Preliminary Draft of Proposed Rules

Office of the Colorado Secretary of State
Bingo and Raffle Games Rules
8 CCR 1505-2

August 29, 2013
	
Disclaimer:
In accordance with the State Administrative Procedure Act, this draft is filed with the Secretary of State and submitted to the Department of Regulatory Agencies.

This is a preliminary draft of the proposed rules that may be revised before the October 2, 2013 rulemaking hearing. If changes are made, a revised copy of the proposed rules will be available to the public and a copy will be posted on the Department of State’s website no later than September 27, 2013.

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Amendments to Rule 1.9:
1.9	“Licensee” means, for the purposes of these rules and unless otherwise specified, a bingo-raffle licensee as defined in section 12 9 102(1.2) 12‑9‑102(1.2), C.R.S.
 Amendments to Rule 1.13:
1.13	“Progressive Pull Tab” Means means a game consisting of one or more seal pull tab deals with identical form numbers that offers a cumulative or carryover jackpot prize. The prize structure for a progressive pull tab game is predetermined by the game’s manufacturer. The structure includes a cumulative jackpot prize, to which each deal of the game in which the jackpot prize is not won contributes a pre-designated amount.
Amendments to Rule 2.1
2.1	Application
2.1.1	Initial Application
(a)	An applicant seeking a bingo-raffle license must submit a complete application, using the form prescribed by the Secretary of State, in addition to the following:
(1)	The application fee;
(2)	A list of all members of the organization, and all members of auxiliary and affiliate organizations who will participate in the operation of games of chance. If the organization has a large number of members, the applicant may submit a copy of the entire membership;
(3)	The names, addresses, and titles of all officers and directors of the organization; and
(4)	Proof that the organization has functioned for the five years immediately preceding the application date and that the organization has had members throughout this period. Proof of existence consists of:
(i)	Articles of Incorporation dated more than five years from the date of application, stating that the organization has members; and
(ii)	Copies of at least one bank statement per year for the five-year period;
(iii)	Copies of minutes from at least one general membership meeting per year for the five-year period; or
(iv)	A copy of the IRS letter recognizing that the organization is exempt from taxation in accordance with the Internal Revenue Code (26 U.S.C.	§ 501(c)) Repealed.
(b)	The organization must qualify as one of the following types of organizations: religious, fraternal, educational, volunteer fire or veterans. The Secretary of State may require submission of supporting documentation.
(b) (c)	The 45 day period for approval or rejection of the application will start upon notification that the Secretary of State received the required information outlined in Rule 2.1.1(a). [Section 12 9 103(1)(a)(I), C.R.S.]
Amendments to Rule 2.3.2:
2.3.2	The designated games manager must be present continuously during all charitable gaming activities and he or she must remain present and for at least 30 minutes after activities end a raffle drawing, a bingo occasion, or a bingo occasion related pull tab game.
Amendments to Rule 3.2.1:
3.2.1	Required Postings. In addition to any postings otherwise required by these rules, a licensee that conducts a progressive jackpot game must also post, , a sign in at least 12-point font stating:
(a)	The amount of the progressive jackpot at the beginning of the bingo occasion;
(b)	The percentage of gross sales of progressive cards that is contributed to the jackpot and whether the contribution amount is added to the jackpot during the present occasion or during the next occasion;
(c)	The price and description, including color and design, of the cards for the progressive game;
(d)	The bingo pattern or number arrangement a player must complete to win the progressive jackpot prize, together with a clear diagram of the number arrangement, if any pattern other than a full card (“blackout” or “coverall”) is required to win;
(e)	The maximum number of calls in which a player must complete the required pattern in order to win the progressive jackpot prize;
(f)	The date, time, and location of the occasion at which the next game in the progression will be conducted if the jackpot is not awarded;
(g)	If the licensee elects to continue a progressive game as a regular game in the event that the progressive jackpot is not won, the amount of the regular game prize; and
(h)	If the licensee is operating a progressive jackpot bingo game and is withholding 10% of the gross sales of progressive cards as a secondary jackpot, a statement to that effect.
Amendments to Rule 3.2.2:
3.2.2	Number of Progressive Games Allowed. No A licensee may not conduct more than three progressive bingo games may be conducted at any one bingo occasion simultaneously, except that a licensee that conducts a members-only bingo occasion for only its members may conduct successive games of a progression during a single bingo occasion.
