820 KAR | Title 820 KAR — Public Protection Cabinet - Kentucky Horse Racing & Gaming Corporation - Office of Charitable Gaming

Chapter 1 Charitable Gaming

820 KAR 1:001 Definitions {#sec-820-kar-1-001 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:001}

Section 1. Definitions.

(1) "Account number" means the unique identification number, if any, assigned by a card-minding device system or electronic pulltab system to a customer that uses a card-minding device to play bingo or an electronic pulltab device to purchase and play a pulltab.

(2) "Bet block" means an area that indicates the dollar amount of the wager.

(3) "Cash over" means the total amount of money actually received from the sale of gaming supplies at a charitable gaming session is more than the amount of money due from the sale of that quantity of gaming supplies.

(4) "Cash short" means the total amount of money actually received from the sale of gaming supplies at a charitable gaming session is less than the amount of money due from the sale of that quantity of gaming supplies.

(5) "Charitable gaming session" means a single gathering, event, or occurrence, at a specific location, during a specific time period, at which games of chance as defined by KRS Chapter 238 are conducted by a charitable organization.

(6) "Charitable gaming session program" means a written list of all games to be played and prize amounts to be paid for each game during a charitable gaming session, including, if the prizes are based on attendance, the amount of the prize and the attendance required.

(7) "Chief executive officer" means the director of the organization or the person who has legal authority to direct the management of the organization, distributor, manufacturer, or charitable gaming facility with respect to the conduct of charitable gaming.

(8) "Chief financial officer" means the person who is:

(a) Responsible for overseeing the financial activities of the organization, distributor, manufacturer, or charitable gaming facility;

(b) The custodian of the charitable gaming session records; and

(9) "Digital signature" means a method by which data, as in a software application, is expressed in a calculated number that is used to verify the accuracy of the data or a copy of the data.

(10) "Draw ticket" means a blank ticket upon which the numbers are marked as they are randomly selected.

(11) "EPROM" means Erasable Programmable read-only memory.

(12) "Gambling" is defined by KRS 528.010(4).

(13) "Merchandise prize" means a noncash prize given away at a charitable gaming session either as a game prize or a door prize.

(14) "Player tracking software" means computer software installed on a card-minding device system, electronic pulltab system, or other point of sale system that is used to identify or track certain characteristics of bingo or pulltab players, including personal data and purchasing habits.

(15) "Primary office location" means:

(a) The land and building in and upon which a charitable organization conducts the majority of its charitable business; and

(b) Does not include any physical space a charitable organization shares with a bar, restaurant, convenience store, or other commercial retail business.

(16) "PROM" means programmable read-only memory.

(17) "Promotional" means any item available at no charge to all participants at a charitable gaming session.

(18) "Proprietary software" means custom computer software developed by the manufacturer that is a primary component of a card-minding device system or electronic pulltab system and is required for a card-minding device to be used in a game of bingo or for an electronic pulltab device to be used to play an electronic pulltab.

(19) "Purchased prize" means any merchandise prize that was purchased and not donated.

(20) "RAM" or "random access memory" means the electronic memory that a computer uses to store information.

(21) "Random number generator" means a device:

(a) For generating number values that exhibit characteristics of randomness; and

(b) Composed of:

Computer hardware;
Computer software; or
A combination of computer hardware and software.

(22) "Secondary component" means an additional software or hardware component that:

(a) Is part of or is connected to a card-minding device system or electronic pulltab system;

(b) Does not affect the conduct of the game of bingo or an electronic pulltab;

(d) May include computer screen backgrounds, battery charge-up software routines, monitors, keyboards, pointer devices, mice, printers, printer software drivers, or charging racks.

(23) "Serial number" means a number assigned by the manufacturer to track the individual product.

(24) "Site system" means computer hardware, software, and peripheral equipment leased or purchased from a licensed distributor and used by a licensed organization to conduct, manage, and record bingo games played on card-minding devices and electronic pulltab games played on electronic pulltab devices.

(25) "Terminal number" means the unique identification number, if any, assigned by a manufacturer to a specific standard card-minding device or a specific electronic pulltab device.

(26) "Transaction log" means a record of the same information printed on each outside ticket that is:

(a) Retained in the computer's memory; or

(b) Printed out by the computer.

(27) "Version number" means a unique number designated by the manufacturer to identify a specific version of software used on or by the card-minding device system or the electronic pulltab system.

History

RELATES TO: KRS 238.500 et. seq.
STATUTORY AUTHORITY: KRS 238.515(9)
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to promulgate administrative regulations to carry out the purposes and intent of the chapter. This administrative regulation establishes definitions of terms used throughout 820 KAR Chapter 1.
History: 22 Ky.R. 146; eff. 9-7-1995; 23 Ky.R. 1000; eff. 11-8-1996; 24 Ky.R. 151; 871; eff. 9-12-1997; Recodified from 500 KAR 11:010, 2-23-1999; 26 Ky.R. 222; 757; eff. 10-15-1999; 28 Ky.R. 1499; 2030; eff. 3-13-2002; 30 Ky.R. 1606; 2154; eff. 4-12-2004; 32 Ky.R. 760; 1266; 1628; eff. 3-31-2006; 33 Ky.R. 3508; 34 Ky.R. 253; eff. 8-31-2007; 42 Ky.R. 138; 1508; eff. 12-4-2015; 44 Ky.R. .2646; 45 Ky.R. 1573; eff. 1-4-2019; 49 Ky.R. 108, 1083; eff. 1-31-2023.

820 KAR 1:005 Charitable gaming licenses and exemptions {#sec-820-kar-1-005 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:005}

Section 1. Application for Licensure.

(1) At least sixty (60) days prior to the expiration of its existing license or its first expected date of gaming, facility operation, or business operations in Kentucky during the license period, an applicant shall submit the appropriate complete, accurate, and documented application:

(a) A charitable organization shall submit Form CG-APP-ORG;

(b) An organization authorized to hold special event raffles pursuant to KRS 238.535(14)(b) shall submit Form CG-APP-SER;

(d) A manufacturer shall submit Form CG-APP-MAN;

(e) A charitable gaming facility shall submit Form CG-APP-FAC; and

(f) A licensed charitable organization shall submit Form CG-APP-ORG-CFE in addition to Form CG-APP-ORG for each charity fundraising event it intends to conduct.

(2) The office shall review the application and notify the applicant in writing of any deficiencies in the application as soon as practicable. An application shall not be considered complete until all deficiencies are resolved.

(3) If the applicant does not file a written response to a deficiency request, provide requested information and documents, or otherwise cure the identified deficiency within thirty (30) days of the written notice, the application shall be deemed withdrawn.

(4) If the applicant files a written response to a deficiency request within thirty (30) days of the written notice, but the response does not cure the identified deficiency, the office shall issue a subsequent deficiency notice. If the deficiency is incapable of being cured, the office shall deny the license.

(5) Once the office has received a complete application, it shall grant or deny the license within sixty (60) days of receipt.

Section 2. License Requirements, Fees, and Issuance.

(1) The office shall issue a license if the applicant has:

(a) Met the statutory requirements established:

For charitable organizations, by KRS 238.535;
For special event raffle organizations, by KRS 238.535(14)(b);
For distributors and manufacturers, by KRS 238.530; or
For charitable gaming facilities, by KRS 238.555;

(b) Paid all fees and fines;

(d) Filed an acceptable financial plan, if required;

(e) Complied with all terms and conditions of any applicable settlement agreement or probationary terms; and

(f) Submitted fingerprints cards as required by KRS 238.525.

(2) Fees for licenses issued shall be paid according to the following schedule:

(a) A nonrefundable application fee of twenty-five (25) dollars shall accompany each application for licensure and shall be credited against the amount of the annual license fee, if the requested license is granted.

(b) For charitable organizations and organizations licensed pursuant to KRS 238.535(14)(b):

$100 for:

a. A charitable organization upon initial application; or

b. A charitable organization with gross receipts not in excess of $100,000;

$200 for a charitable organization with gross receipts over $100,000, but not in excess of $250,000; or
$300 for a charitable organization with gross receipts over $250,000.

(d) For charitable gaming facilities:

$1,000 for a facility that does not conduct bingo sessions; or
$1,250 for a facility conducting between one (1) and eight (8) bingo sessions per week; or
$2,500 for a facility conducting between nine (9) and eighteen (18) bingo sessions per week.

(3) A license shall not be issued until the license fee and any other fees or fines due are paid in full.

(4) The license term shall be for one (1) year from the effective date of the license.

(5) A licensed charitable organization, distributor, manufacturer, or charitable gaming facility may submit a written change request to change any information contained in the license application or printed on the license. All change requests shall be accompanied by a twenty-five (25) dollar change fee and be signed by an officer. The office shall process change requests and issue or deny an amended license within ten (10) days of receipt, and the licensee shall not engage in gaming until a license reflecting the change request has been issued. An organization shall submit requests for changes to its listed officers and chairpersons by submitting Form CG-OCC-ORG (2023), Notice of Change in Officers or Chairpersons.

(a) Except as provided in KRS 238.535(12)(b)(2), a licensed charitable organization may change the date, time, or location of a charitable gaming session if the licensed charitable organization submits a written request to the office at least ten (10) days prior to the date of the requested change. Any change request made pursuant to this subsection shall be accompanied by a lease, if required, for the new gaming location.

(b) If a charitable organization wishes to cancel a charitable gaming session, the organization shall notify the office, in writing, at least twenty-four (24) hours prior to the scheduled start of the charitable gaming session, except if an emergency beyond the organization's control occurs, in which case the organization shall notify the office of the change as soon as practicable. A cancellation shall not require a change fee.

(6) A charitable organization shall not advertise any charitable gaming activity until the activity has been licensed by the office.

Section 3. Temporary License.

(1) Application for Licensure. The office may issue a temporary license to an applicant for a charitable gaming license if the applicant has submitted a complete and accurate license application form, and has complied with all other licensing requirements for an annual license.

(2) License Fee. For each temporary license issued, the licensee shall pay a twenty-five (25) dollar fee. The total temporary license fee charged in a year shall not exceed the annual license fee.

Section 4. Distributor Requirements.

(1) For the operation of a distributorship, a distributor shall maintain a separate bank account that is not commingled with a personal account or another business account. If the licensed distributor owns multiple distributorships, a separate bank account shall be maintained for each distributorship.

(2) Any payments received by a distributor from a charitable organization shall be by check drawn on the charitable gaming account or electronic fund transfer from the charitable gaming account.

(3) A distributor or its agent shall maintain storage facilities within this state for gaming supplies to be sold within the Commonwealth of Kentucky, and shall identify the facilities' physical locations to the office. Storage facilities shall be made accessible to the office for inspection upon request.

Section 5. Charitable Gaming Facility Requirements.

(1) A licensed charitable gaming facility shall be permitted to list on its Web site the names, license numbers, gaming sessions, and information regarding the charitable organizations that game at that licensed charitable gaming facility.

(2) If a charitable organization contracts with a licensed charitable gaming facility to operate a concession stand, the members of the charitable organization that volunteer at the concession stand may volunteer to work for their own gaming session, but shall not volunteer for the gaming session of any other charitable organization that games at that licensed charitable gaming facility.

(3) For a licensed gaming facility operation, a licensed gaming facility shall maintain a separate bank account that is not commingled with a personal account or another business account. If the licensee owns multiple licensed gaming facilities, a separate bank account shall be maintained for each licensed gaming facility. If separate businesses are operated out of the licensed gaming facility, including a check cashing service or a concession stand, each business shall have a separate bank account.

(4) Any payments received by a licensed gaming facility from a charitable organization shall be by check drawn on the charitable gaming account or electronic fund transfer from the charitable gaming account of the charitable organization.

(5) The lease agreement executed between the licensed charitable gaming facility and charitable organization shall contain the day and time of each charitable gaming session a charitable organization will conduct at the licensed gaming facility. The day and time listed in the lease agreement shall be accurate and shall match the day and time listed on the organization's charitable gaming license.

Section 6. Exempt Organizations.

(1) An organization seeking exemption from charitable gaming licensing requirements shall submit a complete and accurate Form CG-APP-EXE, Notification of Intent to Engage in Exempt Charitable Gaming , at least thirty (30) days prior to the expected date of gaming. The Form CG-APP-EXE shall be submitted with a non-refundable fee of twenty-five (25) dollars.

(2) If the charitable organization has submitted a complete application, and meets the requirements for exemption established in KRS Chapter 238, the office shall issue a Notification of Exemption within thirty (30) days of the completed submission.

(3) The office shall review the application and shall notify the applicant within thirty (30) days of receipt of the initial application of the nature of any deficiencies. If identified deficiencies are not cured within thirty (30) days from the notice, the application shall be deemed withdrawn, and no exemption will be granted in response to the application.

(4) The charitable organization shall not be required to file an additional exemption application with the office if the gaming activities of the charitable organization remain within the qualifications for exempt status.

(5) The charitable organization shall notify the office of any changes in the exempt status of the charitable organization within thirty (30) days of the occurrence of the changes.

(6) A charitable organization that conducts charitable gaming pursuant to an exemption shall file an annual report with the officet before January 31 of each year. This report shall be filed on Form CG-FIN-EXE , Annual Financial Report for Exempt Organization. The report may be filed electronically.

(7) A charitable organization that has had its exemption revoked for any reason shall pay a nonrefundable reinstatement fee of twenty-five dollars (25) with any application or request for reinstatement.

Section 7. Licensee Inspections.

(1) An applicant for a license or an exemption shall be able to demonstrate the existence of their establishment by:

(a) Contracts or leases;

(b) Utility bills;

(d) Bank records; or

(e) Similar documents.

(2) Any such records shall be accessible to the office for inspection.

(3) An applicant for a license or an exemption shall be able to demonstrate its maintenance of an office by copies of the business records including the articles of incorporation and by-laws, if any, any tax forms, the check book and bank statements, and any other records kept in the ordinary course of operating the type of business for which licensure is sought.

(4) An applicant for a charitable gaming facility license shall be able to demonstrate that it is the entity that is operating the charitable gaming facility and that the charitable gaming facility does not have any prohibited relationships with organizations, distributors, or manufacturers. This may include an inspection of its office including contracts, required reports, checkbook, bank accounts, and any other records regarding the operation of the charitable gaming facility. Any such records stored or maintained in electronic formats shall likewise be accessible to the office for inspection.

(5) An applicant for a distributor's or manufacturer's license shall be able to demonstrate prior to licensing that it manufactures or distributes gaming supplies from the locations stated on the license application. This may include an inspection of those locations and a demonstration or explanation of its ability to track gaming supplies and maintain the appropriate records. Any such records stored or maintained in electronic formats shall likewise be accessible to the office for inspection.

(6) Inspections shall be completed by appropriate office personnel who shall file a report stating the results of the inspection performed.

Section 8. Incorporation by Reference.

(1) The following material is incorporated by reference:

(a) Form CG-APP-EXE, "Notice of Intent to Engage in Exempt Charitable Gaming (2025)";

(b) Form CG-FIN-EXE, "Annual Financial Report for Exempt Charitable Organization(2025)";

(d) Form CG-APP-SER, "Special Event Raffle License Application (2025)";

(e) Form CG-APP-DIS, "Charitable Gaming Distributor License Application (2025)";

(f) Form CG-APP-MAN, "Charitable Gaming Manufacturer License Application (2025)";

(g) Form CG-APP-FAC, "Charitable Gaming Facility License Application (2025)"; and

(h) Form CG-OCC-ORG, "Notice of Change in Officers or Chairpersons (2025)".

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Kentucky Horse Racing & Gaming Corporation, Office of Charitable Gaming, 4047 Iron Works Parkway, Lexington, Kentucky 40511 , email dcg.accounting@ky.gov, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 238.515, 238.525, 238.530, 238.535, 238.540, 238.555
STATUTORY AUTHORITY: KRS 238.515, 238.525, 238.530, 238.535(2), (13), 238.555
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515(1) requires the Office of Charitable Gaming to license charitable organizations, charitable gaming facilities, manufacturers, and distributors that desire to engage in charitable gaming. KRS 238.515(2) authorizes the Office of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming and the operation of charitable gaming facilities. This administrative regulation establishes the requirements, fees, and procedures for licensure of a qualifying charitable organization, distributor, manufacturer, or charitable gaming facility. This administrative regulation establishes criteria for temporary licenses, exemptions, and inspections for verifying the information contained in an application.
History: 820 KAR 001:005. 32 Ky.R. 796; 1270; 1633; eff. 3-31-2006; 40 Ky.R. 1459; eff. 4-4-2014; 42 Ky.R. 916; eff. 1-4-2016; 44 Ky.R. 2650; 45 Ky.R. 1576; eff. 1-4-2019; TAm eff. 11-22-2019; 49 Ky.R. 1683, 2107; eff. 8-1-2023; TAm eff. 10-30-2025.

820 KAR 1:025 Reports {#sec-820-kar-1-025 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:025}

Section 1. Reporting.

(1) Licensees shall submit corresponding forms and reports quarterly as described in Section (2) of this administrative regulation:

(a) Licensed charitable organizations shall submit Form CG-FIN-ORG, Financial Report for a Licensed Charitable Organization;

Licensed charitable organizations with gross receipts of less than $200,000 per calendar year and no weekly bingo session shall only be required to submit Form CG-FIN-ORG annually, on or before January 31 of each year;
Licensed charitable organizations receiving distributions from organizations described in subsection (1)(d) of this administrative regulation shall submit Form CG-FIN-ORG (RRA), Financial Report for a Licensed Charitable Organization, Recipient Account. If the licensed charitable organization receives distributions from more than one (1) organization, it shall submit Attachment A-1 and G-1 for each distributing organization;

(b) Licensed charitable gaming facilities shall submit Form CG-FAC, Licensed Charitable Gaming Facility Quarterly Report;

(c) Licensed distributors shall submit Form CG-FIN-DIS Licensed Charitable Gaming Distributor Quarterly Report for each quarter that the distributor is licensed;

(d) Organizations licensed pursuant to KRS 238.535(14)(b) shall submit Form CG-FIN-SER, Licensed Organization Financial Report for Special Event Raffle License Only.

(2) All financial reports shall be:

(a) Submitted on the appropriate form prescribed in Section 1(1) of this administrative regulation;

(b) Typed or in permanent ink;

(d) Contain the original signature and printed name or, if submitted electronically, the typewritten name of either the chief executive officer or the chief financial officer of the charitable organization, facility, or distributor; and

(e) Contain the original signature and printed name or, if submitted electronically, the typewritten name of the preparer of the report if prepared by an individual other than the chief executive officer or chief financial officer.

Section 2. Quarterly Reporting Requirements.

(1) A licensee required to submit a quarterly report shall do so on or before the following dates for the preceding three (3) month period:

(a) April 30;

(b) July 31;

(d) January 31.

(2) If a date in Section 2(1) of this administrative regulation falls on a Saturday, Sunday, or legal holiday, the report shall be due on the first business day thereafter.

(3) The financial report and fee shall be considered timely filed if it has been:

(a) Mailed to the department by first class mail, postage prepaid, to the correct address and postmarked by the due date;

(b) Received in the department by hand-delivery on or before the due date; or

(4) If any report or portion thereof is not filed when due, or if any required fee is not remitted when due, the licensee shall be subject to disciplinary action pursuant to KRS 238.560.

Section 3. Specific Reporting Requirements for Licensed Charitable Organizations.

(1) The fee imposed by KRS 238.570(1) on gross gaming receipts of a licensed charitable organization shall be remitted by check made payable to the Kentucky State Treasurer at the time the financial report is due.

(2) If a charitable organization does not have any information to place on an attachment to the financial report, it shall indicate "not applicable" on the attachment.

(3) To complete the Bingo Paper Supplies Inventory page of Form CG-FIN-ORG, the product description shall be listed in the format "# ON # UP", with:

(a) The number "ON" being the number of bingo faces on a bingo paper sheet; and

(b) The number "UP" being the number of bingo paper sheets contained in a bingo paper pack.

(4) If multiple pages are used for inventory, each person completing the inventory shall sign one (1) page of the pages that person completed and initial the remaining pages.

(5) All expenses incurred by a licensee shall be reported on the financial report for the date on which payment was made, which shall be either the date a check was written or an electronic funds transfer was made, regardless of when the supplies were used or the services were rendered.

Section 4. Incorporation by Reference.

(1) The following are incorporated by reference:

(a) Form CG-FIN-ORG, "Financial Report for a Licensed Charitable Organization (2023) ";

(b) Form CG-FIN-ORG (RRA), "Financial Report for a Licensed Charitable Organization, Recipient Account (2023)";

(d) Form CG-FIN-FAC, "Licensed Charitable Gaming Facility Quarterly Report (2023) "; and

(e) Form CG-FIN-DIS, "Licensed Charitable Gaming Distributor Quarterly Report (2023)".

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department of Charitable Gaming, Public Protection Cabinet, 500 Mero Street 2NW24, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 238.530, 238.550, 238.555, 238.560, 238.570
STATUTORY AUTHORITY: KRS 238.515, 238.530, 238.550, 238.555, 238.560, 238.570
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515(4) authorizes the Department of Charitable Gaming to promulgate administrative regulations establishing standards of accounting, recordkeeping, and reporting to ensure charitable gaming receipts are properly accounted for. KRS 238.530 authorizes the department to promulgate an administrative regulation to require a licensed distributor to report all activities relating to the sale, rental, lease, or furnishing of charitable gaming supplies and equipment. KRS 238.560 authorizes the department to take administrative action against any person for any violation of the provisions of KRS Chapter 238 and the administrative regulations promulgated thereunder. This administrative regulation establishes the method and time of filing financial reports and remitting payment of fees due.
History: . (21 Ky.R. 1998; 2500; eff. 3-10-1995; 23 Ky.R. 1410; 1935; eff. 11-8-1996; 24 Ky.R. 152; 873; eff. 9-12-1997; Recodified from 500 KAR 11:025, 2-23-1999; 26 Ky.R. 226; eff. 10-15-1999; 28 Ky.R. 1503; 2033; eff. 3-13-2002; 32 Ky.R. 767; 1273; 1637; eff. 3-31-2006; 33 Ky.R. 3512; 34 Ky.R. 58; 256; eff. 8-31-2007; 40 Ky.R. 1465; eff. 4-4-2014; 42 Ky.R. 924; eff. 1-4-2016; 44 Ky.R. 2654; 45 Ky.R. 1578; eff. 1-4-2019; TAm eff. 11-22-2019; 49 Ky.R. 1686, 2109; eff. 8-1-2023.

820 KAR 1:032 Pulltabs {#sec-820-kar-1-032 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:032}

Section 1. Definitions. These definitions shall apply to all administrative regulations relating to pulltabs or electronic pulltabs.

(1) "Bonus round" means a single, new screen, apart from ordinary gameplay, that incrementally reveals the results of a single electronic pulltab ticket either by simulating the opening of additional tickets or simulating a prize board from which a player may pick symbols or icons.

(2) "Cumulative pulltab game" means a pulltab game consisting of multiple pulltab deals or game sets that is designed by the manufacturer so that a portion of each deal's predetermined payout is designated to a prize pool board.

(3) "Deal" means each separate game or series of pulltabs that have the same serial number and that may be composed of multiple packages.

(4) "Electronic pulltab system" means:

(a) A central computer system, which may be an optional site system;

(b) Electronic pulltab devices;

(d) Secondary components; and

(e) Proprietary software that contains reporting and control functions whereby the central computer system communicates with the electronic pulltab devices for the purpose of distributing a finite number of electronic pulltabs, a certain number of which, if randomly selected, entitle a player to prize awards at various levels.

(5) "Event game" means a type of pulltab game, with or without a seal card, that is designed by the manufacturer so that certain prizes are determined by:

(a) The draw of a bingo ball; or

(b) A method of randomly selecting numbers or symbols that correspond to the numbers or symbols printed on a paper or electronic pulltab.

(6) "Fixedbase electronic pulltab device" means a single personal computing device that has been loaded with proprietary software by a licensed manufacturer to enable it to function as an electronic pulltab device.

(7) "Flare" means the paper included with a deal of paper pulltabs, or the electronic representation of a paper flare included with a game set of electronic pulltabs, that identifies the game, the rules of the game, the payout structure, and other information required by this administrative regulation.

(8) "Form number" means a manufacturer's alphanumeric number that identifies a pulltab payout structure.

(9) "Game set" means the entire deal of finite electronic pulltabs that contains predefined and randomized game results assigned under a unique serial number.

(10) "Game subset" means a division of a game set into equal sizes following randomization, with each game subset also identified by a unique serial number.

(11) "Hand-held electronic pulltab device" means a single tablet or hand-held computer, other than a mobile phone or similar hand-held device that is either manufactured or customized by the manufacturer to operate as an electronic pulltab device.

(12) "Jackpot prize in a progressive pulltab game" or "progressive jackpot prize" means a prize in addition to the instant or seal card prizes that is carried over from deal to deal, or game set to game set, until it is won.

(13) "Jar ticket" means a type of pulltab game ticket that is folded, glued, or stapled.

(14) "Last sale" means a pulltab game designed by the manufacturer in which a prize is awarded to the person who bought the last pulltab or electronic pulltab in a deal or game set.

(15) "Multipackaged pulltab deal" means a pulltab game consisting of a single deal or game set of not more than 25,000 tickets that is packed or electronically grouped in subsets and in which each subset contributes to a prize pool with or without a prize board.

(16) "Progressive pulltab game" or "carryover pulltab game" means a pulltab game consisting of one (1) or more deals or game sets designed by the manufacturer so that a portion of the deal's predetermined prize payout is designated to a progressive jackpot and the jackpot value may accumulate from one (1) deal to the next deal until won.

(17) "Pulltab" means a charity game ticket as defined by KRS 238.505(5).

Section 2. Conformity of Paper Pulltabs.

(1) A licensed distributor of charitable gaming supplies and equipment shall distribute in Kentucky only those paper pulltabs conforming to the requirements of this administrative regulation.

(2) A licensed charitable organization shall sell to the public only those paper pulltabs conforming to the requirements of this administrative regulation.

Section 3. Paper Pulltab Construction Standards.

(1) Pulltabs shall be constructed so that the concealed numbers, symbols, or winner protection features cannot be viewed or determined from the outside of the pulltab using a high intensity lamp of up to and including 500 watts, with or without utilizing a focusing lens.

(2) The deal shall be designed, printed, glued, cut, and assembled in a manner to prevent determination of a winning or losing ticket without removing the tabs or otherwise uncovering the symbols or numbers as intended.

(3) Each pulltab in a deal shall bear the same serial number. If a seal card is used with a pulltab deal, the seal card shall bear the same serial number as each pulltab. Only one (1) serial number shall be used in a deal. A serial number used in a deal of pulltabs shall not be repeated by the same manufacturer on that same manufacturer's form number within a three (3) year period.

(4) If the pulltab utilizes a window, the numbers or symbols on the pulltab shall be fully visible in the window and shall be placed so that no part of a symbol or number remains covered when the tab is removed. Displacement of the symbol to the left or right in a window may be used for increased game security. Additional security devices or methods, including a laminate underneath a window, may be used by a manufacturer.

(5) It shall not be possible to distinguish winning pulltabs from losing pulltabs through variations in printing graphics or colors, including those involving different printing plates.

(6) All winning pulltabs shall have at least one (1) winner protection feature. In addition, all winning pulltabs that entitle a player to an instant prize of greater than twenty (20) dollars shall include an additional form of winner protection. Numeral jar tickets with colored winning numerals shall not be required to have secondary winner protection.

(7) All pulltabs shall be glued on the window edges and between each window. The glue shall be of sufficient strength and type to prevent the separation or delamination of the pulltab. For banded tickets, the glue shall be of sufficient strength and quality to prevent the separation of the band from the ticket.

(8) The window slits on each break-open ticket shall be perforated on at least three cut sides. The ties shall be of a sufficient thickness or strength to prevent unauthorized peering under the windows and so that unauthorized peering under the windows can be detected. It shall not be possible to isolate winning or potential winning tickets from variations to the size or the appearance of a cut edge of the pulltab comprising a particular game.

