Pursuant to C.R.S. 12-9-103 and the rulemaking provisions of the State Administrative Procedure Act, C.R.S. 24-4-103.5, I, Donetta Davidson, Colorado Secretary of State and bingo-raffle licensing authority, do hereby adopt and give NOTICE of the adoption this 13th day of March, 2001, of amendments to the Rules Regulating Bingo and Raffles specifically to Rule 11, "Allowable Expense Amounts", revisions to Rule 16, "Pull Tab Operation", specifically sections 13 and 14, new Rule 22, "Assistance With Licensee's Games of Chance as a Member Requirement-Conditions", and technical corrections to Rule 1, 13 and 17.

Donetta Davidson
Secretary of State

by William A. Hobbs
Deputy Secretary of State

Statements of Basis, Purpose and Specific Statutory Authority

Office of the Secretary of State
Rules Regulating Bingo and Raffles

Amendments to Rules 1, 11, 13, 16 and 17 and
New Rule 22

Basis and Purpose

These amendments, together with new Rule 22, are based on the recommendations of the Colorado Bingo-Raffle Advisory Board, offered to the Secretary of State in accord with C.R.S. 12-9-202 (2).

The statutory bases for the Boards recommendations and the specific purposes for these changes are as follows:

The amendments to Rule 11, "Allowable Expense Amounts and Rental Agreements", are based on C.R.S. 12-9-108 (6), which allows licensee expenditures for bookkeeping, janitorial and security services in connection with bingo occasions, provided that such expenditures are in reasonable amounts "as determined by the licensing authority in rules for each occasion."

It is the specific purpose of these amendments to set standards for allowable bingo expenses that are not only reasonable and uniform, but also flexible enough to allow for anticipated variations in economic circumstances among licensees and over time.

The amendments to Section 13 of Rule 16, "Pull Tab Operation", are based on C.R.S. 12-9-102 (18.1) and 12-9-107 (22) and also on the Administrative Procedure Act, specifically C.R.S. 24-4-103.

The purpose of this amendment is to remove a rule provision that, over time, has been rendered obsolete and in conflict with the Bingo and Raffles Law. Section 13 of Rule 16 was promulgated prior to 1985 and has not been amended since its adoption. The bingo-raffle statute was extensively amended during this time period, however, and the entire article was recreated and reenacted in 1999.

Two of the amended/recreated statutory provisions deal with pull tab games and have created the necessity for the amendment of Section 13 of the Pull Tab Operation Rule. Specifically, C.R.S. 12-9-102 (18.1) defines pull tab games and requires the tickets to be "preprinted with markings distinguishing winners and nonwinners, each ticket so made that its . . . winning or nonwinning status cannot be known or revealed until the ticket is broken or torn apart" and C.R.S. 12-9-107 (22) prohibits use, sale or play of "any pull tab ticket . . . unless it conforms to the definitions and requirements of this article . . ." Section 13 of Rule 16 purports to allow "Last Sale" pull tab games, in which the final winning tickets status is known before it is broken or torn apart, and for which the last winning ticket cannot be preprinted with markings distinguishing it as a winner. For this reason, and as a housekeeping measure, the removal of Section 13 is necessary. An immediate repeal, however, would work a hardship on licensees that have already purchased "last sale" pull tabs in reliance on Section 13. For this reason, the repeal is made effective as of December 31, 2001.

The Amendments to Section 14 of Rule 16, "Pull Tab Operation", are based on an Advisory Board request for simplification of bookkeeping for certain seal flare pull tabs, and the bookkeeping procedures are based on C.R.S. 12-9-108 (1), which requires licensees to "maintain and keep such books and records as necessary" to substantiate required reporting on all games of chance activities.

The specific purpose of these amendments is to reduce the amount of record keeping required for small seal pull tab games that sell out during a single bingo occasion or in one day at a licensees bar or clubroom.

New Rule 22 is based on the charitable gaming provisions of article XVIII, section 2 of the Colorado constitution, specifically subsections (4)(b) and (c), setting forth restrictions on the conduct of games of chance, and also on the provisions of the Bingo and Raffles Law, article 9 of title 12, Colorado Revised Statutes, specifically C.R.S. 12-9-107, governing persons permitted to conduct, hold, or operate bingo-raffles activities for organizations eligible to be licensed by the licensing authority.

