5-406

5-406. Persons permitted to conduct games;
premises; equipment; expenses; compensation

A. A person shall not hold, operate or conduct any game of bingo under any license
issued pursuant to this article unless the person has submitted affidavits as required in
section 5-404 and has received prior written approval from the licensing
authority. Persons seeking to replace a manager, proceeds coordinator, supervisor or
assistant or to serve as an additional manager, supervisor or assistant shall submit the
appropriate affidavit to the licensing authority as required in section 5-404.

B. Except as provided in section 5-413, only members and new members of a licensee
or an applicant may participate or apply to participate in conducting any bingo game held
by the licensee.

C. Except for a class A licensee, a person shall not hold, operate, conduct or
assist in conducting any game or games of bingo under any license if the person or the
person's spouse has a proprietary, equitable or credit interest, or is an officer,
director, agent or employee of an individual or company that has a proprietary, equitable
or credit interest, in the licensee.

D. Bookkeepers or accountants need not be members of the organization.

E. An item of expense shall not be incurred or paid in connection with holding,
operating or conducting any game of bingo held, operated or conducted pursuant to any
license issued under this article, except bona fide expenses in a reasonable amount for
purposes described in section 5-407, subsection G. A game of bingo shall not be
conducted with any equipment except equipment owned solely by the licensee, or jointly by
not more than six licensees. No portion of the ownership of such equipment may be held
by any person or organization not licensed pursuant to this chapter. A game of bingo
shall not be conducted with rented equipment.

F. An applicant or a licensee shall not enter into any purchase agreement other
than a bona fide purchase agreement. The seller may repurchase equipment only upon
default of the buyer and then only at a price equal to or greater than ninety per cent of
any money paid for equipment from buyer to seller. The seller may repurchase a building
only upon default of the buyer at a fair market value per licensee.

G. A licensee shall not conduct or operate more than five occasions of bingo during
any calendar week. No more than twelve hours of bingo shall be conducted in any
building or on any premises during any calendar day.

H. The entire net proceeds of any game shall be devoted to a lawful use or
uses. In addition to other unlawful uses, the following are not considered lawful uses
under this subsection:

1. Compensation and expenses of directors, officers and management personnel.

2. Fees or commissions of consultants.

3. Compensation paid for legal services incurred by a licensee unsuccessfully
defending against charges of violations of this article.

4. Donations to other than national, state or local nonprofit parent organizations
in excess of five per cent of the net proceeds except with the permission of the
licensing authority.

5. Donations or any payment from the lessor to the lessee.

I. The premises where any game of bingo is being held, operated or conducted, where
it is intended that any game of bingo shall be held, operated or conducted or where it is
intended that any equipment shall be used shall at all times be open to inspection by the
licensing authority, its agents and employees and peace officers of any political
subdivision of the state.

J. When any merchandise prize is awarded in a game of bingo, its value shall be its
current retail price. A merchandise prize shall not be redeemable or convertible into
cash directly or indirectly.

K. Equipment, prizes and supplies for games of bingo shall not be purchased or sold
at prices in excess of one hundred fifteen per cent of the average price paid by other
licensees as reported in the reports submitted to the licensing authority during the
prior six month period by licensees having the same class of license. A licensee shall
not enter into any contract or purchase agreement whereby it agrees to limit its source
of supplies.

L. An alcoholic beverage shall not be offered or given as a prize in any such game.

M. The net profits derived from the holding of games of bingo must be devoted
within one year from the date such profits were earned to the lawful purposes of the
organization permitted to conduct such games. Any organization desiring to hold the net
profits of games of bingo for a period longer than one year from the date such profits
were earned must apply to the licensing authority for special permission and upon good
cause shown the authority may grant the request.

N. Any licensee which does not report during any one-year period the amount of its
net profits, if any, shall be required to show cause before the licensing authority why
its license to conduct games of bingo should not be revoked.

O. The licensing authority shall require a licensee which does not conduct bingo
games during any one year period to show cause why its license to conduct games of bingo
should not be cancelled.

P. Except as otherwise provided by this section, a prize greater in amount or value
than one thousand dollars shall not be offered or given in any single game of bingo
conducted under any such license, and total prizes shall not exceed an amount or value
greater than three thousand dollars for any occasion. Door prizes, discounts or other
inducements with a value exceeding two hundred fifty dollars per occasion shall not be
offered or given away.

Q. Except for a class A licensee, on application to the licensing authority by the
licensee the licensing authority may authorize one special bonus game to be played at
weekly consecutive occasions with a quarterly prize limit of twelve thousand dollars. A
weekly consecutive occasion is an occasion played on the same day of each week during the
quarter. The special bonus game may be played at each weekly consecutive occasion
subject to the rules adopted by the licensing authority. The special bonus game is not
subject to the prize limits prescribed by subsection P of this section.

R. The equipment used in playing bingo and the method of play shall be such that
each card shall have an equal opportunity to be a winner. The objects or balls to be
drawn shall be essentially the same as to size, shape, weight, balance and all other
characteristics that may influence their selection. All objects or balls shall be
present in the receptacle before each game is begun. All numbers announced shall be
plainly and clearly audible or visible to all the players present. Where more than one
room is used for any one game, the receptacle, the person calling the numbers as they are
drawn and the person removing the objects or balls from the receptacle must be present in
the room where the greatest number of players is present and all numbers announced shall
be plainly audible or visible to the players in that room and also audible or visible to
the players in the other room or rooms. The cards or sheets of the players shall be part
of a deck, group or series of cards, no two of which shall be alike, and which deck,
group or series shall not be so prepared or arranged as to prefer any card. A licensee
may provide braille cards for legally blind persons as defined in section 41-1973 or
allow legally blind persons to supply their own braille cards. A legally blind person
supplying the person's own cards shall pay a fee to the licensee equal to that which
would be charged if the legally blind person obtained the cards from the licensee. The
bingo game activity shall be conducted and recorded in a manner as prescribed by the
licensing authority to verify the gross receipts from each occasion.

S. The receptacle, the person calling the numbers as they are drawn and the person
removing the objects or balls from the receptacle must be visible to all the players at
all times except where more than one room is used for any one game and subsection R of
this section applies.

T. The particular arrangement of numbers required to be covered in order to win the
game and the amount of the prize shall be clearly and audibly or visibly described and
announced to the players immediately before each game is begun.

U. Any players shall be entitled to call for a verification of all numbers drawn at
the time a winner is determined, and for a verification of the objects or balls remaining
in the receptacle and not yet drawn. The verification shall be made in the immediate
presence of the supervisor and in full view of any player requesting the verification.

V. A person who is not physically present on the premises where the game is
actually conducted shall not be allowed to participate as a player in the game.

W. A person who holds, operates or conducts, or assists in holding, operating or
conducting, a game of bingo shall not play at any occasion at which such person works
unless the game of bingo is conducted pursuant to a class A license.

X. A person shall not conduct a lottery or raffle within a twelve hour period
before or after a bingo occasion or game on any premises used for bingo games or within
one thousand feet of the bingo game. This subsection does not affect any legally
conducted activity related to the state lottery.