(9) Except as provided in subsections (10) and (11) of this section, the minimum information that shall be printed on an unopened pulltab with an overall area of two and five-tenths (2.5) square inches or more shall be:

(a) The name of the manufacturer, or its distinctive logo;

(b) The name of the game;

(d) The price per individual pulltab;

(e) The unique minimum five (5) digit game serial number, printed on the game information side of the pulltab; and

(f) The number of winners and respective winning numbers or symbols, and specific prize amounts.

(10) A pulltab with an overall area of at least one and six tenths (1.6) square inches unopened but less than two and five tenths (2.5) square inches unopened shall:

(a) Have printed on it, at a minimum, the information listed in subsection (9)(a), (b), (c), (d), and (e) of this section; and

(b) Not be required to have the information listed in subsection (9)(f) of this section.

(11) A pulltab with an overall area of less than one and six-tenths (1.6) square inches unopened shall:

(a) Have printed on it, at a minimum, the information listed in subsection (9)(a) and (e) of this section; and

(b) Not be required to have the information listed in subsection (9)(b), (c), (d), or (f) of this section.

Section 4. Randomization of Paper Pulltabs. Winning paper pulltabs shall be distributed and mixed among all other pulltabs in a deal to eliminate any pattern between deals, or portions of deals. The pulltab deal shall be assembled so that the winning pulltabs cannot be distinguished. Winning tickets shall be randomly distributed throughout the deal. Banded tickets packaged in bags, rather than boxes, shall be subject to these requirements.

Section 5. Packaging and Distribution of Paper Pulltabs.

(1)

(a) Each paper pulltab deal's package, box, or other container shall be sealed or taped at every entry point at the manufacturer's factory with a tamper resistant seal or tape.

(b) The seal or tape shall be visible under the shrink-wrap or from outside the container and shall be constructed to guarantee that, if the container is opened or otherwise tampered with, evidence of the opening or tampering will be easily detected.

(c) The seal or tape shall include a warning to the purchaser that the deal may have been tampered with if the package, box, or other container is received by the purchaser with the seal or tape broken.

(d) If the deal is packaged in a plastic bag, the entry point shall be completely sealed by the application of heat or adhesive. The warning may be imprinted in the plastic.

(2) A deal's serial number shall be clearly and legibly placed on:

(a) The outside of the deal's package, box, or other container; or

(b) The inside of the deal's package, box, or other container if it is clearly visible from the outside of the package, box, or other container.

(3) Manufacturers shall print on or affix to the outside of the package or container of pulltabs or include inside the package or container, in bold print of sufficient size to be easily read, a message that states substantially the following: "tickets shall be removed from this packaging container and thoroughly mixed prior to sale to the public."

(4) Manufacturers shall include with every deal of pulltabs a bar code label that contains at a minimum the name of the manufacturer or its distinctive logo, the game form number, and the game serial number. The bar code label shall be visible from the outside of the package, box, or other container.

Section 6. Flares and Seal Cards for Paper Pulltabs.

(1) Every deal of pulltabs shall contain a flare or a seal card. The manufacturer shall print directly on the paper flare or seal card the following information:

(a) The name of the game;

(b) The manufacturer's name or logo;

(d) The game serial number;

(e) The ticket count;

(f) The prize structure, including a description of the number of winning pulltabs by denomination, with their respective winning symbols or number combinations, and amounts dedicated to the prize pool in a seal card game with a cumulative prize, or a carryover or progressive prize; and

(g) The cost per play.

(2) Every deal of pulltabs shall contain instructions on how to play the game.

Section 7. Cumulative Games and Carryover or Progressive Games.

(1) The rules for cumulative games, carryover, or progressive games shall apply to both paper and electronic pulltabs.

(2) The amount dedicated to a cumulative prize pool or a carryover or progressive jackpot shall be predetermined by the manufacturer and built into the payout structure for the game.

(a) For paper pulltabs, the dedicated amount shall be printed by the manufacturer on either the flare or seal card for each game or on each ticket in each game.

(b) For electronic pulltab games, the dedicated amount shall be included by the manufacturer on the flare or seal card for each game.

(3) All games contributing to the cumulative prize pool or the carryover or progressive jackpot shall be of the same form number.

(4) The paper or electronic flare or seal card for the carryover or progressive jackpot shall contain an area in which the current amount of the carryover or progressive jackpot can be posted.

(5) If a carryover or progressive pulltab game uses a progressive jackpot prize card that is separate from the jackpot seal, the jackpot card shall contain prize space for the organization to record the serial numbers of all games contributing to the jackpot prize.

(6) If a carryover or progressive pulltab game uses a jackpot prize card that is separate from the jackpot seal card, each deal of the game shall possess both a seal card and a jackpot prize card that has the serial number of the deal affixed to it by the manufacturer.

(7) In a carryover or progressive pulltab game, the organization shall either start a new jackpot card with each deal or use the original jackpot card until won. The organization shall maintain each jackpot card used.

(8) A progressive pulltab game shall not be designed by the manufacturer to give any player initial odds greater than a fifty (50) percent chance to win the progressive jackpot.

(9) If a paper pulltab game contributes to a progressive raffle jackpot, a licensed charitable organization shall not sell a similar version of that paper pulltab game unless it also contributes to a progressive raffle jackpot. All paper pulltab game tickets that contribute to a progressive raffle jackpot shall be sold for cash and shall not be used as a merchandise prize for any bingo, pulltab, or door prizes.

Section 8. Event Games.

(1) The rules for event games shall apply to both paper and electronic pulltabs.

(2) An event game shall not contain a "last sale" feature.

(3) The number of winners and the prize amounts shall be built into the payout structure for the game by the manufacturer.

(4) An event ticket prize shall not exceed the individual ticket prize limit for a pulltab game.

(5) The prize for an event pulltab game shall not be considered a bingo prize.

Section 9. Multipackaged Pulltab Deals.

(1) The rules for multipackaged pulltab deals shall apply to both paper and electronic pulltabs. Every package shall be played for the deal to show the stated profit.

(2) Each package may contain individual winners if desired. If each package contains a winner, the game shall contain a method of verifying from which package the winner was sold.

Section 10. Tracking by Manufacturer. Every manufacturer of paper pulltabs shall maintain records sufficient to track each deal of paper pulltabs, by serial number and form number, from the manufacturer to the next point of sale for thirty-six (36) months. The records shall be subject to inspection by department staff.

Section 11. Tracking by Distributor.

(1) Every distributor of paper and electronic pulltabs shall maintain records sufficient to track each deal of paper and electronic pulltabs, by serial number and form number, from purchase by the distributor to the next point of sale for thirty-six (36) months. The records shall be subject to inspection by department staff.

(2) For sales in the Commonwealth of Kentucky or to residents of Kentucky, the records required under this section shall be sufficient if the distributor records the name of the purchaser and makes and retains a copy of the Kentucky charitable gaming license or exemption number of the purchaser at the next point of sale.

Section 12. Requirements of Distributor Invoice.

(1) Distributors selling paper pulltabs to charitable organizations or other distributors shall provide the charitable organization or other distributor with an invoice that contains, at a minimum, the following information:

(a) The purchaser's name, address, and license number;

(b) The address to which the shipment was delivered;

(d) The conditions of the sale or credit;

(e) The quantity of pulltabs sold including the number of deals, the name of each deal, the tickets per deal, and the serial number and form number of the deal;

(f) The total invoice amount;

(g) The name of the person who ordered the supplies;

(h) The name of the person making the delivery;

(i) The date of delivery or date the item was picked up for sale or credit;

(j) The place or manner of delivery; and

(k) The name and signature of the person taking delivery, if any.

(2) A distributor may deliver paper pulltabs to an agreed secure location or to an identified person. An invoice not challenged within seven (7) days of delivery shall be determined as accurate. Any challenge to an invoice shall be made in writing to the distributor and a copy shall be sent to the department.

Section 13. Defects.

(1) If a defect in packaging or construction of a paper pulltab is discovered by an organization, the defect shall be reported to the distributor within fifteen (15) days. The distributor shall correct the defect or replace the defective items within a reasonable time, or, if the product cannot be replaced or the defect corrected, the distributor shall provide a refund to the organization.

(2) If the department, in consultation with the manufacturer, determines that a defect actually exists, and the defect affects game security or otherwise threatens public confidence in the game, the department shall, with respect to paper pulltabs for use in Kentucky, require the manufacturer to:

(a) Recall the affected pulltabs that have not been sold at retail to licensed organizations; or

(b) Issue a total recall of all affected deals.

(3) In choosing and directing a particular recall in accordance with subsection (2) of this section, the department shall be guided in each circumstance by any combination of the following factors:

(a) The nature of the defect;

(b) Whether the defect affected game security;

(d) Whether the defect was limited to a specific number of deals of a particular form number;

(e) Whether the defect was easily detectable by a charitable organization;

(f) Whether the defect was easily detectable by members of the general public;

(g) Whether the defect threatens public confidence in the game; or

(h) Whether the defect is capable of being used to adversely affect the fair play of the game.

(4) In consultation with the manufacturer, the department shall determine a specific date for the recall to be completed and whether the manufacturer is required to reimburse the organization or distributor.

Section 14. Pulltab Dispenser Construction and Use.

(1) A pulltab dispenser shall not be sold, leased, or otherwise furnished to any person in the state unless it has been approved by the department.

(2) Before approval by the department, a dispenser that is identical to the dispenser intended to be sold, leased, or otherwise furnished shall be certified by an independent testing laboratory that the dispenser satisfies the manufacturing requirements established in Section 15 of this administrative regulation.

(3) If granted, approval shall extend only to the specific dispenser model approved, and any modification shall first be approved by the department.

Section 15. Requirements of Pulltab Dispensers. Each pulltab dispenser shall meet the following requirements:

(1) Contain a three (3) prong ground and surge protector, and shall be capable of withstanding static electricity;

(2) Accommodate pulltabs of different sizes;

(3) Be constructed so that customers can see how many pulltabs remain within the dispenser, or have resettable counters visible to the customer indicating the number of pulltabs left in each column of the dispenser;

(4) Have an outlet or tray to catch dispensed pulltabs;

(5) Accurately dispense the correct number of pulltabs;

(6) Contain one (1) or more player buttons on the front of the dispenser to dispense pulltabs if pressed;

(7) Contain an illuminated electronic display to display the value of money deposited;

(8) Be capable, if a malfunction occurs or the electrical power is interrupted after the money has been validated, of accurately redisplaying the value of the money after the malfunction or power is restored;

(9) Not dispense any credits, or validate, read, or redeem a winning pulltab;

(10) If using bill acceptors or similar devices that do not return change, clearly disclose that fact to the customer;

(11) Not have a video screen or produce audio sounds except for security alarms;

(12) Not resemble a slot machine or other gambling device;

(13) Contain the manufacturer's name, dispenser's serial number and model number, and date of manufacture, all of which shall be permanently affixed to the side of the dispenser;

(14) Have an on/off switch in an inconspicuous location on the exterior of the dispenser;

(15) Not record test sales of pulltabs or money acceptances on the dispenser's accounting meters;

(16) Contain a nonresettable accounting meter for total money validated and for the total of pulltabs dispensed and shall be capable of retaining this information for six (6) months after power has been disconnected;

(17) Contain an EPROM microchip, microprocessor, or other verifiable electronic program storage media which holds the dispenser's programming code and which is identical in all respects to the manufacturer's programming code approved by the department;

(18) Contain a RAM or an EPROM microchip equipped with a RAM microchip, which shall be installed with a tamper-proof seal inside the dispenser, or a microprocessor or flash memory microchip, or other verifiable electronic program storage media, which shall maintain the same information as required in subsection (17) of this section for six (6) months after power has been disconnected.;

(19) Automatically discontinue operation if any nonresettable accounting meter, RAM microchip, EPROM microchip, microprocessor, or other verifiable electronic program storage media is disconnected; and

(20) Contain at least one (1) electronic money validator that shall:

(a) Only validate United States money;

(b) Not validate money in denominations in excess of twenty (20) dollars;

(d) Be equipped with mechanisms to ensure that pulltabs will not be dispensed unless the money is validated and retained;

(e) Be capable of preventing acceptance of known counterfeit money;

(f) Return any invalid money to the player;

(g) Have at least one (1) removable stacker box capable of stacking bills or a removable drop box contained in a separate locked compartment; and

(h) Automatically discontinue accepting or validating money if a malfunction occurs or if electrical power to the dispenser or currency validator is interrupted.

Section 16. Pulltab Dispensing Limitations.

(1) A charitable organization shall not use a dispenser until the charitable organization that previously used the dispenser has removed its pulltabs and money from the dispenser.

(2) Each charitable organization operating the dispenser shall place upon the dispenser an identification label that displays the organization's name and license number.

(3) The keys to open the locked doors to the dispenser's ticket dispensing area and cash box shall be solely in the possession and control of the designated chairperson of the charitable organization conducting the charitable gaming session.

(4) The entire deal of pulltabs shall be sold from the dispenser and shall not be sold on the floor.

(5) All pulltabs in any one (1) column shall have the same serial number.

(6) A licensee shall not display, use, or otherwise furnish a dispenser that has in any manner been tampered with or that otherwise may deceive the public or affect a person's chances of winning.

(7) A pulltab deal shall not be placed in the dispenser until the entire deal of pulltabs previously in the dispenser has been played out or permanently removed.

(8) After placement in the dispenser, a pulltab shall not be removed from the dispenser, except for those pulltabs:

(a) Actually played by consumers;

(b) Removed by department representatives or law enforcement agencies;

(d) Removed at the end of the charitable gaming session.

(9) At least one (1) chairperson who is listed on the application for licensure shall be present at all times a pulltab dispenser is in use and shall be responsible for the administration and conduct of the pulltab dispenser.

(10) An organization utilizing a pulltab dispenser at its office location or owned premises shall only utilize the dispenser during business hours.

Section 17. Pulltab Dispenser Inspection. The department or its authorized representatives may examine and inspect any automated pulltab dispenser. The examination and inspection shall include immediate access to the dispenser and unlimited inspection of all parts of the dispenser.

Section 18. Pulltab Dispenser Recordkeeping.

(1) Each licensed charitable organization shall maintain the following information in connection with its use of an automated pulltab dispenser:

(a) Date of purchase or lease of each dispenser;

(b) Model and serial number of each dispenser;

(d) Name, address, and license number of the distributor from whom the dispenser was purchased, leased or otherwise furnished; and

(e) A record of all maintenance and repairs relating to the dispenser.

(2) Manufacturers and distributors shall maintain the following information in connection with each sale or lease of a dispenser:

(a) Date of sale or lease;

(b) Quantity sold or leased;

(d) Model and serial number of each dispenser; and

(e) Name, address, and license number of the purchaser or lessee.

(3) All records, reports, and receipts relating to dispenser sales, maintenance and repairs required to be maintained shall be retained for a period of three (3) years for examination by the department.

Section 19. Pulltab Dispenser Defects.

(1) If the department detects or discovers any defect or malfunction with the dispenser that is not temporary in nature or affects the integrity or security of the pulltab game, the department shall direct the manufacturer, distributor, or organization to cease the sale, lease, or use of the dispenser, as applicable, and shall require the manufacturer to correct the defect, malfunction, or problem or recall the dispenser immediately upon notification by the department to the manufacturer.

(2) If the manufacturer, distributor, or organization detects or discovers any defect or malfunction with the dispenser that is not temporary in nature, the entity shall immediately remove the dispenser from use and notify the department of that action.

Section 20. Pulltab Rules of Play.

(1) All individuals involved in the sale of pulltabs shall be trained in the proper conduct of the game and control of funds.

(2) The chairperson shall be in full charge of the charitable gaming session, supervise and direct all volunteers, and be responsible for assuring the proper receipt and recording of gaming funds.

(3) More than one (1) charitable organization shall not conduct gaming at the same time and location as another charitable organization, except for raffles and licensed charity fundraising events.

(4) Each organization's gaming supplies shall be maintained in a location separate from another organization's gaming supplies. This location shall also be locked and access shall be controlled.

(5) Except for a charity fundraising event, a volunteer at any other charitable gaming session at which pulltabs are sold shall not purchase or play pulltabs at that charitable gaming session. At a charity fundraising event, a volunteer may purchase or play pulltabs on a day the volunteer does not work, and from a deal the volunteer does not sell.

(6) If the charitable organization has house rules concerning its charitable gaming session, the house rules shall:

(a) Be posted in at least two (2) conspicuous locations at the charitable gaming session and announced prior to the commencement of the charitable gaming session or be listed on the program;

(b) Not conflict with KRS Chapter 238 or 820 KAR Chapter 1;

(d) Include the organization's name and license number.

Section 21. Playing.

(1) The flare or seal card for paper pulltabs, including a progressive jackpot card relating to a carryover or progressive prize, or a prize board relating to a game with a cumulative prize, shall be posted by the licensed charitable organization in the vicinity of the deal and in full and complete view of the players while the deal is in play, including the time after all tickets have been sold until all prizes have been claimed, or the time to claim prizes has expired. Electronic pulltab games shall include an electronic flare or seal card, including a progressive jackpot card relating to carryover or progressive prizes, that is available for view on the electronic pulltab device by players at all times while the game set is in play.

(2) Paper pulltabs shall not be sold to the public from the original packing box or container. Paper pulltabs shall be removed from the original box or container and mixed by shuffling together prior to sale.

(3) If a deal of paper pulltabs is packed in more than one (1) box or container, an individual container shall not designate a winner or contain a disproportionate number of winning or losing tickets. Each package, box, or container shall be placed out for play at the same time unless the deal is designed by the manufacturer to be played in subsets. Those subsets may be placed out for play in succession.

(4) Paper pulltabs that have been marked, defaced, altered, tampered with, received in packaging that is not tamper-resistant, or otherwise constructed in a manner that tends to deceive the public or affect the chances of winning or losing, shall not be placed into play. The organization shall notify the Department of Charitable Gaming of the existence of these tickets in writing within fifteen (15) days.

(5) Before placing a deal into play, the charitable organization shall verify that the serial number on the paper pulltabs within each deal matches the serial number on the flare or seal card accompanying the deal by conducting a random sampling of pulltabs within each deal. If the charitable organization determines that serial numbers on tickets within a deal or game set do not match the serial number on the flare or seal card accompanying the deal or game set, the organization shall not place the deal or game set into play and shall notify that distributor. If the distributor does not correct the problem within thirty (30) days, the organization shall notify the department in writing.

(6) Any licensed charitable organization that sells pulltabs from its office location or from a pulltab dispenser shall comply with 820 KAR Chapter 1 regarding the play, proper recordkeeping, and reporting of those sales. The sales shall be reported on the financial report.

(7)

(a) If a deal or game set is not played to completion and there remain unsold winning pulltabs, the licensed charitable organization conducting the gaming shall sell the remaining pulltabs on the next appointed date for charitable gaming activities.

(b) If no future date is anticipated, the licensed charitable organization shall consider the deal or game set closed or completed, declare the winners, and post winning numbers for fifteen (15) days with information directing the method of claiming a prize at its office location. All unsold pulltabs shall be retained pursuant to subsection (15) of this section.

(c) If no winning pulltabs remain in the paper deal, the licensed charitable organization may consider the deal closed or completed, declare the winners, and shall retain unsold pulltabs pursuant to subsection (15) of this section.

(d) A licensed charitable organization shall not complete play of a deal, game set, or a seal card it did not initiate.

(8) A pulltab shall not be sold to the public at a price different than that generated by the manufacturer of the pulltab upon the flare or seal card that accompanies the deal or game set.

(9) Only authorized representatives of the charitable organization conducting the event at which pulltabs are sold shall verify the serial numbers and winner protections for all winning pulltabs redeemed.

(10) In playing paper pulltabs that utilize a seal card, a charitable organization shall not award a prize to the holder of a winning pulltab unless the serial number on the ticket presented for redemption matches the serial number on the seal card. In a progressive pulltab game, the serial number on the tickets shall be checked in accordance with Section 6 of this administrative regulation.

(11) A charitable organization shall award prizes to winners of pulltabs only in accordance with the prize structure indicated on the flare or seal card accompanying the deal or game set of tickets as designed by the manufacturer. If multiple prize structures are indicated on the flare or seal card, the charitable organization shall announce to the patrons and circle on the paper flare or seal card the prize structure to be awarded before placing the deal or game set into play.

(12) A holder of a winning pulltab shall have fifteen (15) days to redeem the winning ticket. If the prize is not claimed within fifteen (15) days, the prize shall be considered unclaimed and be retained as property of the organization.

(13) Once redeemed, the holder of a winning pulltab shall be paid in full no later than five (5) days from the date of redemption.

(14) All winning paper pulltabs shall have the winning symbol or number defaced or punched by an authorized representative of the charitable organization immediately after redemption.

(15)

(a) The charitable organization shall retain, in paper or electronic form, for a period of twelve (12) months, to allow auditing by the staff of the department:

All winning pulltabs with a prize value of fifty (50) dollars and above;
The flare from all winning pulltabs with a prize value of fifty (50) dollars and above;
All seal cards with a prize value of fifty (50) dollars and above;
All prize boards in cumulative games with a prize value of fifty (50) dollars and above; and
All unsold pulltabs.

(b) These records may be maintained at the gaming location.

(16) The fair market value of bingo paper, a card-minding device, pulltab, or electronic pulltab device given away as a merchandise prize shall be the price that a patron would have paid for the same bingo paper, card-minding device, pulltab, or electronic pulltab device at that charitable gaming session.

(17)

(a) If bingo paper is awarded as a merchandise prize, whether as a door prize or game prize, the patron shall be given a voucher.

(b) The voucher shall be completed with:

The name, address, and phone number of the patron redeeming the voucher;
The date on which it was awarded;
The date on which it was redeemed;
The amount of bingo paper given in exchange for the voucher; and
The serial number of the bingo paper.

(d) The organization shall retain the voucher with its charitable gaming session records.

(18)

(a) If a card-minding device or electronic pulltab device is awarded as a merchandise prize, whether as a door prize or game prize, the patron shall be given a voucher.

(b) The voucher shall be completed with:

The name, address, and phone number of the patron redeeming the voucher;
The date on which it was awarded;
The date on which it was redeemed; and
The number of card-minding devices and the number of faces loaded on each device, or the number of electronic pulltab devices and credits loaded on each device, if any, given in exchange for the voucher.

(c) Once the voucher is completed, it shall be redeemed for the card-minding device or electronic pulltab device. No more than one (1) card-minding device or one (1) electronic pulltab device may be redeemed per player per charitable gaming session.

(d) The organization shall retain the voucher with its charitable gaming session records.

(e) There shall be a specific button on the point of sale programmed for each type of voucher involving a card-minding device and electronic pulltab device.

(19) If a paper pulltab or electronic pulltab device is awarded as a promotional item or a door prize, the amount and description of the pulltab or electronic pulltab device and credits loaded on each device, if any, shall be listed on the charitable gaming session program with "free" or "promotional" listed as the price. The point of sale shall have a specifically described discount button for this promotion.

(20) If a paper pulltab or electronic pulltab device is awarded as a bingo prize, the person in charge of bingo payouts shall purchase the pulltabs or electronic pulltab device and any credits loaded to the device from the pulltab manager by transfer of cash from bingo payout to pulltab sales, and it shall be recorded as a sale on the charitable gaming session records.

(21) Vouchers shall be redeemed on the same day as awarded.

(22) Jar tickets shall be played and prizes awarded as stated on the flare received with each deal.

(23) "Last Sale" pulltabs shall only be sold by an organization at its office location and not during a bingo session.

Section 22. Seal Card Games.

(1) The organization shall post the paper seal card for the deal in play at the location of the seal game while the deal is in play. An electronic seal for an electronic game set shall be viewable, upon player request, on the video screen of the electronic pulltab device while the game set is in play.

(2) If a deal or game set with a seal card is not completed during a charitable gaming session, the organization shall require the patrons with holders to sign or enter their name electronically on the seal card and provide a means of contacting them when the winner is declared.

(3)

(a) The seal for the deal or game set shall be broken, torn open, or otherwise revealed in plain view of all persons present when:

All tickets from a deal or game set have been sold;
All the winning tickets from a deal or game set have been sold;
All the lines on the sign-up card have been filled;
The deal or game set has been closed because no future date is anticipated; or
Instructed to by the game as designed by the manufacturer.

(b) Each winning combination, the name of the game, and the serial number of the deal or game set shall be announced and posted at the location of the game.

Section 23. Seal Card Games with Carry Over or Progressive Prizes.

(1) The prize pool for a progressive pulltab game shall be established only through the play of deals or game sets of the same game that bear a manufacturer's form number identical to the form number of any previously-played deals or game sets contributing to the prize pool.

(2) Before placing a paper deal into play, the charitable organization shall verify that the serial number on the pulltabs within each deal match the serial number on the flare or seal card accompanying the deal by conducting a random sampling of pulltabs within each deal. The serial number on the tickets shall not be required to match the serial number on the progressive pulltab jackpot card if the deal is the second or subsequent deal played in the progressive game and one (1) progressive jackpot card is used for more than one (1) deal.

(3) After a progressive pulltab game has been started, it shall remain in play continuously until the progressive jackpot prize is awarded. If the game is begun at a bingo session, it shall be offered at each succeeding bingo session of the licensee. If the game is begun at the office location, it shall be offered on each succeeding day its office is open. If an organization stops conducting charitable gaming or wishes to stop playing a progressive pulltab game, the organization shall, with prior approval from the department, transfer the current jackpot to another progressive game or determine a method to award the progressive jackpot to the players. With prior approval from the department, an organization may alter the suggested rules of the manufacturer to determine a winner.

(4) The seal card for each deal or game set in a progressive game shall show, in addition to all other information required for flares and seal cards, the amount dedicated to the progressive jackpot prize pool.

(5) Every seal card for each deal or game set that has been played or is being played in the course of a progressive pulltab game, together with any progressive jackpot card, shall be displayed at all times while the game is in play, until the progressive jackpot prize is won.

(6) The serial numbers for each deal or game set contributing to a carryover or progressive jackpot prize shall be recorded in the charitable gaming session records.

(7) A progressive or carryover pulltab game shall be played in accord with the manufacturer's specifications for the determination of a winner, unless the department permits otherwise pursuant to subsection (3) of this section.

(8) If a progressive or carryover pulltab game bearing the same manufacturer's form number is no longer available, the organization shall contact the department for instructions on how to proceed.

(9)

(a) If a progressive prize remains unpaid, a licensed charitable organization shall display, in full and complete view of the players and at all times either:

The jackpot card being played and each seal card contributing to the jackpot prize pool; or
A legible poster identifying by name, serial number, and form number each deal or game set of pulltabs contributing an amount to the jackpot prize pool.

(b) The poster or seal cards shall remain displayed during bingo sessions or other charitable gaming activities conducted by the organization until the expiration of fifteen (15) calendar days after the organization awards the prize. For progressive pulltab games played on an electronic pulltab device, a poster shall be displayed to fulfill this requirement.

(c) If a progressive jackpot prize is not awarded, the organization shall continue to display the poster or seal cards during bingo sessions or other charitable gaming activities it conducts for at least fifteen (15) calendar days after the date the organization considers the game closed and retains the prize as its property.

(d) If a progressive prize remains unpaid, a licensed charitable organization shall display, in full and complete view of the players and at all times, the current value of the jackpot.

(10) An organization shall not award the jackpot prize in a progressive pulltab game unless the serial number and form number on the winning ticket match the serial number and form number on a seal card from a deal or game set of tickets that contributed to the jackpot prize.

(11) For jackpot prizes of $250 or over, the organization shall attach a copy of the valid state identification card that contains the name, address, date of birth, and state identification number of the winner to the jackpot prize card.

(12) The jackpot prize in a progressive game may accrue in excess of $2,400. An individual jackpot prize shall not be paid in excess of $2,400. The amount of the current jackpot, the amount contributed, the payouts made, and the jackpot carried forward to the next charitable gaming session at each charitable gaming session shall be recorded in the charitable gaming session record.

(13) Any advertisement regarding the progressive jackpot may state the total amount in the jackpot prize pool if it also includes the statement that the individual payout shall not exceed $2,400.

(14) A licensed charitable organization shall report to the department concerning its play of seal card games with a progressive prize on the financial report.

(15) The jackpot prize pool in a progressive game shall be considered an adjusted gross receipt that shall be deposited within two (2) business days of the charitable gaming session.

Section 24. Seal Card Games with Cumulative Prizes.

