PA 07-36—SB 1071

Public Safety and Security Committee

Finance, Revenue and Bonding Committee

AN ACT CONCERNING GAMING PRODUCTS AND RAFFLE PRIZES

SUMMARY: This act:

1. authorizes qualified organizations to conduct special tuition raffles, subject to Division of Special Revenue (DSR) regulation, and offer tuition payments as prizes;

2. indirectly requires dealers and manufacturers who sell or rent bingo products, bingo equipment, or sealed ticket machines to register annually with DSR and pay a fee ($1,500 for bingo and $500 for sealed ticket applicants);

3. allows three classes of raffle permittees to award cash prizes, with a maximum allowable prize of $15,000 for class 1 raffles; and

4. allows the sale of sheet tickets in teacup raffles.

EFFECTIVE DATE: October 1, 2007, except for the provisions on bingo and sealed ticket dealers and manufacturers, which are effective January 1, 2008.

TUITION RAFFLES

Tuition Raffle Authorized

The act allows organizations qualified to conduct bazaars and raffles to conduct special tuition raffles once each calendar year. It defines a “tuition raffle” as one in which the prize is tuition payment at an educational institution for a student recipient the raffle winner designates.

Implementing Regulations for Tuition Raffles

The act requires the DSR executive director to adopt necessary implementing regulations for tuition raffles. The regulations must:

1. allow organizations to fund all or some of a student recipient's education each year for up to four years;

2. allow organizations to give the tuition award to the raffle winner, the winner's relative, or a student the winner chooses;

3. authorize the sponsoring organization to allow the raffle winner to designate several students to share the tuition prize;

4. provide that tuition prizes are paid each consecutive year, starting in the student's first year at an accredited private or parochial school, or public or independent college the student selects;

5. require that prizes be paid directly to the educational institution the student recipient designates and disallow redemption of prizes for cash; and

6. give raffle winners a maximum of four years to name a student recipient.

Accounting and Reporting Procedures for Tuition Raffles

The act requires special tuition raffle proceeds to be deposited in a special dedicated bank account to pay special tuition raffle expenses. The DSR executive director must approve the accounts, which are subject to DSR audit, and prescribe how sponsoring organizations maintain them. The executive director may require organizations to post a performance bond to fully fund prizes.

Organizations that conduct tuition raffles must file quarterly tuition raffle financial reports as the executive director prescribes. These are in addition to the verified financial reports raffle permittees file under existing law. The reports must detail the status of the tuition prize money or raffle and any other information the executive director requires. They are due in January, April, July, and October, until the organization makes all the tuition payments for each special raffle.

BINGO PRODUCT MANUFACTURERS AND EQUIPMENT DEALER REGISTRATION

The act defines “bingo products” as bingo ball equipment, bingo cards, and bingo paper. It indirectly requires bingo product manufacturers or equipment dealers to register with DSR. Anyone seeking to be registered must apply to the DSR executive director on a form he prescribes and include a $1,500 fee with the application, payable to the state treasurer. First-time applicants must undergo state and national criminal history record checks as a condition of registration. The registration is renewable annually for $1,500. DSR may revoke registrations for cause.

The act prohibits registered bingo product manufacturers and equipment dealers from renting or selling any type of bingo product not approved by DSR. It requires any organization authorized to operate bingo to use bingo products that it (1) owns, (2) uses for free, or (3) rents or buys from a registered manufacturer or dealer.

The act allows DSR to adopt implementing regulations.

SEALED TICKET MACHINE MANUFACTURER AND DEALER REGISTRATION

The act indirectly requires manufacturers or dealers in sealed ticket dispensing machines to register with DSR. It prohibits permittees authorized to sell sealed tickets from using mechanical or electronic sealed ticket dispensing machines unless they own them or rent or buy them from a registered manufacturer or dealer.

Anyone seeking to be registered as a manufacturer or dealer must apply to the DSR executive director on a form he prescribes and include a $500 fee with the application, payable to the state treasurer. First-time applicants must undergo state and national criminal history record checks. The registration is renewable annually for $500. DSR may revoke registrations for cause.

The act allows DSR to adopt implementing regulations.

CASH PRIZES FOR RAFFLES

Prior law prohibited awarding cash prizes for raffles, except cow-chip raffles. The act allows classes 1, 2, and 4 raffle permittees to award cash prizes for frog-race, duck race, and traditional raffles. Under existing law, the authorized maximum aggregate value of prizes for class 1 raffles is $15,000; class 2, $2,000; and class 4, $100.

The act requires an organization conducting a raffle to deposit the proceeds in a special checking account it establishes for this purpose. It must pay all cash prizes from the account, and it must pay incidental expenses from the gross raffle receipts on checks drawn on the account. The account is subject to DSR audits.

The act requires the DSR executive director to adopt any implementing regulations necessary.

TEACUP RAFFLES

The act allows qualified organizations conducting teacup raffles to sell “sheet tickets” as an alternative to single tickets. Sheet tickets may contain up to 25 coupons with the same number and include a hold stub for the buyer and a correspondingly numbered stub with the buyer's name, address, and telephone number. (Sheet tickets allow players to complete one stub that has multiple coupons, instead of multiple stubs, as is the case with single tickets. )

The act makes DSR the sole sheet ticket issuer. DSR must sell the tickets to permittees as fundraising items. It cannot sell them for more than 10% above what it paid for them.

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