Amendments to Rules 3.2.4 and 3.25:
3.2.4	Members’ only Members-only occasions. A licensee must restrict a members’ only members-only occasion to bona fide members of the licensee, and accompanying spouses, and guests of bona fide members. The public may not access the premises where members’ only bingo is conducted.
3.2.5	Successive bingo occasions. Once a progressive jackpot bingo game begins at a public bingo occasion, it must continue at each successive bingo occasion of the licensee at the same location until a player wins the jackpot. If a progressive is started at a members-only occasion, successive progressive games for that jackpot must occur at successive members-only occasions.
Amendments to Rule 3.2.11:
3.2.11	No winner of progressive. If no player wins a progressive jackpot in the designated number of balls called, the entire jackpot prize amount, without deduction for consolation prizes, will carry over to the next game in the progression. After the designated number of balls is called, the licensee may either proceed to its next regular bingo game or continue the current game as its next regular game. If the game is continued as a regular game, the licensee must publicly announce the start of the regular bingo game, the pattern or arrangement required to win may not change, and the prize amount is subject to the limitations in these rules.
Amendments to Rule 3.2.13:
3.2.13	Loss of license before award of jackpot. If a licensee’s license expires, is not renewed, is suspended, revoked, or surrendered, or if the licensee permanently terminates its bingo operations or terminates its operations at a particular location before a progressive jackpot is awarded, the licensee must determine a winner and award the jackpot prize and secondary jackpot, if any, on the licensee’s last authorized bingo occasion at the location where the progression was started, regardless of the number of balls called.
Amendments to Rule 3.4.2:
3.4.2	The licensee does not begin the next occasion for 15 minutes after the conclusion of the previous occasion, or until the final accounting for games of bingo played and pull tabs sold is completed and the books are closed for all of the first occasion activities, whichever comes later.
Amendments to Rule 4:
Rule 4. Sale and use use of Bingo Cards, Packs, and Sheets, and Raffle Tickets
Amendments to Rule 4.2.1:
4.2.1	Packs. A licensee must collate each pack sold for use at a bingo occasion from a series of consecutively numbered sheets, and each sheet MUST must contain its individual consecutive series number and the identification number assigned by the manufacturer to that series. Nothing in this rule requires a licensee to sell packs in any particular order.
Amendments to Rule 4.4:
4.4	Cash shortages. A licensee shall notify the Secretary of State within 72 hours if, at the end of the bingo occasion or a bingo occasion related pull tab game, the cash counted is short by $30 or more.
Amendments to Rule 5.1.8:
5.1.8	Removal of deal from play. A licensee may not remove any deal or series of pull tab tickets or any unsold portion thereof from display or sale after the first ticket from the deal or series is sold unless the Secretary of State or any law enforcement authority orders the removal or when there is demonstrated unsalability the deal is unsalable.
(a)	A ticket or portion of a pull tab deal or series is unsalable if it was displayed and openly offered throughout the duration of at least two consecutive bingo occasions at the same location. Pull tabs at bar and clubrooms are unsalable if they were displayed and offered for sale for a two-week period without any pull tab tickets from that deal or series being sold.
(b)	The licensee must keep any unsold or unsalable pull tab tickets unopened for a period of six months following the end of the quarter in which the tickets were removed from sale unless the pull tabs were removed from sale because of defects.
(c)	The licensee must destroy, after the time specified in Rule 5.1.8(b), all pull tabs that were removed from sale.
New Rule 5.2.10 (Current Rule 5.2.10 is renumbered as New Rule 5.2.11):
5.2.10	Unclaimed prizes. The licensee may retain a seal pull tab prize if the prize goes unclaimed for 15 days after sending notification to the winner.
5.2.10 5.2.11	Redemption of pull tabs. The licensee must redeem and retain seal flare prize winning tickets in the same manner as other winning pull tab tickets.
Amendments to Rule 5.4.5:
5.4.5	Flare
(a)	Format. The flare or jackpot card for each deal in a progressive pull tab game must show, , the amount dedicated to the progressive jackpot prize and the current total of the prize. The jackpot prize amount must be modified on the flare each time a contribution is made to the jackpot from sales of progressive pull tab tickets at the immediately preceding occasion and the sales of progressive pull tab tickets during the current occasion.
(b)	Display. The licensee must display or keep available for viewing the flare or jackpot card for each deal in a progressive pull tab game played or that has been played during the course of a progressive game. The flare must be available for viewing at all times the game is in play until the progressive jackpot prize is won.