(1) The prize pool for a cumulative pulltab game shall be established only through the play of deals or game sets of the same game that bear a manufacturer's form number identical to the form number of any previously played deals or game sets contributing to the prize pool, unless the department permits otherwise pursuant to subsection (3) of this section.

(2) Before placing a paper deal into play, the charitable organization shall verify that the serial number on the pulltabs within each deal matches the serial number on the flare, prize board, or seal card accompanying the deal by conducting a random sampling of pulltabs within each deal.

(3) After a cumulative pulltab game has been started, it shall remain in play continuously until the cumulative prize pool has been awarded. If that game is begun at a bingo session, it shall be offered at each succeeding bingo session of the licensee. If the game is begun at the office location, it shall be offered on each succeeding day their office is open. If an organization stops conducting charitable gaming or wishes to stop playing a cumulative pulltab game, the organization shall, with prior approval from the department, transfer the current jackpot to another cumulative game or determine a method to award the cumulative jackpot to the players. With prior approval from the department, an organization may alter the suggested rules of the manufacturer to determine a winner.

(4) Prizes shall be offered and awarded only in accord with the manufacturer's predesignated prize structure for the game, unless the department permits otherwise pursuant to subsection (3) if this section.

(5) The seal card for each deal or game set in a cumulative pulltab game shall show, in addition to all other information required for flares and seal cards, the amount dedicated to the cumulative prize pool.

(6) Every seal card for each deal or game set that has been played or is being played in the course of a cumulative pulltab game, together with any prize board, shall be displayed at all times while the game is in play, until the cumulative prize pool is awarded.

(7) The serial numbers for each deal or game set contributing to a cumulative prize pool shall be recorded in the charitable gaming session records.

(8) An organization shall not award the cumulative prize pool unless the serial number and form number on the winning ticket matches the serial number and form number on a seal card from a deal or game set of tickets that contributed to the cumulative prize board.

(9) A cumulative prize board shall not contain prizes totaling in excess of $2,400.

(10) A licensed charitable organization shall report to the department concerning its play of seal card games of cumulative games on the financial report.

Section 25. Electronic Pulltab System Construction Standards.

(1) An electronic pulltab system's central computer system shall be dedicated to electronic accounting, reporting, presentation, randomization, and transmission of electronic pulltabs to electronic pulltab devices. It shall also be capable of generating the data necessary to provide reports required by administrative regulation or otherwise specified by the department.

(2) A player shall purchase or otherwise obtain access to an electronic pulltab device and load money to a player account for purchase of electronic pulltabs during the current charitable gaming session from a point of sale station or by inserting currency into the gaming device. The point of sale station may be stationary, mobile, or self-service.

(3) All equipment used to facilitate the distribution, play, or redemption of electronic pulltabs shall be physically located within the boundaries of the Commonwealth of Kentucky. Electronic pulltab devices, site system if used, point of sale stations, and all secondary components shall be located on the premises where the charitable gaming session is being held.

(4) A manufacturer, distributor, or charitable organization shall not add to an electronic pulltab system any software or program unless the software or program has been certified by an independent testing facility. If the department detects or discovers an electronic pulltab system at a playing location that is using a program or software that has not been certified by an independent testing facility, the electronic pulltab system shall be determined to have an unauthorized modification and use of the system shall cease immediately.

(5) Any element of the central computer system that holds or maintains game data, other than an electronic pulltab device or point of sale station, shall be kept in a locked and secure enclosure with limited access to designated personnel. The system shall provide a secure physical and electronic means for securing the games and game data against alteration, tampering, or unauthorized access.

(6) The central computer system shall include a central server located in the Commonwealth of Kentucky that is accessible to the department so the department has the ability to remotely verify the operation, compliance, and internal accounting systems of the electronic pulltab system at any time. The department shall have real time and complete read-only access to all data for all systems and devices.

(a) The manufacturer shall provide to the department all current protocols, passwords, and any other required information needed to access the electronic pulltab system prior to the operation of the system within Kentucky, and at all times while the system remains operational within Kentucky.

(b) The department shall be notified of any changes in the protocols, passwords, and any other required information needed to access the system at least three (3) days prior to the change.

(c) Any reports maintained or generated by the electronic pulltab system shall be capable of being downloaded or otherwise accessed via the internet by the department.

(7) A site system, if used, shall:

(a) Be located at the gaming premises;

(b) Be operated by the charitable organization;

(d) Report and transmit the game results as prescribed by the department;

(e) Provide security and access levels sufficient so that the internal control objectives are met as prescribed by the department; and

(f) Contain a point of sale station.

(8) The site system, if used, may include the following components:

(a) Required printers;

(b) Proprietary executable software;

(d) An accounting system or database.

(9) The electronic pulltab system shall provide password protection for each organization.

(10) An electronic pulltab system shall provide a means for terminating a game set if information about electronic pulltabs in an open game set has been accessed, or if the department determines there has been a breach of game security. Traceability of unauthorized access including time and date, users involved, and any other relevant information shall be available.

(11) An electronic pulltab system shall not permit the alteration of any accounting or significant event information. Significant events shall include power resets or failures, communication loss between an electronic pulltab device and the electronic pulltab system, any award in excess of the single-win limit for an electronic pulltab, or corruption of the electronic pulltab system memory or storage. If financial data is changed, an automated audit log shall be capable of being produced to document the following:

(a) Data element altered;

(b) Data element value prior to alteration;

(d) Time and date of alteration.

(12) An electronic pulltab system shall provide password security or other secure means of ensuring data integrity and enforcing user permissions for all system components, including the following:

(a) All programs and data files shall only be accessible via the entry of a password that shall be known only to authorized personnel;

(b) The electronic pulltab system shall have multiple security access levels to control and restrict different privilege levels;

(d) The storage of passwords and PINs shall be in an encrypted, nonreversible form; and

(e) A program or report shall be available that lists all authorized users on the electronic pulltab system including their privilege level.

(13) All components of an electronic pulltab system that allow access to users, other than end-users for game play, shall have a password sign-on comprised of:

(a) A personal identification number; or

(b) a personal identification code and a personal password.

(14) Electronic pulltab system software components shall be verifiable by a secure means at the system level. An electronic pulltab system shall have the ability to allow for an independent integrity check of the components from an outside source and is required for all control programs that may affect the integrity of the electronic pulltab system. This shall be accomplished by being authenticated by a third-party device, which may be embedded within the electronic pulltab system software or having an interface or procedure for a third-party application to authenticate the component. This integrity check shall provide a means for field verification of the electronic pulltab system components.

(15) The electronic pulltab system shall have a medium for securely storing electronic pulltab game sets that shall be mirrored in real time by a backup medium. The electronic pulltab system shall also provide a means for storing duplicates of the game sets already transmitted to the electronic pulltab devices so as to reflect, on an ongoing basis, changes in the transmitted game sets as they occur.

(a) All storage shall be through an error checking, nonvolatile physical medium, or an equivalent architectural implementation, so that if the primary storage medium fails, the functions of the electronic pulltab system and the process of auditing those functions shall continue with no critical data loss.

(b) The database shall be stored on redundant media so that a single failure of any portion of the system shall not result in the loss or corruption of data.

(c) If there is a catastrophic failure when the electronic pulltab system cannot be restarted in any other way, it shall be possible to reload the electronic pulltab system from the last viable backup point and fully recover the contents of that backup, to consist of at least the following information:

All significant events;
All accounting information; and
Auditing information, including all open game sets and the summary of completed game sets.

(16) Connections between all components of the electronic pulltab system shall only be through use of secure communication protocols that are designed to prevent unauthorized access or tampering, employing Data Encryption Standards (DES) or equivalent encryption with changeable seeds or algorithms.

(17) An electronic pulltab system's central computer system may be used to record the data used to verify game play and to configure and perform security checks on electronic pulltab devices, if the functions do not affect the security, integrity, or outcome of any game and meet the requirements established in this administrative regulation regarding program storage devices.

(18) An electronic pulltab system shall not display to the player, the licensed charitable organization, or the licensed distributor the number of electronic pulltabs that remain in a game set, or the number of winners or losers that have been drawn or still remain in the game set while the game set is still open for play. Once a game set has been closed, it shall not be able to be opened for play.

(19) The electronic pulltab system shall render unplayable the electronic pulltabs of a charitable organization once the organization logs out of the system at the end of the organization's charitable gaming session and until the organization logs back onto the system at the start of the organization's next scheduled charitable gaming session. If multiple organizations use the same electronic pulltab devices and electronic pulltab system, one (1) organization's electronic pulltab games and data shall not be accessible or played by another organization.

(20) An electronic pulltab system may include player tracking software. Player tracking records shall at all times be the property of the charitable organization and neither the manufacturer nor the distributor shall utilize or make available to any person, other than the department or as otherwise authorized by law, the information contained within the player tracking software without the express permission of the charitable organization.

(21) One (1) or more electronic internal accounting systems shall be required to perform recordkeeping, reporting, and other functions in support of an electronic pulltab system. The electronic internal accounting system shall not interfere with the outcome of any gaming function.

(22) The electronic internal accounting system shall be capable of recording and retaining for a period of not less than three (3) years the following information:

(a) The name and license number of the organization utilizing an electronic pulltab system; and

(b) For each charitable gaming session:

The date and time of each log-on and log-off of an organization;
The total amount of all monetary transactions regarding electronic pulltabs and electronic pulltab devices at each charitable gaming session;
The total number of electronic pulltab devices sold or provided at each charitable gaming session;
The serial number of each hand-held electronic pulltab device sold or provided;
The terminal number for each fixed base electronic pulltab device sold or provided;
The name, serial number, price, and predetermined finite number of tickets within each game set available for play at each charitable gaming session;
The total number of electronic pulltabs played from each game set at each charitable gaming session;
All prize payouts for each game set per charitable gaming session; and
All wagers and other information necessary to fully reconstruct a game outcome.

(23) The information required pursuant to subsection (22) of this section shall be secure and shall not be accessible for alteration. Information pertaining to the number of electronic pulltabs that remain in an open game set, or the number of winners or losers that have been drawn or still remain in an open game set shall not be accessible to the licensed organization or the licensed distributor.

(24) The electronic pulltab system's central computer system shall maintain a printable, permanent record of all transactions involving each device and each closed electronic pulltab game played on each device.

(25) An electronic pulltab system shall have report generation software with the capability to print all information required to be maintained on the system's active or archived databases, and pursuant to the restrictions related to information available on open game sets.

(26) All data required to be available or reported by this administrative regulation shall be retained for a period of not less than three (3) years.

(27) An electronic pulltab system shall utilize randomizing procedures in the creation of game sets for electronic pulltabs or utilize externally generated randomized game sets. After randomization, game sets may be broken into game subsets of equal size that shall be assigned a unique serial number.

(28) Winning electronic pulltabs shall be distributed randomly among all other pulltabs in a game set to eliminate any pattern between game sets, or portions of game sets.

(29) Any random number generation, shuffling, or randomization of outcomes used in connection with an electronic pulltab system shall be by use of a random number generation application that has successfully passed standard tests for randomness and unpredictability.

Section 26. Electronic Pulltab Point of Sale Requirements.

(1) An electronic pulltab system shall include a point of sale station that is used to facilitate the sale of an electronic pulltab device, to load money to a player account for purchase of electronic pulltabs during the current charitable gaming session, and to cash-out or redeem credits from the play of electronic pulltabs.

(a) The point of sale station may be stationary, mobile, or self-service.

(b) The point of sale station shall not be designed or manufactured to resemble an electronic gaming device that utilizes a video display monitor, such as a video lottery terminal, video slot machine, video poker machine, or any similar video gaming device.

(c) The point of sale station shall not have vertical or horizontal spinning reels, a pull handle, sounds or music, flashing lights, tower light, top box, enhanced animation, artwork, or any other attribute or representation that mimics a video lottery terminal, video slot machine, video poker machine, or any similar video gaming device.

(d) The point of sale station shall not function simultaneously as an electronic pulltab device.

(2) The point of sale station shall be capable of printing a receipt, which the organization shall provide to the player, that details each transaction. The receipt shall contain, at a minimum, the following information:

(a) The date and time of the transaction;

(b) A unique non-resettable transaction number that is printed in continuous, consecutive order;

(c) The dollar amount of the transaction, including the cost, if any, of the electronic pulltab device and the amount of money loaded to a player account that will be available for the purchase of electronic pulltabs during that charitable gaming session;

(d) A unique entry code or account number that will be used to activate an electronic pulltab device and make available to the player the money loaded to the player account at the point of sale for the purchase of electronic pulltabs during that charitable gaming session;

(e) The name of the charitable organization and license number; and

(f) The point of sale identification number or name.

(3) If the receipt printer malfunctions or printed receipts are not legible, manual receipts shall be issued that contain the same information required pursuant to subsection (2) of this section.

(4) The point of sale station shall be capable of displaying, at minimum, the following for each charitable gaming session:

(a) The sales transaction history, including:

The organization name and license number;
Date and time of each transaction;
Dollar value of each transaction;
Quantity of electronic pulltab devices sold;
All transaction numbers; and
The point of sale identification number or name; and

(b) A pay-out history detailing all pay-outs, including:

The organization name and license number;
Date and time of each pay-out;
Dollar value of each pay-out; and
Point of sale identification number or name.

(5) A point of sale station shall not display information relating to prizes already paid out in a particular game set, the number of electronic pulltabs that remain in a game set, or the number of winners or losers that have been drawn or still remain in the game set while the game set is still open for play.

(6) A player shall only cash-out or redeem credits from a point of sale station.

(7) A point of sale station shall not be capable of accepting payment from a credit card or debit card.

Section 27. Electronic Pulltab Device Construction Standards.

(1) An electronic pulltab device shall not be capable of being used for the purpose of engaging in any game prohibited by the department.

(2) An electronic pulltab device shall be designed as a handheld or fixed base personal computing device that:

(a) Is used to play one (1) or more electronic pulltab games;

(b) Requires coded entry or insertion of currency or a credit ticket to activate a device for a player to purchase and play electronic pulltabs;

(c) Maintains and displays information pertaining to accumulation of credits that may be applied to games in play or redeemed upon termination of play;

(d) Has no vertical or horizontal spinning reels, pull handle, flashing lights, tower light, top box, coin tray, hopper, coin acceptor, the ability to dispense coins, cash, tokens, or anything of value other than a credit ticket, or any other attribute or representation that mimics a video slot machine;

(e) Shall not be capable of displaying any animation while in an idle state. An electronic pulltab device may use simple display elements or screen savers to prevent monitor damage;

(f) Has no additional function as a gambling device other than as an electronic pulltab device or as an approved card-minding device;

(g) Is not a pulltab dispenser as established in this administrative regulation; and

(h) The device shall have adjustable volume accessible to the player or the charitable organization.

(3) An electronic pulltab device shall not have hardware or software that determines the outcome of any electronic pulltab, produces its own outcome, or affects the order of electronic pulltabs as dispensed from the electronic pulltab system's central computer system. The game outcome shall be determined by the electronic pulltab system's central computer system.

(4) An electronic pulltab device may utilize a touch screen. The touch screen shall meet the following requirements:

(a) It shall be accurate once calibrated;

(b) It shall be able to be recalibrated; and

(5) A fixed based electronic pulltab device may incorporate an attached bill validator, which shall be constructed to ensure proper handling of inputs that protect against vandalism, abuse, or fraudulent activity. A bill validator shall only accept United States paper currency or a valid credit ticket to initiate play. Bill validators shall be tested to comply with accepted industry standards.

(6) A fixed based electronic pulltab device shall not be capable of accepting payment by credit card or debit card.

Section 28. Electronic Pulltab Software Construction Standards.

(1) Any game available for play in the Commonwealth of Kentucky shall be installed on the demonstration terminals at the Department of Charitable Gaming's office in Frankfort, Kentucky.

(2) An electronic pulltab system shall dispense, upon player request and payment of consideration, an electronic pulltab. A player shall win if the player's electronic pulltab reveals whether and how much money a player has won, or if the electronic pulltab contains a combination of symbols or numbers that was designated in advance of the game as a winning combination. There may be multiple winning combinations in each game. All games shall be played without replacement.

(3) An electronic pulltab game or game set shall:

(a) Be a version of a paper pulltab game, with a prize structure and gameplay rules substantially similar to a paper pulltab game, that is played on an electronic pulltab device;

(b) Have a predetermined, finite number of winning and losing tickets, not to exceed 25,000 tickets per game set;

(d) Comply with KRS Chapter 238, and 820 KAR Chapter 1;

(e) Comply with prize limits established in KRS Chapter 238;

(f) Have a unique serial number for each game set that shall not be regenerated. Each pulltab in a game set shall bear the same serial number and only one (1) serial number shall be used in a game set. After randomization, game sets may be broken into subsets of equal size. If game subsets are used, they shall each be assigned a unique serial number and be traceable to a parent game set. If a seal card is used with a pulltab game set, the seal card shall bear the same serial number as each pulltab;

(g) Have an electronic flare or seal card, viewable upon player request, that displays the name of the game, manufacturer's name or logo, manufacturer's form number, the game serial number, the predetermined finite number of tickets in the game set, and the prize structure, including a description of the number of winning pulltabs by denomination, and amounts, if any, dedicated to the prize pool in a seal card game with a cumulative prize, or a carryover or progressive prize, and the cost per play of an electronic pulltab within the game set; and

(h) Every game set of electronic pulltabs shall contain electronic rules of play.

(4) An electronic pulltab game shall not contain vertical or horizontal spinning reels, a pull handle, or other representations that mimic a video slot machine, including representations of coins falling into a coin tray or hopper.

(5) Games shall not contain obscene or offensive graphics, sounds, or references.

(6) The result of an electronic pulltab ticket shall be clearly shown on the video display. If the game uses symbols or combinations of symbols to reveal whether the player's ticket has won, winning tickets shall indicate to the player the symbols or combination of symbols that resulted in a winning ticket. Prizes shall be added as a credit to the player's account.

(7) The available games, flare, and rules of play shall be displayed on the electronic pulltab device's video screen upon player request.

(8) Any number of games may be selectable for play on any given electronic pulltab device. Only one (1) of the games shall be playable at a time.

(9) An electronic pulltab device shall have one (1) or more buttons, or an electromechanical or touch screen to facilitate the following functions:

(a) Viewing of the game "help" screens;

(b) Viewing of the game rules including the flare or seal card;

(d) Cash-out or logout; and

(e) Purchasing or revealing the pulltab.

(10) Each electronic pulltab shall be initially displayed so that the numbers, letters, or symbols on the pulltab are concealed. Each electronic pulltab game shall require the player to press a "purchase" or equivalent button to initiate the purchase of an electronic pulltab. The game shall then require the player to press a subsequent button or buttons to reveal the numbers, letters, or symbols on the pulltab. A player shall have the option of opening each individual line, row, or column of each electronic pulltab or choosing to "open all".

(11) If an electronic pulltab game contains a bonus round that simulates the opening of additional tickets, then the following disclaimer shall be displayed in a conspicuous manner in the player interface of the electronic pulltab device every time the player wins a supplemental tab or on the flare or help screen: "Tabs that appear in (name of the bonus round) do not represent equal or separate chances to win. The supplemental tabs are utilized to reveal the value of the initial, winning pulltab ticket incrementally. These supplemental tabs appear for entertainment value only."

(12) An available player account balance shall be collected by the player by pressing the "cash-out" button or "logoff" button on the electronic pulltab device and taking the device, the receipt, or, if allowed, a player account card to the point of sale station.

(13) The cost of any individual electronic pulltab ticket shall not exceed five (5) dollars.

Section 29. Independent Testing Facility Certification for Electronic Pulltabs.

(1) An electronic pulltab system shall not be sold, leased, or otherwise furnished to any person for use in the conduct of charitable gaming until an identical system containing identical software has been tested and certified by an independent testing facility.

(2) The cost of testing and certification shall be the responsibility of the manufacturer.

(3) The independent testing facility shall certify in writing that the electronic pulltab system and associated hardware and software conform, at a minimum, to the requirements and restrictions established in KRS Chapter 238 and these administrative regulations.

(4)

(a) The department, in consultation with the independent testing facility, shall determine if the electronic pulltab system and associated hardware and software conform to the requirements and restrictions established in KRS Chapter 238 and these administrative regulations, and shall notify the manufacturer of its decision in writing.

(b) Once the department has received the test results from the independent testing facility, the department may request a demonstration of the product within thirty (30) days.

(5) Any modifications to an electronic pulltab system or its software, except as provided in Section 31(7) of this administrative regulation, shall be tested and certified by an independent testing facility, demonstrated to the department by the manufacturer upon request, in the same manner as a new system or new software. Testing and certification shall be at the manufacturer's expense.

Section 30. Electronic Pulltab Defect and Recall.

(1) If a manufacturer, distributor, or charitable organization detects or discovers any defect, malfunction, or problem with an electronic pulltab system, electronic pulltab device, or electronic pulltab game that affects the security or the integrity of the electronic pulltab system, electronic pulltab device, or electronic pulltab game, the manufacturer, distributor, or charitable organization shall immediately notify the department. The charitable organization shall also immediately notify the distributor of the defect, malfunction, or problem. The distributor shall immediately notify the manufacturer of the defect, malfunction, or problem.

(2) If the department detects, discovers, or is notified of any problem with an electronic pulltab system, electronic pulltab device, or electronic pulltab game that affects the security or the integrity of the electronic pulltab system, electronic pulltab device, or electronic pulltab game, the department shall direct the manufacturer, distributor, and charitable organization to immediately cease the sale, lease, or use of the affected electronic pulltab system, electronic pulltab device, or electronic pulltab game until the problem can be assessed by the department in consultation with the manufacturer or distributor.

(3) If the department, in consultation with the manufacturer or distributor, determines that a defect actually exists, and the defect affects game security or otherwise threatens public confidence in the game, the department shall require the manufacturer to issue a total recall of all affected electronic pulltab systems, electronic pulltab devices, or electronic pulltab games or affected game sets or subsets, if necessary.

(4) In choosing and directing a particular recall pursuant to subsection (3) of this section, the department shall be guided in each circumstance by any combination of the following factors:

(a) The nature of the defect;

(b) Whether the defect affected game security;

(d) Whether the defect was limited to a specific number of deals of a particular form number;

(e) Whether the defect was easily detectable by a charitable organization;

(f) Whether the defect was easily detectable by members of the general public;

(g) Whether the defect threatens public confidence in the game; or

(h) Whether the defect is capable of being used to adversely affect the fair play of the game.

(5) The manufacturer or distributor may correct the defect, if possible, without issuing a total recall if the affected electronic pulltab devices and electronic pulltabs are not offered for sale, lease, or use until the department allows. The manufacturer or distributor shall make all corrections within a reasonable time, not to exceed thirty (30) days, and the manufacturer or distributor shall demonstrate the correction to the department. If the department believes the defect has been corrected and that the defect no longer affects game security or otherwise threatens public confidence in the game, the department may issue written notification that the affected electronic pulltab system, devices, or pulltab game may be reoffered for sale, lease, or use.

(6) If a recall of an electronic pulltab system or electronic pulltab device is necessary, the department, in consultation with the manufacturer, shall determine a specific date for the recall of any affected electronic pulltab system or electronic pulltab device to be completed and whether the manufacturer is required to reimburse the organization or distributor. The recall of any electronic pulltab game shall occur no later than twenty-four (24) hours after the manufacturer is notified of the defect.

Section 31. Electronic Pulltab Manufacturer Requirements.

(1) A manufacturer shall affix to each electronic pulltab device an identification badge that shall include the following information:

(a) Manufacturer name;

(b) A unique serial number;

(d) The date of manufacture, if applicable.

(2) Each manufacturer selling, leasing, or otherwise furnishing electronic pulltab devices, site systems, point of sale stations, secondary components, and electronic pulltabs shall maintain a log or other record showing the following:

(a) The name, address, and license number of the distributor to whom the electronic pulltab devices, site systems, point of sale stations, secondary components, or electronic pulltabs were sold, leased, or otherwise furnished;

(b) The date of the transaction with the distributor;

(d) The account number or terminal number of each fixed base electronic pulltab device, if applicable;

(e) The quantity of each type of electronic pulltab device;

(f) The model and version number of the system software;

(g) The name, form number, and serial number of each game set of electronic pulltabs; and

(h) The quantity of game sets sold, the cost per game set, the selling price per ticket, the cash take-in per game set, and the cash payout per game set.

(3) A manufacturer selling, leasing, or otherwise providing electronic pulltab devices, site systems, point of sale stations, or secondary components to a distributor shall provide the distributor with an invoice or other documentation that contains, at a minimum, the following information:

(a) The manufacturer name, address, and license number;

(b) The distributor name, address, and license number;

(d) The date of sale or credit and the time period covered by the invoice;

(e) The conditions of the sale or credit;

(f) A description of the type and the quantity of electronic pulltab devices, site systems, point of sale stations, and secondary components provided;

(g) The total invoice amount;

(h) The name of the person who ordered the supplies;

(i) The name of the person making the delivery;

(j) The date of delivery or date the item was picked up for sale or credit;

(k) The place or manner of delivery; and

(l) The name and signature of the person taking delivery, if any.

(4) A manufacturer providing electronic pulltabs to a distributor for distribution to a licensed charitable organization shall provide the distributor with an invoice or other documentation that contains, at a minimum, the following information:

(a) The manufacturer name, address, and license number;

(b) The distributor name, address, and license number;

(d) The date of sale or credit and the time period covered by the invoice;

(e) The conditions of the sale or credit;

(f) The quantity of electronic pulltabs sold including the number of game sets, the name of each game set, the number of tickets per game set, and the serial number and form number of the game set; and

(g) The total invoice amount.

(5) The manufacturer shall maintain physical or electronic copies of the documentation required by this section for a period of not less than three (3) years.

(6) A manufacturer shall supply any available financial reports to distributors and organizations, upon request, that provide detailed pulltab sales activity for the requesting distributor or organization for a selected date range.

(7) A manufacturer may conduct routine maintenance activities and replace secondary components of an electronic pulltab system without additional testing and certification if this activity does not affect the operation of any proprietary software, the manner in which an electronic pulltab game is played, the integrity of any critical or controlled software, or the outcome of an electronic pulltab game. A record of all activities shall be maintained and provided to the department within ten (10) days of the maintenance or replacement.

(8) A licensed manufacturer of charitable gaming supplies and equipment shall sell, lease, distribute, or otherwise provide in the Kentucky market only those electronic pulltab systems and electronic pulltabs that conform to the requirements of these administrative regulations. A licensed charitable organization shall provide to the public only those electronic pulltab systems and electronic pulltabs that conform to the requirements of this administrative regulation.

Section 32. Electronic Pulltab Distributor Requirements.

(1) Before initial use by a charitable organization, the distributor shall ascertain that the particular electronic pulltab system, electronic pulltab device, and associated software version are approved by the department for use in Kentucky.

(2) A distributor shall not display, use, or otherwise furnish an electronic pulltab device, site system, or secondary component that has in any manner been marked, defaced, or tampered with, or that is otherwise intended to deceive the public or affect a person's chances of winning.

(3) Before the complete removal of any electronic pulltab system, the distributor shall supply a copy of the data files to each charitable organization that used the electronic pulltab system and to the department.

(4) Each distributor selling, leasing, or otherwise furnishing electronic pulltab devices, site systems, point of sale stations, secondary components, or electronic pulltabs shall maintain a log or other record showing the following information, if applicable:

(a) The name of the location, physical address, telephone number, and facility license number, if applicable, where the electronic pulltab devices, site systems, point of sale stations, and secondary components are located for play;

(b) A description, including the quantity, of all electronic pulltab devices, site systems, point of sale stations, and secondary components at each playing location;

(c) The date any electronic pulltab device, site system, point of sale station, or secondary component was installed in or removed from a playing location;

(d) The model, version, and serial numbers or terminal numbers of the electronic pulltab devices, site systems, point of sale stations, and secondary components, if applicable;

(e) The name and license number of the charitable organization or distributor to whom the electronic pulltab devices, site systems, point of sale stations, or secondary components were sold, leased, or otherwise furnished;

(f) The name and license number of the manufacturer or distributor from whom the electronic pulltab devices, site systems, point of sale stations, and secondary components were purchased, leased, or otherwise obtained;

(g) Each contract, lease, or purchase agreement between a distributor and the charitable organization or other distributor to which the electronic pulltab devices, site systems, point of sale stations, or secondary components are furnished; and

(h) The total dollar amount of electronic pulltab device, site system, point of sale station, and secondary component sales or lease transactions regarding each charitable organization to which the equipment was furnished during each calendar quarter.

