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Virginia Charitable Gaming

Virginia legalized charitable gaming in 1973. Regulation and control of charitable gaming were initially the responsibility of local governments. However, because of inadequate controls over the years, the General Assembly decided to transfer regulation from local government to the Commonwealth and established (SB1020) the Charitable Gaming Commission (CGC) in 1995. On 1 July 1996, the CGC assumed centralized control of charitable gambling activities in Virginia. CGC operations were funded by permit fees and a 1.125% tax on gross proceeds. In transferring control from local to state government, new legislation passed did not substantially change the terms of charitable gaming statutes in effect before the transfer.

In December 2002, after a comprehensive audit of the CGC, a Joint Legislative Review Committee found that the CGC was not adequately staffed and didn't have the appropriate management structure to uniformly administer and enforce charitable gaming in all localities. As a result, the Department of Charitable Gaming (DCG) was created, effective 1 July 2003, and the former CGC was abolished. The DCG reported to the Secretary of Administration. A nine-member board, the Charity Gaming Board (CGB), was established to advise the DCG.

In March 2008, legislators established the Office of Charitable and Regulatory Programs (OCRP) at the Virginia Department of Agriculture and Consumer Services to administer and enforce charitable gaming laws and regulations in the Commonwealth. The OCRP is vested with the jurisdiction, supervision and enforcement of charitable gaming laws over all of charitable gaming. The CGB continued as adviser, but to the OCRP. Items decided by the CGB include eligibility; license fee, based on either a predetermined percentage of gross receipts or on a graduated scale of percentages of gross receipts that it decides; and application processing fees for charitable gaming permits.

Current eligibility requirements for charitable gaming permits mandate that organizations must be in existence for at least three years before applying for a permit; must be actively operating and have always operated as a nonprofit organization; have at least 50% of their membership as Virginia residents; have gross receipts from all charitable gaming in a year of at least $40,000; and have U.S. IRS tax-exempt status Code 501(c).

Virginia legislation stipulates a "use-of-proceeds" requirement which obliges licensed organizations to use at least 10% of their gross sales for charitable purposes, such as donations to approved charitable initiatives or organizations, or specific, approved expenses used in the operation of the organization. The use of proceeds percentage is based on a graduated scale and the organization's total gross receipts for a year.

In 2010, Virginia prohibited the use of equipment that resembles slot machines or which has flashing lights and sounds that are intended to entice individuals to play for charitable gaming. It also required that any action by OCG to revoke, suspend or deny a permit to conduct charitable gaming be reviewed and approved by the CGB and made significant changes to the charitable gaming statute, including authorizing full automatic daubing, limiting the number of bingo games that organizations could play per session, eliminating winner-take-all games and allowing up to six progressive games per session.

In 2012, SB452 authorized the conduct of a new charitable gaming activity known as network bingo; it was carried over to the 2013 legislative session. SB172 permitted charitable gaming organizations to run poker games with the bingo games they operate. The bill also allowed poker tournaments conducted by DACS licensed sponsors and required DACS and the CGB to regulate said tournaments. Poker tournaments would be a separate gaming activity from the poker games suggested by this bill.

In 2013, the state authorized a new charitable game known as network bingo. Network bingo is defined as a specific bingo game that permits pari-mutuel play. "Pari-mutuel play" for purposes of network bingo is defined as an integrated network operated by a licensee consisting of participating charitable organizations where purchase of a network bingo card by a player automatically places that player in a pool with other players in the network, and where a prize is awarded based on a percentage of the total amount of network bingo cards sold in that network. The maximum prize for network bingo is $25,000. Network bingo cards may not be sold or played over the Internet. The bill took effect on 1 January 2014.

The state also increased the maximum value of a pull-tab, instant bingo or seal bingo award from $599 to $1,000 in 2013.
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