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Luzerne County Treasurer Michael L. Morreale is the exclusive agent for the Commonwealth of Pennsylvania for the issuance of Small Games of Chance Licenses in Luzerne County. Please call our office at 570.825.1782 if you would like an information packet which will include an application. Additional information can viewed at the Pennsylvania Code website: PA Code on Small Games of Chance QUESTIONS AND ANSWERS What games are permitted?
The act permits daily drawings, weekly drawings, raffles, punchboards and pull-tabs. Video poker and slot machines are not permitted. Stamp machines may be used. Bingo is permitted under a separate act. (P.L. 214, No. 67 of 1981) Which organizations are eligible to be licensed?
There are several types of entities that may be licensed to conduct Small Games of Chance. These include: (a) Any congressionally chartered organization within Pennsylvania or any branch, lodge, or chapter of a nonprofit national or state organization within Pennsylvania, the membership of which consists of individuals who were members of the armed services or armed forces of the United States. It includes home associations affiliated with these entities.
(b) A club as defined in §102 of the liquor code that qualifies as an exempt organization under IRC §501© or IRC §527 and licensed to sell liquor at retail and which has a charitable, religious or civic purpose or is organized to benefit a political party.
(c) A nonprofit organization within Pennsylvania that is created and carried on for the mutual benefit of its members, having a limited membership and a representative form of government and is a branch, lodge or chapter of a state or national organization.
(d) A not-for-profit religious organization conducting business in accordance with the express purpose of a written constitution, charter, articles of incorporation or by-laws.
(e) Any statewide or branch, lodge, or chapter of a nonprofit national or state organization that is authorized by its written constitution, charter, articles of incorporation or bylaws to engage in a civic or service purpose within Pennsylvania.
(f) Similar (to (e)) local nonprofit organizations, not affiliated with a national or state organization recognized by the governing body of the local municipalities.
(g) Bona fide sportsmen’s and wildlife associations.
(h) Bona fide senior citizen’s organizations.
(i) Volunteer fire companies.
(j) Volunteer rescue squads.
(k) Volunteer ambulance associations.
(l) School booster organizations organized to promote and encourage participation and support for extracurricular activities with the established primary and secondary public, private and parochial school systems. Entities that do not meet the above categories may not be licensed. How long must an organization exist before it can be licensed?
One year. What is a charitable organization?
A not-for-profit group or body of persons that is created and exists for the purpose of: (a) performing a humane service;
(b) promoting the good and welfare of the aged, poor, infirm or distressed;
(c) combating juvenile delinquency; or
(d) advancing the spiritual, mental, social and physical improvement of men and women. What is a religious organization?
A not-for-profit group or body of persons that is created and which exists for the predominant purpose of regularly holding or conducting religious activities or religious education, without pecuniary benefit to any officer, member or shareholder except as reasonable compensation for actual services rendered to the organization. Who is responsible for licensing organizations?
In Luzerne County, the County Treasurer. Who is responsible for licensing distributors?
The Pennsylvania Department of Revenue. What is the prize limit for an individual prize?
$500 except for a special permit raffle. How much, in prizes, can an organization award in a week?
$5,000 may be awarded in cash and merchandise for each seven-day period, except for certain daily drawings. Are there any other limits?
Yes, the total amount of prizes awarded in raffles for any month must not exceed $5,000, except for raffles under a special permit. Any prize awarded may not be in violation of the law, such as liquor to a minor. Is there a limit on the number of raffles an organization may conduct?
Yes. An organization may conduct no more than 12 raffles per year. What is a special permit raffle?
This is a raffle for which an organization obtains a special permit to award individual prizes in excess of $500 each. The organization can award up to a total of $100,000 in prizes in this raffle. A special permit is needed if either the $500.00 limit or the $5,000 limit is exceeded. If an organization holds a special permit raffle in month A, can they hold another raffle in month A which awards a maximum of $5,000 in prizes?
No. How many special permits can an organization receive each year?
Two per license year, except volunteer fire, ambulance and rescue organizations, which may have three in a license year. From whom can organizations buy games of chance from?
Currently licensed distributors. The organization should ask for a copy of the distributor’s current license. Raffle and daily drawing tickets do not have to be purchased from licensed distributors. What is the difference between a raffle and a daily drawing?
A raffle is when the player buys a ticket for a chance determined by a random drawing of corresponding ticket stubs or by reference to drawings of the Pennsylvania State Lottery. The Small Games of Chance license number, location and the date of the drawing must be printed upon the ticket. A daily drawing is also a chance at a random drawing. However, only bona fide members may participate and the drawing must take place on the organization’s premises on the same day as the ticket or number is sold, assigned or selected. The winning number may be determined by a random drawing using a passive selection device or by reference to the to the drawings of the Pennsylvania State Lottery. Tickets may not cost more than $1.00. Once the organization obtains a license, is it true that these games can be sold anywhere?
No, the games may only be conducted on the licensed premises. Raffle tickets may be sold off the premises throughout Luzerne County. An organization that plans to sell raffle tickets in a municipality located in a county other than in a county in which the eligible organization is licensed must notify that county’s district attorney and licensing authority as to the location and dates that the organization plans to sell raffle tickets. Will there be any taxes on the games of chance sold to the organization?
All sales by distributors to organizations will be subject to sales tax unless the purchasing organization has a Pennsylvania sales and use exemption number and provides the distributor with the proper exemption certificate. Are the winnings taxable?
