A Users Guide To Charitable Gaming and Lottery Licensing

Town of Pelham Charitable Gaming Information Kit Page 1 of 30

GENERAL GUIDELINES FOR CHARITABLE GAMING a summary

Municipalities have the authority to issue licences for most lottery events conducted in their communities, including: Bingo events with prize boards up to $5,500; Raffles with prizes up to $50,000; Break Open Ticket events not conducted with another event and where tickets are sold within the municipality; Bazaar gaming events; and Media Bingo. With this authority comes certain responsibility: Report any information required by Alcohol and Gaming Commission of Ontario (AGCO) Registrar, including number and type of licences issued and fees collected; Enforce licensing policies; Ensure licensees comply with terms and conditions of licences; Investigate any breaches of such terms and conditions; Refuse, suspend or cancel licences for non-compliance. Municipalities have the authority to: Investigate suspected contraventions or any financial and/or management improprieties of licensed organizations and persons; Conduct audits of licensed organizations; Attach terms and conditions to any licence(s) issued.

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Did You Know?

Eligibility and Use of Proceeds:
To be eligible to receive a lottery licence, an organization must first have charitable purposes and objects that fall within one of the four classifications of charitability: 1. Relief of Poverty; 2. Advancement of Education; 3. Advancement of Religion; 4. Other Charitable Purposes Beneficial to the Community. To summarize: 1. Relief of Poverty: organizations that assist the economically disadvantaged by directly providing goods, social services, programs or facilities to alleviate the effects of living in poverty. 2. Advancement of Education: significant training or instruction; development of mental faculties; or improvement of a branch of human knowledge resulting in a public benefit. Instruction must be available to a wide section of the public and not be restricted. 3. Advancement of Religion: promotion of a religious groups spiritual teachings and maintenance of doctrines and spiritual observances upon which those teachings are based. The groups activities must include an element of public instruction and promotion of spiritual teachings, serving religious purpose for the public good. Beliefs and practices cannot include anything the courts consider subversive, immoral or illegal. 4. Other Charitable Purposes Beneficial to Community: includes activities that benefit the whole community, without discrimination, so that the purposes have a truly public character and may include: promotion of arts and cultural activities; cultural ethnic, native, historic or heritage pursuits; improvement of the quality of health through medical research; treatment programs and preventative programs; youth sporting activities; community projects undertaken by service organizations.

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ELIGIBLE USE OF PROCEEDS: AN OVERVIEW

The licensing official (appropriate Town staff) must examine the intended use of lottery proceeds as listed on the licence application, by considering the following factors: Which classification does the organization fall under? What is the mandate of the organization? The type of organization; The organizations structure. Eligible proceeds must be: In themselves charitable and advance the charitable purposes/objects of the organization; Used for direct delivery of the charitable purposes/objects of the organization; Directed toward specific segments of the community with a common need. Several restrictions are in place for use of proceeds and will be determined following a review of the application. A few examples of ineligible use of proceeds include: provision of personal benefit or gain for members of the applicant organization; supporting tourism or other purely economic benefits; advancing a particular political issue; enhancing lands and buildings owned and/or operated by a government; is a responsibility traditionally fulfilled by a government; or it funds activities that do not fall within one of the four charitable classifications.

Further, the Clerk must be satisfied that: The proposed uses of proceeds are consistent with the organizations purposes and objects, and the eligible uses of proceeds for the class and type of organization; and The proposed uses of proceeds are related to the direct delivery of programs and services to the eligible beneficiaries. If the answer to both components is yes, the applicants lottery application and proposed use of proceeds may be eligible for lottery licensing. Please be clear and specific when completing your application form to ensure compliance.

If In Doubt Check It Out!

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www.agco.on.ca

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ELIGIBLE USE OF PROCEEDS: TELL ME MORE! (examples are not all-inclusive)

Relief of Poverty Examples of Eligible Uses of Proceeds:
Temporary shelter/subsidized rental accommodation; y Report Food, supplies, clothing; Client life skills training, instruction & support to alleviate effects of living in poverty; Transportation costs for clients to attend programs/access services; Non-profit day care services where funds are used: For programs not historically funded; For the purpose of allowing access to persons who could not otherwise afford the service; Out-of-pocket expenses for staff and volunteers (i.e. staff or volunteers required to use personal vehicle to deliver the service).
Lotter

Advancement of Education Examples of Eligible Uses of Proceeds:

Funds from lotteries cannot fund core programs or services. Lottery proceeds cannot be used for purchase, construction or renovation of facilities or buildings, or purchase of capital assets such as school buses. Proceeds must be used for overall benefit of school; e.g. lottery proceeds raised for athletic programs must be used to support all representative sports teams within the school, not just selected teams. The licensing authority may approve the use of proceeds for the following purposes, as long as they are not historically provided by the organization or mandated by the Provincial government: Non-profit student publications (e.g. newsletters and yearbooks provided at nominal or no cost); Educational student conferences and field trips within Ontario; Student organizations such as arts/drama clubs and student councils/unions; Academic competitions; Student athletics programs: uniforms, sports equipment, safety equipment, fees for qualified officials where necessary, and facility rental fees; Scholarships and bursaries open to Ontario residents; and Travel provided it complies with prescribed criteria.

