{"data":{"id":"us-ky/krs-238.535","jurisdiction":"us-ky","citation":"KRS 238.535","heading":"Licensing of charitable organizations conducting charitable gaming --","body":"Exemptions -- Qualifications -- Application process -- Required information --\nSpecial event raffle license -- Fees -- Escrow.\n(1) Any charitable organization conducting charitable gaming in the Commonwealth of\nKentucky shall be licensed by the corporation. A charitable organization qualifying\nunder subsection (12) of this section but not exceeding the limitations provided in\nthis subsection shall be exempt f rom the licensure requirements when conducting\nthe following charitable gaming activities:\n(a) Bingo in which the gross receipts do not exceed a total of twenty -five\nthousand dollars ($25,000) per year;\n(b) A raffle or raffles for which the gross receipts do not exceed twenty -five\nthousand dollars ($25,000) per year; and\n(c) A charity fundraising event or events that do not involve special limited\ncharitable games and the gross gaming receipts for which do not exceed\ntwenty-five thousand dollars ($25,000) per year.\nHowever, at no time shall a charitable organization's total limitations under this\nsubsection exceed twenty-five thousand dollars ($25,000).\n(2) (a) Any charitable organization exempt from the process of applying for a license\nunder subsection (1 ) of this section, shall notify the office in writing, on a\nsimple form issued by the office, of its intent to engage in exempt charitable\ngaming and the address at which the gaming is to occur. Any charitable\norganization exempt from the process of applyi ng for a license under\nsubsection (1) of this section consents to the jurisdiction of the corporation\nand shall comply with all other provisions of this chapter relating to the\nconduct of charitable gaming, except:\n1. Payment of the fee imposed under the provisions of KRS 238.570; and\n2. The quarterly reporting requirements imposed under the provisions of\nKRS 238.550(7), unless the exempt charitable organization obtains a\nretroactive license pursuant to subsection (9) of this section.\n(b) Before January 31 of the year immediately following  the year of exemption, a\ncharitable organization exempt from licensure under the provisions of\nsubsection (1) of this section shall file a financial report with the office, on a\nform issued by the office, that contains the following information:\n1. The type of gaming activity in which it engaged during that year;\n2. The total gross receipts derived from gaming;\n3. The amount of charitable gaming expenses paid;\n4. The amount of net receipts derived; and\n5. The disposition of those net receipts.\n(3) An exemption that has been granted to a charitable organization for the preceding\ncalendar year shall be automatically renewed on January 1 of the following year.\n(4) If upon receipt of the financial report the office determines that the information\nappearing on t he financial report renders the charitable organization ineligible to\npossess an exemption, the office shall notify the charitable organization that its\nexemption is rescinded. The organization may request an appeal of this rescission\npursuant to KRS 238.565.\n(5) If the annual financial report is not received by January 31, the exemption is\nautomatically rescinded unless an extension of no more than thirty (30) days is\ngranted by the office. The organization may request an appeal of this rescission\npursuant to KRS 238.565.\n(6) If an exemption is revoked because an organization has exceeded the limit imposed\nin subsection (1) of this section, the organization shall apply for a retroactive\nlicense in accordance with subsection (7) of this section.\n(7) If an or ganization exceeds the limit imposed by any subsection of this section it\nshall:\n(a) Report the amount to the office; and\n(b) Apply for a retroactive charitable gaming license.\n(8) Upon receipt of a report and application for a retroactive charitable gamin g license,\nthe office shall investigate to determine if the organization is otherwise qualified to\nhold the license.\n(9) If the office determines that the applicant is qualified, it shall issue a charitable\ngaming license retroactive to the date on which t he exemption limit was exceeded.\nThe retroactive charitable gaming license shall be issued in the same manner as\nregular charitable gaming licenses.\n(10) If the office determines that the applicant is not qualified it shall deny the license\nand take enforcement action, if appropriate.\n(11) Once a retroactive or regular gaming license is issued to an organization, that\norganization shall not be eligible for exempt status in the future and shall maintain a\ncharitable gaming license if it intends to continue c haritable gaming activities,\nunless the charitable organization has not exceeded the exemption limitations of\nsubsection (1) of this section for a period of two (2) years prior to its exemption\nrequest.