Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 238.515, 238.525, 238.530, 238.535, 238.540,
238.555
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515(1) requires
the Department of Charitable Gaming to license charitable organizations,
charitable gaming facilities, manufacturers, and distributors that desire to
engage in charitable gaming. KRS 238.515(2) authorizes the Department of
Charitable Gaming to establish and enforce reasonable standards for the conduct
of charitable gaming and the operation of charitable gaming facilities. This
administrative regulation establishes the requirements, fees, and procedures
for licensure of a qualifying charitable organization, distributor,
manufacturer, or charitable gaming facility. This administrative regulation
establishes criteria for temporary licenses, exemptions, and inspections for
verifying the information contained in an application.
Section 1. Application for Licensure.
(1) At least sixty (60) days prior to the
expiration of its existing license or its first expected date of gaming,
facility operation, or business operations in Kentucky during the license
period, an applicant shall submit the appropriate complete, accurate, and
documented application:
(a) A charitable
organization shall submit Form CG-APP-ORG;
(b) An organization authorized to hold
special event raffles pursuant to KRS 238.535(14)(b) shall submit Form
CG-APP-SER;
(c) A distributor shall
submit Form CG-APP-DIS;
(d) A
manufacturer shall submit Form CG-APP-MAN;
(e) A charitable gaming facility shall submit
Form CG-APP-FAC; and
(f) A licensed
charitable organization shall submit Form CG-APP-ORG-CFE in addition to Form
CG-APP-ORG for each charity fundraising event it intends to conduct.
(2) The department shall review
the application and notify the applicant in writing of any deficiencies in the
application as soon as practicable. An application shall not be considered
complete until all deficiencies are resolved.
(3) If the applicant does not file a written
response to a deficiency request, provide requested information and documents,
or otherwise cure the identified deficiency within thirty (30) days of the
written notice, the application shall be deemed withdrawn.
(4) If the applicant files a written response
to a deficiency request within thirty (30) days of the written notice, but the
response does not cure the identified deficiency, the department shall issue a
subsequent deficiency notice. If the deficiency is incapable of being cured,
the department shall deny the license.
(5) Once the department has received a
complete application, it shall grant or deny the license within sixty (60) days
of receipt.
Section 2.
License Requirements, Fees, and Issuance.
(1)
The department shall issue a license if the applicant has:
(a) Met the statutory requirements
established:
1. For charitable organizations,
by KRS 238.535;
2. For special
event raffle organizations, by KRS 238.535(14)(b);
3. For distributors and manufacturers, by KRS 238.530; or
4. For charitable
gaming facilities, by KRS 238.555;
(b) Paid all fees and fines;
(c) Filed all required reports;
(d) Filed an acceptable financial plan, if
required;
(e) Complied with all
terms and conditions of any applicable settlement agreement or probationary
terms; and
(f) Submitted
fingerprints cards as required by KRS 238.525.
(2) Fees for licenses issued shall be paid
according to the following schedule:
(a) A
nonrefundable application fee of twenty-five (25) dollars shall accompany each
application for licensure and shall be credited against the amount of the
annual license fee, if the requested license is granted.
(b) For charitable organizations and
organizations licensed pursuant to KRS 238.535(14)(b):
1. $100 for:
a. A charitable organization upon initial
application; or
b. A charitable
organization with gross receipts not in excess of $100,000;
2. $200 for a charitable
organization with gross receipts over $100,000, but not in excess of $250,000;
or
3. $300 for a charitable
organization with gross receipts over $250,000.
(c) For manufacturers or distributors:
$1,000.
(d) For charitable gaming
facilities:
1. $1,000 for a facility that does
not conduct bingo sessions; or
2.
$1,250 for a facility conducting between one (1) and eight (8) bingo sessions
per week; or
3. $2,500 for a
facility conducting between nine (9) and eighteen (18) bingo sessions per
week.
(3) A
license shall not be issued until the license fee and any other fees or fines
due are paid in full.
(4) The
license term shall be for one (1) year from the effective date of the
license.
