Can I offer contests that involve charity donations in Arkansas? What are the requirements?

Yes, you can offer contests that involve charity donations in Arkansas, but you must follow certain requirements.

Registration of Charitable Organizations

Charitable organizations, in or out of the state, shall not solicit contributions from persons in Arkansas until the charitable organization has registered and provided certain information concerning the charitable organization and its solicitation activity, as required by Arkansas Code Annotated § 4-28-402, on forms to be provided by the Secretary of State, and has filed the information with the Secretary of State. The information so filed shall be available to the general public as a matter of public record, except and to the extent the records would otherwise be exempt from disclosure under the Freedom of Information Act of 1967, § 25-19-101 et seq.

City Ordinances

Nothing contained in the provisions of the Arkansas Code Annotated § 4-28-401 et seq. shall prohibit any city or incorporated town in Arkansas from enacting otherwise lawful ordinances regulating a solicitation of contributions within the limits of the city.

Raffle and Bingo Records

Licensed authorized organizations shall provide to the Secretary of the Department of Finance and Administration at the time of application for license the address of its primary business office. If the licensed authorized organization maintains its raffle and bingo records at a location other than the primary business office, the licensed authorized organization shall provide the address of the location where the records are maintained. Bingo and raffle records shall be maintained in Arkansas in accordance with generally accepted accounting practices.

Approval of Bingo Faces and Raffle Tickets

The Secretary of the Department of Finance and Administration by rule shall provide for the form of bingo faces and raffle tickets used in Arkansas. All bingo faces must be purchased by the licensed authorized organization from a distributor licensed under this chapter. Only one game shall be played on each bingo face. All bingo faces and raffle tickets shall be preprinted on paper or plastic. Electronic devices, machines, or facsimiles shall not be used as bingo faces, raffle tickets, or otherwise, by participants of games of bingo or raffles conducted under this chapter. All bingo faces and raffle tickets shall be sequentially numbered at the time of printing.

Items of Bingo and Raffle Expense

Expenses that are reasonable and necessary to lawfully conduct games of bingo or raffles are allowable and include expenses incurred for advertising, repairs to premises and equipment, bingo and raffle supplies and equipment, prizes, stated rental or mortgage and insurance expenses, license fees, and bookkeeping or accounting services. No person may be compensated for organizing, promoting, conducting, or otherwise administering a raffle or bingo event. Any such compensation is prohibited under this chapter and is not an allowable expense.

License application — Authorized organizations.

An applicant for an authorized organization license shall file a written verified application with the Department of Finance and Administration on a form prescribed by the department. The license application shall include the name and address of the applicant, a designation and address of the premises intended to be used for a raffle or bingo session, the name and address of the person or persons within the authorized organization who will be responsible for organizing, conducting, and otherwise administering the raffle or bingo sessions, if the premises upon which a raffle or bingo session will be conducted has been leased by the authorized organization, a copy of the lease agreement, and a statement that the applicant complies with the conditions for eligibility for the license.

Control and supervision of games of bingo and raffles.

The Secretary of the Department of Finance and Administration shall administer this chapter under the Arkansas Tax Procedure Act, § 26-18-101 et seq. The secretary has authority over all games of bingo and raffles conducted in this state so that games of bingo and raffles are fairly conducted and the proceeds derived from games of bingo and raffles are used only for an authorized purpose.

Prohibited acts.

It shall be a violation of this subchapter for any person to make any misrepresentation, either express or implied, during the course of soliciting funds for a charitable organization, any charitable organization to engage in any financial transaction that knowingly jeopardizes or interferes with the ability of the charitable organization to accomplish its charitable purpose, any person to knowingly use or exploit the fact of registration so as to lead the public to believe that such registration constitutes an endorsement or approval by the state, any person to knowingly misrepresent that any other person sponsors or endorses a solicitation, any person to knowingly either use the name of a charitable organization or display any emblem, device, or printed matter belonging to or associated with a charitable organization without the express written permission of the charitable organization, any charitable organization to knowingly use a name that is the same as or confusingly similar to the name of another charitable organization unless the latter organization consents in writing to its use, any charitable organization to represent itself as being associated with another charitable organization without the express written acknowledgment and endorsement of the other charitable organization, any person to knowingly make any false or misleading statements on any document required to be filed with the Secretary of State, any person to fail to substantially comply with the requirements of this subchapter, any charitable organization to use the services of an unregistered paid solicitor who is required to register pursuant to this subchapter, any paid solicitor to solicit contributions from citizens or entities located in this state on behalf of an unregistered charitable organization, and any person to use an Arkansas address, including a return address, in any solicitation unless the charitable organization maintains and staffs an office at that address, the solicitation discloses in writing immediately proximate to the address located in this state both the address of the charitable organization’s actual headquarters and the fact that the address is that of a mail drop box or is located in a mail-handling facility, or the person, if soliciting by phone, discloses the address of the organization’s actual headquarters in addition to any address maintained in this state.

Use of net proceeds for charitable purposes.

A licensed authorized organization shall devote to the charitable purposes of the licensed authorized organization its net proceeds of games of bingo and raffles. Except as otherwise provided by law, the net proceeds derived from games of bingo and raffles are dedicated to the charitable purposes of the licensed authorized organization only if directed to a cause, need, or activity that is consistent with the federal tax exemption the licensed authorized organization obtained under 26 U.S.C. § 501, as in existence on January 1, 2007, and under which the organization qualifies as a nonprofit organization as defined by law. If the licensed authorized organization is not required to obtain a federal tax exemption under 26 U.S.C. § 501, as in existence on January 1, 2007, the licensed authorized organization’s net proceeds are dedicated to the charitable purposes of the licensed authorized organization only if directed to a cause, need, or activity that is consistent with the purposes and objectives for which the licensed authorized organization qualifies as a licensed authorized organization. The licensed authorized organization shall make mandatory annual or more frequent disbursements from the bingo and raffle account to the general fund of the licensed authorized organization after providing for appropriate reserves and funds necessary to pay for reasonable and necessary bingo and raffle expenses. Once funds are distributed to the licensed authorized organization general fund, no funds shall be returned to the bingo and raffle account except by means of a loan from the licensed authorized organization’s general fund to the bingo and raffle account as evidenced by a written instrument.

Therefore, to offer contests that involve charity donations in Arkansas, you must register with the Secretary of State, follow the rules and regulations set forth in the Arkansas Code Annotated § 4-28-401 et seq., and comply with the rules and regulations for bingo and raffles set forth in Arkansas Code Annotated § 23-114-101 et seq. Additionally, you must devote the net proceeds of games of bingo and raffles to the charitable purposes of the licensed authorized organization and make mandatory annual or more frequent disbursements from the bingo and raffle account to the general fund of the licensed authorized organization after providing for appropriate reserves and funds necessary to pay for reasonable and necessary bingo and raffle expenses.

Jurisdiction

Arkansas

• Gaming