316 Neb. Admin. Code, 35, § 314 - EXPENSES
314.01 A Class II
pickle card licensee may not allow more than 30 percent of the definite profit
from each pickle card unit sold as commission to the pickle card operator. The
pickle card operator's commission must be deducted from the definite profit of
each pickle card unit sold in determining the amount to be paid by the pickle
card operator to the licensed organization. That amount must be paid by check
by the operator in advance of or at the time of delivery of the pickle card
unit from the organization to the operator.
314.02 All licensed organizations conducting
a lottery by the sale of pickle cards may not spend more than 12 percent of the
definite profit from a pickle card unit to pay the allowable expenses of
operating the lottery by the sale of pickle cards. Pickle card operators'
commissions and unit cost are not included within the definition of allowable
expenses.
The following types of expenses are included within the 12 percent expense limitation:
314.02A
All costs associated with the purchasing, printing, or manufacturing of any
items to be used or distributed to participants in the lottery by the sale of
pickle cards, such as the cost of pickle card dispensing devices and racks if
used by the licensed organization and not rented to a pickle card operator for
fair market value;
314.02B Shipping
or delivery charges incurred by the organization for delivery of pickle card
units to licensed pickle card operators or any shipping or delivery costs on
pickle card units received from a distributor which were not billed by the
distributor as part of the unit cost;
314.02C All office expenses including, but
not limited to, the cost of office supplies and bookkeeping materials, sales
invoices, receipt books, postage costs, copying expenses, telephone costs,
office equipment, and any other related office expenses incurred which are
directly related to the operation of the lottery by pickle card
activity;
314.02D Promotional
expenses such as advertising; any federal gaming license for the organization,
any pickle card dispensing device registration fee for the organization, any
pickle card dispensing device repairs or maintenance paid by the organization,
and any other costs incurred which are directly related to the promotion of the
lottery by pickle card activity;
314.02E All salaries paid to persons to
operate the lottery by the sale of pickle cards, such as salaries, or wages
paid to individuals involved with the operation of the pickle card activity,
including bookkeepers and other office staff, utilization of funds members,
sales agents, whether commissioned or salaried, officers or managers of the
organization who are paid for their participation in the pickle card activity,
and any other related salaries or wages;
314.02F Any rental or lease expense for real
or personal property used and directly related to the operation of the pickle
card activity, such as office or storage space rental, office equipment rental,
car rental, and pickle card dispensing device rental; and
314.02G Any fee paid to any person associated
with the operation of any lottery by the sale of pickle cards, such as fees to
consultants, attorneys, fundraisers, and other professionals for services
performed which are directly related to the organization's pickle card
activities. This includes payments to an individual, firm, or corporation with
whom the licensed organization contracts for services relating to the operation
of the lottery by the sale of pickle cards. This also includes any commission
or fee paid to a sales agent and any reasonable and necessary expense for which
a sales agent is reimbursed.
314.03 License fees paid by the organization
to license itself, its utilization of funds member, or its sales agents and any
actual fees charged for fingerprinting the organization's sales agents are not
included in determining the 12-percent limitation on allowable expenses.
314.03A Pickle card operator license fees,
federal wagering taxes, costs of a pickle card dispensing device, pickle card
dispensing device registration fees, and other expenses incurred by a pickle
card operator in connection with the sale of pickle cards are not considered
allowable expenses and may not be paid or reimbursed by the licensed
organization or any of its members, employees or agents.
314.04 A licensed organization may not use
pickle card monies to pay any fine imposed pursuant to the Nebraska Bingo Act,
Nebraska Pickle Card Lottery Act, or Nebraska Lottery and Raffle Act.
314.05 A Class II pickle card licensee may
not pay a sales agent more than six percent of the definite profit of a pickle
card unit as a commission, salary, or fee for the marketing of the pickle card
unit. The six percent sales agent's limitation is included within the 12
percent overall allowable expense limitation.
314.05A For example, if a licensed
organization pays its sales agent six percent of the definite profit of a
pickle card unit, its remaining allowable expenses may not exceed six percent
of the definite profit ( 12% - 6% = 6%). Additionally, if a licensed
organization incurs other allowable expenses of seven percent, it cannot pay
its sales agent more than five percent of the definite profit of a pickle card
unit. Any payments to sales agents in connection with a lottery by the sale of
pickle cards must be made by check, from the licensed organization's pickle
card bank account and signed by the organization's utilization of funds
member.
314.05B A licensed
organization may reimburse a sales agent for reasonable and necessary expenses
incurred while performing the sales agent's duties. Such reimbursed expenses
may not be included in the six percent limitation on a sales agent's commission
but may be included in the 12 percent overall allowable expense
limitation.
314.06 To
determine whether a licensed organization is within the 12 percent of definite
profit allowable expense limitation when an expense cannot be directly
attributed to a particular pickle card unit, such as a bookkeeper or consultant
fee, the total expense should be allocated to all units sold, either based upon
previous experience, or a reasonable projection of sales for the annual
reporting period. Salaries and other expenses which are not entirely
attributable to the pickle card activity may be allocated on the basis of the
percentage of time spent on pickle card activities.
314.07 The Nebraska Pickle Card Lottery Act
allows a maximum of 12 percent of the definite profit per pickle card unit to
pay all allowable expenses. The following formula should be used to calculate
the allowable expense limitation:
Definite profit x 12% = Allowable Expense Limitation
EXAMPLE:
Gross proceeds | $3,600 |
Less prizes | 2,600 |
Definite profit | $1,000 |
$1,000 (Definite Profit) x .12 = $ 120 (Allowable Expense)
314.08 All
allowable expenses paid by a licensed organization in connection with its
lottery by the sale of pickle cards must be paid by a check drawn on the
organization's pickle card bank account. Checks must be paid directly to the
person, firm or corporation with whom the expense was incurred.
Notes
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