Any cash or merchandise awarded to a player must be reported on the persons individual income tax return filed with the Internal Revenue Service and the Commonwealth of Pennsylvania. There may also be a local income tax. How much does a Small Games of Chance license cost?
$100 for a yearly license, $10 for a limited occasion license and $25 for a special raffle permit. How old do you have to be to play these games?
18 years, unless the organization selling the games holds a liquor license, then the players must be 21 years old. How old do you have to be to operate these games for an organization?
18 years old. Can an organization pay compensation to someone to operate its games of chance?
No. Can an organization advertise the prize or prizes or the dollar value it plans to award in games of chance that it conducts?
An organization may advertise prizes and their dollar value in periodic publications that are limited in their circulation to members of the organization. All other advertisement of prizes or their value is prohibited. What can happen to organizations which do not obey the Act?
It is a summary offense. The organization could be fined up to $1,000 and forfeit its license. It is then ineligible for a license for 30 months.
– The first offense carries a fine not to exceed $1,000 and loss of the license for the remainder of the license period or 6 months, whichever is longer.
– The second offense carries a fine not to exceed $1,000 and loss of the license for the remainder of the license period and the organization will be ineligible for a license for the following license period.
– The third and subsequent offenses carry fines not to exceed $1,000 and loss of the license for the remainder of the license period and the organization will be ineligible for a license for 30 months following the conviction. What can happen to an individual who conducts or assists in the conduct of games of chance in violation of the Act?
It is a summary offense for the first offense, a misdemeanor of the third degree for the second offense, and a first degree misdemeanor for all subsequent offenses. What happens to a distributor who does not get a license or a manufacturer who does not register who sells or delivers games to be used in Pennsylvania?
This is a misdemeanor of the first degree. Is there a penalty for rigging a game?
Yes, it is a misdemeanor of the first degree. Can an organization be required to pay a percentage of total winnings to get the games of chance or the necessary equipment?
No, this is also a misdemeanor of the first degree. Can the organization’s rent be determined by the gross receipts from games of chance or the number of persons attending the event?
No, except that a per head charge may be paid if it is in connection with the serving of a meal. How does this Act affect the Bingo Law?
Not at all, these laws are completely separate and distinct. What should an organization do if it is requested to buy games of chance from an unlicensed distributor?
The organization should not put its license at risk. Report the behavior to the local District Attorney and refuse to do business with unlicensed persons. It would also be helpful to notify the Department of Revenue of this unlicensed activity. What is the Pennsylvania Department of Revenue responsible for?
(1) Prescribing the organization application form;
(2) licensing distributors;
(3) registering manufacturers; and
(4) promulgating regulations addressing: (a) minimum standards and restrictions for manufacturer of tickets,
(b) procedure for registration of manufacturers and licensing of distributors,
(c) procedure for suspension or revocation of manufacturer registrations and distributor licenses
(d) carry out other provisions of the Act. Who will enforce the Act?
The District Attorney is required to investigate alleged violations of the Act and file appropriate complaints and prosecute according to the manner provided by law. Other Commonwealth, county or local law enforcement officials may also investigate and enforce the provisions of the Act. When a complaint is received about an organization, who handles it initially?
The District Attorney will do the initial investigation. The licensing authority may have records that will be used to assist the investigator. Can an organization obtain a listing of distributors who are licensed with the Department of Revenue?
Yes. Each county licensing authority is provided with the updated list. May a raffle winning number be selected using the State Lottery Daily Number?
Yes. Are stamp machines (also known as dispensing machines) legal?
Stamp machines may be used to dispense pull-tab tickets. Manufacturers of approved stamp machines are designated by a registration number preceded by M/S. Can a daily drawing jackpot be rolled over if the winning number is not among the eligible entrants?
Yes, if the tickets were sold for no more than $1.00 for the drawing and no more than one chance was sold to each eligible participant. Can the $5,000 limit ever be exceeded?
Yes, in the daily drawing referred to above and in a daily drawing designed and conducted to pay out 100% of the gross revenues generated from the game. Can a licensed organization use the proceeds of games for any purpose or are they limited?
The proceeds may only be used for public interest purposes or the purchase of small games of chance. What is meant by "public interest purposes"?
"Public interest purposes" include:
(1) benefiting persons by enhancing their opportunity for religious or educational advancement by relieving or protecting them from disease, suffering or distress, by contributing to the physical, emotional or social well being, by assisting them in establishing themselves in life as worthy and useful citizens, or by increasing their comprehension of and devotion to the principals upon which the nation was founded; or (2) initiating, performing, or fostering worthy public works or enabling or furthering the erection or maintenance of public structures; or (3) lessening the burdens borne by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people; or (4) improving, expanding, maintaining or repairing real property owned or leased by the organization and used for purposes specified in (1) – (3) above. "Public interest purposes" do not include the erection or acquisition of any real property, unless the property will be used exclusively for one or more of the purposes specified in (1) – (4) above. What is the difference between a limited occasion license and a regular license?
A limited occasion license permits the organization to hold three events per year. Only two of the events may be raffles. The events may cover not more than a total of seven days. Under a limited occasion license, the organization may not award a prize that exceeds $500. The $5,000 weekly and $5,000 monthly raffle totals also apply. If the organization has a limited occasion license, it is not eligible for either a special permit or regular license for the license period. The license period is one year from the date of application, regardless of the type of license issued. Who is eligible for a limited occasion license?
Organizations that do not own or lease a specific location to conduct their normal business.
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