Amendments to Rule 5.4.11:
5.4.11	Unclaimed prizes. Unclaimed progressive pull tab prizes are the property of the licensee The licensee may retain a progressive pull tab prize if the prize goes unclaimed for 15 days after a winner is determined.
Amendments to Rule 8.1.7:
8.1.7	Postponing or altering a drawing. A licensee must not alter or postpone a raffle after the first raffle ticket has been sold unless the licensee can demonstrate to the Secretary of State that purchasers of raffle tickets will not be adversely affected by a substitution of prizes, a change of time or location and that the information concerning the raffle specifically states that a purchaser need not be present at the drawing to win.
New Rule 8.4:
8.4	Progressive Raffles. In addition to all other applicable raffle requirements, a licensee that conducts a progressive raffle must comply with the following:
8.4.1	Progressive raffle games are restricted to members-only progressive drawings and playing card progressive raffles as follows:
(a)	Members-only progressive drawings
(1)	Licensee members are given the opportunity to buy raffle tickets.
(2)	At the drawing, the licensee places the names of all members or a subset of members into a pool and selects one name. The names of each member who bought a progressive raffle ticket for a specific drawing must be included in the pool for that drawing.
(3)	If the member whose name is drawn purchased a ticket for that drawing, that member wins the raffle prize amount, consisting of the prize money accumulated since the last winning draw.
(4)	If the member whose name is drawn did not purchase a ticket for that drawing, there is no winner and the prize amount is added to the jackpot for the next drawing.
(b)	Playing card progressive raffles
(1)	The licensee must select a Jackpot Prize Card from either a standard deck of 52 cards or a standard deck of 52 cards plus two joker cards (for a total of 54 playing cards).
(2)	The licensee must place each card from the deck in a separate sealed envelope or other sealed container through which the card is not visible. The container must be sealed so that the licensee must tear, break, or rip a portion of the container in order to access the card.
(3)	After selling raffle tickets, the licensee must hold a drawing with the pool containing all tickets purchased for that drawing.
(4)	The purchaser of the drawn ticket is given the opportunity to select one of the envelopes.
(5)	If the ticket purchaser selects the envelope containing the Jackpot Prize Card, the ticket purchaser wins the raffle prize amount, consisting of the prize money accumulated since the last winning draw. 
(6)	If the ticket purchaser’s selected envelope does not contain the Jackpot Prize Card, there is no winner and the prize amount is added to the jackpot for the next drawing.
8.4.2	Additional rules for playing card progressive raffles
(a)	Before sealing cards in the containers, the games manager and at least one other licensee member must verify that all cards are present.
(b)	The licensee must shuffle the envelopes containing the cards before putting them on public display.
(c)	Once the licensee places the envelopes on display, the licensee must keep them in a locked container at all times except during drawings. Only the games manager and licensee officers are allowed access to the keys for the container.
(d)	If the winning ticket purchaser is not present at the drawing, the licensee must continue to draw tickets until selecting a ticket purchaser who is present. 
(e)	If the envelope selected by the drawing winner does not contain the Jackpot Prize Card, the licensee must display the selected card at all future drawings until the licensee awards the jackpot prize.
(f)	The licensee may offer a cash consolation prize for a winning ticket purchaser that does not select the Jackpot Prize Card.
(1)	Consolation prizes do not count against the $15,000 maximum progressive raffle prize limit.
(2)	Before conducting a progressive raffle offering a consolation prize, the licensee must designate the consolation prize as either a specified amount or a specified percentage of the gross proceeds collected from the sale of raffle tickets for a particular drawing.
8.4.3	The licensee may hold a maximum of two progressive raffles simultaneously.
8.4.4	a ticket holder must be present at the drawing in order to claim a progressive raffle prize. 
8.4.5	Progressive Raffles Ticket Sales.
(a)	If the licensee only sells progressive raffle tickets to licensee members, Rule 8.1.4 requirements do not apply. 
(b)	Tickets sold for a specific drawing are void and ineligible for future drawings.
(c)	The licensee must determine ticket prices before selling progressive raffle tickets and must not change ticket prices for any drawing in that progressive sequence.
8.4.6	Progressive Jackpot Prizes.
(a)	A licensee must determine the amount of a progressive raffle jackpot based on a percentage of gross raffle ticket sales from each raffle in the progressive sequence, not to exceed 70%.
(b)	A progressive raffle jackpot prize must not exceed $15,000. When the jackpot prize reaches $15,000, the licensee must award it in the following manner:
(1)	In a playing card progressive raffle, the licensee must award the jackpot to the ticket purchaser whose ticket is first drawn after the prize limit is reached.