(5) A licensed charitable
organization, distributor, manufacturer, or charitable gaming facility may
submit a written change request to change any information contained in the
license application or printed on the license. All change requests shall be
accompanied by a twenty-five (25) dollar change fee and be signed by an
officer. The department shall process change requests and issue or deny an
amended license within ten (10) days of receipt, and the licensee shall not
engage in gaming until a license reflecting the change request has been issued.
An organization shall submit requests for changes to its listed officers and
chairpersons by submitting Form CG-OCC-ORG (2023), Notice of Change in Officers
or Chairpersons.
(a) Except as provided in KRS 238.535(12)(b)(2), a licensed charitable organization may change the date,
time, or location of a charitable gaming session if the licensed charitable
organization submits a written request to the department at least ten (10) days
prior to the date of the requested change. Any change request made pursuant to
this subsection shall be accompanied by a lease, if required, for the new
gaming location.
(b) If a
charitable organization wishes to cancel a charitable gaming session, the
organization shall notify the department, in writing, at least twenty-four (24)
hours prior to the scheduled start of the charitable gaming session, except if
an emergency beyond the organization's control occurs, in which case the
organization shall notify the department of the change as soon as practicable.
A cancellation shall not require a change fee.
(6) A charitable organization shall not
advertise any charitable gaming activity until the activity has been licensed
by the department.
Section
3. Temporary License.
(1)
Application for Licensure. The department may issue a temporary license to an
applicant for a charitable gaming license if the applicant has submitted a
complete and accurate license application form, and has complied with all other
licensing requirements for an annual license.
(2) License Fee. For each temporary license
issued, the licensee shall pay a twenty-five (25) dollar fee. The total
temporary license fee charged in a year shall not exceed the annual license
fee.
Section 4.
Distributor Requirements.
(1) For the
operation of a distributorship, a distributor shall maintain a separate bank
account that is not commingled with a personal account or another business
account. If the licensed distributor owns multiple distributorships, a separate
bank account shall be maintained for each distributorship.
(2) Any payments received by a distributor
from a charitable organization shall be by check drawn on the charitable gaming
account or electronic fund transfer from the charitable gaming
account.
(3) A distributor or its
agent shall maintain storage facilities within this state for gaming supplies
to be sold within the Commonwealth of Kentucky, and shall identify the
facilities' physical locations to the department. Storage facilities shall be
made accessible to the department for inspection upon request.
Section 5. Charitable Gaming
Facility Requirements.
(1) A licensed
charitable gaming facility shall be permitted to list on its website the names,
license numbers, gaming sessions, and information regarding the charitable
organizations that game at that licensed charitable gaming facility.
(2) If a charitable organization contracts
with a licensed charitable gaming facility to operate a concession stand, the
members of the charitable organization that volunteer at the concession stand
may volunteer to work for their own gaming session, but shall not volunteer for
the gaming session of any other charitable organization that games at that
licensed charitable gaming facility.
(3) For a licensed gaming facility operation,
a licensed gaming facility shall maintain a separate bank account that is not
commingled with a personal account or another business account. If the licensee
owns multiple licensed gaming facilities, a separate bank account shall be
maintained for each licensed gaming facility. If separate businesses are
operated out of the licensed gaming facility, including a check cashing service
or a concession stand, each business shall have a separate bank
account.
(4) Any payments received
by a licensed gaming facility from a charitable organization shall be by check
drawn on the charitable gaming account or electronic fund transfer from the
charitable gaming account of the charitable organization.
(5) The lease agreement executed between the
licensed charitable gaming facility and charitable organization shall contain
the day and time of each charitable gaming session a charitable organization
will conduct at the licensed gaming facility. The day and time listed in the
lease agreement shall be accurate and shall match the day and time listed on
the organization's charitable gaming license.
Section 6. Exempt Organizations.
(1) An organization seeking exemption from
charitable gaming licensing requirements shall submit a complete and accurate
Form CG-APP-EXE, Notification of Intent to Engage in Exempt Charitable Gaming,
at least thirty (30) days prior to the expected date of gaming. The Form
CG-APP-EXE shall be submitted with a non-refundable fee of twenty-five (25)
dollars.
