In California, organizations, including churches, are generally required to obtain a license to conduct bingo games. To host bingo games legally in California, your church will likely need to apply for a bingo license from the California Department of Justice’s Division of Gambling Control. The specific requirements and procedures for obtaining a license can vary, so it’s important to consult the Division of Gambling Control or legal counsel familiar with California gaming laws for guidance.
Attorney General:
As per the Attorney General’s Guide for Charties, “Organizations exempt from taxation under Revenue and Taxation Code sections 23701a, 23701b, 23701d (analogous to exemption under Internal Revenue Code section 501(c)(3)), 23701e, 23701f, 23701g, 23701k, 23701l, or 23701w, are authorized to raise money from bingo when the criteria in Penal Code section 326.5 are met.
These criteria include:
- For organizations exempt under Revenue and Taxation Code section 23701d, (religious organization) all profits from the bingo game are used for charitable purposes;
- The games are played on property used by the organization as an office, or to perform its tax-exempt purpose;
- The games are open to the public, players are physically present, and are not minors;
- The games are conducted by members of the organization, whom cannot receive salaries;
- The games cannot be conducted online;
- The value of prizes for each game do not exceed $500 in cash or kind;
- There is no comingling of bingo money with other funds; and
- The organization holds an applicable license issued by the city and/or county where the bingo is played.
Additional, charities must comply with any other local bingo licensing requirements before operating bingo games. Furthermore, charities must account to local licensing authorities for all bingo proceeds.
Registration:
A city and/or county that enacts an ordinance permitting bingo games may specify in the ordinance that if the monthly gross receipts from bingo games of an organization within this subdivision exceed five thousand dollars ($5,000), a minimum percentage of the proceeds shall be used only for charitable purposes not relating to the conducting of bingo games and that the balance shall be used for prizes, rental of property, overhead, administrative expenses, and payment of license fees.
City of Los Angeles:
By way of an example, in the City of Los Angeles, no organization shall conduct a bingo game unless it is in possession of a valid bingo license issued by the Los Angeles Police Department. To be eligible, an organization must apply for and obtain a bingo licenseto conduct bingo in the City. The application must be filed 60 days prior to the commencement of the bingo event and the annual fee is $50”
- An additional fee for law enforcement and public safety costs incurred by the City shall be collected monthly by the City of Los Angeles.
- If a member of an eligible organization applying for a license has been convicted of violating Sections 326.3 or 326.5 of the Penal Code, the provisions of the Los Angeles City Bingo Ordinance, or the provisions of any ordinance adopted by a City or County of the State of California pursuant to Section 19 of Article IV of the State Constitution, or has been convicted of any crime involving the theft of money and/or property, said member shall have no control over the operation or participate in the staffing of the authorized bingo game(s) or the disposition of proceeds derived therefrom.
- Bingo may only be conducted between the hours of 12:00 noon and 12:00 midnight. A licensee shall not conduct bingo more than three days per week. No bingo session shall exceed six continuous hours and not more than one bingo session shall be permitted in one day by any one licensee.
- No person shall either serve or consume alcoholic beverages within the room(s) where bingo is being played during the hours of operation of any bingo game(s).
Property Tax Exemptions:
Although Bingo games may or may not come within the purview of the welfare exemption, the Revenue and Tax Code authorizes the conduct of certain bingo games on properties that otherwise qualify on the basis of a charitable or religious use and ownership by a qualifying organization, provided the local jurisdiction has adopted a local ordinance. Bingo can qualify only as an incidental activity on the property, and that activity must conform to the provisions of section 326.5 of the Penal Code above. If the property of a qualified organization in a non-authorizing locality is used for bingo on a regular basis, the property will not be eligible for exemption.
Under a Church Exemption, conducting Bingo activities disqualifies the church from property tax exemption and the church must claim the welfare exemption.
Note:
Regarding Unrelated Business Income Taxes, the term unrelated trade or business does not include conducting bingo games, provided State and local laws permit the playing of the game. In addition, the locality where the game is played may not be in the same jurisdiction where for-profits also conduct the game such as a casino.
Please see our other related articles
California Attorney General
Church Officer and Director Liability
General Liability Insurance
Disclaimer: Every situation is different and particular facts may vary thereby changing or altering a possible course of action or conclusion. The information contained herein is intended to be general in nature as laws vary between federal, state, counties, and municipalities and therefore may not apply to any given matter. This information is not intended to be legal advice or relied upon as a legal opinion, course of action, accounting, tax, or other professional services. You should consult the proper legal or professional advisor knowledgeable in the area that pertains to your particular situation.