(5) A distributor selling, leasing, or otherwise providing electronic pulltab devices, site systems, point of sale stations, or secondary components to a licensed charitable organization shall provide the organization with an invoice or other documentation that contains, at a minimum, the following information:

(a) The manufacturer name, address, and license number;

(b) The distributor name, address, and license number;

(d) The date of sale or credit and the time period covered by the invoice;

(e) The conditions of the sale or credit;

(f) A description of the type and the quantity of electronic pulltab devices, site systems, point of sale stations, and secondary components provided;

(g) The total invoice amount;

(h) The name of the person who ordered the supplies;

(i) The name of the person making the delivery;

(j) The date of delivery or date the item was picked up for sale or credit;

(k) The place or manner of delivery; and

(l) The name and signature of the person taking delivery, if any.

(6) A distributor providing electronic pulltabs to a licensed charitable organization shall provide the organization with an invoice or other documentation that contains, at a minimum, the following information:

(a) The manufacturer name, address, and license number;

(b) The distributor name, address, and license number;

(d) The date of sale or credit and the time period covered by the invoice;

(e) The conditions of the sale or credit;

(g) The total invoice amount.

(7) An invoice not challenged within seven (7) days of delivery shall be determined as accurate. Any challenge to an invoice shall be made in writing to the distributor and a copy shall be sent to the department.

(8) The distributor shall maintain physical or electronic copies of the documentation required by this section for a period of not less than three (3) years.

(9) A distributor shall deliver electronic pulltab devices, site systems, point of sale stations, and secondary components to an agreed secure location or to an identified person.

(10) A licensed distributor of charitable gaming supplies and equipment shall sell, lease, distribute, or otherwise provide in the Kentucky market only those electronic pulltab systems and electronic pulltabs that conform to the requirements of these administrative regulations. A licensed charitable organization shall provide to the public only those electronic pulltab systems and electronic pulltabs that conform to the requirements of this administrative regulation.

Section 33. Charitable Organization Requirements.

(1) Before initial use, the organization shall ascertain that the particular electronic pulltab system, electronic pulltab device, and associated software version are approved by the department for use in Kentucky.

(2) An organization shall not display, use, or otherwise furnish an electronic pulltab device, site system, or secondary component that has in any manner been marked, defaced, or tampered with, or that is otherwise intended to deceive the public or affect a person's chances of winning.

(3) The number of electronic pulltab devices shall be limited to the following:

(a) A maximum of thirty-five (35) electronic pulltab devices on or in the primary office location of a licensed charitable organization;

(b) A maximum of fifty (50) electronic pulltab devices during the bingo session of a licensed charitable organization;

(d) With prior approval of the department, at any authorized charity fundraising event conducted by a licensed charitable organization at an off-site location.

(4) All electronic pulltab games shall be sold and played at the authorized locations, which shall be stated on the organization's charitable gaming license, and shall not be linked to other authorized locations. A distributor may install electronic pulltab systems or devices in unlicensed locations, for demonstration purposes only, if the system and devices do not accept payments or pay out prizes, and the time period of the demonstration does not exceed seventy-two (72) hours. The electronic pulltab system and devices shall not be operated unless a representative of the licensed manufacturer or distributor conducting the demonstration is present.

(5) Electronic pulltab games shall not be transferred electronically or otherwise to any other location by the licensed organization.

(6) An organization may remove from play a device that a player has not maintained in an activated mode for a specified period of time determined by the organization. The organization shall provide the notice in its house rules and shall allow the player to cash-out.

(7) Before purchasing or being provided with an electronic pulltab device, a player shall present proof that the player is at least eighteen (18) years of age. Proof shall be in the form of a picture identification card that includes the player's date of birth. If an organization uses a self-service point of sale kiosk, identification shall be presented and verified at the door.

(8) Each player shall be limited to the use of one (1) electronic pulltab device at a time.

(9) If a player's electronic pulltab device malfunctions during a game, it shall be repaired or the credits shall be transferred to another electronic pulltab device.

(10) The department shall be allowed access to examine and inspect any part of an electronic pulltab system. The department shall be granted access to all electronic pulltab devices in use by a charitable organization.

(11) The organization shall reasonably ensure that the connection to the electronic pulltab system's central computer system is operational at all times.

(12) If the organization sells electronic pulltab devices for a discounted price or gives them away as a promotion, the site system shall be programmed to account for the discounted item and priced separately from those sold at the regular price. A generic discount key shall not be allowed.

(13) The organization shall generate an Electronic Pulltab Receipts and Payouts report at the end of each charitable gaming session and maintain it with the charitable gaming session records. The Electronic Pulltab Receipts and Payouts worksheet shall be completed in the format of Form CG-EPRP.

(14) A manufacturer's representative or distributor's representative may be present during a charitable gaming session only to consult, demonstrate, provide technical support, or train the organization on the operation of the electronic pulltab system.

(15) A licensed charitable organization shall ensure that an authorized chairperson is present on the premises at all times that electronic pulltab devices are made available to the public.

Section 34. Incorporation by Reference.

(1) Form CG-EPRP, "Electronic Pulltab Receipts and Payouts", (2018), is incorporated by reference.

(2) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department of Charitable Gaming, Public Protection Cabinet, 500 Mero Street, Frankfort, Kentucky 40601, Monday through Friday, 8 a.m. to 4:30 p.m. This material is also available on the department's Web site at dcg.ky.gov.

History

RELATES TO: KRS 238.505, 238.545
STATUTORY AUTHORITY: KRS 238.515, 238.545
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming. KRS 238.545 requires the department to establish standards for pulltab construction, distribution, electronic pulltabs, and rules of play. This administrative regulation establishes those standards.
History: 32 Ky.R. 800; 1640; eff. 3-31-2006; 33 Ky.R. 3516; 34 Ky.R. 60; 257; eff. 8-31-2007; 42 Ky.R. 142; 1510; eff. 12-4-2015; 44 Ky.R. 2656; 45 Ky.R. 702, 1579; eff. 1-4-2019; TAm eff. 11-22-2019; 49 Ky.R.111, 1084; eff. 1-31-2023.

820 KAR 1:042 Bingo {#sec-820-kar-1-042 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:042}

Section 1. Definitions.

(1) "Bingo ball" means a ball imprinted with numbers and letters that is used in the selection process of a bingo game.

(2) "Bingo machine" means:

(a) A type of selection device with:

A receptacle for unselected bingo balls;
A blower for selecting; and
A ball tray that contains seventy-five (75) holes in which to place the ball once it is called; or

(b) A generator that randomly selects the balls and displays them on the face of the device.

(3) "Bingo paper pack" means a group of bingo paper sheets that are manufactured, collated, and sold by the manufacturer as a unit.

(4) "Bingo paper package" means a group of bingo paper sheets or packs that are assembled together by a charitable organization for sale at a charitable gaming session that becomes a unique item for sale with a specific price.

(5) "Bingo paper sheet" means a single piece of paper on which one (1) or multiple bingo faces are printed.

(6) "Break open bingo" means a bingo game in which the numbers on the face are hidden until after purchase.

(7) "Bundle" means to price a certain amount of bingo paper faces for a certain price with the patron choosing the type of packs that make up the total faces.

(8) "Called" means that a number located on a bingo ball has been:

(a) Selected by the selection device;

(b) Verbally announced by the caller;

(d) Placed in a ball tray or otherwise continuously displayed until completion of the bingo game.

(9) "Continuation game" means a multipart bingo game in which more than one (1) game with more than one (1) pattern may be played on one (1) bingo paper sheet.

(10) "Covered" means daubed or smeared with indelible ink if using a disposable paper bingo face, or marked electronically if using a card-minding device.

(11) "Disposable paper bingo face" means a non-reusable bingo face assembled in a single sheet, multiple face sheet, pad, or pack form.

(12) "Face" means a paper or an electronic representation containing:

(a) Five (5) rows of five (5) squares with numbers or symbols;

(b) A free center space;

(d) A unique perm number identifying each face.

(13) "Fixed-base card-minding device" means a computer system, not necessarily manufactured by a licensed manufacturer, that has been loaded with proprietary software by a licensed manufacturer to enable it to function as a card-minding device.

(14) "Flashboard" or "display board" means a board that displays the bingo numbers called.

(15) "Hand-held card-minding device" means a hand-held computer that is either manufactured or customized by the manufacturer to operate as a card-minding device.

(16) "Hard card" means a reusable card bearing a bingo face or faces.

(17) "Perm number" means the number located on a bingo face that identifies the unique pattern of numbers appearing on that face.

(18) "Pickle jar, bonanza ball, or hot ball" means games played in conjunction with other bingo games in which:

(a) A bingo ball is selected by the selection device prior to the start of certain bingo games or all bingo games; and

(b) A patron is awarded the amount of money associated with the pickle jar, bonanza ball, or hot ball, if the selected bingo ball is called, and because of that selected ball being called, a patron wins the bingo game being played.

(19) "Player pick bingo" means that the patron picks the numbers that constitute a bingo on his face or faces and a machine prints those numbers on the bingo face at the charitable gaming session before the game is played.

(20) "Progressive bingo" means a bingo game in which the value of the prize is carried forward to the next bingo session if no player wins at that session.

(21) "Selected" means a bingo number that has been obtained by the selection device and is ready to be called next by the bingo caller.

(22) "Selection device" means a device that:

(a) May be operated manually or automatically; and

(b) Is used to randomly select bingo numbers.

(23) "Selection pool" means the bingo numbers in a selection device that have not been selected.

(24) "Series number" means the number of unique faces contained in a series.

(25) "Set" means a case or cases of paper that contain one (1) of each face in a series.

(26) "Verification system" means a book of bingo faces compiled by the manufacturer or an electronic device created by the manufacturer that:

(a) Lists the unique patterns of numbers on each face by perm number; and

(b) Is used to verify the authenticity of a winning face.

Section 2. Bingo Paper Standards.

(1) A licensed distributor of charitable gaming supplies and equipment shall only distribute, in Kentucky, bingo paper conforming to the requirements of this administrative regulation.

(2) A charitable organization shall sell to the public only bingo paper conforming to the requirements of this administrative regulation.

(3) Reusable bingo hard cards shall be used only at charity fundraising events.

Section 3. Bingo Paper Construction Standards.

(1) The paper used to construct paper bingo cards or faces shall be of sufficient weight and quality to allow for clearly readable numbers and to prevent ink from spreading or bleeding through a pack thereby obscuring other numbers or cards.

(2) Perm numbers shall be displayed on the face.

(3) Numbers displayed on the face shall be randomly assigned.

(4) Each set of bingo paper shall be comprised of faces bearing the same serial number on the top sheet of the pack. A serial number shall not be repeated by the same manufacturer within one (1) year.

(5) Bingo paper assembled in packs shall be glued. Staples shall not be used.

(6) A label shall be placed on, or be visible from, the exterior of each bingo paper carton. The label shall list the following information:

(a) Type of product;

(b) Number of packs, pads, or loose sheets;

(d) Serial number of the top sheet;

(e) Number of cases;

(f) Cut of paper; and

(g) Color of paper.

Section 4. Tracking by Manufacturer. Every manufacturer of bingo paper shall maintain records sufficient to track the bingo paper, by the serial number on the top sheet, from the point of manufacture to the next point of sale for thirty-six (36) months. The records shall be subject to inspection by department staff.

Section 5. Tracking by Distributor.

(1) Every distributor of bingo paper shall maintain records sufficient to track the bingo paper, by the serial number on the top sheet, from the point of purchase by the distributor to the next point of sale for thirty-six (36) months. The records shall be subject to inspection by department staff.

(2) The records required under this section shall be deemed sufficient if the distributor:

(a) Records the name and charitable gaming license or exemption number of the purchaser at the next point of sale; or

(b) Makes and retains a copy of a valid state identification card that contains the name, address, date of birth, and state identification number of the purchaser at the next point of sale.

Section 6. Distributor Invoice Requirements.

(1) Distributors selling bingo paper to charitable organizations or other distributors shall provide the charitable organization or other distributor with an invoice that contains, at a minimum, the following information:

(a) The purchaser's name, address, and license number;

(b) The address to which the shipment was delivered;

(d) The conditions of the sale or credit;

(e) The quantity of bingo paper sold including the number of sheets or packs in a set;

(f) The serial number of the bingo sets sold;

(g) The series number of the bingo sets sold;

(h) The cut of bingo paper sold;

(i) The color of bingo paper sold;

(j) The total invoice amount;

(k) The name of the person who ordered the supplies;

(l) The name of the person making the delivery;

(m) The date of delivery or date item was picked up for sale or credit; and

(n) The place or manner of delivery, including the name and signature of the person taking delivery, if any.

(2) A distributor may deliver bingo paper to an agreed place or to an identified person. An invoice not challenged within seven (7) days of delivery shall be deemed accurate. Any challenge shall be made in writing to the distributor and a copy shall be sent to the department.

Section 7. Bingo Selection and Display Devices.

(1) Bingo ball machines and other selection devices, flashboards and other display devices, and other bingo equipment used in the selection and display of game numbers shall be made available for inspection or testing by the department at any reasonable time.

(2) Equipment shall be designed to produce randomness and be free of any defects when used in a bingo game.

(3) A charitable organization shall not use a selection or display device with a defect that was apparent at the beginning of the session. All bingo balls used in the machine or other device shall:

(a) Be of the same size, shape, weight, and balance;

(b) Have all other characteristics that control their selection the same; and

(4) A manufacturer may conduct routine maintenance activities and replace secondary components of equipment without prior approval of the department or additional testing if this activity does not affect the operation of any equipment or the manner in which a bingo game is played. A record of all routine maintenance activities shall be maintained for one (1) year and provided to the department upon request.

Section 8. Card-Minding Devices.

(1) A card-minding device site system shall:

(a) Be located at the gaming premises;

(b) Be operated by the charitable organization;

(d) Report and transmit the game results pursuant to 820 KAR 1:057;

(e) Provide security and access levels sufficient so that the internal control objectives are met pursuant to Section 9 of this administrative regulation; and

(f) Contain a point of sale station.

(2) The card-minding device site system may include the following components:

(a) A caller verification system;

(b) Required printers;

(d) Proprietary executable software;

(e) Report generation software; and

(f) An accounting system or database.

(3)

(a) A card-minding device and associated site system shall not be sold, leased, or otherwise furnished to any person for use in the conduct of bingo until it has first been tested and certified by an independent testing facility approved by the department, demonstrated to the department by the manufacturer if requested, and approved by the department.

(b) For a hand-held card-minding device, a device and software that is identical to the device and software intended to be sold, leased, or otherwise furnished to any person for use in the conduct of bingo shall be tested and approved.

(c) For a fixed-base card-minding device, a device that contains identical software to the fixed-based card-minding device intended to be sold, leased, or otherwise furnished shall be tested and approved.

(4) The cost of testing and certification shall be the responsibility of the manufacturer.

(5) The independent testing facility shall certify in writing that the device and proprietary software conform to the restrictions and conditions established in this administrative regulation.

(6) Any modifications to a hand-held card-minding device, a fixed base card-minding device, or software, except as provided in subsection (8) of this section, shall be tested and certified by an independent testing facility, demonstrated to the department by the manufacturer if requested, and approved by the department in the same manner as a new device or new software. Testing and certification shall be at the manufacturer's expense.

(7)

(a) The department, in consultation with the independent testing facility, shall determine if all proprietary software and card-minding devices required to be tested by this administrative regulation, as well as other components of card-minding device systems, conform to the requirements and restrictions established in this administrative regulation and shall notify the manufacturer of its decision in writing.

(b) Upon receipt of the test results from the independent testing facility, the department may request a demonstration of the product within thirty (30) days thereof.

(c) The department shall either approve or disapprove the card-minding device and software. The department shall inform the manufacturer of its decision within thirty (30) days of the demonstration, or no later than sixty (60) days after the department receives the test results from the independent testing facility. Approval shall be granted in accordance with paragraph (a) of this subsection.

(8) A manufacturer may conduct routine maintenance activities and replace secondary components of a card-minding device system without prior department approval or additional testing if this activity does not affect the operation of any proprietary software or the manner in which a bingo game is played, the integrity of any critical or controlled software, or the outcome of a bingo game. A record of all routine maintenance activities shall be maintained for one (1) year and made available to the department upon request.

(9)

(a) If a licensee has knowledge of any defect, malfunction, or problem with a card-minding device system, card-minding device or software that affects the security or the integrity of the bingo game or the card-minding device or system, the licensee shall immediately notify the department. The charitable organization shall also immediately notify the distributor of the defect, malfunction, or problem. The distributor shall immediately notify the manufacturer of the defect, malfunction, or problem.

(b) If the department has knowledge of any problem with a card-minding device system, card-minding device, or software that affects the security or the integrity of the bingo game or the card-minding device or system, the department shall direct the manufacturer, distributor, and charitable organization to immediately cease the sale, lease, or use of the affected card-minding device system, card-minding device, or software until the problem can be assessed by the department in consultation with the manufacturer or distributor.

(c) If the department determines that a defect actually exists, and the defect affects game security or otherwise threatens public confidence in the game, the department shall require the manufacturer to issue a total recall of all affected card-minding device systems, card-minding devices, or software, as necessary.

(d) In choosing and directing a particular recall in accordance with paragraph (c) of this subsection, the department shall be guided in each circumstance by any combination of the following factors:

The nature of the defect;
Whether the defect affected game security;
Whether the defect affected game playability;
Whether the defect was limited to a specific number of bingo faces;
Whether the defect was easily detectable by a charitable organization;
Whether the defect was easily detectable by members of the general public;
Whether the defect threatens public confidence in the game; or
Whether the defect is capable of being used to adversely affect the fair play of the game.

(e) The manufacturer or distributor may correct the defect, if possible, without the issuance of a total recall if the affected card-minding devices and software are not offered for sale, lease, or use until the department allows. The manufacturer or distributor shall make all corrections within a reasonable time, not to exceed thirty (30) days, and the manufacturer or distributor shall demonstrate the correction to the department. If the department believes the defect has been corrected and that the defect no longer affects game security or otherwise threatens public confidence in the game, the department may issue written notification that the affected card-minding device system, devices, or software may again be offered for sale, lease, or use.

(f) If a recall is necessary, the department shall determine a specific date for the recall of any affected card-minding device system, card-minding device, or software to be completed.

(g) The department shall also determine whether the manufacturer is required to reimburse the charitable organization or distributor.

(10)

(a) A distributor or charitable organization shall not add or remove any software programs to an approved card-minding device system without the permission of the manufacturer and the department.

(b) If the department detects or discovers a card-minding device system at a playing location that is using components or software that were required to have been approved by the manufacturer and the department but have not been approved, the card-minding device system shall be determined to have an unauthorized modification and the use of the system shall cease immediately.

Section 9. Card-Minding Device Systems Manufacturer Requirements.

(1) A manufacturer of a card-minding device system shall manufacture each site system to include a point of sale station and an internal accounting system that is capable of recording the charitable organization's sale of all charitable gaming supplies.

(2)

(a) A manufacturer of a card-minding device system shall ensure that the site system has internet capability so that the department has the ability to remotely verify the operation, compliance, and internal accounting systems of the site system at any time. The department shall have real time and complete read-only access to all data for all systems and devices.

(b) The manufacturer shall provide to the department all current protocols, passwords, and any other required information needed to access the system prior to the operation of the system in Kentucky.

(c) The department shall be notified of any changes in the protocols, passwords, and any other required information needed to access the system at least three (3) days prior to the change.

(d) Any reports maintained or generated by the card-minding device system shall be capable of being downloaded or otherwise accessed via the internet by the department.

(3) A manufacturer of a card-minding device system shall manufacture each site system to ensure that an internal accounting system is capable of recording and retaining for a period of not less than twelve (12) months the following information:

(a) The serial number of each bingo face sold for card-minding device use;

(b) The price of each face or package sold;

(d) The total number of faces sold for use with card-minding devices for each session;

(e) The serial number of each hand-held card-minding device sold; and

(f) The terminal number or account number associated with each fixed base card-minding device sold.

(4)

(a) The information established in subsection (3) of this section shall be secure and shall not be accessible for alteration during the session.

(b) The site system shall have report generation software with the capability to print all information required to be maintained on the site system's active or archived databases. The total sales activity report shall be completed in the format of Form CG-CMD.

(5) A manufacturer of a card-minding device system shall manufacture each site system to ensure that the applicable point of sale station is capable of printing a receipt for each sale or voided sale of a card-minding device. The receipt shall include the following information:

(a) The date and time of the transaction;

(b) The dollar value of the transaction and quantity of associated products;

(d) The session in which the product was sold;

(e) The serial number of each hand-held card-minding device sold; and

(f) The terminal number or account number for each fixed base card-minding device sold.

(6) A card-minding device system may include player tracking software. Player tracking records shall at all times be the property of the charitable organization and neither the manufacturer nor the distributor shall utilize or make available to any person, other than the department or as otherwise authorized by law, the information contained within the player tracking software without the express permission of the charitable organization.

(7) A manufacturer of a card-minding device system shall manufacture each associated site system to include a caller station verifier that is able to verify winning cards and to print the cards for posting. The caller station verifier shall be capable of posting all balls called for verification purposes and printing an ordered list of the called balls.

(8)

(a) Each card-minding device system shall employ safeguards to verify that proprietary software components are authentic copies of approved software components and all components of the card-minding device system are operating with identical copies of approved software programs.

(b) The system shall have sufficient security safeguards to ensure that any restrictions or requirements of the department or any approved proprietary software are protected from alteration by unauthorized personnel.

(c) Examples of security measures that may be employed to comply with these provisions include the use of dongles, digital signature comparison hardware and software, secure boot loaders, encryption, and key and callback password systems.

(9) A manufacturer of a card-minding device system shall ensure that a card-minding device shall not allow any bingo cards or faces other than those verifiably purchased by the patron to be available for play.

(10) A manufacturer shall not display, use, or otherwise furnish a card-minding device that has in any manner been marked, defaced, or tampered with, or that is otherwise intended to deceive the public or affect a person's chances of winning.

(11) If the card-minding device system is capable of using radio frequency, it shall not be dual frequency.

(12) The card-minding device system shall provide password protection for each charitable organization.

(13) The card-minding device system shall erase, deactivate, or render unplayable the electronic faces on each card-minding device prior to the next scheduled charitable gaming session:

(a) Upon turning off the device after the last bingo game of the charitable gaming session has been played or upon placing the device into a charging unit; and

(b) By a secondary timing method established by the manufacturer.

(14) The card-minding device system shall ensure that patrons purchase additional electronic bingo faces at the site system only.

Section 10. Tracking by Manufacturer of Card-minding Device Systems.

(1) Each licensed manufacturer selling, leasing, or otherwise furnishing card-minding device systems in Kentucky shall maintain a single log or other record showing the following:

(a) The date of the transaction with the distributor;

(b) The model, version, and serial number of each hand-held card-minding device;

(d) The model and version number of the site system software; and

(e) The name and license number of the distributor to whom the card-minding device system was sold, leased, or otherwise furnished.

(2) A licensed manufacturer selling, leasing, or otherwise providing a card-minding device system to a distributor for use in Kentucky shall provide the distributor with an invoice or other documentation that contains, at a minimum, the following information:

(a) The date of sale and the time period covered by the invoice;

(b) The quantity sold or leased; and

(3) The licensed manufacturer shall maintain physical or electronic copies of the documentation required by this section for a period of thirty-six (36) months.

Section 11. Distributor Requirements for Card-Minding Device Systems.

(1) Before initial use by a charitable organization, the distributor shall ascertain that the particular device and associated software version have been approved by the department according to this administrative regulation.

(2) If the card-minding devices are used at multiple locations, each location shall have its own separate site system.

(3) Before the complete removal of any card-minding device system, the distributor shall supply a copy of the data files to each charitable organization that used the card-minding device system and to the department.

(4) A distributor shall not display, use, or otherwise furnish a card-minding device that has in any manner been marked, defaced, tampered with, or that is otherwise intended to deceive the public or affect a person's chances of winning.

(5) Each distributor selling, leasing, or otherwise furnishing card-minding device systems shall maintain a single log or other record showing the following information, to be submitted to the department upon request:

(a) The playing location name, physical address, telephone number, and facility license number, if applicable, where the card-minding device system is located;

(b) The modem number and quantity of card-minding devices at each playing location;

(d) The model, version, and serial numbers or terminal numbers of the card-minding devices and site system equipment;

(e) The name and license number of the charitable organization or distributor to whom the card-minding device system was sold, leased, or otherwise furnished;

(f) The name and license number of the manufacturer or distributor from whom the card-minding device system was purchased, leased, or otherwise obtained;

(g) Each contract, lease, or purchase agreement between a distributor of a card-minding device and the charitable organization or other distributor to which a device is furnished; and

(h) The total dollar amount of card-minding device sales or lease transactions regarding each charitable organization to which any card-minding device was furnished during each calendar quarter.

(6) A distributor selling, leasing, or otherwise providing a card-minding device system to a charitable organization or distributor shall provide the charitable organization or distributor with an invoice or other documentation that contains, at a minimum, the following information:

(a) The date of sale and the time period covered by the invoice;

(b) The quantity sold or leased; and

(7) The distributor shall maintain physical or electronic copies of the documentation required by this section for a period of thirty-six (36) months.

Section 12. Requirements for Use of Card-Minding Device Systems.

(1) Before initial use of a card-minding device system, the charitable organization shall ascertain that the particular device and associated software version have been approved by the department for use in Kentucky.

(2) A charitable organization shall not display, use, or otherwise furnish a card-minding device that has in any manner been marked, defaced, tampered with, or that otherwise may deceive the public or affect a player's chances of winning.

(3) If a player's card-minding device malfunctions during a bingo game, it may be repaired or the faces transferred to another card-minding device if it will not interrupt the game.

(4) Each card-minding device shall be limited to offering for play a maximum of seventy-two (72) card faces during any one (1) game of a session.

(5) The charitable organization shall ensure that the card-minding device system does not allow a card-minding device to be used to obtain a bingo prize for any bingo game other than for a game within the bingo session for which the card-minding device was sold.

(6) The department may examine and inspect any card-minding device and site system. The department shall be granted reasonable access to the card-minding devices and unlimited inspection of all parts of the site system.

(7) The charitable organization shall provide the player with a receipt printed on a receipt printer for each sale detailing the transaction. The receipt shall contain, at a minimum, the following information:

(a) A unique transaction number that is printed in continuous, consecutive order and that cannot be reset or altered;

(b) The serial number of the card-minding device issued;

(d) The name of the charitable organization and license number; and

(e) A description, quantity, purchase price, and total dollar amount of each item purchased.

(8) The charitable organization shall void the original transaction and issue a new receipt if a player requests a partial or full refund. Additional purchases shall not require voiding of the original transaction.

(9) A voided transaction shall be treated in the manner established by this section.

(a) A voided transaction shall be processed immediately.

(b) If a voided transaction involves a card-minding device, the card-minding device shall be connected to the site system to ensure all electronic bingo cards are erased or deactivated.

(c) The player shall possess the receipt issued at the time of the purchase of the card minding device before the purchase is voided.

(d) The word "void" shall be clearly printed on the receipt.

(e) The player shall write his name, address, telephone number, signature, and amount of refund on the back of the receipt before a partial or full refund may be issued.

(f) All voided receipts shall be attached to the Total Sales Activity Report printed at the end of each charitable gaming session and maintained with the gaming records.

(10) If the charitable organization loads the card-minding devices prior to selling them, all unsold card-minding devices shall be voided by the start of the second game.

(11) If the receipt printer malfunctions or printed receipts are not legible, manual receipts shall be issued that contain the same information required by subsection (7) of this section.

(12) If the department or any player requests verification of a winning card face played on a card-minding device, the session chairperson shall print the winning card face and post it in a conspicuous location where it may be viewed in detail. Winning card faces requested for posting shall remain posted for at least thirty (30) minutes after the completion of the last bingo game at that particular charitable gaming session.

