99B.7 - GAMES CONDUCTED BY QUALIFIED ORGANIZATIONS -- PENALTIES.
99B.7 GAMES CONDUCTED BY QUALIFIED ORGANIZATIONS --
PENALTIES.
1. Except as otherwise provided in section 99B.8, games of skill,
games of chance and raffles lawfully may be conducted at a specified
location meeting the requirements of subsection 2 of this section,
but only if all of the following are complied with:
a. The person conducting the game or raffle has been issued a
license pursuant to subsection 3 of this section and prominently
displays that license in the playing area of the games.
b. No person receives or has any fixed or contingent right to
receive, directly or indirectly, any profit, remuneration, or
compensation from or related to a game of skill, game of chance, or
raffle, except any amount which the person may win as a participant
on the same basis as the other participants. A person conducting a
game or raffle shall not be a participant in the game or raffle.
c. (1) Cash or merchandise prizes may be awarded in the game
of bingo and, except as otherwise provided in this paragraph, shall
not exceed one hundred dollars. Merchandise prizes may be awarded in
the game of bingo, but the actual retail value of the prize, or if
the prize consists of more than one item, unit or part, the aggregate
retail value of all items, units or parts, shall not exceed the
maximum provided by this paragraph. Bingo games allowing for a
trade-in of a bingo card during a bingo game for not more than fifty
cents a trade-in may be conducted. A jackpot bingo game may be
conducted twice during any twenty-four-hour period in which the prize
may begin at not more than three hundred dollars in cash or actual
retail value of merchandise prizes and may be increased by not more
than two hundred dollars after each bingo occasion to a maximum prize
of one thousand dollars for the first jackpot bingo game and two
thousand five hundred dollars for the second jackpot bingo game.
However, the cost of play in a jackpot bingo game shall not be
increased. A jackpot bingo game is not prohibited by paragraph
"h". A bingo occasion shall not last for longer than four
consecutive hours. A qualified organization shall not hold more than
fourteen bingo occasions per month. Bingo occasions held under a
limited license shall not be counted in determining whether a
qualified organization has conducted more than fourteen bingo
occasions per month, nor shall bingo occasions held under a limited
license be limited to four consecutive hours. With the exception of
a limited license bingo, no more than three bingo occasions per week
shall be held within a structure or building and only one person
licensed to conduct games under this section may hold bingo occasions
within a structure or building. A licensed qualified organization
shall not conduct free games.
(2) However, a qualified organization, which is a senior
citizens' center or a residents' council at a senior citizen housing
project or a group home, may hold more than fourteen bingo occasions
per month and more than three bingo occasions per week within the
same structure or building, and bingo occasions conducted by such a
qualified organization may last for longer than four consecutive
hours, if the majority of the patrons of the qualified organization's
bingo occasions also participate in other activities of the senior
citizens' center or are residents of the housing project. At the
conclusion of each bingo occasion, the person conducting the game
shall announce both the gross receipts received from the bingo
occasion and the use permitted under subsection 3, paragraph "b",
to which the net receipts of the bingo occasion will be dedicated and
distributed.
d. (1) Cash prizes shall not be awarded in games other than
bingo and raffles. The value of a prize shall not exceed ten
thousand dollars and merchandise prizes shall not be repurchased. If
a prize consists of more than one item, unit, or part, the aggregate
value of all items, units, or parts shall not exceed ten thousand
dollars. However, one raffle may be conducted per calendar year at
which real property or one or more merchandise prizes having a
combined value of more than ten thousand dollars may be awarded or
cash prizes of up to a total of two hundred thousand dollars may be
awarded.
(2) If a raffle licensee holds a statewide raffle license, the
licensee may hold not more than eight raffles per calendar year at
which real property or one or more merchandise prizes having a
combined value of more than ten thousand dollars may be awarded or
cash prizes of up to a total of two hundred thousand dollars may be
awarded. Each such raffle held under a statewide license shall be
held in a separate county.
