70 percent of gross profits for bingo and beginning July 1, 2006, 60 percent for other gambling.

Gross profit not spent for expenses (net profit) can only be spent for lawful purposes, which include the following:

Net profits can also be spent to pay state, federal, and local taxes on gambling.

What are the rules for charitable gambling?

The major rules that apply to all gambling are as follows:

4       Gambling must be supervised by a gambling manager appointed by the organization

4       Players must be at least 18 years old

4       Players can’t use checks or play on credit (except checks for raffle tickets)

4       Odds and house rules must be posted on the premises

4       Compensated gambling workers must be registered with the board and may not gamble at sites where they are working, with some limited exceptions

Are there prize limits for charitable gambling?

Prize limits are as follows:

4       Bingo, $200 per game and $2,800 for most bingo occasions

4       Single pull-tab, $599

4       Single paddlewheel prize, $70

4       Largest tipboard prize, $599

What taxes apply to charitable gambling?

The state imposes taxes on charitable gambling in lieu of sales taxes:

4       Bingo, paddlewheels, and raffles, 8.5 percent of gross profit

4       Pull-tabs and tipboards, 1.7 percent of “ideal gross” (potential gross receipts from all tickets in a package, with a refund for unsold tickets)

4       Pull-tabs and tipboards, additional “combined receipts tax” of 1.7 percent to 5.1 percent of gross receipts, depending on the organization’s annual receipts

What gambling is exempt from licensing?

Organizations do not have to obtain a license for the following:

4       Gambling conducted for five or fewer days a year with total prizes not exceeding $50,000

4       Bingo conducted at fairs for up to 12 days a year and bingo conducted elsewhere for up to four days a year

4       Raffles with a prize of not more than $1,500

Exempt organizations must register with the board, except for excluded raffles, and follow state law on spending net profits.