Event Planning

Fundraisers

The Legalized Games of Chance Control Commission
Community Groups, Organizations, Service Groups and Churches engage in various fund
raising activities every day, from car washes and bake sales to bingo and raffles. In representing
non-profits it is important to know what types of fund-raising activities the organization can
engage in without violating the laws of this state.
New Jersey allows certain types of gaming by specific types of non-profit organizations. There
are detailed licensing procedures, however, that must be followed, as well as significant
restrictions on how the proceeds derived from permitted games of chance may be used. A large
number of non-profits that would qualify to conduct games of chance are unaware of the
licensing requirements imposed by law and the significant civil penalties that may be assessed
for conducting such gaming without a license.
A majority of gaming by non-profits is conducted in the form of bingo and raffles. Accordingly,
this article focuses specifically on gaming under the Bingo Licensing Law1 and the Raffles
Licensing Law2 (together referred to as bingo and raffles licensing laws), and the corresponding
regulations established under them.3
The Licensing Process
The bingo and raffles licensing laws provide a dual licensing mechanism, in which the
municipality where the gaming will be conducted ultimately issues the license to qualified,
fund-raising organization. Thus, the location in which the gaming activity is conducted is
extremely important, because the particular municipality determines whether the gaming will or
will not be permitted. The bingo and raffles licensing laws operate only in those municipalities
where they have been adopted by public referendum.
Organizations desiring to be licensed to conduct bingo or raffles must begin with the Legalized
Games of Chance Control Commission, established under the Department of Law and Public
Safety to administer the bingo and raffles licensing laws.4
In order for an organization to apply for a municipal license it first must register with and obtain
an “identification number” from the Commission
In order to register, the organization must submit a completed application, including a nonrefundable,
biennial registration fee of $100.00 dollars.5, a copy of its constitution and bylaws; a
list of the names, addresses and ages of each member of its organization; and if incorporated, a
copy of its articles of incorporation filed with the Secretary of State.6
The Commission will then analyze whether the organization is a “qualified” non-profit
organization, as discussed below.
Qualified Organizations
Not all non-profit organizations are qualified to conduct games of chance pursuant to the bingo
and raffles licensing laws. Qualified organizations include bona fide organizations or
associations of veterans of any war in which the United States has been engaged , churches and
or religious congregations and religious organizations, charitable, educational and fraternal
organizations, civic and service clubs, senior citizen associations and clubs, officially
recognized volunteer fire companies and officially recognized volunteer first aid or rescue
squads.7 If the Commission determines that an organization falls within one of the enumerated
categories, it will review the following:
1. If the organization is incorporated, whether it is incorporated in New Jersey as a religious
corporation or an association not-for-pecuniary profit, and is empowered by its articles of
incorporation to further one or more of the authorized purposes defined by the regulations. If
incorporated out of the state of New Jersey a form 12A must be completed.
2. If it is not incorporated, whether it is organized in New Jersey as a religious or other
organization not-for-pecuniary profit, and is authorized by its written constitution, bylaws or
charter to further one or more of the authorized purposes. A letter from the National
Organization indicating that the organization is in good standing and a dissolution statement.
3. Whether the organization is comprised of a membership of not less than 5 persons.
4. Whether it relies primarily on funds from sources other than the conduct of games of chance
for furthering its authorized purpose.8
* If the application meets these criteria, the Commission will issue the organization an
identification number, which is valid for two years, allowing it to apply to a municipality for a
license to conduct gaming. There is no requirement in the bingo and raffles licensing laws or
the regulations that the organization be a corporation which is exempt from taxation pursuant to
section 501(c)(3) of the Internal Revenue Code of 1986 as amended, in order to be issued an
identification number. Additionally, the term “membership” is not defined by the regulations,
nor is there any mechanism to obtain a waiver of the of the 5-member requirement. For these
reasons, the Commission has been reluctant to issue identification numbers to applicants which
are not comprised of at least 5 persons who possess voting power in the corporation or
association.
The Municipal License
Neither registration nor assignment of an identification number entitles a qualified organization
to hold or conduct a game of chance. Organizations must first obtain the approval of the
municipality in which the game of chance is to be held, operated or conducted.
The application filed with the municipality in which the game will be held generally requires
the same information required by the Commission, together with a description of the gaming to
be conducted, including a sample ticket, if it is a raffle.
The application also must designate an active member or members of the organization under
whom the game of chance will be conducted, including a statement by the member or members
that they will be responsible for the conduct of the game in accordance with the bingo and
raffles licensing laws and the regulations if a license is granted.