(3) If a prize is merchandise, its value shall be determined by
the purchase price paid by the organization or donor. If a prize is
real property or is cash and the combined value of the prize or the
cash prize exceeds one hundred thousand dollars, the department shall
conduct a special audit to verify compliance with the appropriate
requirements of this chapter including all of the following
applicable requirements:
(a) The licensee has submitted a real property or cash raffle
license application and a fee of one hundred dollars to the
department, has been issued a license, and prominently displays the
license at the drawing area of the raffle.
(b) The real property was acquired by gift or donation or has
been owned by the licensee for a period of at least five years.
(c) All other requirements of this section and section 99B.2 are
met.
(d) Receipts from the raffle are kept in a separate financial
account.
(e) A cumulative report for the raffle on a form determined by
the department and one percent of gross receipts are submitted to the
department within sixty days of the raffle drawing. The one percent
of the gross receipts shall be retained by the department to pay for
the cost of the special audit.
e. The ticket price including any discounts for each game or
raffle shall be the same for each participant.
f. No prize is displayed which cannot be won.
g. Merchandise prizes are not repurchased.
h. A game or raffle shall not be operated on a build-up or
pyramid basis.
i. Concealed numbers or conversion charts shall not be used
to play any game and a game or raffle shall not be adapted with any
control device to permit manipulation of the game by the operator in
order to prevent a player from winning or to predetermine who the
winner will be, and the object of the game must be attainable and
possible to perform under the rules stated from the playing position
of the player.
j. The game must be conducted in a fair and honest manner.
k. Each game or raffle shall be posted.
l. During the entire time that games permitted by this
section are being engaged in, both of the following are observed:
(1) No other gambling is engaged in at the same location, except
that lottery tickets or shares issued by the Iowa lottery authority
may be sold pursuant to chapter 99G.
(2) A ticket, coupon, or card shall not be used as a door prize
or given to a participant of a raffle, game of bingo, or game of
chance if the use of the ticket, coupon, or card would change the
odds of winning for participants of the raffle, game of bingo, or
game of chance.
m. (1) The organization conducting the game can show to the
satisfaction of the department that all of the following requirements
are met:
(a) The organization is exempt from federal income taxes under
section 501(c)(3), 501(c)(4), 501(c)(5), 501(c)(6), 501(c)(7),
501(c)(8), 501(c)(10), or 501(c)(19) of the Internal Revenue Code as
defined in section 422.3, the organization is an agency or
instrumentality of the United States government, this state, or a
political subdivision of this state, or, in lieu of an exemption from
federal income taxes, the organization is a parent-teacher
organization or booster club that is recognized as a fund-raiser and
supporter for a school district organized pursuant to chapter 274 or
for a school within the school district, in a notarized letter signed
by the president of the board of directors, the superintendent of the
school district, or a principal of a school within that school
district.
(b) The organization has an active membership of not less than
twelve persons.
(c) The organization does not have a self-perpetuating governing
body and officers.
(2) This lettered paragraph "m" does not apply to a political
party, as defined in section 43.2, to a nonparty political
organization that has qualified to place a candidate as its nominee
for statewide office pursuant to chapter 44, or to a candidate's
committee as defined in section 68A.102.
n. The person conducting the game does none of the following:
(1) Hold, currently, another license issued under this section.
(2) Own or control, directly or indirectly, any class of stock of
another person who has been issued a license to conduct games under
this section.
(3) Have, directly or indirectly, an interest in the ownership or
profits of another person who has been issued a license to conduct
games under this section.
o. A person shall not conduct, promote, administer, or assist
in the conducting, promoting, or administering of a bingo occasion,
unless the person regularly participates in activities of the
qualified organization other than conducting bingo occasions or
participates in an educational, civic, public, charitable, patriotic,
or religious organization to which the net receipts are dedicated by
the qualified organization.
p. A licensee shall keep records of all persons who serve as
manager or cashier, or who are responsible for carrying out duties
with respect to a bingo account. A licensee is subject to license
revocation if it knowingly permits a person to serve in one of these
capacities if the person was a manager, cashier, or responsible for
carrying out duties with respect to a bingo account for another
licensee at the time of one or more violations leading to revocation
of the other licensee's license, and if the license is still revoked
at the time of the subsequent service.