(2)	In a members-only drawing, the licensee must continue to draw member names until a member who purchased a ticket is drawn. The licensee must award the progressive prize to that member. 
(3)	The licensee may retain any proceeds from raffle tickets sold after the progressive prize reaches the $15,000 prize limit.
8.4.7	Required Postings. In addition to any postings otherwise required by these rules, a licensee that conducts a progressive raffle must also post a sign in at least 12-point font stating:
(a)	The amount of the progressive raffle jackpot and any consolation prizes;
(b)	The percentage of gross sales of progressive raffle tickets that will be contributed to the jackpot;
(c)	If applicable, the maximum number of progressive raffle drawings without a jackpot winner before the licensee will automatically award the prize according to procedures listed in Rule 8.4.6(b);
(d)	If the jackpot is not awarded, the date, time, and location of the occasion at which the next drawing will occur;
(e)	In a playing card progressive raffle, the Jackpot Prize Card.
8.4.8	If a licensee’s license expires, is not renewed, is suspended, revoked, or surrendered, or if the licensee permanently terminates its operations or terminates its operations at a particular location before awarding a progressive raffle jackpot, the licensee must determine a winner and award the jackpot prize on the last posted drawing date at the location where the progression was started.
Amendments to new Rule 8.5 (formerly Rule 8.4):
8.4 8.5	Games not classified as raffles. The games of chance commonly known as “Animal Plop Bingo,” “Golf Ball Drops,” plastic or rubber “Duck Races,” “Coin Flip Games,” and variations of these games are not raffles as defined by section 12 9 102(19.3) 12‑9‑102(19.3), C.R.S., and are not raffles as authorized by subsections (2) to (4) of Section 2 of Article XVIII of the Colorado Constitution. Therefore, these games of chance are not licensed or regulated by the Secretary of State. In certain circumstances, these games of chance may be considered unlawful gambling. Licensees or other organizations who wish to conduct these games should contact law enforcement authorities or legal counsel to determine how to comply with Colorado law.
New Rule 9.2.3:
9.2.3	Progressive raffle. The maximum progressive raffle prize may not exceed $15,000.
Amendments to Rule 9.3.3:
9.3.3	Method of payment. Licensees must award all pull tab prizes in cash, by check, or in merchandise, except that winning pull tab tickets may be exchanged for an equivalent amount in new tickets of the same deal and serial number.
(a)	All progressive jackpot bingo and progressive pull tab prizes in excess of $500 must be paid by check.
(b)	A progressive jackpot bingo prize and a progressive jackpot pull tab prize need not be paid immediately upon the determination of a winner if:
(1)	The prize amount exceeds $500;
(2)	The prize amount is paid in full within 48 hours after the winner was declared;
(3)	The prize amount is paid at a location and in a manner acceptable to the winner; and
(4)	The winner is presented with a voucher or promissory note for the full amount of the jackpot prize before the end of the occasion during which the winner was declared. The licensee’s games manager and one other member of the licensee must sign the voucher or promissory note. The note must state the following:
(i)	The name and license number of the licensee;
(ii)	The date, time, and location of verification of the winning card;
(iii)	The manufacturer’s serial and identification numbers of the winning card;
(iv)	The identification of the winner of the prize; and
(v)	The date, time, place and manner in which the check for the prize amount will be delivered to the winner.
Amendments to Rules 10.1.2 and 10.1.3:
10.1.2	Receipts to be recorded. Each licensee must record the following receipts:
(a)	Gross receipts collected for all cards, packs and sheets sold for each occasion.
(b)	Gross receipts collected for all pull tabs sold for each occasion and in bars and clubrooms.
(c)	Gross receipts collected for all raffle tickets sold.
10.1.3	Progressive bingo and pull tabs games
(a)	All receipts from the sale of progressive bingo cards and progressive pull tabs games must be accounted for separately within the licensee’s bingo-raffle checking or savings account created in accordance with section 12 9 108(3)(a) sections 12‑9‑108(3)(a) and 12 9 108(3)(b), C.R.S.
(b)	All receipts from the sale of progressive bingo cards and progressive pull tabs games must be deposited in the bingo-raffle account by means of separate deposit slips that indicate the serial numbers of the progressive bingo cards sold and the serial numbers of the progressive pull tabs sold. all deposits must be made no later than the close of the business day after the occasion at which the cards were sold.
