Student Legal Services: State of Indiana

The Top Ten Things You Need to Know

Our Top Ten list is a brief overview meant to highlight the Do’s and Don’ts of charity gaming and point you to government web sites where you will find the forms you will to file to sponsor a charity game.

1. Time, Time, Time

The first thing you need to consider when planning a gaming event is time. The application process to be able to host an event can take anywhere from four to eight weeks depending on the forms that need to be filed with the State of Indiana. So if you are planning on hosting an event next week and are just now reading this pamphlet, it may be time to change your plans.

2. What is a Legal Gaming Event?

A qualified organization can host many kinds of gaming events. Once qualified, an organization may host a raffle, bingo night, charity gaming night (Las Vegas Night), a festival, or simply offer door prizes. Each offers a fun and legal way to raise funds for your charitable organization.

3. Is Your Organization Able to Hold a Legal Gaming Event?

In order to conduct a legal gaming event, your organization must meet certain criteria. You must be a bona fide educational, religious, senior citizen, veteran, or other civic organization, and must be tax-exempt under section 501 of the Internal Revenue Code. Additionally, your organization must also have been in continuous active existence for a period of at least five years, or affiliated with another qualified organization that has been in existence in Indiana for at least five years. If you are affiliated with a national charitable organization, you may also be eligible to host a charitable gaming event if certain criteria are met.

4. Filing with the Indiana Department of Revenue

The first step in conducting an event is to file an Annual Qualification Application (form CG-1). Upon filing this application, the State of Indiana will decide if your organization is eligible to conduct the event, so be sure to include all relevant information that explains why your organization should qualify. If your organization is approved, you must file one of these forms each year to maintain eligibility. Once your organization is approved, you need only make sure that your filing is up to date with the state.

5. Applying for a Gaming License

A license application (form CG-3) must be filed at least eight weeks before your organization plans on holding a gaming event. These forms should be submitted with the Annual Qualification Application for organizations applying for the first time. However, if the event planed by your organization meets certain criteria, a license will not be necessary. If your organization is already registered with the state, and the value of all the prizes to be awarded does not exceed $1,000 for a single event and not more than $3,000 for all events during a calendar year, you do not need to file an official license application. Instead, you must file an exemption letter (form CG-AEL) four weeks in advance of the planned event. The validated AEL form must be posted at your event.

6. Hosting a Gaming Event

After you have been qualified as a charitable organization and have filed the necessary paperwork to host an event, there are additional requirements for the actual event. First, you must stay within the prize limits you reported to the state. Second, the event must be held in the county where your organization is located (with an exception for annual conventions) and the gaming license must be signed by two club officers who reside in the county where the event is to be held. Third, you must also make sure that the people staffing the event meet the specific criteria laid out in the Indiana Administrative Code sections 45-18-1-30 and 45-18-1-43.

7. Where to Host an Event

An event may be hosted in any facility that your organization owns, rents or has donated to them. These facilities may be used for up to three days during a calendar week for gaming purposes, with any two of those days being consecutive.

8. Advertising a Gaming Event

A valid license or AEL form must be on file before your organization can advertise a gaming event. Any advertisement must include the name of the organization and the license number. During the event, your organization must post a copy of the gaming license or AEL, as well as produce a sign with the name of the organization, the license number, and the license expiration date. Additionally, you must have a sign stating that “TIPPING IS NOT ALLOWED.” This section will not be applicable to all gaming events but, if there is any doubt, an organization should err on the side of caution and post all required material.

9. What to do After an Event

Adequate record keeping is a must. Within 10 days of hosting an event, a financial report must be filed (form CG-9). Additionally, a Nightly Summary Report may also need to be filled out by the organization and kept in the organization’s records (form CG-NSR). It is very important that your organization keep adequate records of any event, as poor record-keeping practices will not be an excuse if your organization is subject to an investigation. If your organization is required by the IRS to withhold taxes before giving out any prizes, then you may be responsible for taxes in Indiana as well. The State of Indiana recommends you contact the IRS at 1-800-829-1040 to see if you are required to withhold any taxes.

10. A Great Responsibility

While a gaming event can be a great way to raise funds for your organization, it is a great responsibility as well. Failure to follow the appropriate guidelines may be punishable by fines and possibly jail time as well as civil penalties. As such, if you have any questions, you should not hesitate to contact the Indiana Department of Revenue, the IRS, as well as consulting the Indiana Administrative Code section 45-18-1 through 45-18-6.