2. a. Games of skill, games of chance, and raffles may be
conducted on premises owned or leased by the licensee, but shall not
be conducted on rented premises unless the premises are rented from a
person licensed under this section, and unless the net rent received
is dedicated to one or more of the uses permitted under subsection 3
for dedication of net receipts. This subsection shall not apply
where the rented premises are those upon which a qualified
organization usually carries out a lawful business other than
operating games of skill, games of chance or raffles. However, a
qualified organization may rent premises other than from a licensed
qualified organization to be used for the conduct of games of skill,
games of chance and raffles, and the person from whom the premises
are rented may impose and collect rent for such use of those
premises, but only if all of the following are complied with:
(1) The rent imposed and collected shall not be a percentage of
or otherwise related to the amount of the receipts of the game or
raffle.
(2) The qualified organization shall have the right to terminate
any rental agreement at any time without penalty and without
forfeiture of any sum.
(3) Except for purposes of bingo, the person from whom the
premises are rented shall not be a liquor control licensee or beer
permittee with respect to those premises or with respect to adjacent
premises.
b. The board of directors of a school district may authorize
that public schools within that district, and the policymaking body
of a nonpublic school, may authorize that games of skill, games of
chance, bingo and raffles may be held at bona fide school functions,
such as carnivals, fall festivals, bazaars and similar events. Each
school shall obtain a license pursuant to this section prior to
permitting the games or activities on the premises. However, the
board of directors of a public school district may also be issued a
license under this section. However, a board of directors of a
public school shall not spend or authorize the expenditure of public
funds for the purpose of purchasing a license. The department of
inspections and appeals shall provide by rule a short form
application for a license issued to a board of directors. Upon
written approval by the board of directors, the license may be used
by any school group or parent support group in the district to
conduct activities authorized by this section. The board of
directors shall not authorize a school group or parent support group
to use the license more than twice in twelve months.
3. a. A person wishing to conduct games and raffles pursuant
to this section as a qualified organization shall submit an
application and a license fee of one hundred fifty dollars. The
annual license fee for a statewide raffle license shall be one
hundred fifty dollars. However, upon submission of an application
accompanied by a license fee of fifteen dollars, a person may be
issued a limited license to conduct all games and raffles pursuant to
this section at a specified location and during a specified period of
fourteen consecutive calendar days, except that a bingo occasion may
only be conducted once per each seven consecutive calendar days of
the specified period. In addition, a qualified organization may be
issued a limited license to conduct raffles pursuant to this section
for a period of ninety days for a license fee of forty dollars or for
a period of one hundred eighty days for a license fee of seventy-five
dollars. For the purposes of this paragraph, a limited license is
deemed to be issued on the first day of the period for which the
license is issued.
b. (1) A person or the agent of a person submitting
application to conduct games pursuant to this section as a qualified
organization shall certify that the receipts of all games, less
reasonable expenses, charges, fees, taxes, and deductions allowed by
this chapter, either will be distributed as prizes to participants or
will be dedicated and distributed to educational, civic, public,
charitable, patriotic, or religious uses in this state and that the
amount dedicated and distributed will equal at least seventy-five
percent of the net receipts.
(2) (a) "Educational, civic, public, charitable, patriotic, or
religious uses" means uses benefiting a society for the prevention
of cruelty to animals or animal rescue league, or uses benefiting an
indefinite number of persons either by bringing them under the
influence of education or religion or relieving them from disease,
suffering, or constraint, or by erecting or maintaining public
buildings or works, or otherwise lessening the burden of government,
or uses benefiting any bona fide nationally chartered fraternal or
military veterans' corporation or organization which operates in Iowa
a clubroom, post, dining room, or dance hall, but does not include
the erection, acquisition, improvement, maintenance, or repair of
real, personal or mixed property unless it is used for one or more of
the uses stated.
(b) "Public uses" specifically includes dedication of net
receipts to political parties as defined in section 43.2.
(c) "Charitable uses" includes uses benefiting a definite
number of persons who are the victims of loss of home or household
possessions through explosion, fire, flood, or storm when the loss is
uncompensated by insurance, and uses benefiting a definite number of
persons suffering from a seriously disabling disease or injury,
causing severe loss of income or incurring extraordinary medical
expense when the loss is uncompensated by insurance.