\n(12) (a) In order to qualify for licensure, a charitable organization shall:\n1. a. Possess a tax exempt status under 26 U.S.C. secs. 501(c)(3),\n501(c)(4), 501(c)(8), 501(c)(10), or 501(c)(19), or be covered\nunder a group ruling issued by the Internal Revenue Service under\nauthority of those sections; or\nb. Be organized within the Commonwealth of Kentucky as a local\nschool district, as a common school as defined in KRS 158.030, as\nan institution of higher education as defined in KRS 164A.305, or\nas a state college or university as provided for in KRS 164.290. A\ncommon school, a program or organization affiliated with a\ncommon school, or any combination of common schools and\nprograms affiliated with common schools located within a local\nschool district may conduct charitable gaming under the local\nschool district's charitable gaming license;\n2. Have been established and continuously operating within the\nCommonwealth of Kentucky for charitable purposes, other than the\nconduct of charitable gaming, for a period of three (3) years prior to\napplication for licensure.  For purposes of this paragraph, an applicant\nshall demonstrate establishment and continuous operation in Kentucky\nby its conduct of charitable activities from an office physically located\nwithin Kentucky both during the three (3) years immediately precedi ng\nits application for licensure and at all times during which it possesses a\ncharitable gaming license. However, a charitable organization that\noperates for charitable purposes in more than ten (10) states and whose\nprincipal place of business is physical ly located in a state other than\nKentucky may satisfy the requirements of this paragraph if it can\ndocument that it has:\na. Been actively engaged in charitable activities and has made\nreasonable progress, as defined in subparagraph 3. of this\nparagraph, in the conduct of charitable activities or the expenditure\nof funds within Kentucky for a period of three (3) years prior to\napplication for licensure; and\nb. Operated for charitable purposes from an office or place of\nbusiness in the Kentucky county where i t proposes to conduct\ncharitable gaming for at least one (1) year prior to application for\nlicensure, in accordance with subparagraph 4. of this paragraph\nand paragraph (c) of this subsection;\n3. Have been actively engaged in charitable activities during the three (3)\nyears immediately prior to application for licensure and be able to\ndemonstrate, to the satisfaction of the office, reasonable progress in\naccomplishing its charitable purposes during  this period. As used in this\nparagraph, \"reasonable progress in accomplishing its charitable\npurposes\" means the regular and uninterrupted conduct of activities\nwithin the Commonwealth or the expenditure of funds within the\nCommonwealth to accomplish reli ef of poverty, advancement of\neducation, protection of health, relief from disease, relief from suffering\nor distress, protection of the environment, conservation of wildlife,\nadvancement of civic, governmental, or municipal purposes, or\nadvancement of those purposes delineated in KRS 238.505(10). In order\nto demonstrate reasonable progress in accomplishing its charitable\npurposes when applying to renew an existing license, a licensed\ncharitable organization shall additionally provide to the office a detail ed\naccounting regarding its expenditure of charitable gaming net receipts\nfor the purposes described in this paragraph;\n4. Have maintained an office or place of business, other than for the\nconduct of charitable gaming, for at least one (1) year in the cou nty in\nwhich charitable gaming is to be conducted. The office or place of\nbusiness shall be a separate and distinct address and location from that\nof any other licensee of the Office of Charitable Gaming; except that up\nto three (3) licensed charitable organizations may have the same address\nif they legitimately share office space; and\n5. Comply with administrative regulations imposed by the corporation in\naccordance with KRS Chapter 13A.\n(b) 1. A charitable organization that has established and maintained an office\nor place of business in the county for a period of at least one (1) year\nmay hold a raffle drawing or a charity fundraising event, including\nspecial limited charity fundraising events, in a Kentucky county other\nthan that in which the organizatio n's office or place of business is\nlocated.\n2. For raffles, the organization shall notify the Office of Charitable\nGaming in writing of the organization's intent to change the drawing's\nlocation at least thirty (30) days before the drawing takes place. Thi s\nwritten notification:\na. May be transmitted in any commercially reasonable means,\nauthorized by the office, including facsimile and electronic mail;\nand\nb. Shall set out the place and the county in which the drawing will\ntake place.\nApproval by the office shall be received prior to the conduct of the raffle\ndrawing at the new location.\n(c) Any charitable organization that was registered with the county clerk to\nconduct charitable gaming in a county on or before March 31, 1992, shall\nsatisfy the requireme nt contained in paragraph (a)4. of this subsection if it\nmaintained a place of business or operation, other than for the conduct of\ncharitable gaming, for one (1) year prior to application in a Kentucky county\nadjoining the county in which they were registered.