Section 440. Network bingo providers: application, qualifications, suspension, revocation or refusal to renew permit, maintenance, and production of records

Part V. Network Bingo

Article 1
Network Bingo Providers

A. Prior to providing network bingo, a network bingo provider shall submit an application on a form prescribed by the department and receive a permit. A $500 application fee payable to the Treasurer of Virginia is required. In addition, a network bingo provider must be authorized to conduct business in the Commonwealth of Virginia, which may include, but not be limited to, registration with the State Corporation Commission, the Department of Taxation, and the Virginia Employment Commission. The actual cost of background investigations for a permit may be billed by the department to an applicant.

B. The department may refuse to issue a permit or may suspend or revoke a permit if an officer, director, partner, employee, agent, or owner:

1. Is operating without a valid license, permit, or certificate as a supplier, manufacturer, or network bingo provider in any state in the United States;

2. Fails or refuses to recall a product as directed by the department;

3. Conducts business with unauthorized entities or is not authorized to conduct business in the Commonwealth of Virginia;

4. Has been convicted of or pleaded nolo contendere to any crime as specified by § 18.2-340.34:2 B of the Code of Virginia; has had any license, permit, certificate, or other authority related to activities defined as charitable gaming in the Commonwealth suspended or revoked in the Commonwealth or in any other jurisdiction; has failed to file or has been delinquent in excess of one year in the filing of any tax returns or the payment of any taxes due the Commonwealth; or has failed to establish a registered office or registered agent in the Commonwealth if so required by § 13.1-634 or 13.1-763 of the Code of Virginia. As this provision relates to employees or agents, it shall only apply to individuals involved in sales to or solicitations of customers in the Commonwealth of Virginia;

5. Fails to notify the department within 20 days of the occurrence, knowledge, or receipt of the filing of any administrative or legal action relating to charitable gaming or network bingo involving or concerning the network bingo provider, any officers or directors, employees, agent, or owner during the term of its permit;

6. Fails to provide to the department upon request a current Letter for Company Registration on file with the U.S. Department of Justice, if required in accordance with the Gambling Devices Act of 1962 (15 USC §§ 1171-1178) for any device that it distributes in the Commonwealth of Virginia; or

7. Has been engaged in conduct that would compromise the department's objective of maintaining the highest level of integrity in charitable gaming.

C. A network bingo provider shall not distribute a network bingo system, network bingo supplies, or other incidental items to perform network bingo to anyone in the Commonwealth of Virginia or to an organization for use upon the premises owned or exclusively leased by the organization in which the portion of the premises are qualified to sell pull-tabs to members and their guests only as authorized by § 18.2-340.26:1 of the Code of Virginia. However, a network bingo provider may:

1. Distribute such a system, supply, or item to a qualified organization authorized to conduct charitable gaming for use during a session that is open to the public and not limited to members and their guests only.

2. Distribute such a system, supply, or item to an organization that expects to gross the amount set forth in § 18.2-340.23 of the Code of Virginia or less in any 12-month period, providing that the amount of such purchase would not be reasonably expected to produce more than the amount set forth in § 18.2-340.23 of the Code of Virginia in gross sales. For each such organization, the network bingo provider shall maintain the name, address, and telephone number. The network bingo provider shall also obtain a written and signed statement from an officer or game manager of such organization confirming that gross receipts are expected to be the amount set forth in § 18.2-340.23 of the Code of Virginia or less. Such statement shall be dated and kept on file for a minimum of three years from the close of a fiscal year.

All such distributions shall be documented pursuant to subsection G of this section and reported to the department pursuant to subsection I of this section.

D. No network bingo provider, its agents, or its employees may be involved in the management, operation, or conduct of charitable gaming in the Commonwealth of Virginia. A network bingo provider, its agents, or its employees may call a network bingo game or distribute network bingo prizes associated with the network bingo provider's network bingo system. No member of a network bingo provider's immediate family or person residing in the same household as a network bingo provider may be involved in the management, operation, or conduct of charitable gaming of any customer of the network bingo provider in the Commonwealth of Virginia. No network bingo provider, its agents, or its employees may participate in any charitable gaming of any customer of the network bingo provider in the Commonwealth of Virginia. For the purposes of this chapter, servicing of the network bingo system shall not be considered conduct or participation.