(13) The charitable organization shall reasonably ensure that the internet connection to the site system is operational at all times.

(14) If the charitable organization sells card-minding devices for a discounted price, or gives them away as a promotion, the site system shall be programmed to account for the discounted item and shall be priced separately from those sold at the regular price. A generic discount key shall not be allowed.

(15) The charitable organization shall print a Total Sales Activity Report reflecting activity from the time of the initial sale to the end of each bingo session. These records shall be maintained with the charitable gaming session records.

(16) A manufacturer's representative or distributor's representative may be present during a bingo session only to consult, demonstrate, or train charitable organizations on the operation of the card-minding device system.

Section 13. Bingo Rules of Play: General Provisions.

(1) All individuals involved in the conduct of a bingo session shall be trained in the proper conduct of the game and the control of funds.

(2) The chairperson of the licensed charitable gaming session shall be in full charge of the licensed charitable gaming session, supervise and direct all volunteers, and be responsible for assuring the proper receipt and recording of gaming funds.

(3) Except for braille cards intended for use by blind players, bingo paper or card minding devices shall not be reserved by the charitable organization for any player. Legally-blind players may use their own cards if the charitable organization does not make braille cards available. In accordance with KRS 238.505(15), braille cards shall not be considered gaming supplies and equipment and may be purchased from ordinary sources of supply.

(4) More than one (1) charitable organization shall not conduct gaming at the same time and location as another charitable organization except for a licensed charity fundraising event.

(5) If a bingo session is cancelled once it is commenced, a charitable organization may refund a portion of the purchase price of the bingo paper or card-minding device. A charitable organization shall not continue the session or award the prizes at a later date.

(6) Each charitable organization's gaming supplies shall be maintained in a location separate from another charitable organization's gaming supplies. This location shall be locked and access shall be limited. An extra set of bingo balls shall not be stored at the caller's stand but shall be stored with the other charitable gaming supplies.

(7) A volunteer at a charitable gaming session at which bingo cards or faces are sold shall not purchase or play bingo cards or faces at that session unless the volunteer's duties are complete for the session. Once a volunteer starts playing bingo, that person shall not work as a volunteer for the remainder of that charitable gaming session.

(8) If the charitable organization has house rules concerning its bingo session, the house rules shall:

(a) Be posted in at least two (2) conspicuous locations at the charitable gaming session and announced prior to the commencement of the charitable gaming session, or be listed on the program;

(b) Not be in conflict with KRS Chapter 238 or 820 KAR Chapter 1;

(d) Include the charitable organization's name and license number.

(9) Every ball in the bingo machine or other selection device shall be displayed for verification at the commencement and at the completion of each bingo session.

(10) Individual bingo paper sheets in a pack shall not be sold as individual bingo paper sheets.

(11) The charitable organization shall buy a complete set of paper and use that paper before starting another set.

(12) A charitable organization shall not separate faces on one (1) paper sheet or any paper sheets in a pack prior to play.

(13) The price for each type of bingo sheet, pack, or package shall be listed on the bingo program.

(14) Bingo paper sheets, bingo paper packs, and bingo paper packages shall be used during the bingo session for which they were purchased. A charitable organization shall not allow a player to carry over purchased, but unused, bingo paper sheets, bingo paper sheet packs, or bingo paper packages to a subsequent bingo session.

(15) A charitable organization shall not allow a player to play bingo paper that was not purchased at that session, except for braille cards pursuant to subsection 3 of this section.

(16) The charitable organization shall not duplicate or otherwise make copies of bingo paper.

(17) If a charitable organization sells the same paper packs or paper sheets for different prices, the packs or sheets shall be distinguishable by serial number.

(18) A charitable organization shall not sell bingo paper in a bundle.

(19) If a charitable organization sells bingo paper as a package, the package shall become a unique item with a certain price and the items in the package shall not be sold individually unless a separate serial number is used.

(20) If a charitable organization games in back-to-back sessions, it may pre-sell paper for the second session if a different set of paper is used with a different color or border and a different serial number. The money from the preselling of paper shall be deposited with the second session receipts and the sales recorded on the second session charitable gaming session records. If the price for the presold paper is discounted, the charitable organization shall list this discount on the charitable gaming session program and use a third set of paper with a different serial number.

Section 14. Playing.

(1) All players shall be physically present at the location where the bingo game is held in order to play the game or claim a prize.

(2) The bingo session shall start when the balls are verified. The balls shall be verified before the pickle jar, bonanza ball, or hot ball is selected and called. If a licensed charitable organization is authorized to sell paper or electronic pulltabs during its bingo session, the licensed charitable organization may commence selling paper or electronic pulltabs prior to the start of the bingo session with prior approval of the department. All paper or electronic pulltabs sold in this manner shall be reported on the licensed charitable organization's bingo session records.

(3) The caller shall turn off all personal electronic devices and shall not use any personal electronic devices while engaged in the calling of a bingo game.

(4) Before selecting or calling the first number in a game, the bingo caller shall call out the amount of the game prize to be awarded.

(5) Before selecting and calling the first number in a game, the bingo caller shall announce the pattern or arrangement of squares to be covered to win the game, which shall also be listed in the bingo program.

(6) After selecting each number, the bingo caller shall:

(a) Clearly announce the number;

(b) With the exception of a speed game, display the ball or other device used in a manner allowing the players to see the number;

(c) Cause the ball or other device to be placed in a ball tray or other device so as to prevent it from being placed back into the selection pool; and

(d) Enter each letter and number called on a flashboard or similar device for player viewing.

(7) A winner shall be determined when the preannounced pattern of squares is covered by a player on a card.

(8) It shall be the player's responsibility to notify a volunteer including the chairperson or caller that the player has a winning bingo combination.

Section 15. Pickle Jar, Bonanza Ball, or Hot Ball. (1) When an additional prize is to be awarded if a patron wins on a certain number, the rules of play, the maximum payout, and cost to enter shall be listed on the bingo program. These numbers may be selected and posted before the first game is called.

Section 16. Break-open Bingo.

(1) A break-open bingo game shall begin when, in the presence of players attending the bingo session, the charitable organization calls and posts, either manually or by use of a flashboard, a predetermined quantity of randomly selected bingo numbers from a selection device or a separate bingo number container. If a flashboard is used, these numbers shall be posted on a board separate from the regular bingo board unless the regular board is capable of keeping track of these numbers separately. The balls shall then be placed back into the selection pool until the game is played on the program.

(2) Sealed bingo paper sheets for a break-openbreak open game may be sold throughout the bingo session. Additional bingo paper sheets for a break-open game shall not be sold after the charitable organization resumes calling letters and numbers when the game is played on the program.

(3) A charitable organization may allow players to trade break-open bingo faces for new faces.

(4) If the charitable organization allows players to trade break-open bingo faces for new faces, two (2) sets of the game faces shall be maintained. One (1) set shall be known as the "original set" and shall be of a different serial number than the second set, known as the "trade in" set.

(5) A charitable organization shall list on the bingo program the price of the original set and the trade-in set.

Section 17. Player Pick.

(1) If the charitable organization offers a Player Pick game, the requirements established in this section shall apply.

(2) A player shall select numbers between one (1) and seventy-five (75). A player shall not select more than five (5) numbers for each column. The player may allow the machine to select the numbers.

(3) Duplicate numbers shall not be played on a purchased face. If duplicate numbers appear on a face, the card shall be void.

(4) Once selected, the machine shall print a face with the selected numbers.

(5) The faces shall conform to the construction and randomization standards established in this administrative regulation.

(6) The price of each face and the amount of numbers that will be chosen shall be listed on the bingo program.

(7) The numbers shall be daubed as the balls are called when the game is played as listed on the bingo program.

(8) A player shall win if he or she is the first person to cover the numbers.

Section 18. Continuation Games.

(1) Multiple patterns may be played on one (1) bingo face. Each portion of the continuation game shall be considered a single bingo game, even though the bingo balls shall not be returned to the selection pool after a winner has been determined and verified.

(2) Each winning pattern shall be verified independently.

Section 19. Progressive Bingo Games.

(1)

(a) Progressive games or prizes connected to a bingo game or conditioned on winning a bingo game shall be permitted only if prizes awarded on progressive games are included in the prize limit established in KRS 238.545(1), regardless of the method by which a player is eligible to participate.

(b) The charitable organization shall be responsible for ensuring that the value of any progressive bingo game prize, when added to the values of the other prizes of the same date or session, does not exceed the statutory prize limit.

(c) All receipts on progressive bingo games shall be reported to the department as gross receipts for the date collected pursuant to KRS 238.550.

(2) Once a progressive bingo game has been started, the game shall be played in the same manner at every session until the prize is awarded. The jackpot prize shall be offered at each successive bingo session for that charitable organization until the jackpot prize has been won.

Section 20. Lucky Ball.

(1) If the charitable organization offers Lucky Ball play, the requirements in this Section shall apply.

(2) Players may purchase one (1) Lucky Ball ticket prior to the beginning of a bingo session, and before purchasing any other bingo paper. Each player shall be limited to one (1) Lucky Ball ticket per bingo session.

(a) Lucky Ball tickets shall consist of a pre-printed form with space provided for the player's Lucky Ball number, name, date, and the name of the ticket seller to be written in. The Lucky Ball tickets shall also have pre-printed sequential ticket numbers for tracking and verification purposes.

(b) The cost of a Lucky Ball ticket shall not exceed five (5) dollars. Money from Lucky Ball ticket sales shall be retained by the charitable organization as part of the gaming proceeds from the gaming session.

(c) Each player may choose his own Lucky Ball number at the time of purchase of the ticket, and shall immediately write that number, in ink, on the Lucky Ball ticket, along with the player's name, the date, and the name of the ticket seller.

(d) Once the information is written on the Lucky Ball ticket, the carbon copy or electronic duplicate copy of the ticket shall be retained by the charitable organization, and all ticket copies shall be placed in numerical order as soon as possible after the start of a gaming session. The charitable organization shall verify that the player has written a correct name on the ticket by checking photo ID at the time of sale, and shall keep a log of tickets sold and Lucky Ball numbers to verify that any tickets are used only by the ticket buyer and are not traded or sold during the session.

(e) Once the player purchases bingo paper for play in that session, the player shall write their Lucky Ball number on the back of each piece of bingo paper to be put into play.

(3) During bingo play, any player who purchased a Lucky Ball number may mark that number as a free space, or "wildcard" number to mark their bingo paper to form bingos, regardless of whether that number is selected by the caller in regular play.

(4) No selling, trading, or exchange of any kind of Lucky Ball tickets or bingo paper may take place during a bingo session between players of their chosen Lucky Ball numbers. All monitors, sellers, and volunteers shall observe whether a player's Lucky Ball number matches the number written on the back of the bingo paper to prevent selling, trading, or exchange of Lucky Ball tickets or bingo paper.

(5) Verifying a bingo.

(a) Once a player announces a bingo, a volunteer or monitor reads the perm number from the bingo paper to the caller. The caller then enters the perm number into the console.

(b) If the console does not verify a bingo, and if the Lucky Ball tickets cannot be verified electronically by the perm numbers, the caller must ask if there is a Lucky Ball.

(c) If there is a Lucky Ball, the volunteer calls out only the receipt number on the Lucky Ball ticket to the caller, in the presence of a neutral player.

(d) The caller then communicates the receipt number to the office or to the person holding the carbon copies of the Lucky Ball tickets in numerical order. The charitable organization shall verify that the Lucky Ball ticket had not been sold, traded, or exchanged by the players, by checking the photo ID of the winning player and checking to ensure the Lucky Ball number was written on the back of the bingo paper.

(e) After the receipt is located and the receipt numbers verified, the Caller shall announce the Lucky Ball number to the Monitor and the audience. The neutral player shall still be viewing the ticket to verify the bingo. The Lucky Ball number of the winning player may or may not be the last number called.

(f) Once a bingo is verified, the caller shall announce the last number called and the number of valid bingos for that game. The same verification procedure shall be followed in the case of multiple bingos until all are verified.

Section 21. Winner Verification and Registration.

(1) A manufacturer of bingo paper shall make available for purchase a verification book or other verification system for all paper manufactured.

(2) The charitable organization conducting a bingo game shall use a reliable verification system that corresponds with the set of paper in play.

(3) When a player declares a winning bingo, the steps established in this subsection shall be followed for winner verification.

(a) The game shall be stopped before the next number is called. If the next number has been selected, it shall be secured to ensure that if the declared "bingo" is invalid, the game will continue.

(b) If an electronic verifier or verifier book is used, a volunteer for the charitable organization shall:

Show the winning face to a neutral player, who shall be a player other than the winner; and
Call back the perm number while in front of the neutral player.

Show the winning face to a neutral player, who shall be a player other than the winner; and
Call back the winning combination while in front of the neutral player.

(4) The caller shall ask at least twice if there are any other winners before announcing the close of the game. If playing a continuation game, the caller shall ask at least twice if there are any other winners before the close of that part of the game.

(5) If more than one (1) winner is declared in a bingo game, prizes shall be awarded as established in this subsection.

(a) Cash prizes shall be divided equally among the verified winners.

(b) If the prize is something other than cash and cannot be divided among winners, prizes of equal proportionate value shall be awarded.

Section 22. Prizes.

(1) If a merchandise prize or discount is available to everyone, it shall be considered a promotional item and counted as an expense.

(2) If a merchandise prize or discount is not available to everyone, it shall be included in the prize limit established in KRS 238.545(1) at its fair market value. It shall be included in expenses for purchased prizes at actual cost. If the merchandise prize is a gaming supply, it shall be included in supplies expense at actual cost.

(3) The fair market value of bingo paper, a card-minding device, electronic pulltab device, or paper pulltabs awarded as a merchandise prize shall be the price that a patron would have paid for the same bingo paper, card-minding device, electronic pulltab device, or paper pulltab at that charitable gaming session.

(4)

(a) If bingo paper is awarded as a door prize or a bingo game prize, the patron shall be given a voucher.

(b) The voucher shall be completed with:

The name, address, and phone number of the patron redeeming the voucher;
The date on which it was awarded;
The date on which it was redeemed;
The amount of paper given in exchange for the voucher; and
The serial number of the bingo paper.

(d) The charitable organization shall retain the voucher with its session records.

(5) If bingo paper is awarded as a promotional item, the description of the paper shall be listed on the program with "free" or "promotional" listed as the price. If the charitable organization also sells that type of paper, a separate set of paper with a separate serial number shall be used.

(6)

(a) If a card-minding device or electronic pulltab device is awarded as a door prize or a bingo game prize, the patron shall be given a voucher.

(b) The voucher shall be completed with:

The name, address, and phone number of the patron redeeming the voucher;
The date on which it was awarded;
The date on which it was redeemed; and
The number of card-minding devices and the number of faces loaded on each device, or the number of electronic pulltab devices and credits loaded on each device, if any, given in exchange for the voucher.

(d) The charitable organization shall retain the voucher with its session records.

(e) There shall be a specific button on the point of sale programmed for each type of voucher and package involving a card-minding device or electronic pulltab device.

(7) If a card-minding device is awarded as a promotional item, the description of the promotional package shall be listed on the program with "free" or "promotional" listed as the price. The point of sale shall have a specifically described discount button for this promotion.

(8) If a charitable organization offers coupons for bingo paper or a card-minding device, a voucher shall be completed when the coupon is redeemed, and the coupon and the voucher shall be retained with the charitable gaming session records.

(9) If the charitable organization sells gift certificates for bingo paper or a card-minding device, the receipts for the sale shall be counted as gaming receipts on the day they are received. When the gift certificate is redeemed, a voucher shall be completed and the gift certificate and the voucher shall be retained with the charitable gaming session records.

(10) If a paper pulltab or electronic pulltab device is awarded as a bingo prize, the person in charge of bingo payouts shall purchase the pulltabs or electronic pulltab device and any credits loaded to the device from the pulltab manager by transfer of cash from bingo payout to pulltab sales and it shall be recorded as a sale on the session records.

(11) Each bingo winner shall be determined and every prize shall be awarded and delivered on the same day on which the bingo was conducted.

(12) A voucher shall be redeemed on the same day as awarded.

Section 23. Incorporation by Reference.

(1) Form CG-CMD, "Total Sales Activity Report (2018)" is incorporated by reference.

History

RELATES TO: KRS 238.515, 238.530, 238.545
STATUTORY AUTHORITY: KRS 238.515, 238.545
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming and to promulgate administrative regulations necessary to carry out the purposes and intent of KRS Chapter 238. This administrative regulation establishes standards for the construction and distribution of bingo paper, the construction and distribution of bingo equipment including card-minding devices, and the conduct of bingo play.
History: 820 KAR 001:042. 32 Ky.R. 809; 1284; 1647; eff. 3-31-2006; 44 Ky.R. 2670; 45 Ky.R. 1592; eff. 1-4-2019; TAm eff. 11-22-2019; Crt eff. 12-23-2025.

820 KAR 1:050 Raffles {#sec-820-kar-1-050 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:050}

Section 1. Definitions.

(1) "Access control" means the restriction of access to a place or other resource. Locks and login credentials are two (2) mechanisms of access control.

(2) "Address Resolution Protocol (ARP)" is the protocol used to translate IP addresses into MAC addresses to support communication on a LAN (Local Area Network). The Address Resolution Protocol is a request and reply protocol and it is communicated within the boundaries of a single network, never routed across internetwork nodes (connection points, either a redistribution point or an end point for data transmissions).

(3) "Algorithm" means a finite set of unambiguous instructions performed in a prescribed sequence to achieve a goal, especially a mathematical rule or procedure used to compute a desired result. Algorithms are the basis for most computer programming.

(4) "Authentication" means a security measure designed to protect a communications system against acceptance of a fraudulent transmission or simulation by establishing the validity of a transmission, message, or originator.

(5) "Bearer ticket" means an electronic or paper ticket that contains one (1) or more draw numbers purchased.

(6) "Bi-Directional" means the ability to move, transfer, or transmit in both directions.

(7) "Counterfoil" means an electronic record or paper ticket stub, also known as a barrel ticket, which shall be drawn to determine a winner and contains a player's draw number matching the bearer ticket purchased and may, depending on the type of raffle, contain the name, address, or telephone number of the player.

(8) Critical memory means memory that is used to store all data that is considered vital to the continued operation of the RSU.

(9) "Crypto-analytic" means an attack against the encryption key (refer to definition of encryption key).

(10) "Cryptographic" means anything written in a secret code or cipher.

(11) "Distributed Denial of Service (DDoS)" means a type of Denial of Service (DoS) attack where multiple compromised systems, usually infected with a destructive software program, are used to target a single system causing a Denial of Service (DoS) attack. Victims of a DDoS attack consist of both the end targeted system and all systems maliciously used and controlled by the hacker in the distributed attack.

(12) "Domain" is a term used to identify one (1) or more IP addresses. A domain name is used in a Uniform Resource Locator (URL) to identify particular Web pages.

(13) "Draw number" means a uniquely identifiable number that is provided to the purchaser for each chance purchased and may be selected as the winning number for the raffle.

(14) "Electronic raffle system" means computer software and related equipment used by raffle licensees to sell tickets, account for sales, and facilitate the drawing of tickets to determine the winners.

(15) "Encryption" means the reversible transformation of data from the original (the plaintext) to a difficult-to-interpret format (the cipher text) as a mechanism for protecting its confidentiality, integrity, or its authenticity.

(16) "Encryption key" means a sequence of numbers used to encrypt or decrypt (to decode/decipher) data.

(17) "Firewall" means any number of security schemes that prevent unauthorized users from gaining access to a computer network or that monitor transfers of information to and from the network.

(18) "Geolocation" means identifying the real-world geographic location of an Internet connected computer, mobile device, or Web site visitor.

(19) "Host" means a computer system that is accessed by a user working at a remote location. Typically, the term is used when there are two (2) computer systems connected by modems and telephone lines. The system that contains the data is called the host, while the computer at which the user sits is called the remote terminal. A computer that is connected to a TCP/IP network, including the Internet. Each host has a unique IP address.

(20) "Hypertext Transfer Protocol (HTTP)" means the underlying protocol used by the World Wide Web. HTTP defines how messages are formatted and transmitted, and what actions Web servers and browsers shall take in response to various commands.

(21) "Internet" means an interconnected system of networks that connects computers around the world via the TCP/IP protocol. TCP/IP protocol is short for Transmission Control Protocol/Internet Protocol, the suite of communications protocols used to connect hosts on the Internet.

(22) "Intrusion Detection System (IDS)" or "Intrusion Prevention System (IPS)" means a system that inspects all inbound and outbound network activity and identifies suspicious patterns that may indicate a network or system attack from someone attempting to break into or compromise a system. Used in computer security, intrusion detection refers to the process of monitoring computer and network activities and analyzing those events to look for signs of intrusion in a system.

(23) "Internet Protocol (IP)" means an identifier for a computer or device on a TCP/IP network.

(24) "Media Access Control (MAC)" means a hardware address that uniquely identifies each node, such as the computer or printer, of a network.

(25) "Man-in-the-Middle (MITM)" means an active Internet attack where the person attacking attempts to intercept, read, or alter information moving between two (2) computers.

(26) "Message authentication" means a security measure designed to establish the authenticity of a message by means of an authenticator within the transmission derived from certain predetermined elements of the message itself.

(27) "Online" means being connected to the Internet.

(28) "Online Purchasing Platform" means the raffle system hardware and software that drives the features common to all raffles offered, and which forms the primary interface to the Raffle System for both the patron and the operator. The online purchasing platform provides the patron with the means to register an account, log in to or out of their account, modify their account information, make ticket purchases, request account activity statement or reports, and close their account. In addition, any web pages displayed to the patron that relate to ticket purchasing offered on the raffle system. The online purchasing platform provides the operator with the means to review patron accounts, enable or disable raffles, generate various financial transaction and account reports, input raffle outcomes, enable or disable patron accounts, and set any configurable parameters.

(29) "Protocol" means a set of formal rules describing how to transmit or exchange data, especially across a network. TCP/IP is the standard communications protocol of the Internet and most internal networks.

(30) "Raffle sales unit (RSU)" means a portable or wireless device, a remote hardwired connected device, or a standalone cashier station that is used as a point of sale for bearer tickets.

(31) "Remote access" means any access from outside the system or system network including any access from other networks within the same establishment.

(32) "Shellcode" means a small piece of code used as the payload (cargo of data transmission) in the exploitation of computer security. Shellcode exploits a vulnerability and allows an attacker the ability to reduce a computer system's information assurance.

(33) "Security certificate" means information, often stored as a text file, which is used by the Secure Socket Layers (SSL) protocol to establish a secure connection. A security certificate contains information about whom it belongs to, who it was issued by, valid dates, and a unique serial number or other unique identification that may be used to verify the contents of the certificate. In order for an SSL connection to be created, both sides are required to have a valid security certificate, which is also called a digital ID.

(34) "Stateful firewall" means a firewall that keeps track of the state of network connections traveling across it. The firewall is programmed to distinguish legitimate packets for different types of connections. Only packets matching a known active connection shall be allowed by the firewall; others shall be rejected. Stateful inspection, also referred to as Dynamic Packet Filtering, is a security feature often included in business networks,

(35) "Stateless" means a communications protocol that treats each request as an independent transaction that is unrelated to any previous request so that the communication consists of independent pairs of requests and responses. A stateless protocol does not require the server to retain session information or status about each communications partner for the duration of multiple requests. In contrast, a protocol that requires the keeping of internal state is known as a stateful protocol. Examples of stateless protocols include Internet Protocol (IP) and the Hypertext Transfer Protocol (HTTP).

(36) "Validation number" means a unique number that may represent one (1) or more draw numbers that shall be used to validate the winning number for the raffle.

Section 2. Raffle Ticket Construction.

(1) Raffle tickets shall have a detachable section or duplicate ticket and shall be consecutively numbered. If raffle tickets are sold electronically, the charitable organization selling the tickets shall provide all purchasers with a physical ticket or electronic communication that contains the information required by subsection (2) of this section.

(2) The detachable section or duplicate of the ticket shall bear a duplicate number corresponding to the number on the ticket and shall provide space for the purchaser's name, complete address, and telephone number.

(3) The following information shall be on each ticket:

(a) The date and time for each drawing;

(b) The location of each drawing;

(d) The charitable organization's license number or exemption number;

(e) The price of the ticket; and

(f) Each prize to be awarded with a fair market value over $500.

(4) The requirements of subsections (2) and (3) of this section shall be waived if:

(a) The raffle tickets sell for five (5) dollars or less, or

(b) The raffle sales are initiated and concluded and all winners are selected at a licensed charity fundraising event or a licensed special limited charity fundraising event.

Section 3. Raffle Prizes.

(1) A charitable organization conducting a raffle in which real or personal property prizes are to be awarded shall be responsible for the transfer and delivery of the prize without lien or interest of others.

(2) All raffle prizes shall be awarded as indicated on the raffle ticket unless the event at which the raffle was to be conducted is postponed. If the raffle is postponed, all reasonable efforts shall be made to notify ticket holders of the new drawing date.

(3) If the prize to be awarded is the jackpot of a progressive raffle board, the charitable organization's charitable gaming session records shall report in the gross receipts total all startup cash, monies derived from raffle ticket sales, and any other contribution to the jackpot.

Section 4. Conduct of Raffles.

(1) Any person holding a raffle ticket shall be permitted to observe the raffle drawing. A charitable organization may broadcast a raffle drawing via a verifiable online live streaming service to provide ticket holders an opportunity to view the drawing if the charitable organization provides purchasers with instructions for viewing the drawing at the time tickets are purchased.

(2) A person shall not be required to be present at a raffle drawing in order to be eligible for the prize drawing.

(3) For raffles using paper tickets, each ticket seller shall return to the charitable organization the stubs or other detachable sections or duplicates of all tickets sold prior to the drawing.

(4) For raffles using paper tickets, before drawing, the charitable organization shall place the seller's portion of each ticket sold into a receptacle from which the winning tickets are to be drawn. The receptacle shall be designed so that each ticket placed in it has an equal chance to be drawn.

(5) If a charitable organization uses electronic raffle software to conduct a raffle, the charitable organization shall ensure that the electronic raffle software has been:

(a) Purchased, leased, or otherwise obtained from a distributor licensed by the department;

(b) Manufactured by a manufacturer licensed by the department;

(d) Approved by the department for use in the Commonwealth.

(6) A charitable organization shall conduct a raffle entirely with traditional paper tickets or entirely with an electronic or online raffle system; a charitable organization shall not use both paper and electronic tickets in the same raffle, except for paper receipts or bearer tickets generated by an electronic or online raffle system in compliance with this regulation.

Section 5. Claiming Raffle Prizes.

(1) If the winner is not present at the drawing, the charitable organization shall notify the winner within seven (7) days of the drawing that the winner shall claim the prize within thirty (30) days.

(2) If a winner does not wish to claim the prize but wishes to donate it to the charitable organization, the charitable organization shall obtain a written statement of the winner's intention within the thirty (30) day period. A charitable organization shall not accept the donation to the charitable organization of a prize won if doing so would violate KRS 238.540.

(3) If a raffle winner does not claim the prize or donate it to the charitable organization within thirty (30) days after having been contacted by certified mail, or if the raffle winner is ineligible by law to claim the prize, the charitable organization shall notify the department and draw another ticket in the presence of department personnel.

(4) The requirements of subsections (1), (2), and (3) of this section shall be waived, and the charitable organization shall be allowed to draw tickets until a winner is present if:

(a) The raffle tickets sell for five (5) dollars or less;

(b) The raffle sales are initiated and concluded and all winners are selected at a licensed charity fundraising event; or

(c) The raffle sales are initiated and concluded and all winners are selected at a licensed special limited charity fundraising event.

Section 6. Electronic Raffle System Standards.

(1) Each electronic raffle system shall have a device or facility that provides for the sale of bearer tickets and the collection and accounting tools needed to track all sales initiated through the raffle system. The system shall have the ability to support all RSUs, whether they are hard-wired or connected wirelessly, to ensure that each RSU sends or transmits all ticket sales to the system. The system shall have the ability to facilitate winner selection by either manual or electronic means.

(2) Time Limits. The electronic raffle system software shall be capable of setting time limits for when tickets may be purchased for a raffle drawing.

(3) Configuration Changes. After the commencement of a raffle, the electronic raffle system software shall not allow changes to parameters that may affect the integrity of the raffle.

