UNOFFICIAL COPY 23 RS HB 287/GA
Page 1 of 4
HB028710.100 - 840 - XXXX 3/1/2023 2:25 PM GA
AN ACT relating to charitable gaming. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
ď˘Section 1. KRS 238.550 is amended to read as follows: 3
(1) All adjusted gross receipts from charitable gaming shall be handled only by 4
chairpersons, officers, or employees of the licensed charitable organization. 5
(2) Except as authorized by subsection (11) of this section, within two (2) business 6
days after the completion of a charitable gaming event or session, all gross receipts 7
and adjusted gross receipts shall be deposited into one checking account devoted 8
exclusively to charitable gaming. This checking account shall be designated the 9
"charitable gaming account," and the licensed charitable organization shall maintain 10
its account at a financial institution located in the Commonwealth of Kentucky. No 11
other funds may be deposited or transferred into the charitable gaming account. 12
(3) All payments for charitable gaming expenses, payments made for prizes purchased, 13
and any charitable donations from charitable gaming receipts shall be made from 14
the charitable gaming account and the payments or donations shall be made only by 15
bona fide officers of the organization by checks having preprinted consecutive 16
numbers and made payable to specific persons or organizations. No check drawn on 17
the charitable gaming account may be made payable to "cash," or "bearer," except 18
that a licensed charitable organization may withdraw start-up funds for a charitable 19
gaming event or session from the charitable gaming account by check made payable 20
to "cash" or "bearer," if these start-up funds are redeposited into the charitable 21
gaming account together with all adjusted gross receipts derived from the particular 22
event or session. Checks shall be imprinted with the words "charitable gaming 23
account" and shall contain the organization's license number on the face of each 24
check. Payments for charitable gaming expenses, prizes purchased, and charitable 25
donations may be made by electronic funds transfer if the payments are made to 26
specific persons or organizations. The department may by administrative regulation 27 UNOFFICIAL COPY 23 RS HB 287/GA
Page 2 of 4
HB028710.100 - 840 - XXXX 3/1/2023 2:25 PM GA
adopt alternative reporting requirements for charitable gaming of limited scope or 1
duration, if these requirements are sufficient to ensure accountability for all moneys 2
handled. 3
(4) A licensed charitable organization shall expend net receipts exclusively for 4
purposes consistent with the charitable, religious, educational, literary, civic, 5
fraternal, or patriotic functions or objectives for which the licensed charitable 6
organization received and maintains federal tax-exempt status, or consistent with its 7
status as a common school, an institution of higher education, or a state college or 8
university. No net receipts shall inure to the private benefit or financial gain of any 9
individual. 10
(5) Accurate records and books shall be maintained by each organization exempt from 11
licensure under KRS 238.535(1) and each licensed charitable organization for a 12
period of three (3) years. Department staff shall have access to these records at 13
reasonable times. Licensed charitable organizations and exempt organizations shall 14
maintain their charitable gaming records at their offices or places of business within 15
the Commonwealth of Kentucky as identified in their license applications or 16
applications for exempt status. An exempt organization shall submit a yearly 17
financial report in accordance with KRS 238.535(2), and failure to file this report 18
shall constitute grounds for revocation of the organization's exempt status. 19
(6) All licensed charitable organizations that have annual gross receipts of two hundred 20
thousand dollars ($200,000) or less and do not have a weekly bingo session shall 21
report to the department annually at the time and on a form established in 22
administrative regulations promulgated by the department. 23
(7) All other licensed charitable organizations shall submit reports to the department at 24
least quarterly at the time and on a form established in administrative regulations 25
promulgated by the department. 26
(8) Failure by a licensed charitable organization to file reports required under this 27 UNOFFICIAL COPY 23 RS HB 287/GA
Page 3 of 4
HB028710.100 - 840 - XXXX 3/1/2023 2:25 PM GA
chapter shall constitute grounds for revocation of the organization's license or 1
denial of the organization's application to renew its license in accordance with KRS 2
238.560(3). Reports filed by a licensed charitable organization shall include but 3
shall not be limited to the following information: 4
(a) All gross receipts received from charitable gaming for the reporting period, 5
classified by type of gaming activity; 6
(b) The names and addresses of all persons who are winners of prizes having a 7
fair market value of six hundred dollars ($600) or more; 8
(c) All expenses paid and the names and addresses of all persons to whom 9
expenses were paid; 10
(d) All net receipts retained and the names and addresses of all charitable 11
endeavors that received money from the net receipts; and 12
(e) Any other information the department deems appropriate. 13
(9) No licensed charitable organization shall incur charitable gaming expenses, except 14
as provided in this chapter. No licensed charitable organization shall be permitted to 15
expend amounts in excess of prevailing market rates for the following charitable 16
gaming expenses: 17
(a) Charitable gaming supplies and equipment; 18
(b) Rent; 19
(c) Utilities; 20
(d) Insurance; 21
(e) Advertising; 22
(f) Janitorial services; 23
(g) Bookkeeping and accounting services; 24
(h) Security services; 25
(i) Membership dues for its participation in any charitable gaming trade 26
organization; and 27 UNOFFICIAL COPY 23 RS HB 287/GA
Page 4 of 4
HB028710.100 - 840 - XXXX 3/1/2023 2:25 PM GA
(j) Any other expenses the department may determine by administrative 1
regulation to be legitimate. 2
(10) No licensed charitable organization shall expend receipts from charitable gaming 3
activities nor incur expenses to form, maintain, or operate as a labor organization. 4
(11) For the purposes of deposits under subsection (2) of this section, a licensed 5
charitable organization conducting charitable gaming events or sessions shall 6
only be required to deposit its gross receipts and adjusted gross receipts one (1) 7
time per week if the following conditions are met: 8
(a) The charitable gaming involves only games using charity game tickets; 9
(b) The charitable gaming is not part of a charity fundraising event; and 10
(c) The licensed charitable organization's deposits of gross receipts and 11
adjusted gross receipts from charitable gaming total less than two thousand 12
five hundred dollars ($2,500) in the week prior to the deposit. 13