(2) If the charitable
organization has submitted a complete application, and meets the requirements
for exemption established in KRS Chapter 238, the department shall issue a
Notification of Exemption within thirty (30) days of the completed
submission.
(3) The department
shall review the application and shall notify the applicant within thirty (30)
days of receipt of the initial application of the nature of any deficiencies.
If identified deficiencies are not cured within thirty (30) days from the
notice, the application shall be deemed withdrawn, and no exemption will be
granted in response to the application.
(4) The charitable organization shall not be
required to file an additional exemption application with the department if the
gaming activities of the charitable organization remain within the
qualifications for exempt status.
(5) The charitable organization shall notify
the department of any changes in the exempt status of the charitable
organization within thirty (30) days of the occurrence of the
changes.
(6) A charitable
organization that conducts charitable gaming pursuant to an exemption shall
file an annual report with the department before January 31 of each year. This
report shall be filed on Form CG-FIN-EXE, Annual Financial Report for Exempt
Organization. The report may be filed electronically.
(7) A charitable organization that has had
its exemption revoked for any reason shall pay a nonrefundable reinstatement
fee of twenty-five dollars (25) with any application or request for
reinstatement.
Section
7. Licensee Inspections.
(1) An
applicant for a license or an exemption shall be able to demonstrate the
existence of their establishment by:
(a)
Contracts or leases;
(b) Utility
bills;
(c) Records maintained by
the parent organization;
(d) Bank
records; or
(e) Similar
documents.
(2) Any such
records shall be accessible to the department for inspection.
(3) An applicant for a license or an
exemption shall be able to demonstrate its maintenance of an office by copies
of the business records including the articles of incorporation and by-laws, if
any, any tax forms, the check book and bank statements, and any other records
kept in the ordinary course of operating the type of business for which
licensure is sought.
(4) An
applicant for a charitable gaming facility license shall be able to demonstrate
that it is the entity that is operating the charitable gaming facility and that
the charitable gaming facility does not have any prohibited relationships with
organizations, distributors, or manufacturers. This may include an inspection
of its office including contracts, required reports, checkbook, bank accounts,
and any other records regarding the operation of the charitable gaming
facility. Any such records stored or maintained in electronic formats shall
likewise be accessible to the department for inspection.
(5) An applicant for a distributor's or
manufacturer's license shall be able to demonstrate prior to licensing that it
manufactures or distributes gaming supplies from the locations stated on the
license application. This may include an inspection of those locations and a
demonstration or explanation of its ability to track gaming supplies and
maintain the appropriate records. Any such records stored or maintained in
electronic formats shall likewise be accessible to the department for
inspection.
(6) Inspections shall
be completed by appropriate department personnel who shall file a report
stating the results of the inspection performed.
Section 8. Incorporation by Reference.
(1) The following material is incorporated by
reference:
(a) Form CG-APP-EXE, "Notice of
Intent to Engage in Exempt Charitable Gaming (2023)";
(b) Form CG-FIN-EXE, "Annual Financial Report
for Exempt Charitable Organization (2023)";
(c) Form CG-APP-ORG, "Charitable Gaming
Organization License Application (2023) ";
(d) Form CG-APP-SER, "Special Event Raffle
License Application (2023) ";
(e)
Form CG-APP-DIS, "Charitable Gaming Distributor License Application
(2023)";
(f) Form CG-APP-MAN,
"Charitable Gaming Manufacturer License Application (2023)";
(g) Form CG-APP-FAC, "Charitable Gaming
Facility License Application (2023)"; and
(h) Form CG-OCC-ORG, "Notice of Change in
Officers or Chairpersons (2023)".
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Department of
Charitable Gaming, Public Protection Cabinet, 500 Mero Street, Frankfort,
Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.
STATUTORY AUTHORITY: KRS 238.515, 238.525, 238.530,
238.535(2), (13), 238.555