13 Miss. Code. R. 10-5.5 - Authorized Expenditures

(a) All net proceeds derived from a bingo game authorized by the Charitable Bingo Law shall be expended only for the purposes for which the charitable organization is created. The use of bingo proceeds for any other purpose to include start-up costs, attorney fees, appellate costs or any other cost not routinely incurred by the charitable organization must be preapproved by the Commission in writing. Approvals are not necessarily prohibited but the Commission must determine if they are necessary, reasonable, and specifically described in the charitable organization's statement of purpose. No attorney fees will be approved to defend any individual in an administrative, civil or criminal matter.

(b) None of the proceeds of a bingo game shall be used to purchase, construct or improve a building, hall or other facility solely for the purpose of conducting or operating a bingo game.

Source: Miss. Code Ann. § 97-33-52(3).

(c) The total amount of prizes which may be awarded in any one (1) session by a bingo location shall not exceed Seven Thousand Five Hundred Dollars ($7,500.00) in cash or other items of value offered as a prize or Eight Thousand Dollars ($8,000.00) if only one (1) session is held in any one week. The total prize limit does not include paybacks for pull-tabs or electronic representations.

Source: Miss. Code Ann. § 97-33-67(2).

(d) The total amount of prizes which may be awarded in any one day under a charitable limited license shall not exceed Fifteen Thousand Dollars ($15,000.00).

Source: Miss. Code Ann. § 97-33-59(1).

(e) No commission, salary, compensation, reward or recompense, including but not limited to bonuses, incentive pay, loans, granting or use of bingo cards without charge or at a reduced charge, shall be paid or given to any person holding, operating, conducting or assisting in holding or operating any licensed bingo game, either directly or indirectly by the charitable organization except as authorized by Section 97-33-69(3) and these rules.

Source: Miss. Code Ann. § 97-33-69(2).

(f) The charitable organization is prohibited from compensating any member or other person who, acting on behalf of the charitable organization, organizes, arranges, directs, oversees, consults, confers or in any manner participates in the holding of a bingo game other than the exception as authorized by statute and described in this section and in 13 Miss. Admin. Code Pt. 12, R. 5.4. Violation of this provision by the charitable organization could result in suspension and/or revocation of the license issued to the charitable organization. The burden of proof shall be upon the licensed charitable organization to prove this provision is not violated. The financial records of the charitable organization, aside from the required bingo records, must be made available to the Commission upon request for verification.

(g) A bingo location may compensate any person involved in holding, operating, or conducting any licensed game or games, provided that the total amount paid as such compensation shall not exceed Six Hundred Dollars ($600.00) for any one (1) six-hour session, and that no such employee shall be paid for more than one job function.

1. Individuals to whom such compensation may be paid include the bingo supervisor, alternate supervisors, callers, runners, cashiers, etc. The bingo supervisor and alternate supervisors, if compensated, must have a written contract on a per session basis.

2. However, neither the bingo supervisor, nor any alternate supervisor, nor any person related to any supervisor or alternate by blood, marriage, or business relationship, while being compensated as a bingo supervisor, shall receive any other compensation directly or indirectly from the charitable organization.

Source: Miss. Code Ann. § 97-33-69(3).

(h) Authorized expenditures include the actual and reasonable costs of purchasing or leasing necessary supplies, equipment and materials used exclusively in the holding of the bingo game.

Source: Miss. Code Ann. § 97-33-69(7)(a).

(i) Authorized expenditures include the actual and reasonable cost incurred in obtaining and performing necessary bookkeeping, security and janitorial services for the holding, operating or conducting of the bingo game.

Source: Miss. Code Ann. § 97-33-69(7)(b).

(j) No charitable organization shall pay any consulting fee to any person for any service performed in relation to the conducting of a bingo game, nor pay any concession fees to any person who provides refreshments to the participants.

Source: Miss. Code Ann. § 97-33-69(8).

(k) No lease which provides for a rental arrangement for premises or a lease of equipment may provide any payment in excess of the reasonable market rental rate. No lease payment may be based on a percentage of gross receipts or profits derived from any bingo game.

Source: Miss. Code Ann. § 97-33-69(9).

(l) The monthly report required to be filed with the Commission must list each item of expense incurred and each item of expenditure made or to be made.

(m) In order to ensure that authorized bingo games are actually held for the benefit of a charitable organization, and that a bingo location's net proceeds are expended for the purposes for which the charitable organization was created, a bingo location's authorized expenses may not exceed sixty percent (60%) of its adjusted gross receipts from bingo activities. Where authorized expenses exceed 60% of adjusted gross receipts due to the Covid-19 pandemic but the bingo location demonstrates to the Commission a practice of legitimate operation of games, the Commission may vote to allow temporary suspension of the 60/40 requirement. Any request for temporary suspension of the 60/40 requirement must be submitted in writing to the Commission along with supporting documentation for vote at the next monthly Commission meeting. The net adjusted gross receipts, remaining after authorized expenses, must be devoted to the specific purposes for which the charitable organization was created. Not less than sixty-five percent (65%) of the net proceeds shall be expended for direct program services. For the purpose of this section, direct program services are grants, allocations, specific assistance to individuals and approved charitable services. Direct program services do not include administrative expenses or compensation of officers, directors, etc. of the charitable organization.

1. Adjusted gross receipts are to be calculated by taking the bingo location's gross receipts (all revenues received from bingo operations) and subtracting the amount paid out as prizes and the amount of fees paid to the Commission.

2. The authorized expenses which may be incurred by a licensed charitable organization are set forth in Section 97-33-69 of the Mississippi Code and in 13 Miss. Admin. Code Pt. 10, R. 5.5(g)-(i).

3. Every licensed charitable organization shall be in compliance with the requirements of this provision for all periods of twelve consecutive months. Failure to be in compliance with the requirements of this provision may be grounds for the Commission's denial, suspension and/or revocation of a charitable bingo license. 4. When the Commission conducts an audit of the charitable organization and/or bingo books/records, the charitable organization will provide sufficient private office space or agents and/or authorized representatives of the Commission to utilize during said audit.

(n) To ensure that all net proceeds derived from a bingo game authorized by the Charitable Bingo Law shall be expended only for the purposes for which the charitable organization is created, the Commission shall have the power to audit the flow of funds, whether gross proceeds or net proceeds, that are expended by the charitable organization to maintain at least 65% of the net proceeds from the bingo location to be expended for direct program services. The Commission shall have the power to deny, suspend and/or revoke the license of the licensee or the application of the applicant if the licensee or applicant fails to comply with the provisions of this section.

Notes

13 Miss. Code. R. 10-5.5

Miss. Code Ann. §§ 97-33-52, 97-33-53(b)(1), 97-33-57, 97-3369, and 97-33-107.

Adopted 12/17/2017 Amended 10/21/2020