The specific purposes of this rule are to clarify the status, in light of the above cited provisions of law, of a licensees membership qualifications when such qualifications require individuals to operate or assist with charitable gaming activities, and to set forth specific conditions for determining that such individuals are bona fide, active, uncompensated volunteer members of the bingo-raffle licensee.

The technical corrections to Rules 1, 13 and 17 are "housekeeping" amendments and updates.

The purpose of the change to Rule 1 is to update a reference to the maximum allowable prize amount for a single bingo game. The prize amount reference was outdated by an amendment to the statutory provision on which it was based, C.R.S. 12-9-107 (13). The statute now allows a licensee to choose an alternative maximum prize, in any amount from $250 to $500, for a single game at any bingo occasion the licensee conducts.

The purpose of the amendment to Rule 13 is to correct a typographical error that resulted in a run-on sentence. The amendment divides sentence two of Rule 13 (5) into sentences two and three by replacing the comma splice with a period and capital.

The purpose of the addition to Rule 17 (3) is to remove any possible unintended conflict between its provisions and those of Rule 16 (14). Rule 16 (14) allows a longer pull tab redemption period in the case of seal card games because seal card games are structured differently from other pull tabs and do or may not reveal winners immediately.

Specific Statutory Authority

These changes to the Rules Regulating Bingo and Raffles are promulgated in accord with the Colorado Administrative Procedure Act, C.R.S. 24-4-103, "Rule-making," and pursuant to the specific rule-making authority granted to the secretary of state by the Colorado Bingo and Raffles Law at C.R.S. 12-9-103 (1), "Licensing authority-powers-duties."

Amendments to Rules Covering and Regulating Bingo/Raffles

Adopted by the Secretary of State March 13, 2001

(Note: Material to be deleted is shown in stricken type; new material is shown in all capitals.)

1. TECHNICAL CORRECTIONS AND AMENDMENTS TO RULES 1, 13, AND 17:

RULE 1  - DEFINITION OF BINGO AND RAFFLE TERMS

Bingo Game:
A bingo game starts when the first numbered object or ball is selected at random and called and continues until all the objects or balls have been returned to the receptacle. A game may have two or more parts with winners for each part, if the total amount of prizes offered or given for all parts of one game does not exceed $250, in amount or value, the statutorily set maximum prize that may be offered or given in a single game of bingo.

RULE 13 - CONDUCT DURING BINGO GAMES

5) Immediately following the drawing of each ball in a bingo game, the caller shall display, or cause to be displayed, the letter and number on the ball to the participants by means of a monitor or physically showing the number and letter to the participants in the game so the participants may know that the proper number has been called. The letter and the number on the ball shall be called out clearly and announced twice prior to the drawing of any other ball. ,a After the letter and number are called, the corresponding letter and number on the flash board, if any, shall be lit for participant viewing. The ball is not official until it has been properly called. If monitors are used, a sign shall be placed by each monitor that shall read: "Ball on TV is not official until called."

RULE 17 - CONTROL OF PRIZES

3) Cash and merchandise pull tab prizes shall be awarded upon a determination of a winner. Any ticket presented 10 days after such a determination shall be considered void and of no value, and shall not be redeemed for a prize by any licensee, except as provided for seal flare pull tab winners under rule 16 (14) d.

2. AMENDMENTS TO RULE 11 - "CONCERNING ALLOWABLE EXPENSE AMOUNTS AND RENTAL AGREEMENTS':

RULE 11 - ALLOWABLE EXPENSE AMOUNTS AND RENTAL AGREEMENTS

1) A bingo-raffle licensee conducting bingo occasions may not pay more than $40 per occasion for bookkeeper or accountant services in preparing the financial reports for such occasions.

2) A bingo-raffle licensee conducting bingo occasions on premises owned by it, or in its sole control, or which it uses rent free may pay a total of not more than $40 for janitorial services for each occasion it conducts., UNLESS THE LICENSEE HAS REQUESTED AND RECEIVED THE WRITTEN PERMISSION OF THE LICENSING AUTHORITY TO PAY A GREATER AMOUNT. REQUESTS SHALL BE BY LETTER, ACCOMPANIED BY DOCUMENTATION OF THE LICENSEE'S ANTICIPATED COSTS FOR JANITORIAL SERVICES AND OF THE PREVAILING RATES OF PAYMENT FOR SUCH SERVICES IN THE COMMUNITY IN WHICH THE LICENSEE'S BINGO PREMISES ARE LOCATED. PERMISSION SHALL BE GRANTED ONLY FOR PAYMENTS THAT ARE REASONABLE IN LIGHT OF SUCH PREVAILING RATES.