(3) Proceeds given to another charitable organization to satisfy
the seventy-five percent dedication requirement shall not be used by
the donee to pay any expenses in connection with the conducting of
bingo by the donor organization, or for any cause, deed, or activity
that would not constitute a valid dedication under this section.
c. (1) A qualified organization shall distribute amounts
awarded as prizes on the day they are won. A qualified organization
shall dedicate and distribute the balance of the net receipts
received within a quarter and remaining after deduction of reasonable
expenses, charges, fees, taxes, and deductions allowed by this
chapter, before the quarterly report required for that quarter under
section 99B.2, subsection 4, is due. The amount dedicated and
distributed must equal at least seventy-five percent of the net
receipts. A person desiring to hold the net receipts for a period
longer than permitted under this paragraph shall apply to the
department for special permission and upon good cause shown the
department may grant the request.
(2) If permission is granted to hold the net receipts, the person
shall, as a part of the quarterly report required by section 99B.2,
report the amount of money currently being held and all expenditures
of the funds. This report shall be filed even if the person no
longer holds a gambling license.
4. If a licensee derives ninety percent or more of its total
income from conducting bingo, raffles, or small games of chance, at
least seventy-five percent of the licensee's net receipts shall be
distributed to an unrelated entity for an educational, civic, public,
charitable, patriotic, or religious use.
5. It is lawful for an individual other than a person conducting
games or raffles to participate in games or raffles conducted by a
qualified organization, whether or not there is compliance with
subsections 2 and 3: However, it is unlawful for the individual to
participate where the individual has knowledge of or reason to know
facts which constitute a failure to comply with subsection 1.
6. A political party or a political party organization is a
qualified organization within the meaning of this chapter. Political
parties or party organizations may contract with other qualified
organizations to conduct the games of skill, games of chance, and
raffles which may lawfully be conducted by the political party or
party organization. A licensed qualified organization may promote
the games of skill, games of chance, and raffles which it may
lawfully conduct.
7. a. Proceeds coming into the possession of a person under
this section are deemed to be held in trust for payment of expenses
and dedication to charitable purposes as required by this section.
b. A licensee or agent who willfully fails to dedicate the
required amount of proceeds to charitable purposes as required by
this section commits a fraudulent practice.
8. A qualified organization licensed under this section shall
purchase bingo equipment and supplies only from a manufacturer or a
distributor licensed by the department. Section History: Early Form
[C75, 77, 79, 81, § 99B.7; 81 Acts, ch 44, § 8--12; 82 Acts, ch
1189, § 2] Section History: Recent Form
83 Acts, ch 85, § 1; 83 Acts, ch 164, § 1, 2; 84 Acts, ch 1220, §
5--11; 84 Acts, ch 1305, § 22; 85 Acts, ch 150, §1--3; 86 Acts, ch
1042, § 2; 86 Acts, ch 1201, § 7--9; 87 Acts, ch 184, § 5, 6; 88
Acts, ch 1134, § 21; 88 Acts, ch 1274, § 33; 89 Acts, ch 231, §
18--21; 91 Acts, ch 175, §1; 94 Acts, ch 1062, §3--5; 96 Acts, ch
1143, § 3, 4; 98 Acts, ch 1198, §1, 2; 2000 Acts, ch 1130, §2, 3;
2002 Acts, ch 1068, §3--10; 2003 Acts, ch 44, §32; 2003 Acts, ch 178,
§104, 121; 2003 Acts, ch 179, §142; 2003 Acts, 1st Ex, ch 2, §38,
209; 2004 Acts, ch 1058, §1--5; 2005 Acts, ch 19, §30; 2005 Acts, ch
106, §5, 11; 2008 Acts, ch 1032, §188, 201
Referred to in § 99B.1, 99B.2, 99B.5, 99B.5A, 99B.6, 99B.7B,
99B.8, 99B.9, 99B.9A, 99B.10, 99B.10A, 99B.12, 99D.8, 99F.5, 99F.6