(4) Bearer Tickets. After the payment of a fee, participants shall receive a bearer ticket for one (1) or more chances to win a raffle drawing. The bearer ticket shall be printed with the information required by Section (2)(2) of this administrative regulation and shall include:

(a) The date and time (in twenty-four (24) hour format showing hours and minutes) that the ticket was purchased;

(b) All unique draw numbers purchased for the raffle;

(d) A unique validation number or barcode.

(5) Validation Numbers. The algorithm or method used by the electronic raffle system to generate the bearer ticket validation number shall be unpredictable and ensure against duplicate validation numbers for the raffle currently in progress.

(6) Voiding a Ticket. The electronic raffle system shall be designed to flag or otherwise identify a voided bearer ticket and its corresponding draw number. The system shall record at a minimum the draw numbers and the validation number from the voided bearer ticket. Voided draw numbers shall not be able to be resold or reissued for that raffle.

(7) Counterfoils. If a manual draw is used to determine a winner, all counterfoils used in a raffle drawing shall be the same size, shape, and weight. A counterfoil shall be printed or stored electronically for each purchased draw number. If an electronic random number generator is used to determine the winner of the raffle drawing, a printed counterfoil is not required. A counterfoil shall only contain one (1) draw number and shall contain the following information, which matches the bearer ticket issued to the player:

(a) Event Identifier or Location;

(b) The draw number;

(d) Value or cost of the bearer ticket; and

(e) Unique validation number or barcode.

(8) Reprinting of Counterfoils. If the system supports the reprinting of counterfoil tickets, the facility shall require additional supervised access controls, and the draw numbers for all reprinted counterfoils shall be flagged in the system as reprints.

(9) Raffle Prize Displays. An electronic raffle system may include a raffle prize display that may be viewed by participants of the raffle that displays the raffle prize and the current progression of the prize. The electronic raffle system may have multiple raffle awards displayed in an alternating fashion.

(10) Electronic Raffle Drawing Requirements. A raffle drawing shall be held at a date, time, place stated on the charitable organization's license or certificate of exemption. The drawing shall be administered by an officer or chairperson of the charitable organization. A raffle drawing shall only be conducted after:

(a) The close of the raffle; and

(b) All sales and voided sales for the particular raffle purchase period have been reconciled.

(11) Closing the Raffle Purchase Period. The system shall be capable of closing off the sale of bearer tickets at a time determined by the operator. Tickets shall not be sold after the raffle purchase period has closed. The system shall be capable of displaying to the operator by way of the RSU device display that all sales from a particular device have been uploaded, transferred, or otherwise communicated to the electronic raffle system.

(a) On verification of the sales data transfer, the RSU device shall be capable of being reset or closed; and

(b) The RSU shall not be enabled for any further sales for the current raffle.

(12) Voided Tickets. Voided tickets shall not be qualified toward any prize. The system shall be capable of reconciling voided sales for the raffle purchase to identify all voided tickets that may be committed to the draw. The system shall record an acknowledgement from the event manager that voided tickets have been reconciled before permitting a winning number to be entered into the system for validation.

(13) Winner Determination. The operator shall conduct an electronic or other approved draw procedure that ensures a randomly selected draw number as a winner from all tickets sold. Each drawn counterfoil shall be verified as a sold and valid ticket. This process shall be repeated for each advertised prize.

(14) Official Drawing Results. Results of the drawing become official and final after the drawn number is verified as a winning bearer ticket for the respective drawing, and is presented to the participants of the raffle. The system shall display the winning draw on all capable display devices intended to be viewed by participants.

(15) Winner Verification. Winning tickets shall be verified prior to payout. Participants shall present the bearer ticket to an authorized agent for validation with the system. The system shall be capable of verifying the winning draw numbers and shall allow for the validation of draw numbers either manually or through the use of a bar code scanner or equivalent.

(16) System Reporting Requirements. The system shall be capable of producing general accounting reports to include the following information for each draw conducted:

(a) Raffle Drawing Report. A report that includes the following for each raffle drawing:

Date and time of the event;
Organization running the event;
Sales information;
Prize value awarded to participant;
Prize distribution (total raffle sales vs. prize value awarded to participant);
Refund totals by event;
Draw numbers-in-play count;
Winning number(s) drawn (including draw order, call time, and claim status); and
All other information required by 820 KAR 1:057.

(b) Exception Report. A report that includes system exception information, including changes to system parameters, corrections, overrides, and voids;

(c) Bearer Tickets Report. A report that includes a list of all bearer tickets sold including all associated draw numbers, selling price, and RSU identifier;

(d) Sales by RSU. A report that includes a breakdown of each RSU's total sales (including draw numbers sold) and any voided or misprinted tickets;

(e) Voided Draw Number Report. A report that includes a list of all draw numbers that have been voided including corresponding validation numbers;

(f) Raffle Sales Unit Event Log. A report that lists all events recorded for each RSU, including the date and time and a brief text description of the event or identifying code;

(g) Raffle Sales Unit Corruption Log. A report that lists all RSUs unable to be reconciled to the system, including the RSU identifier, RSU operator, and the money collected; and

(h) All information required by 820 KAR 1:057.

Section 7. Raffle Sales Unit Standards.

(1) After the payment of a fee, participants shall receive a chance to win a raffle drawing. A chance to win a raffle drawing shall be purchased from an attendant-operated Raffle Sales Unit (RSU).

(a) Attendant-Operated Raffle Sales Unit. A participant may purchase a bearer ticket from an attendant-operated RSU by providing payment for the ticket(s) to the attendant. Upon receiving payment, the attendant shall provide the participant the bearer ticket(s) purchased by the participant.

(b) Player-Operated Raffle Sales Unit. A participant may purchase a bearer ticket from a player-operated RSU by following the instructions appearing on the screen of the RSU and providing payment for the ticket(s). Upon payment for the ticket(s), the RSU shall issue the corresponding bearer ticket(s) purchased by the participant.

(2) An RSU shall be capable of generating and printing a bearer ticket with one (1) or more uniquely identifiable draw numbers.

(a) The system shall not generate duplicate draw numbers within the same event.

(b) For each draw number generated, there shall be only one (1) corresponding counterfoil with the same draw number.

(3) Access Controls. Access to raffle sales software shall be controlled by a secure logon procedure. It shall not be possible to modify the configuration settings of an RSU without an authorized secure logon.

(4) Touch Screens. Touch screens shall be accurate once calibrated and shall maintain that accuracy for at least the manufacturer's recommended maintenance period.

(5) RSU Interface. The functions of all buttons, touch or click points represented on the RSU interface shall be clearly indicated within the area of the button, touch or click point or within the help menu. There shall be no functionality available through any buttons or touch or click points on the RSU that are undocumented.

(6) Communications. A Raffle Sales Unit shall be designed or programmed to only communicate with authorized electronic raffle systems components. The electronic raffle system shall have the capability to uniquely identify and authorize each RSU used to sell tickets for a raffle.

(7) Wireless Raffle Sales Units. Communication shall only occur between the RSU and the electronic raffle system via authorized access points.

(8) Printing Bearer Tickets. If the RSU connects to a printer that is used to produce bearer tickets, the bearer ticket shall include information as indicated in Section 2 (2) of this administrative regulation. This information, or some of this information, may be contained on the ticket stock itself.

(a) The RSU shall control the transfer of ticket data sent to the printer, and only transfer ticket data to the printer when sufficient space is available in the printer memory to receive the ticket information.

(b) If a barcode forms part of the validation number printed on the bearer ticket, the printer shall support the barcode format and print with sufficient resolution to permit validation by a barcode reader.

(9) Printer Error Conditions. The bearer ticket printer shall be able to detect and indicate to the operator the following error conditions:

(a) Low battery;

(b) Out of paper or paper low;

(d) If the unit is capable of reprinting a ticket, the reprinted ticket shall clearly indicate that it is a reprint of the original ticket.

(10) Critical Memory Requirements. Critical memory shall be maintained for the purpose of storing and preserving critical data including:

(a) If not communicating with the system, recall of all tickets sold including, at minimum, draw numbers and validation numbers; and

(b) RSU configuration data.

(11) Maintenance of Critical Memory. Critical memory storage shall be maintained by a methodology that enables errors to be identified. This methodology may involve signatures, checksums, partial checksums, multiple copies, time stamps or effective use of validity codes.

(12) Comprehensive Checks. Comprehensive checks of critical memory shall be made on startup and shall detect failures with an extremely high level of accuracy.

(13) Unrecoverable Critical Memory. An unrecoverable corruption of critical memory shall result in an error. Upon detection, the raffle sales unit shall cease to function.

(14) Backup Requirements. The RSU shall have a backup or archive capability, which allows the recovery of critical data if a failure occurs.

(15) RSU Program Identification. All programs shall contain sufficient information to identify the software and revision level of the information stored on the RSU, which may be displayed via a display screen.

(16) Detection of Program Corruption. RSU programs shall be capable of detecting program corruption and cause the RSU to cease operations until corrected.

(17) Verification of Program Updates. Prior to execution of the updated software, the software shall be successfully authenticated on the RSU.

(18) Independent Control Program Verification. The RSU shall have the ability to allow for an independent integrity check of the RSU's software from an outside source and is required for all software that may affect the integrity of the raffle. This shall be accomplished by being authenticated by a third-party device or by allowing for removal of the media so that it may be verified externally. This integrity check shall provide a means for field verification of the software to identify and validate the program. The test laboratory, prior to device approval, shall evaluate the integrity check method.

Section 8. Random Number Generator Requirements.

(1) A random number generator shall reside on a program storage device secured in the logic board of the system. The numbers selected by the random number generator for each drawing shall be stored in the system's memory and be capable of being output to produce a winning number. The use of an RNG results in the selection of raffle outcomes in which the selection shall:

(a) Be statistically independent;

(b) Conform to the desired random distribution;

(d) Be unpredictable.

(2) Applied Tests. The test laboratory may employ the use of various recognized tests to determine whether or not the random values produced by the random number generator pass the desired confidence level of ninety-nine (99) percent. The independent test lab shall choose the appropriate tests on a case by case basis depending on the RNG under review. These tests may include:

(a) Chi-square test;

(b) Equi-distribution (frequency) test;

(d) Overlaps test;

(e) Poker test;

(f) Coupon collector's test;

(g) Permutation test;

(h) Kolmogorov-Smimov test;

(i) Adjacency criterion tests;

(j) Order statistic test;

(k) Runs tests (patterns of occurrences shall not be recurrent);

(l) Interplay correlation test;

(m) Serial correlation test potency and degree of serial correlation (outcomes shall be independent of the previous game);

(n) Tests on subsequences; and

(o) Poisson distribution.

(3) Period. The period of the RNG, in conjunction with the methods of implementing the RNG outcomes, shall be sufficiently large to ensure that all valid, sold numbers are available for random selection.

(4) Range. The range of raw values produced by the RNG shall be sufficiently large to provide adequate precision and flexibility when scaling and mapping.

(5) Background RNG Cycling or Activity Requirement. To ensure that RNG outcomes cannot be predicted, adequate background cycling or activity shall be implemented between each drawing at a speed that cannot be timed. The rate of background cycling or activity shall be sufficiently random in and of itself to prevent prediction.

(6) RNG Seeding or Re-Seeding. The methods of seeding or re-seeding implemented in the RNG shall ensure that all seed values are determined securely and that the resultant sequence of outcomes is not predictable.

(a) The first seed shall be randomly determined by an uncontrolled event. After every bearer ticket draw, there shall be a random change in the RNG process (new seed, random timer, or delay, ). This shall verify the RNG does not start at the same value, every time. It is permissible not to use a random seed, except the manufacturer shall ensure that the selection process will not synchronize.

(b) Unless proven to have no adverse effect on the randomness of the RNG outcomes or actually improve the randomness of the RNG outcomes, seeding and re-seeding shall be kept to an absolute minimum. If the background cycling or activity of the RNG is interrupted, the next seed value for the RNG shall be a function of the value produced by the RNG immediately prior to the interruption.

(7) Scaling Algorithms. The methods of scaling ( converting raw RNG outcomes of a greater range into scaled RNG outcomes of a lesser range) shall be linear, and shall not introduce any bias, pattern, or predictability. The scaled RNG outcomes shall be proven to pass various recognized statistical tests as chosen by the independent testing laboratory.

(a) If a random number with a range shorter than that provided by the RNG is required for some purpose within the raffle system, the method of re-scaling, ( converting the number to the lower range), shall be designed in a way that all numbers within the lower range are equally probable.

(b) If a particular random number selected is outside the range of equal distribution of rescaling values, it is permissible to discard that random number and select the next in sequence for the purpose of re-scaling.

(8) Winning Number Draw. The winning number selection shall only be produced from sold bearer ticket numbers from the current drawing to be available for selection.

(a) Each valid, sold raffle number shall be available for random selection at the initiation of each drawing; and

(b) For raffles that offer multiple awards or drawings with separate buy-ins for each, the winning number selection shall only be produced from sold bearer ticket numbers corresponding with each applicable award or drawing. As winning numbers are drawn, they shall be immediately used as governed by the rules of the raffle ( the bearer tickets shall not be discarded due to adaptive behavior).

(9) No Corruption from Associated Equipment. An electronic raffle system shall use appropriate protocols to protect the random number generator and random selection process from influence by associated equipment, which may be communicating with the electronic raffle system.

Section 9. Electronic Raffle System Server Requirements.

(1) The Electronic Raffle System Server(s) may be located locally, within a single facility or may be remotely located outside of the facility through a Wide Area Network (WAN).

(2) Physical Security. The servers shall be housed in a secure location that has sufficient physical protection against alteration, tampering, or unauthorized access.

(3) Logical Access Control. The electronic raffle system shall be logically secured through the use of passwords, biometrics, or other means certified as secure by the independent testing lab. The storage of passwords, PINs, biometrics, and other authentication credentials shall be secure. The system shall have multiple security access levels to control and restrict different classes of access to the electronic raffle system.

(4) Security from Alteration, Tampering, or Unauthorized Access. The electronic raffle system shall provide a logical means for securing the raffle data against alteration, tampering, or unauthorized access. The following rules also apply to the raffle data within the Electronic Raffle System:

(a) Equipment shall not have a mechanism whereby an error will cause the raffle data to automatically clear. Data shall be maintained at all times regardless of whether the server is being supplied with power.

(b) Data shall be stored in a way as to prevent the loss of the data when replacing parts or modules during normal maintenance.

(5) Data Alteration. The electronic raffle system shall not permit the alteration of any accounting, reporting, or significant event data without supervised access controls. In the event any data is changed, the following information shall be documented or logged:

(a) Data element altered;

(b) Data element value prior to alteration;

(d) Time and date of alteration; and

(e) User login to identify the personnel that performed the alteration.

(6) Server Programming. There shall be no means available for an operator to conduct programming on the server in any configuration (the operator shall not be able to perform SQL statements to modify the database). Network administrators may perform authorized network infrastructure maintenance with sufficient access rights, which include the use of SQL statements that were already resident on the system.

(7) Copy Protection. Copy protection to prevent unauthorized duplication or modification of software, for servers or RSUs, may be implemented if:

(a) The method of copy protection is fully documented and provided to the Test Laboratory, which shall verify that the protection works as described; or

(b) The program or component involved in enforcing the copy protection may be individually verified by the methodology described in subsection (17).

(8) Uninterruptible Power Supply Support. If the server is a stand-alone application, it shall have an uninterruptible power supply (UPS) connected and of sufficient capacity to permit a graceful shut-down and that retains all electronic raffle system data during a power loss. The electronic raffle system server may be a component of a network that is supported by a network-wide UPS if the server is included as a device protected by the UPS.

(9) System Clock Requirements. An Electronic Raffle System shall maintain an internal clock that reflects the current date and time (in twenty-four (24) hour format showing hours and minutes) that shall be used to provide for the following:

(a) Time stamping of significant events;

(b) Reference clock for reporting; and

(10) System Clock Synchronization Feature. If multiple clocks are supported the system shall have a facility to synchronize clocks within all system components.

(11) RSU Management Functionality. An electronic raffle system shall have a master list of each authorized RSU in operation, including at minimum the following information for each entry:

(a) A unique RSU identification number or corresponding hardware identifier ( MAC);

(b) Operator identification; and

(12) RSU Validation. It is recommended that RSUs be validated at least once per year with at least one (1) method of authentication. The system shall have the ability to remotely disable the RSU after the threshold of unsuccessful validation attempts has been reached.

(13) Counterfoil Printers. If printed counterfoils are in use, the printer mechanism shall be able to detect and indicate the following error conditions:

(a) Out of paper;

(b) Paper low;

(d) Printer failure; and

(e) Printer disconnected.

(14) Printer Disable. At any time during an active draw, the operator shall have the ability to manually disable a printer and remove the printer from the configuration without affecting the remaining printers or any outstanding print requests.

(15) Significant Event Logging. Significant events shall be communicated and logged on the electronic raffle system, which shall include:

(a) Connection or Disconnection of an RSU or any component of the system;

(b) Critical memory corruption of any component of the system;

Out of paper or paper low;
Printer disconnect or failure; and
Printer memory error;

(d) Establishment and failure of communications between sensitive electronic raffle system components;

(e) Significant event buffer full;

(f) Program error or authentication mismatch;

(g) Firewall audit log full, if supported; and

(h) Remote access, if supported.

(16) Significant Event Surveillance or Security Functionality. Each significant event conveyed to the electronic raffle system shall be stored. An electronic raffle system shall provide an interrogation program that enables on-line comprehensive searching of the significant events through recorded data. The interrogation program shall have the ability to perform a search based at least on the following:

(a) Date and time range;

(b) Unique component identification number; and

(17) Storage Medium Backup. The electronic raffle system shall have sufficient redundancy and modularity so that if any single component or part of a component fails, the raffle may continue. Redundant copies of critical data shall be kept on the electronic raffle system with open support for backups and restoration.

(a) All storage shall be through an error checking, nonvolatile physical medium, or an equivalent architectural implementation, so if the primary storage medium fail, the functions of the electronic raffle system and the process of auditing those functions may continue with no critical data loss.

(b) The database shall be stored on redundant media so that no single failure of any portion of the system would cause the loss or corruption of data.

(18) Recovery Requirements. In the event of a catastrophic failure, and if the electronic raffle system cannot be restarted in any other way, it shall be possible to reload the electronic raffle system from the last viable backup point and fully recover the contents of that backup, including:

(a) Significant Events;

(b) Accounting information;

(d) Specific site information such as employee files or raffle set-up

(19) Verification of System Software. System software components and modules shall be verifiable by a secure means at the system level denoting the program identification and version. The system shall have the ability to allow for an independent integrity check of the components and modules from an outside source and is required for all software that may affect the integrity of the system. This shall be accomplished by being authenticated by a third-party device, or by allowing for removal of the media so that it may be verified externally. This integrity check shall provide a means for field verification of the system components and modules to identify and validate the programs or files. The independent testing laboratory, prior to system approval, shall approve the integrity check method.

Section 10. Electronic Raffle System Communication Requirements.

(1) Communication Protocol. Each component of an electronic raffle system shall function as indicated by the communication protocol implemented. An electronic raffle system shall provide for the following:

(a) Communication between all system components and shall provide mutual authentication between the component and the server;

(b) All protocols shall use communication techniques that have proper error detection and recovery mechanisms, which are designed to prevent eavesdropping and tampering. Any alternative implementations shall be reviewed on a case-by-case basis, with regulatory approval; and

(c) All data communications critical to the raffle shall employ encryption. The encryption algorithm shall employ variable keys, or similar methodology to preserve secure communication.

(2) Connectivity. Only authorized devices shall be permitted to establish communications between any system components. Electronic raffle systems shall provide a method to:

(a) Verify that the system component is being operated by an authorized user;

(b) Enroll and un-enroll system components;

(d) Ensure that only enrolled and enabled system components participate in the raffle; and

(e) Ensure that the default condition for components shall be un-enrolled and disabled.

(3) Loss of Communications. Raffle sales units (RSUs) may continue to sell tickets when not in communication with the system. Sales taking place on the RSU during a loss of communication with the system shall be logged on the device. The RSU shall deactivate upon detecting the limit of its buffer overflow. Upon the re-establishment of communication, the system shall require the RSU to re-authenticate with the server(s). All tickets sold during communication loss shall be transmitted to the system. Loss of communications shall not affect the integrity of critical memory.

(4) System Security. All communications, including remote access, shall pass through at least one (1) approved application-level firewall and shall not have a facility that allows for an alternate network path. Any alternate network path existing for redundancy purposes shall also pass through at least one (1) application-level firewall.

(5) Firewall Audit Logs. The firewall application shall maintain an audit log and shall disable all communications and generate a significant event that meets the requirements as specified in Section 9(13) if the audit log becomes full. The audit log shall contain:

(a) All changes to configuration of the firewall;

(b) All successful and unsuccessful connection attempts through the firewall; and

(6) Remote Access. The electronic raffle system shall have the option to disable remote access. Remote access shall accept only the remote connections permissible by the firewall application and electronic raffle system settings. In addition, there shall be:

(a) No unauthorized remote user administration functionality, such as adding users, or changing permissions;

(b) No unauthorized access to any database other than information retrieval using existing functions;

(d) For systems using an electronic random number generator, the electronic raffle system shall immediately detect remote access.

(7) The system manufacturer may, as needed, remotely access the electronic raffle system and its associated components for the purpose of product and user support.

(8) Remote Access Auditing. The electronic raffle system shall maintain an activity log that updates automatically depicting all remote access information, to include:

(a) Log on name;

(b) Time and date the connection was made;

(d) Activity while logged in, including the specific areas accessed and changes that were made.

(9) Wide Area Network Communications. Wide Area Network (WAN) communications are permitted as allowed by the regulatory body and shall meet the following requirements:

(a) The communications over the WAN are secured from intrusion, interference, and eavesdropping via techniques such as use of a Virtual Private Network (VPN) or encryption; and

(b) Only functions documented in the communications protocol shall be used over the WAN. The protocol specification shall be provided to the Testing Laboratory.

(10) Wireless Network Communications. If a wireless communication solution is utilized, it shall adhere to the following requirements:

(a) Segregation of Networks. Networks used by the electronic raffle systems shall be separate and not include other devices that are not part of the electronic raffle system.

(b) Service Set Identifier (SSID). The wireless network name (SSID) used to identify the wireless network shall be hidden and not broadcast.

(c) Media Access Control (MAC) Address Filtering. The wireless network should use MAC address filtering to validate whether or not a device may connect to the wireless network.

(d) Device Registration. The electronic raffle system shall use a device registration method to validate whether or not a device is an authorized device on the electronic raffle system.

Section 11. Online Raffle Ticket Sales.

(1) All systems used for the sale of raffle tickets through the Internet shall meet the requirements contained within this administrative regulation and the terms and conditions set forth by this administrative regulation for the sale of raffle tickets through the Internet.

(2) All online raffle ticket sales systems, software, and database requirements shall be tested and certified by an independent testing laboratory to meet the applicable requirements set forth in this administrative regulation and approved by the department.

(3) Operation manuals and service manuals shall be expressed in broad terms that are directly relevant to the system used to sell raffle ticket(s) through the Internet and shall be provided at the request of the department.

(4) Geolocation. The raffle system, online purchasing platform or the patron device shall be able to reasonably detect the physical location of an authorized patron attempting to access the service. Third parties may be used to verify the location of patrons.

(5) Inventory. If issued a charitable gaming license to conduct a raffle, the charitable organization shall provide the number of raffle tickets available for sale through the Internet. The raffle system software shall have the ability to set time limits for which tickets may be purchased. Upon completion of the sale of the final raffle ticket for a charitable organization raffle, the raffle shall close.

(6) Systems used by the purchaser to obtain raffle ticket(s) through the Internet shall be designed to be reasonably impervious to communication errors. Personally identifiable information, sensitive account data, and financial information shall be protected over a public network.

(7) Asset Management. All assets housing, processing of communication controlled information, including those comprising the operating environment of the Raffle system or its components, shall be accounted for and have a designated owner responsible for ensuring that information and assets are appropriately classified, and defining and periodically reviewing access restrictions and classifications.

(8) Raffle Equipment Security. Raffle system servers shall be located in server rooms that restrict unauthorized access. Raffle system servers shall be housed in racks located within a secure area.

(9) Network Security Management. To ensure purchasers are not exposed to unnecessary security risks by choosing to participate in raffles, these security requirements shall apply to the following critical components of the raffle system:

(a) Raffle system components that record, store, process, share, transmit, or retrieve sensitive purchaser information, such as credit card or debit card details, authentication information, or patron account balances;

(b) Raffle system components that store results of the current state of a purchaser's purchase order;

(c) Points of entry to and exit from the above systems (other systems that are able to communicate directly with the core critical systems); and

(d) Communication networks that transmit sensitive patron information.

(10) Networks should be logically separated so that there shall be no network traffic on a network link that cannot be serviced by hosts on that link.

(a) The failure of any single item shall not result in denial of service;

(b) An Intrusion Detection System or Intrusion Prevention System shall be installed on the network and shall:

Listen to both internal and external communications;
Detect or prevent Distributed Denial of Services (DDoS) attacks;
Detect or prevent shellcode from traversing the network;
Detect or prevent Address Resolution Protocol (ARP) spoofing; and
Detect other Man-in-the-Middle indicators and server communications immediately if detected.

(c) Stateless protocols shall not be used for sensitive data without stateful transport (HTTP is allowed if it runs on TCP);

(d) All changes to network infrastructure shall be logged;

(e) Virus scanners or detection programs shall be installed on all pertinent information systems. These programs shall be updated regularly to scan for new strains of viruses;

(f) Network security shall be tested by a qualified and experienced individual at least once per year;

(g) Testing shall include testing of the external (public) interfaces and the internal network; and

(h) Testing of each security domain on the internal network shall be undertaken separately.

(11) Communication Protocol. Online raffle tickets offered for sale by a charitable organization shall support a defined communication protocol that ensures purchasers are not exposed to unnecessary security risks when using the Internet for this purpose. Each component of a raffle system shall function as indicated by the communication protocol implemented. The system shall provide for the following:

(a) All critical data communication shall be protocol based or incorporate an error detection and correction scheme to ensure accuracy of messages received;

(b) All critical data communication shall employ encryption. The encryption algorithm shall employ variable keys or similar methodology to preserve secure communication;

(c) Communication between all system components shall provide mutual authentication between the component and the server;

(d) All protocols shall use communication techniques that have proper error detection and recovery mechanisms, which are designed to prevent eavesdropping and tampering;

(e) All data communications critical to raffle ticket sales through the Internet shall employ encryption. The encryption algorithm shall employ variable keys, or similar methodology to preserve secure communication.

(12) Remote Access. Remote access shall only be allowed with prior written approval of the department and shall have the option to be disabled. If allowed, remote access shall accept only the remote connections permissible by the firewall application and online raffle ticket sales settings. In addition, there shall be:

(a) No authorized remote user administration functionality;

(b) No authorized access to any database other than information retrieval using existing functions;

(d) The raffle system shall maintain an activity log that updates automatically depicting all remote access information.

(13) Error Recovery. The system used by a licensed charitable organization to offer the sale of raffle ticket(s) through the Internet shall be able to recover messages when they are received in error. This would include inaccurately inputting personal or banking information that would result in the purchaser being notified that the information is invalid and shall require review and corrective measures. In the event of a catastrophic failure, if the system cannot be restarted in any other way, it shall be possible to reload the system information from the last viable backup point and fully recover the contents of that backup, including:

(a) Significant events;

(b) Accounting information;

(d) Specific site information, including employees file and the raffle set-up.

(14) Bi-Directional Requirements. Any system used to sell raffle ticket(s) through the Internet shall be tested by an independent testing laboratory, which shall certify that:

(a) The physical network is designed to provide exceptional stability and limited communication errors;

(b) The system is stable and capable of overcoming and adjusting for communication errors in a thorough, secure, and precise manner; and

(c) Information is duly protected with the most secure forms of protection via encryption, segregation of information, firewalls, passwords, and personal identification numbers.