3) A bingo-raffle licensee may not rent premises for an occasion except from a landlord licensee. No rental fee may be paid without prior approval of the secretary of state and shall cover the expenses reasonably necessary for the use of the premises for the occasion.

4) Prior to renting a space in a commercial bingo facility and conducting an occasion there-in, a bingo-raffle licensee shall file with the secretary of state an executed rental agreement. If the bingo-raffle licensee agrees to use games of chance equipment owned by a landlord or another bingo raffle licensee, the bingo-raffle licensee shall also file an equipment agreement. All such agreements shall be on forms prescribed by the secretary of state or forms approved by the secretary of state, such approval shall be in writing.

5) A rental agreement may be terminated by either party upon at least two week's notice to the other, or upon the voluntary or involuntary suspension of the license of either. The agreement may contain such other terms and conditions upon which the parties shall agree, except:

a. It shall not specify the fee that the bingo-raffle licensee shall charge for a player's right to participate in any games of chance conducted during a bingo occasion.

b. It shall not obligate a bingo-raffle licensee to pay for any canceled occasion.

6) A BINGO-RAFFLE LICENSEE CONDUCTING BINGO OCCASIONS MAY PAY NOT MORE THAN $16 PER HOUR FOR SECURITY SERVICES FOR SUCH OCCASIONS UNLESS THE LICENSEE HAS REQUESTED AND RECEIVED THE WRITTEN PERMISSION OF THE LICENSING AUTHORITY TO PAY A GREATER AMOUNT. REQUESTS SHALL BE BY LETTER ACCOMPANIED BY DOCUMENTATION OF THE LICENSEE'S ANTICIPATED COSTS FOR SECURITY SERVICES AND OF THE PREVAILING RATES OF PAYMENT FOR SUCH SERVICES IN THE COMMUNITY IN WHICH THE LICENSEE'S BINGO OCCASIONS ARE HELD. PERMISSION SHALL BE GRANTED ONLY FOR PAYMENTS THAT ARE REASONABLE IN LIGHT OF SUCH PREVAILING RATES. SECURITY SHALL BE PAID FOR NO LONGER THAN THE LENGTH OF THE OCCASION PLUS ONE ADDITIONAL HOUR FOR MONEY TRANSPORT, IF NEEDED.

7) THE MAXIMUM ALLOWABLE AMOUNTS SET IN THIS RULE 11 FOR BINGO EXPENSES FOR BOOKKEEPING, JANITORIAL, AND SECURITY SERVICES SHALL BE ADJUSTED ANNUALLY ON THE FIRST DAY OF FEBRUARY, BEGINNING ON FEBRUARY 1, 2002. THE ADJUSTMENT TO EACH ALLOWABLE MAXIMUM AMOUNT SHALL BE IN THE SAME PERCENTAGE AS THE TOTAL OVERALL PERCENT CHANGE IN THE BUREAU OF LABOR STATISTICS CONSUMER PRICE INDEX, ALL URBAN U.S. CITY AVERAGE (CPI-U) FOR THE PRECEDING CALENDAR YEAR.

3. REPEAL OF RULE 16, SECTION (13) - "LAST SALE" PULL TABS:

RULE 16 - PULL TAB OPERATION

13) A bingo-raffle licensee may sell or pay in full any pull tab deal which offers a prize for the "Last Sale" in the deal if the bingo-raffle licensee:

a. Completes the forms required by the Secretary of State for each such "Last Sale" pull tab prize paid, and retains the same for four months after the end of the quarter in which the prize was paid.

b. Verifies the identification of the winner of the "Last Sale" pull tab prize, regardless of amount, including such person's name, address, and driver's license number or Colorado identification number. No "Last Sale" prize may be paid without such verified information.
THIS SECTION 13) IS REPEALED, EFFECTIVE JANUARY 1, 2002.

