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Non-profit organizations have developed ingenious ways to raise money. Many groups, like the Sierra Club, sell memberships. The “Run for Green” is the signature fundraiser of the Davidson Lands Conservancy. The Girl Scouts sell cookies and marching bands sell mattresses. But forget about Butter Braids and cookie dough for a minute – everyone knows that the big money is in raffles and bingos. Why are those activities legal?
B-I-N-G-O
Bingo games may be held by any legitimate tax-exempt charitable organization. The legal definition of a bingo game is a lot more formalistic than you might expect. North Carolina Statute Section 14-309.6(2) defines a “bingo game” as “a specific game of chance played with individual cards having numbered squares ranging from one to 75, in which prizes are awarded on the basis of designated numbers on such cards conforming to a predetermined pattern of numbers.” The law specifically prohibits “instant bingo” games where the winner is determined on the basis of pre-marked cards and not as a result of a bingo caller announcing bingo numbers.
Charities operating bingo games are required to obtain a Charitable Bingo License from the Department of Public Safety and furnish a copy of the license to their local law enforcement agency. Licenses cost $200 and are valid for one year. Bingo games may only be conducted on property owned or leased by the non-profit charity and the charity group must own all of the equipment used in the bingo game.
No more than two bingo sessions may be held in one week and no session may last for more than five hours. The maximum prize money that can be offered is $500 per game. Organizations may pay one of their members up to one and one-half times the minimum wage per hour worked to administer bingo games.
Beach bingo, a low stakes North Carolina pastime, is also permitted. Beach bingo games are defined as “bingo games which have prizes of ten dollars ($10.00) or less.” Anyone (not just non-profit charities) may hold a “beach bingo game” so long as the game is not held in conjunction with any other type of bingo game.
- Can you sell drinks at a bingo game?
Not during the game. Under North Carolina law it is “unlawful to sell or consume” alcoholic beverages in a room where a bingo game or raffle is being conducted. If you want to serve alcohol at a bingo game, all sales must take place in a separate room and players cannot be allowed to take their drinks into the bingo hall.
- Does anyone have ticket number 119? Ticket number 119?
Any tax-exempt non-profit organization may hold a raffle. A raffle is defined by North Carolina Law as “a game in which the prize is won by random drawing of the name or number of one or more persons purchasing chances.” A non-profit charity may not conduct more than two raffles per year. The annual limit on raffle prizes is $125,000 unless the prize is real estate in which case the limit is $500,000.
Raffles may not be conducted in conjunction with any bingo game and at least 90 percent of the net proceeds of a raffle must be used for charitable, religious, educational, civic, or other non-profit purposes. None of the raffle proceeds can be used “to pay any person to conduct the raffle, or to rent a building where the tickets are received or sold or the drawing is conducted.”
- Can a non-profit charity host a casino night fundraiser?
North Carolina law prohibits games of chance involving betting money or other property (gambling). One exception to this general prohibition is for casinos operated in accordance with the Federal Indian Gaming Regulatory Act. Harrah’s Cherokee Casino Resort located in the town of Cherokee and operated by the Eastern Band of Cherokee is the only Native American casino in North Carolina.
So, unless your non-profit charity happens to be a federally recognized Native American tribe, you are out of luck, right? Not necessarily. Games of chance are only prohibited if they involve betting money or property. A game of craps or blackjack where no money changes hands is not gambling. But how much fun is that? No one wants to go to a casino event that advertises: “No cash prizes! Come to our Casino Party – You Can’t Lose (or Win)!”
But clever fundraisers have found a way to make even bet-free casino parties fun. The law does not prohibit games of chance where players bet Monopoly money, and at the end of the night if you can use your play money to buy real raffle tickets, what is the problem?
Some entertainment companies, like Funtastic Events, specialize in running charitable casino events for non-profit organizations. Due to the upfront costs of licenses, permits and hiring a company to run a charity casino party, small events may not be a cost-effective way to raise funds.
The State of North Carolina considers illegal gambling, lotteries, raffles and bingo games to be serious crimes. If your organization is considering a charitable raffle, bingo game or casino night, please consult a lawyer experienced with non-profit fundraising before anyone places a bet.
David and Lyn Batty live in Davidson and as lawyers, they also want you to read this disclaimer: We write this Common Laws column for informational purposes only. This column is not legal advice and it should not be relied on for making any decisions that may affect your rights. If you need legal advice regarding a specific situation you should consult a lawyer. No attorney-client relationship is created with any of our readers. Although we try to ensure that the information we provide is accurate, we disclaim any liability for inaccurate, incomplete or out-of-date information appearing in this column.
Image may be NSFW.Clik here to view.
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