Advancement of Religion Examples of Eligible Uses of Proceeds:

Development and enhancement of religious programs for parishes, missions, synagogues, temples or other religious assemblies in Ontario; Religious training, education, instruction; Relief of poverty provided it is within mandate of organization; Publication and distribution of religious literature and educational materials; Administrative costs including wages & salaries; Rent or mortgage payments and utilities for buildings used for religious purposes; Direct travel costs within Ontario (for religious purposes); Maintenance and repair of buildings used for religious purposes; Capital projects including purchase or construction of facilities to be used for religious purposes and property improvements/renovations on buildings used for religious purposes.

For the category Other Charitable Purposes Beneficial To Community: See Licensing Authority re Eligible Use of Proceeds.
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CONSTITUTING DOCUMENTS WHAT WE NEED:

Applicant organizations must have a document that establishes the organization, setting out the members common purpose and detailing how the organization will operate in order to achieve that purpose. Formal documents include Letters Patent, a constitution, and a memorandum of association. Informal associations that have not adopted formal written constituting documents are not eligible for lottery licensing. The following items must be included in constituting documents: Organization name; Organization purpose or object; Description of how one becomes and retains membership; A clause stating members will not derive any gain from the organization and that any profits will be used solely to promote the organizations objectives; Description of the organizational structure (e.g. president or chair, secretary, treasurer, etc.); Description of how organization elects directors; Signature of officers who adopted incorporating documents; Signature of at least three of the organizations current directing officers, certifying that the incorporating documents are current and still in effect; Effective date of the instrument; General dissolution clause addressing winding up of the organization; Further clause providing for distribution of assets.

Please provide the Town of Pelham with annual updates regarding your directing officers and financial particulars as outlined on page 7 of this information package.

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CONFLICT OF INTEREST: GUIDELINES

Conflict of Interest guidelines have been established by the AGCO to give the public confidence in the integrity of charitable organizations conducting lottery events. As this can be a sensitive issue, licensees must be vigilant in preventing any possibility of a potential or perceived conflict of interest!

Guidelines: No member, principal officer or paid staff of an applicant organization may be involved, in any way, in the approval of a licence application and/or the management and conduct of a licensed event. No person assisting in the conduct and management of a lottery event may have any monetary interest in any card, ticket or bet, or have a chance to win a lottery prize in any way. No designated member responsible for the conduct of the licensed lottery, or volunteers assisting with the lottery, may have any direct or indirect personal financial interest in the funds raised. Some examples: Designated members-in-charge, prize donors, and other persons or companies involved in the conduct of the raffle must not purchase tickets; Prizes must not be purchased from a business controlled by any of the designated members-in-charge of the licensed lottery event; A neutral third party should draw the winning ticket (i.e. a person who has not purchased a ticket); No one involved in the sale of Break Open Tickets may purchase tickets or participate in gaming events held in conjunction with the BOT gaming event; Owners and employees of registered BOT seller locations may not purchase Break Open Tickets sold at that location; Executive members of Hall Charities Associations may not purchase BOTs in their hall; Licensees may not permit their bona fide members or persons acting as runners, cashiers or other capacities to play bingo while they are conducting the bingo; Members of a licensees board of directors may not personally benefit or profit in any way from a lottery event conducted and managed by the licensee or play bingo at that hall at any time.
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Each Year, the Town of Pelham Should receive the following information about your Organization:

A copy of the applicants Articles of Incorporation and/or constitution as well as any by-laws, if applicable (if there has been a change in the past year).

A copy of a letter from Canada Revenue Agency recognizing the charitable status under the Income Tax Act (if there has been any change since this information was previously submitted.) A copy of the most recent filing with Canada Revenue Agency. A list containing the names, business addresses and business telephone numbers of all bona fide members, and a list of the current Executive, including names of those persons having signing authority for your organization. A copy of the applicants complete budget, covering the current twelve month fiscal or calendar year, detailing how resources will be acquired and disbursed during this period. A copy of your previous years financial statement. Detailed program of services provided. Annual updates regarding your directing officers and financial particulars.