(c)	Unless the licensee starts a progressive jackpot bingo game with a secondary jackpot amount, the licensee shall continuously hold an amount equal to at least the accrued progressive jackpot prize in the licensee’s bingo-raffle checking or savings account for the entire duration of the progression. No part of this amount may be expended, transferred, or otherwise removed from the account prior to the payment of the progressive jackpot to a winner.
(d)	If the licensee has started a progressive jackpot bingo game with a secondary jackpot amount, the licensee shall continuously hold an amount equal to at least the accrued primary and secondary jackpots in the licensee’s bingo-raffle checking or savings account for the entire duration of the progression. No part of this amount may be expended, transferred, or otherwise removed from the account prior to the payment of the progressive jackpot to a winner.
(e)	If the licensee conducts a progressive pull tab game or a progressive raffle, the licensee must maintain an amount in the bingo-raffle account sufficient to pay out the total of all prize amounts in the game.
(f)	If the licensee fails to maintain account balances in accordance with this rule or uses such balances for unlawful purposes, the failure or action is prima facie evidence of fraud.
Amendments to Rules 10.3.1 through 10.3.3:
10.3.1	Bookkeeper. A licensee must not pay more than $75 $100 per occasion for bookkeeper or accountant services. The licensee must notify the Secretary of State in writing, signed by an officer of the licensee, if it remunerates its games manager for performing bookkeeping or accounting services.
10.3.2	Security. 
(a)	A bingo-raffle licensee must not pay more than $75 $100 per occasion for security unless:
(1)	 security Security is provided by one or more off-duty law enforcement officers; or 
(2)	The occasion requires additional security, for example, a large number of people or large amount of money will be present on the premises. 
(b)	If a bingo-raffle licensee uses off-duty law enforcement officers, it the licensee must notify the Secretary of State and list the names and badge numbers of those officers who perform security duties prior to paying more than $75 $100 per occasion.
(c)	If a bingo-raffle licensee uses security other than off-duty law enforcement officers, and payment will exceed $100 for a single occasion, the licensee must notify the Secretary of State and provide a reason for the increase before making the payment.
10.3.3	Janitorial. A licensee must not pay more than $75 $100 per occasion for janitorial services. The licensee may only pay for janitorial services in facilities owned by the licensee or in its sole control, or which it uses rent-free.
Amendments to Rule 12.1.3:
12.1.3	Duration. A landlord license is issued for a period of one calendar year (January through December)..
Amendments to Rule 15.1:
15.1	general General. The schedule of fines provided in this rule applies to any violation of the Bingo and Raffles Law or Rules for which the Secretary of State elects to impose an administrative fine in lieu of seeking a license suspension or revocation.
Amendments to Rule 15.5.1:
15.5.1	Issuance. The Secretary of State shall issue all citations in writing, signed and dated by the authorized agent of the Secretary of State and shall identify the licensee cited; the facts and/or conduct constituting the violation,; the specific rule or statutory provision violated,; and the fine assessed in accordance with this rule and the Bingo and Raffles Law.
Amendments to Rule 15.5.4:
15.4.4 15.5.4	Referral to law enforcement. Irrespective of whether a citation was issued, the Secretary of State reserves the right to refer any violation to a law enforcement agency.	
Amendments to Rule 15.6:
15.6	Hearings, and payment of fines, and collections.
15.6.1	Request for hearing. In accordance with section 12 9 103(1)(a)(II) 12‑9‑103(1)(a)(II), C.R.S., a licensee may request a hearing before an administrative law judge to appeal the imposition of a fine. The Secretary of State must receive a written request for a hearing within 20 days of the date that the Secretary of State denied a fine suspension or reduction request.
15.6.2	Payment of fines.
(a)	If a licensee does not request a fine suspension, fine reduction, or hearing before an administrative law judge, then the licensee must pay within 20 days of the date of the citation imposing the fine.
(b)	If the Secretary of State denies a fine suspension request or grants a reduction request, then the licensee must pay the fine or reduced fine within 20 days of the date of the notice of denial or reduction.
(c)	If an administrative law judge denies an appeal of a fine, then the licensee must pay the appealed fine within 20 days of the date of the issuance of the administrative law judge’s order.
(d)	A licensee must pay fines by check or money order, payable to the Colorado Secretary of State.
15.6.3	The Secretary of State will send a fine to Central Collection Services for collection if it is not paid within 90 days of the payment deadlines listed in Rules 15.6.2(a)-(c).