\n(13) In applying for a license, the information to be submitted shall include but not be\nlimited to the following:\n(a) The name and address of the charitable organization;\n(b) The date of the charitable organization's establishment in the Commonwealt h\nof Kentucky and the date of establishment in the county or counties in which\ncharitable gaming is to be conducted;\n(c) A statement of the charitable purpose or purposes for which the organization\nwas organized. If the charitable organization is incorpora ted, a copy of the\narticles of incorporation shall satisfy this requirement;\n(d) A statement explaining the organizational structure and management of the\norganization. For incorporated entities, a copy of the organizations' bylaws\nshall satisfy this requirement;\n(e) A detailed accounting of the charitable activities in which the charitable\norganization has been engaged for the three (3) years preceding application\nfor licensure;\n(f) The names, addresses, dates of birth, and Social Security numbers of all\nofficers of the organization;\n(g) The names, addresses, dates of birth, employment information if applicable,\nand Social Security numbers of all employees and members of the charitable\norganization who will be involved in the management and supervision of\ncharitable gaming. No fewer than two (2) employees or members of the\ncharitable organization who are involved in the management and supervision\nof charitable gaming, along with the chief executive officer or the director of\nthe applicant organization, shall be designated as chairpersons;\n(h) The address of the location at which charitable gaming will be conducted and\nthe name and address of the owner of the property, if it is owned by a person\nother than the charitable organization;\n(i) A copy of the letter or other legal document issued by the Internal Revenue\nService to grant tax-exempt status;\n(j) A statement signed by the presiding or other responsible officer of the\ncharitable organization attesting that the information submitted in the\napplication is true and correct and that the organization agrees to comply with\nall applicable laws and administrative regulations regarding charitable\ngaming;\n(k) An agreement that the charitable organization's records may be released by\nthe Federal Internal Revenue Service to the office; and\n(l) Any other information the office deems appropriate.\n(14) (a) An organization or a group of individuals that does not meet the licensing\nrequirements of subsection (12) of this section may hold a raffle if:\n1. The gross receipts do not exceed five hundred dollars ($500);\n2. All proceeds from the raffle are distributed to a charitable organization;\nand\n3. The organization or group of individuals holds no more than three (3)\nraffles each year;\nand shall be exempt from complying with the notification, application, and\nreporting requirements of subsections (2) and (13) of this section.\n(b) An organization or a group of individuals that does not meet the licensing\nrequirements of subsection (12) of this section may hold a raffle if:\n1. The organization holds a special event raffle license issued by the office\nand complies with the regulatory requirements in thi s chapter, including\nbut not limited to the quarterly reporting requirements of KRS\n238.550(7), the retention requirements of KRS 238.536,  and payment of\nthe fee imposed by KRS 238.570;\n2. The organization possesses a tax -exempt status under 26 U.S.C. sec .\n501(c)(7);\n3. The organization holds no more than twelve (12) raffles per year;\n4. Each raffle complies with the office's raffle standards in KRS 238.545\nand administrative regulations promulgated thereunder and is approved\nby the office in writing prior to the sale of the first raffle ticket;\n5. The gross receipts of each raffle do not exceed five hundred thousand\ndollars ($500,000); and\n6. One hundred percent (100%) of the net receipts of each raffle shall be\ndistributed to a charitable organization licensed by the office pursuant to\nsubsection (12) of this section to conduct charitable gaming as follows:\na. All distributed net receipts shall be maintained by the recipient\nlicensed charitable organization in a separate account to be\ndesignated as the \"raffle recipient account\";\nb. All distributed net receipts shall be expended by the recipient\nlicensed charitable organization to further the charitable purpose of\nthe recipient licensed charitable organization as required by KRS\n238.550(4); and\nc. All distr ibuted net receipts, and the expenditure thereof, shall be\nreported to the office and be subject to the office's auditing and\ninvestigative authority consistent with the provisions of this\nchapter.