You may wish to provide this information package to subsequent Boards of Directors!
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A Little About: Raffles

A raffle is a lottery scheme where tickets are sold for a chance to win a prize in a draw.
Great Prizes! Lic. No. 123456

The Alcohol and Gaming Commission of Ontario Policy Manual states that groups and organizations may only be licensed for one raffle event at a time, except for calendar draws or under a blanket licence. Permitted raffle lottery events are: Stub Draws; Elimination Draws; Calendar Draws; Sports Raffles; Rubber Duck Races; 50/50 Draws; Blanket Raffle Licences; Meat Spins & Turkey Rolls; Name the Raffle lotteries; Bossy Bingo and Cow Patty Bingo. Prize values cannot exceed $50,000 or the licence is issued by the Province of Ontario (AGCO) directly. Retail market value of prizes must not be less than 20% of the total value of the tickets. So, if your total prize value is $2,500, the total value of tickets cannot be under $500. Fixed prizes must be awarded in raffle draws, except 50/50 draws. You must know what your prizes are and the values prior to making application for a licence. Raffle tickets must not be sold to anyone under the age of eighteen (18) and must not be offered, ordered or sold through the Internet, a web page or any other computer generated communications medium. Only new and unused merchandise purchased from a reputed vendor may be offered as prizes. Livestock must not be awarded as prizes. If the prize value exceeds $10,000, financial guarantees will be required to be submitted to the Town Clerk. The licence application must state the number of tickets to be printed. The licensees name and licence number must appear on both the main ticket and the ticket stub, and any advertising. A sample application is included in this information package. Lottery Report must be submitted within 30 days of the holding of the lottery.
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Sample of a Raffle Licence Application:

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Sample of Lottery Report for Raffle:

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A Little About: Bazaar Licences

A Bazaar is defined as a sale of goods held to raise money for a charity. When raffles or penny sales are held ancillary to a Bazaar, an Application to Manage and Conduct a Lottery Type Scheme at a Bazaar is needed.

Four types of lottery events are permitted at bazaars, in any combination: 1. Wheels of Fortune 2. Bingo 3. Raffles 4. Penny Auction (Penny Sale) Raffles Wheels of Fortune: A game where players wager chips, tokens or cash on the spin of a wheel in order to win a prize. Wagers are set and the wheel is spun it must complete at least three full revolutions and come to a full stop for prizes to be awarded (example Crown & Anchor). Maximum of three wheels of fortune; maximum bets of $2.00. Bingo: Under a Bazaar licence, a bingo lottery may be conducted with a maximum of $500 in prizes. Bingo cards may be sold for cash only, and only on the day of the event. General Bingo Licensing Policies apply. Raffles: A raffle lottery may be conducted under a bazaar licence with a maximum of $500 in prizes. Cash transactions for ticket sales only are permitted. Tickets must be consecutively numbered (i.e. you can use roll tickets). When raffle tickets are sold at a single premises and tickets are drawn the same day (i.e. at the bazaar) the licensee is exempt from general raffle policies requiring printing of complete raffle information on the ticket and retaining unsold tickets for one year. Penny Auction Raffles: Total prize value has a maximum $500 cap. Participants purchase tickets which are detachable from stub portion and are used to bid on a variety of auction items (the prizes) by depositing a ticket into a container assigned to that prize. The prize is awarded to the person whose ticket is drawn, at random, from the container. Important Note: AGCO requires that the application include a complete list of the prizes to be awarded for each game. Sample of an Application to Manage and Conduct a Lottery Type Scheme at a Bazaar:
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Sample of Lottery Report for Bazaar Raffle:

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A Little About: Licences

BINGO !

A game of chance where players are awarded a prize for being the first to complete a specified arrangement of numbers on bingo paper, based on numbers selected at random.
The Town of Pelham is authorized to issue licences for the following types of Bingo events:

(a) (b) (c)

Regular Bingo Merchandise Bingo Loonie Pot Bingo

(d) (e) (f)

