Ask Bingo Bob: Ohio Charities

Verna asked the question:
At what winning amounts do you have to provide your name, address and social security number to a bingo hall?

Bingo Bob’s answer:
Since we are dealing with an IRS issue, this interests all of us. The following was excerpted from the IRS Publication 505:

Gambling winnings from bingo, keno and slot machines generally are not subject to income tax withholding. However, you may need to provide the payer (bingo hall) with a social security number to avoid withholding (on certain winnings). This rule applies to winnings of at least $1,200 from bingo or slot machines or $1,500 from keno, and to certain other gambling winnings of at least $600.00.

If you have any kind of gambling winnings and do not give the payer your social security number, the payer may have to withhold income tax at a flat 28% rate.

My interpretation of this publication as it pertains to bingo is:

If you win $600.00 in a pull tab game and $1,200 in a bingo game, the hall has the right to ask for your name, address and social security number. Some halls may interpret the rule that all $600 or more wins in the hall requires getting the name, address and social security number. (I would have no issue with that) If you decline to give them the information, they have the right to withhold federal tax at 28%. They must provide you with a Form W-2G showing the amount you won and the amount withheld.

Lisa from St. Joseph’s had this question:
How should a charity treat proceeds from the “Pig” game? Is it recorded as Type 1 or Type 2 revenue and expense?

Bingo Bob says:
Lisa, let’s make sure we understand what the “PIG” game is all about. Many charities play this “add on” game, but call it another name. Basically, $1.00 is collected from those players that want to play. A percentage of the money collected goes into a jar and if a player achieves a bingo on a certain number the $ in the jar is given to the player. If no one bingos on the chosen number then the balance in the jar is carried to the following session.

Since this is a game played in conjunction with a traditional bingo game and the winner is decided by the numbers called from the ball machine, then the revenue and expenses must be reported under the TYPE 1 license. It’s got to be part of the $3,500.00 maximum payout.

Mary from the East Side asked:
Hey Bob, we play the pre-called Bonanza Bingo. Is it Type 1 or Type 2 revenue and expense?

Bingo Bob says:
Mary, this is an easy one, the Bonanza game that has a quantity of numbers pre-daubed and the game is won when the first player gets a coverall is definitely a Type 1 game. The ticket does not meet the definition of an instant ticket, and the winner is determined by the bingo balls called from the ball machine. It must be counted as part of the $3,500.00 maximum payout.

Henry asks:
We have a Type 3 license to sell pull tabs. Does the operator have to be physically on site during all hours of selling the pull tabs?

Bingo Bob says:
No, you do not have to be physically on site during the entire time the pull tabs are being sold. However, you are responsible for training the volunteers and ensuring that the records are accurately maintained.

More from Henry:
Can I operate my Type 3 license on the same day as my Type 1 license?

Bingo Bob says:
The Ohio Revised Code section 2915 is vague on whether a Type 3 can operate on the same day as a Type 1. However, if the Type 3 either ends 2 hours before or starts 2 after the Type 1 game is played then it MAY be acceptable to the State.

It would be much cleaner and more readily acceptable to the State if the Type 3 is played on different days from the Type 1 traditional bingo session.

Remember, the Type 3 licensee may play 5 days per week and 10 hours a day.

John from out West asks:
I want to operate a traditional bingo game for less than 4 weeks a year. What type of license should I get?

Bingo Bob says:
Hi John, you should apply for a Type 1 license, and the cost should be only $50.00.

Zoe from the middle of the State asks:
Can a charity provide free pull tabs to players as part of their buy in package?

Bingo Bob says:
Sorry Zoe, but that is a big NO! By giving the player pull tabs as part of the buy in package, the charity is not charging the full price for the pull tabs and that is in violation of the Ohio gaming laws.

Nick from up North asks:
Can a charity give pull tabs to a player in lieu of cash prizes?

Bingo Bob says:
Yes, it is permissible to give a payout in the form of pull-tabs since they are charging full price for the pull tabs. (The exchanging of money is assumed)

Question from a Distributor:
May a distributor give samples of pull tabs to a charity?

Bingo Bob says:
We welcome questions from anyone interested in improving Ohio’s bingo. Yes, a distributor may provide sample pull tabs, but the charity may not sell the samples to the players. The State does not regulate what a deal may be sold for, but the distributor must only sell to a licensed charity. (But you already know that one!)

Nancy has an interesting question:
Why can’t we play “U Pick’em” Games?

Bingo Bob says:
Good question Nancy, but the answer is that the State in an August 16, 2007 ruling determined that this game, or any similar variation, does not meet the definition of traditional bingo as defined in ORC 2915.01 (S)(1) or “instant bingo” as found in ORC 2915.01 (FF). Sorry about that Nancy, I know that “U Pick’em Games” are very popular with the players. Please remember that you also would be competing with the Ohio lottery commission and they do not want competition. (oops, I will get off my soapbox!)

Question: Well, Spencer from out West asks if it is legal to have second chance drawing for losing tickets. 

Bingo Bob says:: This is a common practice throughout the State.  We cannot find any mention in Chapter 2915 of the State of Ohio gaming laws prohibiting such action.  I think that is the way life should be – we all need a second chance in life, or “do over” as the kids used to say. 
 

Question: Adam from the middle of the State of Ohio wonders if it is legal to pre-sell admission packages at the beginning of the month.  For example, can a player get 4 admissions for the price of 3? 

Bingo Bob says:  This is already being done in the State of Ohio.  Nothing illegal about it, and I happen to think it is a wise business practice.  A player may show up at the bingo hall at the end of the month since the admission package has already been paid.  If they show up, they may purchase more pull tabs. 
 

Question:  Amanda posed a question concerning the length of time a bingo hall has to payout a winning ticket that was sold, but not redeemed.   

Bingo Bob says::  We had a similar question a few months ago.  Chapter 2915.091 (A) (15) of the Ohio Revised Code tells us that a charity must continuing selling a box of instants until the top two highest tiers of prizes in the deal are sold.  Presumably, the charity will know when the two highest tiers of prizes in the deal are sold when the players turns them in for payment.   

There is no mention what the charity must do if the player does not try to collect the prize for the highest tiers.  Logically, the charity could keep it or they could find some other way to distribute the prize to the players. Most charities will insist that the player redeem the winners the same night the deal is completely sold.