4. AMENDMENTS TO RULE 16, SECTIONS 14) b AND 14) e, CONCERNING SMALL SEAL PULL TAB DEALS:

RULE 16 - PULL TAB OPERATION

14)

b. The licensee shall post the flare for the deal in play at the location of the seal game. The flare shall be posted out of reach but fully visible to any player present. Tickets redeemed for a chance at a seal pull tab flare prize shall be defaced and returned to the purchaser, and the licensee shall keep and maintain for the duration of the game the unopened flare and the correct and accurate sign-up sheet, showing the names of all holders of redeemed tickets which offer a chance on the flare prizes and the potential winning combination of each such ticket redeemed. Otherwise neither the sign-up sheet nor the posted flare shall show any information about redeemed tickets or tickets remaining to be sold. In addition, the bingo-raffle licensee shall maintain a separate list of the addresses of all holders of redeemed tickets in order to contact them in the event that they are not present when the winning combinations are revealed. THE LICENSEE NEED NOT MAINTAIN A SIGN-UP SHEET AND ADDRESS RECORD FOR A SMALL SEAL PULL TAB DEAL. A SMALL DEAL SHALL BE ONE CONSISTING OF 600 OR FEWER TICKETS THAT IS REASONABLY ANTICIPATED TO SELL OUT IN THE COURSE OF A SINGLE BINGO OCCASION OR IN ONE DAY AT A LICENSEE'S BAR OR CLUBROOM.

e. If a seal pull tab deal is not sold out before the end of a bingo occasion or the closing time for a bar or clubroom where the deal was offered for sale, the bingo-raffle licensee shall announce and post that fact, giving the game name, the form number and the serial number of the deal not sold out and the time, date and place of the next scheduled conduct of pull tab operations, and advising patrons to retain potential winning tickets until the flare is opened. THE LICENSEE SHALL ALSO PREPARE A COMPLETE AND ACCURATE SIGN-UP SHEET AND ADDRESS RECORD, AS DESCRIBED IN SECTION (14) B OF THIS RULE 16, FOR ANY SMALL SEAL PULL TAB GAME THAT DOES NOT SELL OUT AS ANTICIPATED IN A SINGLE OCCASION OR DAY.

5. NEW RULE 22 CONCERNING ASSISTANCE WITH LICENSEE'S GAMES OF CHANCE AS A MEMBERSHIP REQUIREMENT:

RULE 22 - ASSISTANCE WITH LICENSEE'S GAMES OF CHANCE AS A MEMBERSHIP REQUIREMENT - CONDITIONS

IF A BINGO-RAFFLE LICENSEE, AS A MEMBERSHIP CONDITION OR QUALIFICATION, REQUIRES ALL ITS ACTIVE MEMBERS TO ASSIST WITH ITS CHARITABLE GAMING FUNDRAISING, SUCH MEMBERS SHALL BE CONSIDERED BONA FIDE VOLUNTEER WORKERS WHEN OPERATING OR ASSISTING WITH THE LICENSEE'S BINGO-RAFFLE ACTIVITIES IF BOTH OF THE FOLLOWING CONDITIONS ARE MET:

1) NO MEMBER SHALL RECEIVE ANY REMUNERATION, REWARD, RECOMPENSE, ENHANCED MEMBERSHIP BENEFIT, OR OTHER THING OF VALUE, INCLUDING, BUT NOT LIMITED TO, ANY FEE, EXPENSE, TRAVEL, TUITION, OR OTHER CREDIT THAT IS BASED ON THE AMOUNT OF SERVICE OR ASSISTANCE RENDERED OR TIME SPENT BY SUCH MEMBER IN THE COURSE OF OPERATION OF ANY LICENSED BINGO-RAFFLE ACTIVITY.

2) NO BINGO-RAFFLE LICENSEE SHALL OFFER OR GIVE TO ANY MEMBER AN OPTION TO PAY MONEY OR DONATE ANY THING OF VALUE TO THE LICENSEE INSTEAD OF ASSISTING WITH THE LICENSEE'S BINGO-RAFFLE ACTIVITIES, NOR SHALL A LICENSEE OFFER OR GIVE A REDUCTION IN ANY MEMBER'S BENEFITS, PRIVILEGES, OR POWERS AS AN ALTERNATIVE TO THAT MEMBER'S ASSISTANCE WITH BINGO-RAFFLE ACTIVITIES.