Virginia Administrative Code
Title 11 - GAMING
Agency 20 - DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES, CHARITABLE GAMING
Chapter 20 - CHARITABLE GAMING REGULATIONS
Part II - Charitable Gaming Organizations
Article 3 - Bank Accounts, Recordkeeping, Financial Reporting, Audits, Fees
Section 11VAC20-20-110 - Use of proceeds

A. All payments by an organization intended as use of proceeds, except for payments made from electronic gaming receipts, must be made by check written from the organization's charitable gaming account or a bank account authorized pursuant to 11VAC20-20-80 A.

B. All payments by an organization intended as use of proceeds that are made from electronic gaming receipts must be made by check or electronic funds transfer from the organization's charitable gaming account or a bank account authorized pursuant to 11VAC20-20-80 A.

C. Use of proceeds payments may be made for scholarship funds or for religious, charitable, educational, or community purposes. In addition, an organization may obtain department approval to establish a special fund account or an irrevocable trust fund for special circumstances. Transfers to such an account or an irrevocable trust fund from the organization's charitable gaming account may be included as a use of proceeds if the payment is authorized by the organization's board of directors.

No payments made to such a special fund account shall be withdrawn for other than the specified purpose, unless prior notification is made to the department.

D. Expenditures of charitable gaming funds for social or recreational activities or for events, activities, or programs that are open primarily to an organization's members and their families shall not qualify as use of proceeds unless substantial benefit to the community is demonstrated.

E. Payments made to or on behalf of indigent, sick, or deceased members or their immediate families shall be allowed as use of proceeds provided they are approved by the organization's board of directors and the need is documented.

F. Payments made directly for the benefit of an individual member, member of an individual member's family, or person residing in an individual member's household shall not be allowed as a use of proceeds unless authorized by the Charitable Gaming Law or regulations adopted pursuant thereto.

G. Use of proceeds payments by an organization shall not be made for any activity that is not permitted by federal, state, or local laws or for any activity that attempts to influence or finance directly or indirectly political persons or committees or the election or reelection of any person who is or has been a candidate for public office.

H. Organizations shall maintain details of all use of proceeds disbursements for a minimum of three years following the close of the fiscal year and shall make this information available to the department upon request.

I. The department may disallow a use of proceeds payment to be counted against the minimum percentage referred to in 11VAC20-20-20 D. If any payment claimed as use of proceeds is subsequently disallowed, an organization may be allowed additional time as specified by the department to meet minimum use of proceeds requirements.