After a complete application is filed, the municipal governing body must investigate the merits
of each application and make specific findings, including that the applicant is a qualified
organization and the designated member or members are bona fide members of the
organization, of good moral character and never convicted of a crime.9
If the municipal governing board makes the requisite findings with respect to an application for
a gaming license, the board must adopt a resolution authorizing issuance of the license.10 the
license shall be valid for a period of no more than one year from the date of issuance.
Conducting Bingo and Raffles
The regulation governing the conduct of bingo and raffles under the bingo and raffles licensing
laws are quite comprehensive. Detailed below are some fundamental requirements for
conducting bingo or raffles of which licensees should be aware.
The licensee must designate a specific representative will be responsible for insuring that all
gaming is conducted in accordance with applicable statutes and regulations. Only bona fide
members of the organization may operate the game, and no person can be paid for conducting
or assisting in conducting the game. The exception to this rule applies to Casino Night events
that require trained licensed operators known as dealers. Proceeds derived from gaming
operations may be used only to further the organization’s authorized purpose. Further, supplies
necessary to the gaming operation may be purchased or leased only from vendors approved by
the Commission.
The bingo and raffles licensing laws also limit the prizes that may be awarded in the aggregate
and in any one particular game. Specifically, no licensee may offer a prize having a retail value
greater than $100,000 in any one raffle conducted by drawing, or $500 in any raffle not
conducted by drawing. Further, no licensee shall offer prizes that, in aggregate, amount to a
value greater than $500,000 in any 12-month period. Finally, all tickets or rights to participate
in a raffle must be sold at a uniform unit price, and discounts for purchases of more than one
ticket are prohibited.11 As for bingo games, no prize may be offered exceeding $1,000 in one
particular game, nor may prizes exceeding $3,000 in the aggregate for one occasion be
offered.12 as for the premises and equipment used for bingo, unless the licensee is the sole
owner, or it is donated, the person leasing the premises and equipment, and the price for the
same, must be approved by the Commission.
Report of Operations
No later than the 15th day of the calendar month following the month in which a game of chance
is conducted, the organization conducting the game and the member or members responsible for
the conduct of the game must file a report of operation with the Commission.13 The report must
include the gross receipts derived from each game; the expenses incurred and to whom such
amounts were paid; the net profit from each game; the uses to which the net profit has been or
will be applied; and a list of the prizes offered or given and the respective value of each.
Fines and Penalties
A violation of the bingo and raffles licensing laws or regulations carries a fine of up to $7,500
for a first offense and up to $15,000 for the second and each subsequent offense. In addition, the
Commission is authorized to order restitution to an aggrieved party.14 All penalties may be
collected in a summary manner pursuant to the Penalty Enforcement Act.15
Conclusion
New Jersey non-profit organizations can successfully raise funds through bingo or raffles.
However, if the organization does not adhere to the bingo and raffles licensing laws or the
regulations, the penalty may wipe out any profits realized. Care should be taken, therefore, to
understand and comply with all applicable laws and regulations.
Endnotes
1. N.J.S.A. 5:8-24 et seq.
2. N.J.S.A. 5:8-50 et seq.
3. N.J.A.C. 13:47-1.1 et seq.
4. N.J.S.A. 5:8-1.
5. A senior citizen association or club requesting registration is exempt from the biennial
registration fee. N.J.A.C. 13:47-2.3(b).
6. N.J.A.C. 13:47-2.3(a).
7. N.J.S.A. 5:8-25 and 51.
8. An “authorized purpose” is an educational, charitable, patriotic, religious or publicspirited
purpose, defined to be a purpose that benefits an indefinite number of persons,
either by bringing their minds or hearts under the influence of education or religion, by
relieving their bodies from disease, suffering or constraint, by helping them establish
themselves in life, or by erecting or maintaining public buildings or works, or otherwise
lessening the burden of government, or in the case of a senior citizen association or club,
the support of such organization. An authorized purpose does not include the erection,
acquisition, repair improvement or maintenance of property, real personal or mixed,
unless such property is and shall be used exclusively for one or more of the purposes
stated above. N.J.A.C. 13:47-1-1.
9. N.J.S.A. 5:8-27 and 53
10. Id
11. N.J.A.C. 13:47-8.3 Note that these limits do not apply to on premise raffles where all of
the prizes are wholly donated.
12. N.J.A.C. 13:47-7.2 Progressive Jackpot Bingo and 50/50 bingo games are not subject to
this limitation.
13. N.J.S.A. 5:8-37 and 64
14. N.J.S.A. These penalty provisions do not apply to violations that are committed by
organizations that hold a valid license at the time the offense is allegedly committed.
15. N.J.S.A. 2A:58-1 et seq.
stj/2007