(15) Encryption. Security messages that traverse data communications lines shall be encrypted using an encryption key or keys to ensure that communications are demonstrably secure against crypto-analytic attacks. The encryption keys or keys used to provide security to the system that provide for the sale of raffle tickets through the Internet shall be monitored and maintained. Additionally, there shall be a documented process for:

(a) Obtaining or generating encryption keys;

(b) Managing the expiry of encryption keys;

(d) Securely changing the current encryption keyset;

(e) The storage of any encryption keys; and

(f) To recover data encrypted with a revoked or expired encryption key for a defined period of time after the encryption key becomes valid.

(16) Cryptographic Controls. Cryptographic controls shall be implemented for the protection of the following information:

(a) Any sensitive or personally identifiable information shall be encrypted if it traverses a network with a lower level of trust;

(b) Data that is not required to be hidden and has to be authenticated shall use some form of message authentication technique;

(d) The grade of encryption used shall be appropriate to the sensitivity of the data;

(e) The use of encryption algorithms shall be reviewed periodically by qualified management staff to verify that the current encryption algorithms are secure;

(f) Changes to encryption algorithms to correct weaknesses shall be implemented as soon as practical. If no changes are available, the algorithm shall be replaced; and

(g) Encryption keys shall not be stored without being encrypted themselves through a different encryption method or by using a different encryption key.

(17) Firewalls. All online raffle systems shall utilize firewalls that comply with the following provisions:

(a) A firewall shall be located at the boundary of any two (2) dissimilar security domains.

(b) All connections to hosts used for the sale of raffle tickets through the Internet shall be housed in a secure data center and shall pass through at least one (1) application-level firewall. This includes connections to and from any non-related hosts used by the operator.

Only firewall-related applications may reside on the firewall; and
Only a limited number of accounts may be present on the firewall.

(d) The firewall shall reject all connections except those that have been specifically approved.

(e) The firewall shall reject all connections from destinations that cannot reside on the network from which the message originated.

(f) The firewall shall maintain an audit log of all changes to parameters that control the connections permitted through the firewall.

(g) The firewall shall maintain an audit log of all successful and unsuccessful connection attempts. Logs shall be kept for ninety (90) days and a sample reviewed monthly for unexpected traffic.

(h) The firewall shall disable all communication if the audit log becomes full.

(18) Firewall Audit Logs. The audit log shall contain:

(a) All changes to the configuration of the firewall;

(b) All successful and unsuccessful attempts through the firewall; and

(19) System Clock. The system used for the sale of raffle tickets through the Internet shall maintain an internal clock that reflects the current date and time that shall be used for the following:

(a) Time stamping of significant events;

(b) Reference clock for reporting; and

(20) Purchase Session. A purchase session consists of all activities and communications performed by a purchaser during the time the purchaser accesses the raffle system or online purchasing platform. Tickets sold online shall only be purchased during a purchase session.

(21) Purchasing Tickets. A participant may purchase a raffle ticket from the Web site by following the instructions appearing on the screen and providing payment for the tickets. Each raffle ticket shall be sold individually for the price indicated. Multiple discounted prices shall only be allowed if a way of ensuring financial accountability is possible by the online purchasing platform or raffle system:

(a) A ticket purchase via a credit card transaction or other methods that may produce a sufficient audit trail shall not be processed until the funds are received from the issuer or the issuer provides an authorization number indicating that the purchase has been authorized;

(b) There shall be a clear notification that the purchase has been accepted by the system and the details of the actual purchase accepted shall be provided to the patron once the purchase is accepted; and

(c) Purchase confirmation shall include the amount of the purchase accepted by the raffle system or online purchasing platform.

(22) Disputes. The raffle system or online purchasing platform shall conspicuously provide a mechanism to advise the patron of the right to make a complaint against the operator and to enable the patron to notify the department of a complaint.

(23) Bearer Ticket Issuance. After the payment of a fee, the purchaser shall receive a receipt through the Internet that the purchase of a raffle ticket or tickets is complete. Upon receiving the receipt acknowledging the purchase through the Internet, the purchaser may receive the raffle ticket via e-mail. The receipt acknowledging purchase and the issuance of the raffle tickets through the Internet shall be processed as two (2) separate transactions.

(24) Validation Numbers. The method used by the raffle system to generate the bearer ticket validation number shall be unpredictable and ensure against duplicate validation numbers for the raffle currently in progress.

(25) Voiding a Ticket. If a ticket is voided, the appropriate information shall be recorded, which includes the draw numbers and the validation number pertaining to the voided ticket. Voided draw numbers shall not be able to be resold or reissued.

(26) Raffle Drawing Requirements.

(a) A raffle drawing shall be held the date, time, and place stated on the organization's license or certificate of exemption.

(b) The operator shall conduct a manual or electronic draw procedure that ensures a randomly selected draw number as a winner from all the tickets sold. Each drawn counterfoil shall be verified as a sold and valid ticket. Voided tickets shall not be qualified toward any prize. This process shall be repeated for each advertised prize.

(c) Results of the drawing become official and final after the drawn number is verified as a winning raffle ticket for the respective drawing and is presented to the participants for the raffle. The winning draw number shall be made available on the raffle Web site for the participants to review. Operators may utilize any additional methods in presenting the winning draw number(s) to the participants.

(27) Accounting Requirements. Any system used for the sale of raffle tickets through the Internet shall have the capability to log sales and to print reports detailing sales and accounting information for specific dates and time periods that shall be available. This information shall include the price of each raffle ticket, number of raffle tickets sold, and total sales. The system or other equipment shall be capable of producing accounting reports to include the following information:

(a) Data required to be maintained for each raffle drawing, including:

Date and time of event;
Organization running the event;
Sales information;
Value of prize(s) awarded;
Prize distribution;
Refund totals of event;
Draw numbers-in-play;
Winning number(s) drawn (including draw order, call time, and claim status); and
Any other information required by 820 KAR 1:057.

(b) Exception Report. A report that includes system exception information, including changes to system parameters, corrections, overrides, and voids.

(c) Bearer Tickets Reports. A report that includes a list of all bearer tickets sold including all associated draw numbers and selling price.

(d) Sales Report. A report that includes a breakdown of sales of raffle ticket(s) through the Internet, including draw numbers sold and any voided and misprinted tickets.

(e) Voided Draw Number Report. A report that includes a list of all draw numbers that have been voided including corresponding validation numbers.

(f) Event Log. A report that lists all events recorded specific to the sales of raffle ticket(s) through the Internet. This shall include the date and time of the transaction and a brief description of the transaction or identifying code.

(g) Corruption Log. A report that lists all Internet transactions that were unable to be reconciled to the system.

(28) Sales and Accounting Report Requirements. Any raffle ticket sold shall be included in the sales and accounting reports and be detailed in all financial transactions on the system. In addition, a log relating to accounting and raffle ticket sales shall be maintained on the system. The charitable organization conducting the raffle shall be given the option of printing this log on demand.

(29) Backup Requirements. Any system used for the sale of raffle ticket(s) through the Internet shall have a backup and archive utility to allow the licensed charitable organization, conducting the raffle, the ability to save critical data if a system failure occurs. This backup may be automatically run by the charitable organization.

(30) Data Alteration. The alteration of any accounting, reporting or significant event data related to the sale of raffle tickets through the Internet shall include supervised access controls. In the event any data is changed, the following information shall be logged, documented, stored, and available upon request for review:

(a) Data element altered;

(b) Data element value prior to alteration;

(d) Time and date of alteration; and

(e) User login of the personnel that performed the alteration.

(31) Access Controls. The allocation of access privileges shall be restricted and controlled on business requirements and the principle of least privilege.

(a) A formal user registration and de-registration procedure shall be in place for granting and revoking access to all information systems and services.

(b) All users shall have a unique identifier (user ID) for their personal use only, and a suitable authentication technique shall be chosen to substantiate the claimed identity of a user.

(d) Password provision shall be controlled through a formal management process.

(e) Passwords shall meet business requirements for length, complexity, and lifespan.

(f) Access to system applications shall be controlled by a secure log-on procedure.

(g) Appropriate authentication methods, in addition to passwords, shall be used to control access by remote users

(h) Any physical access to areas housing components used for the sale of raffle ticket(s) through the Internet application and any logical access to these applications shall be recorded.

(i) The use of automated equipment identification to authenticate connections from specific locations and equipment shall be formally documented and shall be included in the regular review of access by management.

(j) Restrictions on connection times shall be used to provide additional security for high-risk applications.

(k) The use of utility programs that might be capable of overriding system application controls shall be restricted and tightly controlled.

(l) A formal policy shall be in place and appropriate security measures shall be adopted to protect against the risks of using mobile computing and communication facilities.

(32) Purchaser Account Registration. The raffle system or online purchasing platform shall employ a mechanism to collect purchaser information prior to registration of a purchaser account. The purchaser shall be fully registered, and the purchaser's account shall be activated prior to permitting ticket purchases. Once the identity verification is successfully complete, and the purchaser has acknowledged all of the necessary privacy policies and the terms and conditions, the purchaser account registration is complete and the patron account shall become active.

(33) Third-Party Services. Any third-party service providers contracted to provide service involving accessing, processing, communicating, or managing the sale of raffle tickets through the Internet shall adhere to information contained in this administrative regulation. The security roles and responsibilities of third-party service providers shall be defined and documented as it relates to the security of information.

(a) Agreements with third-party service providers involving accessing, processing, communicating, or managing the purchase of on-line raffle tickets through the Internetor its components, or adding products or services to the system used or its components shall cover all relevant security requirements.

(b) The services, reports, and records provided by the third-party shall be monitored and reviewed by the department upon request.

(c) Changes to the provision of services, including maintaining and improving existing information security policies, procedures and controls, shall be managed, taking account of the criticality of business systems and processes involved and re-assessment of risks.

(d) The access rights of third-party service providers to the system or its components shall be removed upon termination of their contract or agreement, or adjusted upon change.

History

RELATES TO: KRS 238.545, 238.550
STATUTORY AUTHORITY: KRS 238.515
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming and to promulgate administrative regulations necessary to implement KRS Chapter 238. This administrative regulation establishes standards for the conduct of raffles.
History: 22 Ky.R. 441; eff. 10-13-1995; Recodified from 500 KAR 11:050, 2-23-1999; 32 Ky.R. 771; 1291; 1653; eff. 3-31-2006; 33 Ky.R. 3525; 34 Ky.R. 69; 264; eff. 8-31-2007; 42 Ky.R. 944; eff. 1-4-2016; 44 Ky.R. 2670; 45 Ky.R. 715, 1599; eff. 1-4-2019; 47 Ky.R. 190, 1029, 1219; eff. 3-2-2021.

820 KAR 1:055 Charity fundraising event standards {#sec-820-kar-1-055 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:055}

Section 1. Charitable Fundraising Event Licensing and Standards.

(1) At least thirty (30) days prior to the scheduled date for a charity fundraising event, a licensed charitable organization shall submit a complete and accurate application on Form CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application.

(2) Each application for licensure under this administrative regulation shall be accompanied by:

(a) A twenty-five (25) dollar fee; and

(b) A copy of the executed lease for the charitable gaming facility, if applicable.

(3) The department shall issue a license if the applicant:

(a) Possesses a regular charitable gaming license; and

(b) Has met the requirements for licensure established in KRS 238.505.

(4) The event shall not be advertised nor preregistrations taken until a license is issued.

(5) Once a license is issued, players may preregister for the event prior to the day of the event only if payment is received by the charitable organization.

(6) Charity game tickets shall not be an approved game of chance at a charity fundraising event held by an exempt charitable organization.

Section 2. Special Limited Games Played at a Charity Fundraising Event. The department shall grant approval to play special limited games at a charity fundraising event if the information contained in the application shows that the event meets the requirements of KRS 238.545.

Section 3. Volunteers.

(1) All individuals involved in the conduct of a charity fundraising event or a special limited charity fundraising event shall be trained in the proper conduct of the game and the control of funds.

(2) The chairperson shall:

(a) Be in charge of the charity fundraising event or special limited charity fundraising event;

(b) Supervise and direct all volunteers; and

Section 4. Equipment Used for Events.

(1) Poker tables, blackjack tables, prize wheels, and chips, scrip, or imitation money shall not be considered charitable gaming supplies or equipment and may be purchased from ordinary sources of supply. The licensed charitable organization shall not pay for poker tables, blackjack tables, prize wheels or chips, scrip, or imitation money from the charitable gaming account.

(2) Roulette wheels and craps tables shall be considered charitable gaming supplies and shall be obtained from a licensed distributor. The licensed charitable organization shall pay for roulette wheels and craps tables from the charitable gaming account.

(3) If special limited charity games are played, the licensed charitable organization shall provide the department with a copy of the executed contract for the use of those supplies no later than thirty (30) days following the event. This contract shall specify exactly the items provided, at what cost, and from whom.

Section 5. Expenses.

(1) The licensed charitable organization shall pay the gaming expenses for the charity fundraising event or special limited charity fundraising event from the gaming account. All other expenses shall be paid from the general account.

(2) If an expense is both a gaming expense and a general expense, the expense shall be prorated pursuant to the amount of gross receipts obtained from gaming and nongaming events. The full amount shall be paid from the general account and the amount attributable to gaming shall be reimbursed from the gaming account to the general account.

(3) Food, beverages, and other items provided to participants without additional payment at an event where only gaming activity takes place shall be considered a promotional expense, if all participants are equally eligible.

Section 6. Special Limited Charity Fundraising Event Licensing and Standards.

(1) A licensed charitable organization shall submit a complete, accurate, and documented application on Form CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application, for a special limited charity fundraising event, at least thirty (30) days prior to the scheduled date for the event.

(2) A fee of twenty-five (25) dollars shall accompany each application for licensure under this administrative regulation.

(3) When the application is filed, the licensed charitable organization shall provide the department with a copy of the executed lease for a licensed gaming facility, if applicable.

(4) The department shall issue a license, if the applicant possesses a regular charitable gaming license and has met the requirements for licensure established in KRS 238.505.

(5) The event shall not be advertised nor preregistrations taken until a license is issued.

(6) Once a license is issued, players may preregister for the event prior to the day of the event only if payment is received by the licensed charitable organization.

(7) A central bank shall be maintained in accordance with KRS 238.547.

(8) For all games that require a central bank to be used:

(a) The amount of money received for selling chips, scrip, or imitation money shall be the gross receipts;

(b) All chips, scrip, or imitation money redeemed shall be the payouts; and

(9) Games requiring a predetermined amount of chips, scrip, or imitation money shall be pre-counted. Accurate records shall be kept of all chips, scrip, or imitation money sales, whether the sale is an initial entry fee or a later purchase of chips, scrip, or imitation money.

(10) If the special limited charity games are played as a tournament, then:

(a) A record of attendance shall be kept for the special limited charity games; and

(b) The cost to enter, the cost of the buy backs, the cost of the add ons, the rules of the game, the manner for raising blinds or closing tables, and the prizes shall be listed on the gaming session program. The prizes may be listed as a percentage of the receipts.

Section 7. Incorporation by Reference. The following items are incorporated by reference:

(1) Form CG-Schedule A, "Charity Fundraising Event or Special Limited Charity Fundraising Event License Application (2019) ", is incorporated by reference.

History

RELATES TO: KRS 238.505, 238.515, 238.535, 238.545, 238.547
STATUTORY AUTHORITY: KRS 238.515 238.545
NECESSITY, FUNCTION, AND CONFORMITY: The Department of Charitable Gaming is authorized by KRS 238.515 to establish and enforce reasonable standards for the conduct of charitable gaming. This administrative regulation establishes standards, fees, and procedures for the conduct of charity fundraising events and special limited charity fundraising events.
History: 820 KAR 001:055 32 Ky.R. 816; 1292; 1654; eff. 3-31-2006; 33 Ky.R. 3526; 34 Ky.R. 265; eff. 8-31-2007; 40 Ky.R. 1480; 2140; eff. 4-4-2014; 42 Ky.R. 946, eff. 1-4-2016; 44 Ky.R. 2681; 45 Ky.R. 1600; eff. 1-4-2019; TAm eff. 11-22-2019; Cert. eff. 12-23-2025.

820 KAR 1:057 Recordkeeping {#sec-820-kar-1-057 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:057}

Section 1. Bank Account and Records.

(1) A charitable organization shall maintain a single bank account for charitable gaming receipts. This account shall be separate from any other account maintained by the charitable organization.

(2) Disbursements for charitable gaming expenses and charitable donations shall be made by check or electronic fund transfer directly from the charitable gaming account.

(3) All receipts and donations from each charitable gaming session shall be deposited by the second business day following the charitable gaming session at which they were received. The deposit for each charitable gaming session shall be made separately and shall not be combined with the deposit from any other charitable gaming session.

(4) All types of deposits, including startup cash, returned checks collected and check collection fees, progressive game carry forward, cash prizes not awarded, and adjusted gross receipts, shall be listed separately on the deposit reconciliation sheet and the deposit slip. Each individual check shall be listed separately on the deposit slip. If a register tape is run listing the amounts of the individual checks, it may be attached to the deposit slip. Total cash and coins shall be listed separately. The charitable organization shall keep a copy of the deposit slip.

(5) Checks that have been returned for insufficient funds that have not been collected shall be retained by the charitable organization for three (3) years following the close of the calendar year in which the check was issued. If the check has been turned over for collection, the charitable organization shall retain a copy of the check with contact information for the person or entity collecting the check.

(6) Monthly bank statements and reconciliations for all accounts shall be maintained by the charitable organization for three (3) years following the close of a calendar year.

(7) Bank image copies of the fronts and backs of checks from any account into which charitable gaming funds are deposited or transferred shall be made available to the department upon request.

(8) Gross receipts shall include the money received from the sale of raffle tickets, bingo cards or faces, pickle jars, bonanza balls, hot balls, card-minding devices, pulltabs, electronic pulltab devices and electronic pulltabs, charity fundraising event games, special limited charity fundraising event games, returned check collections, credit card fees collected by a charitable organization at a charitable gaming session, and any check collection fees minus returned checks.

Section 2. Start-up Cash.

(1) If the source of start-up cash is not the charitable gaming account, the source of the start-up cash shall be identified on the charitable gaming session sheet and signed by the chairperson of the charitable organization.

(2) Start-up cash from one (1) charitable organization shall not be commingled with the start-up cash from another charitable organization. The start-up cash shall be identified on the check withdrawing the funds and on the deposit slip.

Section 3. Charitable Organization Records.

(1) The chief financial officer shall be the custodian of the gaming records and shall be responsible for ensuring that the records are accurate, complete, and maintained regularly for inspection by the department.

(2) A charitable organization that hand-writes data and later enters the information onto another form or computer program shall retain the hand-written records along with the other form or computer generated record.

(3) Charitable organizations shall prepare and maintain accurate and adequate corporate or other organizational records, such as articles of incorporation, minutes of board of directors meetings, and resolutions.

(4) Charitable organizations shall maintain detailed records of all expenditures made in furtherance of its charitable purpose, including all charitable contributions.

(5) All records shall be made available for inspection and audit at the request of the department.

(6) Any charitable organization's records, or copies of those records, deemed necessary to complete an inspection, audit, or investigation may be obtained by the department. The department shall provide a written receipt of the records at the time of taking possession.

(7) Charitable organizations shall provide records requested by the department within ten (10) calendar days, unless a longer response time is granted.

Section 4. Charitable Gaming Session Records.

(1) Each charitable organization shall prepare and maintain records for each charitable gaming session. The charitable gaming session records shall be prepared or completed by a volunteer or chairperson of the charitable organization. The charitable gaming session records shall not be completed by an independently compensated bookkeeper.

(2) Gaming proceeds shall be counted by an officer or a chairperson of the charitable organization and the count shall be verified. A count may be verified by a volunteer.

(3) A charitable gaming session record shall contain:

(a) The date of the charitable gaming session;

(b) The name and license number of the charitable organization conducting the charitable gaming session;

(d) A deposit reconciliation worksheet that records:

All currency, coins, checks, and credit card receipts available for deposit;
All profit or loss from each gaming activity, all start-up cash, all cash from incomplete pulltab sales, any progressive game carry forward, returned checks collected and check collection fees, and all other gaming receipts that should be available for deposit;
Any variance between the amount of currency, coins, checks, and credit card receipts actually available for deposit, and the amount that should be available for deposit according to the charitable gaming session records;
The amount of donations received at the charitable gaming session that will be deposited into the general account;
The printed name and signature of the chairperson in charge of the charitable gaming session;
The printed name and signature of the person taking the deposit from the charitable gaming session;
The printed name and signature of the person making the deposit, if different from the person taking the deposit; and
The printed name and signature of the person in possession of the start-up cash, and the amount and source of the start-up cash.

(4) If a charitable organization offers coupons for bingo paper or a card-minding device, a voucher shall be completed when the coupon is redeemed, and the coupon and the voucher shall be retained with the charitable gaming session records.

(5) If a charitable organization offers coupons for pulltabs or electronic pulltab devices, the type and number of pulltabs, electronic pulltab devices, and credits loaded on each device, if any, given away shall be recorded on the charitable gaming session records and on CG-FIN Attachment C and D. The coupon shall be retained with the charitable gaming session records.

(6) If the charitable organization sells gift certificates for bingo paper or a card-minding device, the receipts for the sale shall be counted as gaming receipts on the day they are received. When the gift certificate is redeemed, a voucher shall be completed and the gift certificate and the voucher shall be retained with the charitable gaming session records.

(7) If the charitable organization sells gift certificates for pulltabs or electronic pulltab devices, the receipts for the sale shall be counted as gaming receipts on the day they are received. When the gift certificate is redeemed, the type and number of pulltabs, electronic pulltab devices, and credits loaded on each device, if any, given away shall be recorded on the charitable gaming session records and on CG-FIN Attachment C and D. The gift certificate shall be retained with the charitable gaming session records.

(8) If the charitable organization plays a paper pulltab game that contributes in whole or in part to a progressive raffle jackpot, the charitable organization shall report its deposits and receipts on Worksheet WS-06c, Worksheet WS-14b, and Worksheet WS-15a.

(9) All charitable gaming receipts and records shall be kept separate from noncharitable gaming receipts and records.

(10) All charitable gaming session records shall be retained by the charitable organization for a period of three (3) years. Charitable gaming session records shall be made available for inspection and audit by the department upon request.

(11) Charitable organizations shall provide records requested by the department within ten (10) calendar days unless a longer response time is requested and granted by the department.

Section 5. Bingo Paper Sale Records. Bingo paper sale records shall contain the following information:

(1) Attendance determined by headcount of number of people playing bingo at a charitable gaming session;

(2) Each type of bingo paper being sold;

(3) The serial number of the set of each type of paper sold;

(4) The number of each type of bingo paper given away with the voucher being redeemed attached to the charitable gaming session records, if applicable;

(5) Number of each type of bingo paper destroyed;

(6) The number of each type of bingo paper sold;

(7) The price of each type of bingo paper sold;

(8) The number of pickle jar, bonanza ball, or hot ball games sold;

(9) The price of pickle jar, bonanza ball, or hot ball games and whether the price is per person or per pack;

(10) The number of player pick bingo games sold;

(11) The price of each player pick bingo game sold;

(12) The amount of money expected to be received from the sale of bingo paper, player pick, and pickle jar, bonanza ball, or hot ball for that charitable gaming session;

(13) The amount of money actually received from the sale of bingo paper, player pick, and pickle jar, bonanza ball, or hot ball for that charitable gaming session;

(14) The cash short or cash over from the sale of bingo paper, player pick, and pickle jar, bonanza ball, or hot ball for that charitable gaming session;

(15) The sales report printed from the player pick machine that includes the number of games sold, price for each game, and the amount of money expected from the sale of player pick games for that charitable gaming session;

(16) Records of all carryover or cumulative bingo games played, which shall contain the following information:

(a) The name of each progressive bingo game in play;

(b) The amount carried over from the previous charitable gaming session;

(d) The amount paid out for the current charitable gaming session; and

(e) The amount carried forward to the next charitable gaming session;

(17) A copy of the charitable gaming session program, which shall include:

(a) The charitable organization name and license number;

(b) A specific description of all bingo products for sale and the price of each product; and

(18) Form CG-Vol.

Section 6. Bingo Payout Records.

(1) Bingo payout records shall contain the following information:

(a) A list of all bingo games that will be played at that charitable gaming session;

(b) Each pickle jar, bonanza ball, or hot ball game available to be awarded;

(d) The prize that was actually awarded for each bingo game and door prize;

(e) A notation for the prize awarded for each bingo game and door prize, specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise, the cost of the merchandise and the fair market value of the merchandise;

(f) If a voucher was issued for card-minding devices or bingo paper, the fair market value of the card-minding devices or bingo paper;

(g) The total amount of all cash awarded for bingo prizes and door prizes;

(h) The total amount of all checks issued as bingo prizes and door prizes;

(i) The total cost and fair market value of all merchandise awarded for bingo prizes and door prizes;

(j) A grand total of cash, checks, and fair market value of merchandise awarded for bingo prizes and door prizes, which shall not exceed $5,000; and

(k) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check.

(2) If a paper pulltab or electronic pulltab device is awarded as a bingo prize, door prize, or promotional item, the person in charge of bingo payouts shall purchase the pulltabs or electronic pulltab device and any credits loaded on the device from the pulltab manager by transfer of cash from bingo payout to pulltab sales. It shall be recorded as a cash payout on the bingo payout session record, and it shall be included as a gross receipt on the charitable gaming session's pulltab record and on CG-FIN Attachment C and D.

Section 7. Card-minding Device Records. Card-minding device records shall contain the following information:

(1) The type of programs loaded, including the number of faces;

(2) The number of units rented for each type of program;

(3) The number of each type of card-minding device rental given away, with the redeemed voucher attached to the charitable gaming session records;

(4) The number of units voided for each type of program;

(5) The price per unit for each type of program;

(6) The amount of money expected to be received from the rental of card-minding devices;

(7) The actual amount of money received from the rental of card-minding devices for that charitable gaming session;

(8) The cash short or cash over from the rental of card-minding devices for that charitable gaming session;

(9) The total sales activity report completed on Form CG-FIN;

(10) A copy of the charitable gaming session program, which shall include:

(a) The charitable organization name and license number;

(b) A specific description of all bingo products for sale and the price of each product; and

(11) Form CG-Vol.

Section 8. Pulltab Records.

(1) Pulltab records shall contain the following information for each charitable gaming session:

(a) The name, serial number, and form number of all games played;

(b) The name of all progressive jackpot games in play during that charitable gaming session;

(d) The price for each ticket;

(e) The prize expected or available to be awarded for each pulltab game, including the progressive jackpot games;

(f) If a pulltab is awarded as a pulltab prize, the information required by subsection (2) of this section;

(g) The prize that was actually awarded for each pulltab game, including the progressive jackpot games;

(h) A notation for the prize awarded for each pulltab game specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise and the cost;

(i) If a pulltab game was played in conjunction with a progressive jackpot game, as designed by the manufacturer, the amount contributed to the progressive jackpot;

(j) The cash short or cash over for each charitable gaming session with pulltabs;

(k) The total amount of all cash awarded for pulltab prizes;

(l) The total amount of all checks issued as pulltab prizes;

(m) The total cost of all merchandise awarded for pulltab prizes;

(n) If a check from the charitable organization's charitable gaming account was issued as a pulltab prize instead of cash, the number of the check;

(o) The total amount of money from any incomplete sale of pulltab games;

(p) Records of any progressive pulltab games sold, which shall contain the following information:

The name of each progressive pulltab jackpot game in play;
The amount carried over from the previous charitable gaming session;
The receipts from the current charitable gaming session;
The amount paid out for the current charitable gaming session;
The amount carried forward to the next charitable gaming session; and
The serial number of all games that contributed to the prize pool; and

(q) Form CG-Vol.

(2) If a pulltab is awarded as a pulltab prize, the person in charge of pulltab payouts shall purchase the pulltabs from the deal being awarded as the prize by transfer of cash from the deal being sold to the deal being awarded as the prize. It shall be recorded as a cash payout for the deal being sold and it shall be included as a gross receipt for the deal being awarded as a pulltab prize and on CG-FIN Attachment C and D.

