The Department of Charitable Gaming (DCG) provides a regulatory framework allowing charitable gaming to thrive as a viable fundraising mechanism. The department helps to ensure the productivity of charitable gaming through appropriate regulation, oversight and education. Our agency is privileged to partner with charities to accomplish these goals and looks forward to continuing that partnership. The department continues to seek new ways to assist charities in gaming, while policing the industry to ensure that charities do not fall prey to those seeking to use charitable gaming as a means to make money for themselves.
As we look to the future, the department will continue to strive to ensure that charitable gaming is an activity in which more charities participate to make money for their causes, and to make the industry safer for those charities already gaming. As always, the department serves as a resource for charities and has training available. Also, the office is working to make its website more informative and educational for charities. With your help, charitable gaming has a bright future.
Administrative Regulations Update
Kentucky’s administrative regulations related to charitable gaming went into effect on Saturday, Jan. 5, 2019. Amending the regulations was a lengthy process, and we thank our licensees for input and assistance. We hope you find that these regulations are better organized and that the amendments have reduced a substantial amount of red tape.
Some changes that may affect your organization include the following:
• In addition to an organization’s primary office location and a licensed charitable gaming facility, licensed charitable organizations may now allow patrons to play electronic pulltabs at other locations where they conduct bingo sessions. 820 KAR 1:032 Sec. 33 (3)
• Added a series of amendments to ensure that electronic pulltab devices are representations of paper pulltab games. 820 KAR 1:032 Sec. 28
• Organizations may begin selling pulltabs in conjunction with a bingo session prior to the time the session starts with prior approval of the Department. 820 KAR 1:042 Sec. 14 (2)
• Bingo callers must turn off their cellular phones and other electronic devices while they’re at the caller stand. 820 1:042 Sec. 14 (3)
• Organizations may now play Lucky Ball Bingo. 820 KAR 1:042 Sec. 20
• For raffles, “strip tickets” without all of the purchaser’s information can now be used for raffle tickets that cost $5 or less, which was previously only allowed for tickets costing $1 or less. 820 KAR 1:050 Sec. 1 (4)
• Organizations may play pulltab games that feed into a progressive raffle jackpot. 820 KAR 1:050 Sec. 2 (3)
• Deleted requirement that a raffle drawing cannot be held unless all unsold tickets are returned to the organization. 820 KAR 1:050 Sec. 3 (3)
• Limit on money spent toward volunteer food set at $15 per volunteer. 820 KAR 1:057 Sec. 13 (2)
• Increased value of non-cash items as rewards to volunteers from $25 to $50. 1:057 Sec. 13 (3)
• Employees and family members of manufacturers and distributors cannot play their own games. 820 KAR 1:060 Sec. 4
• Organizations must making a “no tipping” announcement during the session. 820 KAR 1:060 Sec. 1 (1)
Along with changes to the regulations, several of the forms and worksheets used in charitable gaming have also been updated, including the forms for the application and the financial reports. We’re working to get them uploaded to this site as soon as possible. Once posted, these forms and worksheets can be found on our website by hovering your mouse over the “Resources” tab in the yellow bar at the top of the page, then clicking “Applications and Reports.”
The new regulations can be viewed on the Legislative Research Commission (LRC) website. (Note: As of Jan. 8, 2019, the LRC had not updated the regulations, so they are still listed as “proposed,” but the final versions will be posted soon.).
Clarification about Kentucky's new sales tax
The Kentucky General Assembly made several changes to Kentucky tax law during its 2018 session. Several of our licensees have asked our Department how the new state sales tax law affects charitable gaming, so we contacted the Kentucky Department of Revenue for clarification concerning the new tax law.
The 2018 changes to the tax law now require that a 6 percent sales and use tax be collected on admissions to events and participation in amusement activities. According to the Department of Revenue, this means that organizations who conduct bingo will have to collect a 6 percent sales tax on charges for the packs of bingo paper since these packs represent an admission to play the game. Any similar games in which players must pay to participate in a game, such as poker tournaments conducted under a charity fundraising event license, will also be taxable. The sales tax will not apply to pulltabs (paper or electronic) or raffle tickets.
We will be updating our forms to ensure that our licensees accurately report the amount spent in sales tax, but it will take time. We will not be requiring this information until we develop a proper form. Please keep an eye on our website and Facebook for updates. When we do get a proper form, we will send that out to all licensees.
The Kentucky Department of Revenue regulates and enforces Kentucky tax law. If you have additional questions, please visit their website or phone 502-564-5170.
Additional resources from the Kentucky Department of Revenue:
Information Concerning Sales and Excise Taxes
Registering for a Sales and Use Tax Account
Facility and Event Admission Fees FAQ
We are on Facebook!
The Department of Charitable Gaming now has a Facebook page! It will consist of announcements, live interactive training sessions and other information of interest to our licensees. Please click on the link to the right and "like" our page to stay up to date!
Check out our newest video about FaceBook Live Training!
Pursuant to KRS 238.570, as of Oct. 1, 2017, the fee on charitable gaming gross receipts will be .00957. The fee will be applied beginning with all 2017 4th Quarter Financial Reports and 2017 Annual Financial Reports.
Oct. 30, 2017 Notice to Distributors
Distributors are reminded to list on their quarterly reports all invoices that they originate and issue to licensed organizations for the sale or lease of charitable gaming supplies. The Department has received reports that are incomplete and have failed to list some of these transactions. Any sale or lease that is not invoiced by you should not be listed on the quarterly report. Failure to submit a complete and accurate report could result in a violation being issued.
Taxability of Charitable Gaming Supplies:
Kentucky Department of Revenue's response related to taxability of charitable gaming supplies by tax-exempt entities -- Charitable Gaming Supplies