North Dakota Charitable Gaming
The state's Gaming Division, which includes a five-member gaming commission, regulates charitable gaming. The Gaming Division is part of the office of the state's Attorney General. The state's gaming commission ensures that an organization's net proceeds are used for its primary purpose, such as educational, charitable, patriotic, fraternal or religious.
Only groups defined as a "veterans, charitable, educational, religious, fraternal, civic and service, public safety or public-spirited organization" may apply for a charitable gaming license. The group must be based in North Dakota, incorporated as a nonprofit, and actively operating in the state for at least two years prior to the application. An educational organization does not need to be incorporated or be in existence for two years. An organization's primary purpose may not involve the conduct of games. Licenses are issued by the Attorney General.
To apply for a license, an eligible organization must first get authorization from the local municipality where the games will be held. The local city or county may charge an approval fee of $100 at its discretion. Once the site authorization is received, the organization applies to the Attorney General for an annual permit to conduct the games of chance for each location intended to hold the games. A licensed organization may not apply for more than 25 location permits. The permit fee is $150 each and must be submitted before 1 July. Only one licensed organization is authorized to conduct games of chance at one location each day, except for raffles, if specific criteria are met.
If an organization conducts only a raffle in two or more cities or counties, the Attorney General may allow that organization to apply for an annual consolidated license. The permit fee is the same, $150 for each city or county where a site is located. Prizes for raffles may be cash or merchandise, but not real estate. A single cash prize is limited to $4,000 and the total cash prizes in one day is also limited to $4,000. However, on two occasions each year a licensed organization may exchange a merchandise prize valued at not more than $25,000 for a cash prize, at the winning player's request.
North Dakota also allows for public-spirited organizations to conduct games of chance on sites authorized by the city or county. A public-spirited organization is one that primarily supports scientific research, amateur sports competition, safety, literature, arts, preservation of cultural heritage, educational activities, educational public service, youth, economic development, tourism, community medical care, community recreation or similar. A local charity permit allows the organization to conduct raffles, bingo, sports pools, paddlewheels, blackjack and poker. The limit for a primary prize is $6,000 and the limit for the total of all prizes awarded for all games is $12,000. A local charity permit restricts the licensee to one event a year.
The Attorney General assesses a tax each quarter on the total gross proceeds received by a licensed organization. For gross proceeds of $1.5 million or less the tax is 1%; for gross proceeds of more than $1.5 million, the tax is $15,000 plus 0.0225% of the gross proceeds over $1.5 million. The tax revenues are deposited to the state general fund except for 7%, which is distributed to the cities and counties that host the organization events.
In February 2005, the North Dakota House voted down a bill that would have legalized poker tournaments that could be held anytime at a charity's discretion. Poker tournaments are limited to two events a year.
North Dakota Charitable Gaming Properties
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