\n(c) An applicant qualifying under paragraph (b) of this su bsection shall submit an\napplication for a special event raffle license, and the information to be\nsubmitted shall include but not be limited to the following:\n1. The name and address of the organization;\n2. The date of the organization's establishment in the Commonwealth of\nKentucky and the date of the organization's establishment in the county\nor counties in which charitable gaming is to be conducted;\n3. A statement of the purpose or purposes for which the organization was\norganized and identification of the licensed charitable organization to\nwhich the applicant will distribute its net receipts. If the organization is\nincorporated, a copy of the articles of incorporation shall satisfy this\nrequirement;\n4. A statement explaining the organizational structur e and management of\nthe organization. For incorporated entities, a copy of the organization's\nbylaws shall satisfy this requirement;\n5. The names, addresses, dates of birth, and Social Security numbers of all\nofficers of the organization;\n6. The names, addresses, dates of birth, and Social Security numbers of all\nemployees and members of the organization who will be involved in the\nmanagement and supervision of charitable gaming. No fewer than two\n(2) employees or members of the organization who are involve d in the\nmanagement and supervision of charitable gaming, along with the chief\nexecutive officer or the director of the applicant organization, shall be\ndesignated as chairpersons;\n7. The address of the location at which charitable gaming will be\nconducted and the name and address of the owner of the property, if it is\nowned by a person other than the organization;\n8. A copy of the letter or other legal document issued by the Internal\nRevenue Service to grant tax-exempt status;\n9. A statement signed by the presiding or other responsible officer of the\norganization attesting that the information submitted in the application is\ntrue and correct and that the organization agrees to comply with all\napplicable laws and administrative regulations regarding charitab le\ngaming;\n10. An agreement that the organization's records may be released by the\nfederal Internal Revenue Service to the office; and\n11. Any other information as determined by the corporation through the\npromulgation of administrative regulations.\n(15) The office may issue a license for a specified period of time, based on the type of\ncharitable gaming involved and the desired duration of the activity.\n(16) The office shall charge a fee for each license issued and renewed, not to exceed one\nthousand dollars ($1,000). Specific fees to be charged may be prescribed in a\ngraduated scale promulgated by administrative regulations of the corporation and\nbased on typ e of license, type of charitable gaming, actual or projected gross\nreceipts, or other applicable factors, or combination of factors.\n(17) (a) A licensed charitable organization may place its charitable gaming license in\nescrow if:\n1. The licensee notifies the office in writing that it desires to place its\nlicense in escrow; and\n2. The license is in good standing and the office has not initiated\ndisciplinary action against the licensee.\n(b) During the escrow period, the licensee shall not engage in charitabl e gaming,\nand the escrow period shall not be included in calculating the licensee's\nretention rate under KRS 238.536.\n(c) A charitable organization may apply for reinstatement of its active license and\nthe license may be reinstated provided:\n1. The charitable organization continues to qualify for licensure;\n2. The charitable organization has not engaged in charitable gaming during\nthe escrow period; and\n3. The charitable organization pays a reinstatement fee established by the\noffice.\n(18) (a) At least sixty (60) days prior to the expiration of its existing license or its first\nexpected date of gaming, facility operation, or business operations in\nKentucky during the license period, an applicant shall submit a complete,\naccurate, and documented application. The office shall review the application\nand notify the applicant in writing of any deficiencies in the application within\nthirty (30) days. An application shall not be considered complete until all\ndeficiencies are resolved.\n(b) If the applicant does not f ile a written response to a deficiency request,\nprovide requested information and documents, or otherwise cure the identified\ndeficiency within thirty (30) days of the written notice, the application shall\nbe deemed withdrawn.\n(c) If the applicant files a written response to a deficiency request within thirty\n(30) days of the written notice, but the response does not cure the identified\ndeficiency, the office shall issue a subsequent deficiency notice within thirty\n(30) days. If the deficiency is incapable of being cured, the office shall deny\nthe license.\n(d) Once the office has received a complete application, it shall grant or deny the\nlicense within sixty (60) days of receipt. The office may issue a temporary\nlicense to an applicant that has submitted a complete and accurate license\napplication form, and has complied with all other licensing requirements in\nthis section, until the office makes a final decision to grant or deny the annual\nlicense.","path":["KRS Chapter 238"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=58116","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:52:51Z","sha256":"6eb78b5f721e30ec1465837091774e39657ea5dd4b84fa90454e36b66a5ce115","source_id":"us-ky","stale":false,"prev":"us-ky/krs-238.530","next":"us-ky/krs-238.536"},"notice":"GroundRules: Original legal text. Not legal advice."}