Section 9. Electronic Pulltab Device Records. Electronic pulltab device records shall contain the following information:

(1) The name, serial number, and form number of all electronic pulltab games played;

(2) The ticket count for each electronic pulltab game sold;

(3) The price for each electronic pulltab ticket sold;

(4) The name of all electronic progressive jackpot games in play during that charitable gaming session;

(5) The prize expected or available to be awarded for each electronic pulltab game;

(6) The amount of money expected to be received from the sale of electronic pulltab devices and electronic pulltabs at a charitable gaming session;

(7) The actual amount of money received from the sale of electronic pulltab devices and electronic pulltabs at a charitable gaming session;

(8) The cash short or cash over from the sale of electronic pulltab devices and electronic pulltabs at a charitable gaming session;

(9) The electronic pulltab receipts and payouts report, Form CG-EPRP;

(10) All information required under Section 5 of this administrative regulation; and

(11) Form CG-Vol.

Section 10. Raffle Records.

(1) If the raffle tickets sell for $100 or more, the raffle records shall contain the following information:

(a) The number of raffle tickets printed;

(b) The sales price for each ticket;

(d) The date the raffle drawing was held;

(e) A voided raffle ticket or copy of a raffle ticket;

(f) If tickets are given to volunteers to sell, a list of each volunteer's name with the total number of the tickets and ticket numbers given to them;

(g) The total amount of money collected for the raffle event;

(h) The total number of ticket stubs collected from the sale of all raffle tickets for the raffle event;

(i) The total amount of money that should have been collected based on the number of ticket stubs collected for the raffle event;

(j) Total cash short or cash over amount from raffle ticket sales for the raffle event;

(k) A list of all raffle prizes awarded;

(l) A notation for the prize awarded for each raffle specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise and the cost;

(m) The total amount of all cash awarded for raffle prizes;

(n) The total amount of all checks issued as raffle prizes;

(o) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check;

(p) Each winning ticket stub;

(q) All unsold tickets;

(r) A list of all raffle expenses including a copy of all invoices supporting each expense; and

(s) If the raffle is being conducted on a special event raffle license issued by the department pursuant to KRS 238.535(14)(b), the organization shall report its session record using Worksheet WS-23d, Worksheet-23e, and, when applicable, Worksheet, WS-23f.

(2) If the raffle tickets sell for fifty (50) dollars to $100, the raffle records shall contain the following information:

(a) The number of raffle tickets printed;

(b) The sales price for each ticket;

(d) The date the raffle drawing was held;

(e) A voided raffle ticket or copy of a raffle ticket;

(f) If tickets are given to volunteers to sell, a list of each volunteer's name with the total number of the tickets and ticket numbers given to them;

(g) The total amount of money collected for the raffle event;

(h) The total number of ticket stubs collected from the sale of all raffle tickets for the raffle event;

(i) The total amount of money that should have been collected based on the number of ticket stubs collected for the raffle event;

(j) Total cash short or cash over amount from raffle ticket sales for the raffle event;

(k) A list of all raffle prizes awarded;

(l) A notation for the prize awarded for each raffle specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise and the cost;

(m) The total amount of all cash awarded for raffle prizes;

(n) The total amount of all checks issued as raffle prizes;

(o) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check;

(p) Each winning ticket stub;

(q) A list of all raffle expenses including a copy of all invoices supporting each expense; and

(r) If the raffle is being conducted on a special event raffle license issued by the department pursuant to KRS 238.535(14)(b), the organization shall report its session record using Worksheet WS-23c, Worksheet-23e, and, when applicable, Worksheet, WS-23f.

(3) If the raffle tickets sell for more than five (5) dollars but less than fifty (50) dollars, the raffle records shall contain the following information:

(a) The number of raffle tickets printed;

(b) The sales price for each ticket;

(d) The date the raffle drawing was held;

(e) A voided raffle ticket or copy of a raffle ticket;

(f) The total amount of money collected for the raffle event;

(g) The total number of ticket stubs collected from the sale of all raffle tickets for the raffle event;

(h) The total amount of money that should have been collected based on the number of ticket stubs collected for the raffle event;

(i) Total cash short or cash over amount from raffle ticket sales for the raffle event;

(j) A list of all raffle prizes awarded;

(k) A notation for the prize awarded for each raffle specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise and the cost;

(l) The total amount of all cash awarded for raffle prizes;

(m) The total amount of all checks issued as raffle prizes;

(n) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check;

(o) Each winning ticket stub;

(p) A list of all raffle expenses including a copy of all invoices supporting each expense; and

(q) If the raffle is being conducted on a special event raffle license issued by the department pursuant to KRS 238.535(14)(b), the organization shall report its session record using Worksheet WS-23b, Worksheet-23e, and, when applicable, Worksheet, WS-23f.

(4) If the raffle ticket sells for five (5) dollars or less, the raffle records shall contain the following information:

(a) The beginning and ending serial number or ticket number for each roll of tickets sold or the beginning and ending number of the tickets printed;

(b) The quantity of tickets sold;

(d) The date of the raffle;

(e) The total amount of money collected for the raffle event;

(f) The total amount of money that should have been collected based on the number of ticket stubs collected for the raffle event;

(g) Total cash short or cash over amount from raffle ticket sales for the raffle event;

(h) A list of all raffle prizes awarded;

(i) A notation for the prize awarded for each raffle specifying whether the prize was cash, a check, or merchandise, and if merchandise, a description of that merchandise and the cost;

(j) The total amount of all cash awarded for raffle prizes;

(k) The total amount of all checks issued as raffle prizes;

(l) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check;

(m) Each winning ticket stub; and

(n) A list of all raffle expenses, including a copy of all invoices supporting each expense.

(o) Nothing in this subsection shall prohibit an organization from using preprinted tickets for raffle tickets that sell for five (5) dollars or less, but the organization shall maintain a session record that complies with Section 10(3) of this administrative regulation if it sells preprinted tickets for five (5) dollars or less.

(p) If the raffle is being conducted on a special event raffle license issued by the department pursuant to KRS 238.535(14)(b), the organization shall report its session record using Worksheet WS-23a, Worksheet-23e, and, when applicable, Worksheet, WS-23f.

Section 11. Charity Fundraising Event Records.

(1) Charity fundraising event records shall contain the following information:

(a) The name of each game of chance played;

(b) The price to play each game of chance;

(d) The grand total of adjusted gross receipts received from the play of all games of chance;

(e) The total amount of all checks issued for each game of chance prize and door prize;

(f) The total cost of all merchandise awarded for each type of game of chance prize and door prize;

(g) If a check from the charitable organization's charitable gaming account was issued as a prize instead of cash, the number of the check;

(h) If bingo games are conducted, accurate bingo paper sale records, card-minding device records, and bingo payout records;

(i) If pulltabs are sold, accurate pulltab records;

(j) If a raffle is conducted, accurate raffle records; and

(k) If the charity fundraising event continues for more than one (1) day, a summary of the required information for each day.

(2) Special limited game records for a charity fundraising event shall contain:

(a) The name of each game to be played;

(b) The adjusted gross receipts for each game for each day of the charity fundraising event; and

Section 12. Special Limited Charity Fundraising Event Records.

(1) Special limited charity fundraising event records shall contain the following information for special limited charitable gaming events:

(a) The name of each game played;

(b) The quantity of scrip, chips, or imitation money the central bank started with prior to any sales, and the corresponding cash amount associated with each denomination of scrip, chips, or imitation money;

(c) The quantity of scrip, chips, or imitation money the central bank sold during the special limited charity fundraising event;

(d) The amount of money received by the central bank from the sale of scrip, chips, or imitation money;

(e) Cash short or cash over from the sale of scrip, chips, or imitation money;

(f) The quantity of scrip, chips, or imitation money collected by the central bank and redeemed for prizes;

(g) Prizes awarded by the central bank;

(h) A notation for prizes awarded specifying whether each prize was cash, check, or merchandise, and if merchandise, a description of that merchandise and the cost.

(2) The amount of money corresponding to the scrip, chips, or imitation money collected by the central bank shall be compared to the sale of scrip, chips, or imitation money by the central bank at the conclusion of the special limited charity fundraising event. Any variance shall be documented and cash short or cash over shall be determined.

(3) For all tournaments played during special limited charity fundraising events, the special limited charity fundraising event records shall contain the following information in addition to the regular records required at special limited charity fundraising events:

(a) A record of attendance shall be kept for the special limited charitable games; and

(b) A copy of the charitable gaming session program, which shall include the:

Charitable organization name and license number;
Cost to enter, the cost of the buy-backs, and the cost of the add-ons;
Rules of the game;
Manner for raising blinds or closing tables; and
Prizes. The prizes may be listed as a percentage of the receipts.

(4) If bingo games are conducted, accurate bingo paper sale records, card-minding device records, and bingo payout records shall be maintained.

(5) If pulltabs are sold, accurate pulltab records shall be maintained.

(6) If raffles are conducted at a special limited charity fundraising event, accurate raffle records shall be maintained.

(7) The organization shall complete Form CG-Vol and keep it with the charitable gaming session record for that event.

Section 13. Other Allowable Expenses. In addition to those authorized expenses provided for in KRS 238.550, each of the following expenses is determined to be legitimate and shall be allowable charitable gaming expenses of a charitable organization:

(1) The following customary and usual banking fees or charges paid to any financial institution, check reader, or verification company in connection with a charitable organization's charitable gaming account and activities:

(a) Monthly service charges;

(b) Check verification service charges;

(d) Charges relating to returned checks;

(e) Copying charges for bank records; and

(f) Credit card processing charges;

(2) Volunteer food, to be consumed on gaming premises, not to exceed fifteen (15) dollars per volunteer, per day;

(3) Any noncash item not to exceed fifty (50) dollars in fair market value given upon achieving a predetermined goal in a raffle;

(4) Clothing provided to volunteers as authorized in these administrative regulations;

(5) Payments made to the Department of Charitable Gaming;

(6) Printing costs incurred in connection with a charitable organization's charitable gaming activities;

(7) Payments for the purchase of prizes to be awarded during the charitable organization's conduct of charitable gaming;

(8) Promotional items;

(9) Federal excise taxes levied under 26 U.S.C. 4401 and 4411, or fees associated with the filing of Internal Revenue Service Form 11-C and paid by a charitable organization during the calendar year; and

(10) Customary and usual fees or charges incurred in the collection of checks dishonored for insufficient funds.

Section 14. Charitable Gaming Expense Categories.

(1) The items that may be included as a utilities expense, pursuant to KRS 238.550(9)(c), shall be the money paid for electric, gas, water, sewer, telephone, and trash collection. It may also include any cable or internet expenses that are incurred by the charitable organization for credit card services, card-minding devices, or electronic pulltab systems.

(2) The items that may be included as an advertising expense, pursuant to KRS 238.550, shall be the expenses for a handout, flyer, radio, television, advertising sign, billboard, or other media used to promote an event or activity required to be licensed pursuant to KRS Chapter 238 and any printing costs associated with them.

(3) The items that may be included as a bookkeeping expense, pursuant to KRS 238.550, shall be the costs of completing the financial report, the federal excise tax form, and the federal gaming forms. Bookkeeping expenses shall not include expenses associated with handling charitable gaming funds, preparing charitable gaming session records, or ordering supplies.

(4) The items that may be included as security services, pursuant to KRS 238.550, shall be the expenses associated with paying a person whose sole duty is to promote and provide peace, order, and safety at a charitable gaming event which:

(a) May include patrolling the parking lot or accompanying the charitable organization's personnel to the bank or night depository with the charitable gaming receipts; and

(b) Shall not include costs for security or alarm systems or for special lighting for the building or parking lot.

Section 15. Raffle Recipient Account.

(1) A licensed charitable organization receiving distributions from an organization licensed pursuant to KRS 238.535(14)(b) shall maintain a separate bank account that shall be referred to as the "raffle recipient account," in addition to the charitable gaming account and general account maintained by the licensed charitable organization. The raffle recipient account shall be for the sole purpose of receiving distributions from organizations licensed pursuant to KRS 238.535(14)(b) to hold special event raffles. The funds distributed into the raffle recipient account shall not be commingled with any other account maintained by the licensed charitable organization or any personal account or business account. If the license charitable organization receives distributions from more than one organization licensed pursuant to KRS 238.535(14)(b), the licensed charitable organization shall maintain a separate raffle recipient account for each relationship.

(2) Any distributions received by a licensed charitable organization from an organization licensed pursuant to KRS 238.535(14)(b) shall be by check drawn on the charitable gaming account or electronic fund transfer from the charitable gaming account from the organization licensed pursuant to KRS 238.535(14)(b). All distributions shall be made within ten (10) business days of the raffle drawing.

(3) Any expenditures from the raffle recipient account shall be directly to forward the charitable purpose of the licensed charitable organization. No other expenses shall be paid from the raffle recipient account. Distributions into the raffle recipient account shall not be transferred to any other account maintained by the licensed charitable organization or any other person or business.

Section 16. Incorporated by Reference.

(1) Form CG-Vol, "Charitable Gaming Volunteer Sign Up Sheet (2018)", is incorporated by reference.

(2) Worksheet WS-06c, "Pulltabs Contributing to a Progressive Raffle Jackpot (2018)", is incorporated by reference.

(3) Worksheet WS-14b, "Progressive Raffle Receipts and Payouts with Pulltab Contributions to Jackpot (2018)", is incorporated by reference.

(4) Worksheet WS-15a, "Progressive Raffle with Pulltab Contribution to Jackpot Deposit Reconciliation (2018)", is incorporated by reference.

(5) Worksheet WS-23a, "Raffle Receipts and Payouts with a Ticket Price of $5 or Less (2018)", is incorporated by reference.

(6) Worksheet WS-23b, "Raffle Receipts and Payouts with a Ticket Price of More than $5, but Less than $50 (2018)", is incorporated by reference.

(7) Worksheet WS-23c, "Raffle Receipts and Payouts with a Ticket Price of $50 or More, but Less than $100 (2018)", is incorporated by reference.

(8) Worksheet WS-23d, "Raffle Receipts and Payouts with a Ticket Price of $100 or More (2018)", is incorporated by reference.

(9) Worksheet WS-23e, "501(c)(7) Raffle Deposit Reconciliation (2018)", is incorporated by reference.

(10) Worksheet WS-23f, "Deposit Accountability (When Charitable Gaming Receipts Are Deposited Before the Raffle Draw (2018)", is incorporated by reference.

(11) This material may be inspected, copied, or obtained, subject to applicable copyright law, at the Department of Charitable Gaming, Public Protection Cabinet, 500 Mero Street 2NW24, Frankfort, Kentucky 40601-3714, Monday through Friday, 8 a.m. to 4:30 p.m.

History

RELATES TO: KRS 238.536, 238.550, 238.560
STATUTORY AUTHORITY: KRS 238.515, 238.550
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 and 238.550 authorize the Department of Charitable Gaming to establish and enforce standards of accounting, recordkeeping, and reporting to the department to ensure charitable gaming receipts are accounted for properly. This administrative regulation establishes the minimum requirements for accounting, recordkeeping, and reporting to the department and establishes allowable charitable gaming expenses.
History: 820 KAR 001:057 32 Ky.R. 819; 1294; 1656; eff. 3-31-2006; 33 Ky.R. 3530; 34 Ky.R. 70; 266; eff. 8-31-2007; 42 Ky.R. 952; 1776; eff. 1-4-2016; 44. Ky.R. 2683; 45 Ky.R. 718, 1601; eff. 1-4-2019; TAm eff. 11-22-2019; Cert. eff. 1-23-2025.

820 KAR 1:060 Prohibited conduct {#sec-820-kar-1-060 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:060}

Section 1. Tipping Prohibited.

(1) The charitable organization conducting gaming shall take one (1) or more of the following measures to inform the public that, pursuant to KRS 238.540(4), its volunteers are unable to accept tips or other forms of gratuities:

(a) Post signs in a conspicuous location that volunteers are not permitted to accept tips;

(b) State prominently on the charitable gaming session program that volunteers are not permitted to accept tips; or

(2) Except as provided in subsection (3) of this section, a charitable organization shall not pay remuneration or expenses other than those authorized in KRS 238.550(4), award, or otherwise provide any sort of benefits, to, for, or on behalf of any person engaged as a volunteer in the conduct of charitable gaming.

(3) A charitable organization may provide volunteer workers the following:

(a) Food or drink of incidental value not to exceed fifteen (15) dollars per day to be consumed on the premises where charitable gaming occurs;

(b) Any article of clothing worn by the volunteers on the premises where charitable gaming occurs that identifies the volunteer worker as a volunteer; and

(c) Any noncash item not to exceed twenty-five (25) dollars in fair market value given to volunteers upon achievement of predetermined goals in the conduct of a raffle.

(4) All allowable expenditures made by charitable organizations for volunteers shall be reported on the charitable organization's financial reports.

Section 2. Rebuttable Presumption of Compensation.

(1) There is a rebuttable presumption of compensation if a person volunteers at more than four (4) charitable gaming sessions a week excluding charity fundraising events as defined in 820 KAR 1:055.

(2) There is a rebuttable presumption of compensation if a person volunteers at more than four (4) special limited charitable fundraising events per year.

Section 3. Department Employees Prohibited From Playing Charitable Games. (1) No Department of Charitable Gaming employee, during his term of employment, shall play any charitable game authorized in KRS Chapter 238 unless the employee's participation in the game is authorized in advance by the Commissioner as a necessary function of the employee's job duties.

Section 4. Officers, Agents, or Employees of Manufacturers and Distributors.

(1) No distributor, distributor's agent, or distributor's employee may play or participate in any charitable gaming in the Commonwealth of Kentucky involving products sold or leased by the distributor while such person is employed by a licensed distributor.

(2) No manufacturer, manufacturer's agent, or manufacturer's employee may play or participate in any charitable gaming in the Commonwealth of Kentucky involving products made, sold, or leased by the manufacturer while such person is employed by a licensed manufacturer.

(3) Servicing of electronic gaming devices shall not be considered conduct or participation in charitable gaming.

History

RELATES TO: KRS 238.510, 238.540, 238.550
STATUTORY AUTHORITY: KRS 238.515
NECESSITY, FUNCTION, AND CONFORMITY: The Department of Charitable Gaming is authorized by KRS 238.515 to establish and enforce reasonable standards for the conduct of charitable gaming. This administrative regulation prohibits tips or other gratuities for volunteers working at charitable gaming events and prohibits employees of the Department of Charitable Gaming from playing any charitable games, removing any potential conflict of interest or appearance of impropriety.
History: 820 KAR 001:060 22 Ky.R. 442; eff. 10-13-1995; 1412; eff. 11-8-1996; Recodified from 500 KAR 11:060, 2-23-1999; 32 Ky.R. 772; 1661; eff. 3-31-2006; 45 Ky.R. 2690; 45 Ky.R. 724, 1607; eff. 1-4-2019; Crt. eff. 12-23-2025.

820 KAR 1:125 Gaming inspections {#sec-820-kar-1-125 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:125}

Section 1. Inspections. A compliance officer, investigator, auditor, or any other employee authorized by the department may, to ensure compliance with all statutes and administrative regulations relating to charitable gaming, inspect the conduct of gaming by the following:

(1) Exempt organizations;

(2) Licensed charitable organizations;

(3) Licensed charitable gaming facilities;

(4) Licensed manufacturers; and

(5) Licensed distributors.

History

RELATES TO: KRS 238.515, 238.560
STATUTORY AUTHORITY: KRS 238.515, 238.560
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming. KRS 238.560 authorizes the department to inspect and examine charitable gaming operations. This administrative regulation establishes how the department will investigate the conduct of charitable gaming through inspections.
History: 820 KAR 001:125 32 Ky.R. 824; 1300; 1662; eff. 3-31-2006; 42 Ky.R. 959; 1780; eff. 1-4-2016; 44 Ky.R. 2691; eff. 1-4-2019; Cert. eff. 12-23-2025.

820 KAR 1:130 Administrative actions {#sec-820-kar-1-130 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:130}

Section 1. Department Enforcement Powers.

(1) The department may issue a letter of warning, letter of reprimand, or a cease and desist order to any license holder for any violation of KRS Chapter 238 or 820 KAR Chapter 1.

(2) The department may impose administrative action pursuant to KRS 238.560 if the department determines that the action will deter future violations and promote efforts to correct the violation cited.

Section 2. Fines.The department may assess fines against any license holder in accordance with the following schedule:

(1) A violation of KRS Chapter 238 or 820 KAR Chapter 1 relative to charitable gaming recordkeeping and reporting requirements, except for failure to file quarterly reports, may be subject to a fine not to exceed $500 for each offense. A second or subsequent violation of the same statutory or regulatory provision during a three (3) year period may be subject to a fine not to exceed $1,000 for each offense.

(2) A violation of KRS Chapter 238 or 820 KAR Chapter 1 relative to the conduct of charitable games, may be subject to a fine not to exceed $500 for each offense. A second or subsequent violation of the same statutory or regulatory provision during a three (3) year period may be subject to a fine not to exceed $1,000 for each offense.

(3) A violation of KRS Chapter 238 or 820 KAR Chapter 1 relative to manufacture, packaging, and distribution of charitable gaming supplies and equipment may be subject to a fine not to exceed $500 for each offense. A second or subsequent violation of the same statutory or regulatory provision during a three (3) year period may be subject to a fine not to exceed $1,000 for each offense.

(4) A violation of the provisions of KRS 238.530(10) or 238.555(3) relative to conflicts of interest among types of licensees may be subject to a fine not to exceed $750 for each offense. A second or subsequent violation during a three (3) year period may be subject to a fine not to exceed $1,000 for each offense.

(5) A violation for conducting any activity without a license for which a license is required pursuant to KRS Chapter 238 and 820 KAR Chapter 1 may be subject to a fine not to exceed $1,000 for each offense.

(6) A violation for making false statements in any documents submitted to the department may be subject to a fine not to exceed $1,000 for each offense.

(7) A violation of KRS Chapter 238 or 820 KAR Chapter 1 relative to diversion of net receipts from authorized expenses or charitable purposes, unlawful compensation to an individual involved in the conduct of charitable gaming, or any other inurement of net receipts to the private benefit or financial gain of an individual or person, may be subject to a fine not to exceed $1,000 for each offense.

(8) A violation of KRS 238.510(5) relative to gambling offenses committed on licensed charitable gaming premises or in conjunction with charitable gaming may be subject to a fine not to exceed $1,000 for each offense.

(9) Any other violation of KRS Chapter 238 or 820 KAR Chapter 1 for which a fine is not established in this section may be subject to a fine not to exceed $1,000 for each offense.

Section 3. Probation.

(1) The department may impose upon any license holder a term of probation for any violation of KRS Chapter 238 or 820 KAR Chapter 1.

(2) The department may impose this administrative action, pursuant to KRS 238.560(3), if it determines that department oversight and monitoring of the license holder's activities will promote efforts to correct the cited violation and deter future violations.

Section 4. Revocation, Suspension, or Denial of License.

(1) The department shall revoke, suspend, or deny a license or application for a license if:

(a) An applicant, license holder, license holder seeking renewal, or individual associated with the applicant or license holder in a capacity established in KRS 238.525(3) fails to meet the requirements of KRS 238.525(4) or 820 KAR 1:005;

(b) A license holder fails to pay a fine, correct a violation, or comply with any other requirement imposed by a final order of the department within the previous five (5) years;

(c) A license holder, upon notice of delinquency, fails to remit to the department any charitable gaming fee required pursuant to KRS 238.570(1);

(d) A licensed charitable organization fails to maintain its federal tax-exempt status or status as a common school, institute of higher learning, or public college or university, as required by KRS 238.535(12)(a); or

(e) A licensed charitable organization fails to maintain an office or place of business in the Commonwealth of Kentucky, as required by KRS 238.535(12)(b) and (d).

(2) The department may revoke, suspend, or deny the license or application of a licensed charitable organization, manufacturer, distributor, or charitable gaming facility for violations of KRS Chapter 238 or 820 KAR Chapter 1 if the nature, frequency, and severity of the offenses charged or the license holder's or applicant's history of previous violations demonstrate an unwillingness or inability to operate in compliance with the law.

Section 5. Written Notice of Violation. The department shall issue a written notice of violation to a license holder determined to have violated any provision of KRS Chapter 238 or 820 KAR Chapter 1. Any notices of violation issued to a license holder shall be considered by the department in evaluating the license holder's history of previous violation. A notice of violation shall state the provisions alleged to have been violated and shall notify the license holder that the department may take administrative action against the license holder as a result of the violations.

Section 6. Investigations. A person may submit a request, in writing, to the department to initiate an investigation of an alleged violation.

History

RELATES TO: KRS 238.510, 238.515, 238.530, 238.555, 238.560, 238.995
STATUTORY AUTHORITY: KRS 238.515, 238.560
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 and 238.560 authorize the Department of Charitable Gaming to take appropriate disciplinary action against licensed charitable organizations, charitable gaming facilities, manufacturers, distributors, or persons who do not operate in compliance with KRS Chapter 238 and the administrative regulations promulgated thereunder. KRS 238.560 authorizes the department to classify offenses and recommended administrative actions. This administrative regulation establishes the required classifications and penalties.
History: 820 KAR 001:130. 28 Ky.R. 1539; 2039; eff. 3-13-2002; TAm eff. 8-9-2007; 42 Ky.R. 960; eff. 1-4-2016; 44 Ky.R. 2693; 45 Ky.R. 1607; eff. 1-4-2019; TAm eff. 11-22-2019; 49 Ky.R. 1689, 2110; eff. 8-1-2023; Crt to Am; filing deadline 6-23-2027.

820 KAR 1:135 Disposal of gaming supplies {#sec-820-kar-1-135 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:135}

Section 1. Cessation of Gaming. When a charitable organization ceases to game, the charitable organization shall:

(1) Perform a final inventory of all charitable gaming supplies and equipment;

(2) Spend or disburse remaining charitable gaming funds:

(a) In a manner that is consistent with the charitable organization's charitable purpose; or

(b) Donate the charitable gaming funds to another charitable organization's charitable purpose; and

(3) Dispose of all unused charitable gaming supplies and equipment by:

(a) Returning to a distributor;

(b) Donating to another charitable organization with the permission of the department;

(d) Destruction pursuant to Section 2 of this administrative regulation.

Section 2. Method of Destruction. When a charitable organization must destroy gaming supplies, the gaming supplies shall be destroyed by:

(1) Burning in compliance with state and federal law;

(2) Shredding;

(3) Defacing the gaming supplies in some manner that prevents its reuse; or

(4) Any combination of the above-referenced methods.

Section 3. Abandoned Charitable Gaming Supplies and Equipment. Abandoned charitable gaming supplies and equipment shall be seized by the department and destroyed or kept for demonstration and training purposes.

History

RELATES TO: KRS 238.515
STATUTORY AUTHORITY: KRS 238.515
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.515 authorizes the Department of Charitable Gaming to establish and enforce reasonable standards for the conduct of charitable gaming and the operation of charitable gaming facilities. This administrative regulation establishes standards for the disposal of charitable gaming supplies and equipment.
History: 820 KAR 001:135 44 Ky.R. 2721; 45 Ky.R. 1608; eff. 1-4-2019; Cert. eff. 12-23-2025.

Title 820 KAR — Public Protection Cabinet - Kentucky Horse Racing & Gaming Corporation - Office of Charitable Gaming

Chapter 1 Charitable Gaming

820 KAR 1:001 Definitions {#sec-820-kar-1-001 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:001}

820 KAR 1:005 Charitable gaming licenses and exemptions {#sec-820-kar-1-005 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:005}

820 KAR 1:025 Reports {#sec-820-kar-1-025 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:025}

820 KAR 1:032 Pulltabs {#sec-820-kar-1-032 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:032}

820 KAR 1:042 Bingo {#sec-820-kar-1-042 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:042}

820 KAR 1:050 Raffles {#sec-820-kar-1-050 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:050}

820 KAR 1:055 Charity fundraising event standards {#sec-820-kar-1-055 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:055}

820 KAR 1:057 Recordkeeping {#sec-820-kar-1-057 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:057}

820 KAR 1:060 Prohibited conduct {#sec-820-kar-1-060 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:060}

820 KAR 1:125 Gaming inspections {#sec-820-kar-1-125 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:125}

820 KAR 1:130 Administrative actions {#sec-820-kar-1-130 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:130}

820 KAR 1:135 Disposal of gaming supplies {#sec-820-kar-1-135 omnilex-key=us-ky-regs-official--title-820--820 KAR 1:135}

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