INFORMATION BULLETIN No. 64
Regulatory Changes Affecting Charitable Gaming Events Conducted and Managed in Class A and Class B and Pooling Class C Bingo Halls (The Bingo Revenue Model)
As part of the on-going Modernization of Charitable Gaming initiative, and in response to bingo industry stakeholder submissions, the Registrar of Alcohol and Gaming is implementing changes to the Bingo Revenue Model (BRM) to assist charities conducting and managing Charitable Gaming Events conducted and managed in Class A and Class B and Pooling Class C Bingo Halls (Bingo Revenue Model bingo halls) with the aim of providing greater flexibility and supporting greater economic viability and further growth for the industry.
Additional Flexibility in Determining the Percentage of Bingo Win Allocated to the Hall Marketing Fund
The Registrar acknowledges the importance of marketing for the viability and growth of bingo. Various stakeholders have, since the implementation of the BRM, recommended that the AGCO provide further flexibility in determining the amount of bingo win allocated for marketing purposes, recommending both an increase and decrease to the marketing fund contribution. As a result, the Registrar is providing greater flexibility in the amount of bingo win allocated to the Hall Marketing Fund. The contribution will range between 8% and 12% of bingo win. This change to the revenue model is effective September 1, 2010.
In halls where it has been determined that the full 10% of bingo win is not required for marketing the Hall Charities Association may determine the percentage of bingo win (gross wager minus prizes paid) that is directed to the Hall Marketing Fund. The Hall Charities Association may determine this percentage, ranging between 8% and 10% of bingo win. Consistent with decision making such as determining the game mix and schedule of events it is anticipated that the HCA will make its decision in consultation with the Hall Owner/Operator, by calling upon their expertise in understanding the business in order to make a well informed decision that affects the marketing plan that has been jointly developed.
The amount that the marketing fund contribution is reduced by (0-2%), will flow directly into the Hall Charities Association’s consolidated designated trust account. These monies do not form part of the total revenues in determining the 55% paid to operators for services provided (the 55/45 revenue calculation). The HCA will disburse these additional funds in the same manner as all other revenues, on a monthly pro-rata basis.
In halls where it has been determined that more than 10% of bingo win is a reasonable and necessary expense to be used for marketing efforts, the Hall Charities Association together with the Hall Owner/Operator will determine the appropriate amount ranging between 10% and 12% of bingo win. This decision must be made jointly by the parties and reflected in the joint marketing plan. The total amount allocated for marketing (10% to 12% of bingo win) is deducted from the bingo win and does not form part of the total revenues in determining the 55% paid to operators for services provided (the 55/45 revenue calculation).
Elimination of the Provincial Break Open Ticket Fee for tickets sold at charitable gaming events conducted and managed in pooling bingo halls (Bingo Revenue Model Bingo Halls)
As part of this further modernization the Registrar is implementing a change in the Bingo Revenue Model designed to provide licensees with additional funds to be used to deliver their programs and services in Ontario. The Bingo Revenue Model is being amended by eliminating the Provincial Break Open Ticket Fee (5% fee), currently paid by licensees on Break Open Ticket (BOT) products sold in the bingo hall. As a result of this change, the monies previously remitted for the Provincial BOT Fee will be deducted from the BOT win and directed to the HCA’s Consolidated Designated Trust Account and ultimately to member organizations of the HCA. Please note that the calculation is 5% of gross wager on BOTs and the deduction occurs prior to the revenue pooling calculations. These monies do not form part of the total revenues in determining the 55% paid to operators for services provided (the 55/45 revenue calculation). The HCA will disburse these additional funds in the same manner as all other revenues, on a monthly pro-rata basis. The elimination of this fee is retroactive to July 1, 2010. Details of this initiative, including transition considerations, are attached to this information bulletin.
If you have any questions or require further clarification please contact Rusty Parr, Gaming Registration Officer at 416-314-0539 or our toll-free line at 1-800-522-2876.
Further Information for Information Bulletin Number 64 Regulatory Changes Affecting Charitable Gaming Events Conducted and Managed in Class A and Class B and Pooling Class C Bingo Halls (The Bingo Revenue Model)
Determining the Percentage of Bingo Win Allocated to the Hall Marketing Fund A portion of the bingo win is to be allocated to the Hall Marketing Fund.
The amount will range between 8% of bingo win and 12% of bingo win. In order to determine the appropriate amount discussions should occur between the Hall Charities Association (HCA) and the bingo hall owner/operator. Different factors should be taken into consideration when determining the appropriate amount some of which may include all aspects of marketing including the initiatives outlined in the marketing plan, the results and the measurement of the effectiveness of the marketing that has been executed (also included in marketing plan), the amount to be allocated to the provincial bingo development fund, the benefits realized from marketing in retaining existing customers and growing the business. The bingo hall owner/operator has valuable knowledge and expertise that should be considered when making this decision. T
The amount that is determined as appropriate must be identified on the charitable gaming summary report. This is identified as the amount for marketing for that specific month both noted as a percentage and the dollar amount for the Hall Marketing Fund. This is also reflected as an amount that has been deposited directly to the Hall Charities Association’s Consolidated Designated Trust Account (if the marketing is between 8% and 10%).
Reporting the Allocation of the 5% of Gross Wager on BOT sales
The dollar value of the 5% of gross wager on BOT sales must be identified on the Charitable Gaming Summary Report. This amount must also be reflected as an amount that has been deposited directly to the CDTA.
Transition Details Relating to the 5% BOT fee
Due to the effective date of change to the 5% BOT fee being retroactive to July 1, 2010, there is a need to have some money flow back to the charities. The Charitable Gaming Summary Reports for July and August reflect that the 5% fee has flowed from the charities to the bingo hall owner/operator in order to allow for payment to flow through to the Break Open Ticket manufacturers. This money must flow back into the CDTA of the HCA. The amount the HCA has remitted to the Hall Owner/Operator for the 5% BOT fee on the July and August reports must be deducted from the amount to be paid to the Hall Owner/ Operator on the September report.
Due to the timing of the implementation it is not expected that any bingo hall owner/ operator has paid the 5% to the Break Open Ticket manufacturer. However, if this has occurred the manufacturer must refund the appropriate amount back to the bingo hall Owner/Operator within 15 days of the issue date of this information bulletin.
Please note that for accountability and tracking purposes, the refund of any monies associated with the Provincial Break Open Ticket Fee must follow the same process as they were remitted.