Decision Bingo Table Board Bingo Media Bingo

Regular bingo events may be licensed by a municipality allowing eligible charitable organizations to conduct Regular Bingo events with prize boards that do not exceed $5,500. Game schedules may include any combination of fixed prize and variable prize payouts for each game on the schedule. If all games are variable prize, maximum prizes to be awarded cannot exceed 60% of gross sales for each game; total prizes paid out can never exceed the licensed prize board. Merchandise bingo is where prize board consists of items of merchandise. Licences can be for regular bingo events or at a black tie event where participants play by invitation only. Loonie Pot Bingo is a special, variable prize game within a Regular Bingo game schedule. Bingo cards are stamped (for a fee) and before the game begins a number is selected, announced and replaced in the machine. If a player with a stamped bingo paper calls Bingo!, and their winning number arrangement contains the pre-selected number, they also win the Loonie Pot Bingo prize. Decision Bingo is where players use chips to purchase bingo paper and during each game, players have an option of ending play or continuing by an ante. Table Board Bingo is played on a mechanical table board bingo device which contains permanent bingo cards and shutters. Media Bingo licences may be issued where prize boards do not exceed $5,500. Media Bingo is operated through the public media including radio, newspaper or television. Cards sold must have clearly visible, consecutively numbered serial numbers for tracking purposes. For more information contact Town Clerk, or see www.agco.on.ca

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Sample of an Application to Manage and Conduct a Bingo Lottery:

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AGCO requires that groups submit a detailed description of the manner in which the winner will be determined for each game. Groups that conduct regular Bingo events may submit this type of form to satisfy this requirement.

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Sample of Bingo Lottery Report:

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BREAK OPEN TICKETS B.O.T.s

Break Open Tickets are instant win lottery tickets, commonly known as pull tab or Nevada tickets. They are: Made of cardboard; Have one or more perforated cover window tabs which conceal winning and losing numbers or symbols; Are played by tearing off the cover tabs; and Also include seal cards and bingo event tickets. In order to be approved for sale in Ontario, all B.O.T.s must comply with the Registrars requirements and standards, including the Standards for Suppliers of Goods and Services: Break Open Tickets. Schedules of such approved B.O.T.s are available from the Registrar and can also be found on the AGCO website. In addition to general conflict of interest guidelines, licensees must comply with the following guidelines for B.O.T. lottery events: 1. No one involved in the sale of B.O.T.s may purchase tickets or participate in gaming events held in conjunction with the licensed B.O.T. gaming event; 2. The owner and employees of a registered B.O.T. seller location may not purchase tickets sold at that location; 3. Executive members of Hall Charities Associations may not purchase Break Open Tickets in their hall. Important Points: The period for a B.O.T. licence cannot exceed one year, including any amendments; A ticket dispenser or container must not contain tickets sold under more than one licence; A deal of tickets must not be split between dispensers or containers; If all tickets are sold before the licence expiry date, the licence will be deemed to have expired; The licensing authority may grant an amendment extending the licence period provided that: All tickets authorized by the licence have been imprinted with the licence number and name of licensee, but not sold; The licensee makes the request for extension in writing before the current licence expires; and Total licence period does not exceed 12 months.

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Sample of a Break Open Ticket Licence Application:

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Sample of Break Open Ticket Lottery Report:

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FREQUENTLY ASKED QUESTIONS:

Why do I need a licence to raise money for a good cause? A lottery is an event where a fee is paid for a chance to win a prize. Typically these may include bingos, raffles, break open (Nevada) tickets and charity casino events. All lotteries require a licence issued by a municipality or by the Province of Ontario. What happens if our Break Open Ticket (B.O.T.) licence expires before we have sold all of the tickets? You may apply to the Town for an amendment to your licence to extend the time period of the licence. However, the total period for one licence, including amendments, must not exceed one year. If you have not sold all B.O.T.s within the one year, the licence is not valid and tickets must not be sold. If I am a member of the Board of Directors or lottery/ fundraising committee, can I purchase a lottery ticket on that lottery event? No. In accordance with the AGCO rules and regulations, this constitutes a Conflict of Interest and is not permitted. See the conflict of interest guidelines contained in this information kit. Note - anyone who has purchased a ticket cannot pull the winning ticket. How soon can I pick up the licence once the application has been submitted? Municipal staff must carefully review all applications and ensure that the organizations file is complete. Please allow at least five business days for processing your licence application. Can my licence application be suspended, cancelled or refused? Yes. A licence may be suspended, cancelled or refused where there has been a breach of any term or condition; if there are reasonable grounds to believe the licensee will not conduct and manage the lottery scheme in accordance with the law; it is in the public interest to do so; or if a licensee fails to submit the financial reports relating to the conduct of any lottery event. Must lottery revenues be held in a separate bank account? Yes. A licensed organization must open and maintain a separate lottery trust account, designated as a trust account by the branch of a recognized financial institution. What if I have more questions? There is a great deal of useful information available on the AGCO website, www.agco.on.ca. However, if you need further information, please contact the Town Clerk at (905) 892-2607, ext. 320, or the Deputy Clerk at ext. 315.

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