E. The department shall conduct a background investigation prior to the issuance of a permit to any network bingo provider. The investigation may include, but shall not be limited to, the following:

1. A search of criminal history records on all officers, directors, and owners; and

2. Verification of current compliance with Commonwealth of Virginia tax laws.

If the officers, directors, owners, or partners are domiciled outside of the Commonwealth of Virginia, or have resided in the Commonwealth of Virginia for fewer than five years, a criminal history search conducted by the appropriate authority in any state in which they have resided during the previous five years shall be provided by the applicant.

F. Appropriate information and authorizations shall be provided to the department to verify information cited in subsection E of this section.

G. Network bingo providers shall document each sale of network bingo supplies, equipment, and other incidental items to perform network bingo to any person for use in the Commonwealth of Virginia on an invoice, which reflects the following:

1. Name, address, and organization number of the organization;

2. Date of sale, lease, or rental and location where the network bingo supplies, equipment, and other incidental items to perform network bingo is shipped or delivered, if different from the billing address;

3. Form number, serial number, quantity, and purchase or rental price of the network bingo supplies, equipment, and other incidental items to perform network bingo;

4. Quantity of network bingo cards sold, the cost per card, and the selling price per card; and

5. Date of the network bingo game in which the qualified organization participated, the start time and end time of the game, and the number of balls called during the game.

H. Network bingo providers shall ensure that two copies of the detailed invoice are provided to the customer for the sale of network bingo supplies, equipment, and other incidental items to perform network bingo.

I. Each network bingo provider shall provide a report to the department by March 1 of each year on the sale of network bingo supplies, equipment, and other incidental items to perform network bingo for the fiscal year ending December 31 of the previous year to each organization in the Commonwealth of Virginia. This report shall be provided to the department via a department-approved electronic medium. The report shall include the name, address, and organization number of each organization and the following information for each sale or transaction:

1. Date of sale, lease, or rental and location where the network bingo supplies, equipment, and other incidental items to perform network bingo is shipped or delivered, if different from the billing address;

2. Serial number, quantity, and purchase or rental price of the network bingo supplies, equipment, and other incidental items to perform network bingo;

3. Quantity of network bingo cards sold, the cost per card, and the selling price per card;

4. Date of the network bingo game in which qualified organizations participated, the start time and end time of the game, the number of balls called during the game, the total gross receipts for the game; and

5. Prize amount awarded to the winning player and which organization sold the winning network bingo card.

J. A network bingo provider shall maintain documentation on all deposits and disbursements into the prize pool for the network bingo game.

K. A network bingo provider, its agents, and its employees; members of a network bingo provider's immediate family; or persons residing in a network bingo provider's household shall not make any loan directly or indirectly to any organization or officer, director, game manager, or entity involved in the management, operation, or conduct of charitable gaming of the network bingo provider's customer located in the Commonwealth of Virginia.

L. A network bingo provider, its agent, or its employee shall not directly or indirectly provide a rebate, discount, or refund to any person other than an organization that purchases, rents, or leases network bingo supplies, equipment, and other incidental items to perform network bingo. All such transactions shall be recorded on the network bingo provider's account books.

M. A network bingo provider shall not rent, sell, or otherwise provide network bingo supplies, equipment, and other incidental items to perform network bingo unless the network bingo provider possesses a valid permit in the Commonwealth of Virginia.

N. A written agreement specifying the terms of lease or rental between the network bingo provider and the qualified organization shall be required for any equipment used to perform network bingo.

O. A network bingo provider shall record the following information on each winner of a network bingo game:

1. Name and address of the winner;

2. Name of the qualified organization that sold the winning network bingo card;

3. Date and time when the winning network bingo card was purchased by the winner; and

4. Location where the winning network bingo card was purchased by the winner.

Historical Notes

Derived from Volume 33, Issue 04, eff. November 17, 2016.

Statutory Authority

§ 18.2-340.15 of the Code of Virginia.