The Order-in-Council :

• defines the roles and responsibilities of municipal councils and the Registrar; and
• outlines the authority of the Registrar and municipalities to license and regulate certain lottery events.

It also provides broad policies for the administration of lottery events and general terms and conditions for the conduct of lotteries.

The Order-in-Council does the following:

• stipulates that proceeds from licensed lottery schemes must be used only for a charitable or religious object providing a direct benefit to the residents of Ontario
• outlines certain standard licence requirements
• gives the Registrar authority to attach terms and conditions to any licence
• ​gives a municipal council authority to attach terms and conditions to any licence it issues, provided these do not conflict with those of the Registrar
• gives the Registrar authority to consent to a licensee conducting and managing a lottery scheme in one or more provinces in addition to Ontario
• gives the Registrar and municipal councils authority to refuse, suspend or cancel a licence, under specified circumstances.

1.2.1 (D) Terms and conditions

The Registrar issues a specific set of rules, known as the terms and conditions, to regulate each type of licensed lottery event. The terms and conditions provide detailed instructions for the conduct and management of licensed lottery events. For example, the terms and conditions govern:

• the role of the licensee
• the types and amounts of prizes to be awarded
• rules of play
• licence fees
• banking guidelines
• reporting requirements.

The Registrar may impose additional terms and conditions on any lottery licence, as necessary. A municipal council may impose additional terms and conditions on any lottery licence it issues, provided they do not conflict with those of the Registrar. Licensees must observe all the terms and conditions of their lottery licence.

1.2.1 (E) Standards and Directives issued by the Registrar

1.4.1 (A) Issuing lottery licences

Municipal councils have the authority to issue licences for most lottery events conducted in their communities, including:

• bingo events with prize boards of up to $5,500
• non-electronic raffles with prizes of up to $50,000
• break open ticket events that are not conducted in conjunction with another licensed gaming event, and where the tickets are sold within the municipality
• bazaar gaming events
• media bingo.

2.2.1. POLICIES: CHARITABLE ORGANIZATIONS

In order to be considered a charitable organization for the purposes of lottery licensing, an organization must have objects or purposes and activities that are exclusively and wholly charitable. A charitable organization cannot have a mixture of charitable and non-charitable purposes or activities.

Charitable organizations have a number of characteristics:

1. They are non-profit organizations. Charitable organizations do not make a profit nor do they distribute profits to their members.
2. Charitable organizations provide benefits to the public or a specified segment of the public.
3. Charitable organizations are restricted to carrying out activities that advance their objects, which must be exclusively charitable. Their business activities are restricted and the public benefit they provide must be of a nature recognized by the courts as charitable.

The Office of the Public Guardian and Trustee has supervisory responsibility for charitable organizations and their use of charitable funds. Charitable organizations must comply with the reporting requirements of the Charities Accounting Act and the ownership restrictions set out in the Charitable Gifts Act.

Charitable organizations may register with the Canada Revenue Agency. However, registration as a charitable organization for the purposes of the Income Tax Act does not automatically qualify an organization for lottery licensing.

2.2.2. POLICIES: NON-PROFIT WITH CHARITABLE OBJECTS

Organizations that have a mixture of charitable and non-charitable objects or purposes may be considered to be “non-profit with charitable objects.” A non-profit organization with charitable objects is eligible to receive lottery licences if its charitable mandate falls within one of the four charitable classifications and it meets all the other relevant criteria.

Non-profit organizations have a number of characteristics in common with charitable organizations. However, non-profit organizations do not have the same level of restriction placed on their business activities and the public benefit that they provide.

If an organization’s application does not include documentation proving its status as a charitable organization, it should be considered against the eligibility criteria to determine whether it is a non-profit organization with charitable objects.

If a licensing official receives an application from an organization that appears to be a sub-group, “partner” or auxiliary of another eligible organization, the official must ask the following questions in order to determine the status of the two organizations:

• Are the organizations separate legal entities? For example, if the parent organization dissolves, will the sub-group still exist?
• Do the organizations have different Boards of Directors?
• Do the organizations have independent budgets, banking procedures and funding?
• Do the organizations have differing mandates or purposes?
• Does one of the organizations have overall control, or influence, on the decisions of the other organization?

If the comparison shows that the two organizations exist for the same purposes, the parent group may be licensed if it is an eligible organization. The sub-group, “partner” or auxiliary may only be licensed where the parent group chooses not to conduct lottery events and permits the sub-group, “partner” or auxiliary group to hold lottery licences on its behalf.

2.2.4. POLICIES: ORGANIZATIONS THAT AMALGAMATE

2.2.4 (A) Amalgamation: Two or more eligible organizations

If two or more eligible organizations amalgamate, the resulting entity must be treated as one organization for lottery licensing purposes. For example, if two community service organizations that each have a break open ticket licence amalgamate, the new organization may have only one licence. When two or more eligible organizations amalgamate, licensing officials must complete a full eligibility review.

Eligible organizations that amalgamate must disburse the funds in their designated lottery trust accounts for the purposes approved by the licence. The funds may be disbursed after amalgamation. If the funds are not disbursed before amalgamation, the licensing authority must approve the disbursement of funds.

2.2.4 (B) Amalgamation: An eligible organization and an ineligible organization

When an eligible organization amalgamates with an ineligible organization, the new organization may or may not be eligible for lottery licensing. Licensing officials must complete a full eligibility review before issuing any new lottery licences.

2.3.1. POLICIES: INELIGIBLE ORGANIZATIONS

Organizations ineligible for lottery licensing include:

• professional associations, unions and employee groups, except those set up to carry out charitable activities;
• elected representative groups, including municipal, regional, provincial and federal governments;
• government agencies or bodies;
• political lobby groups and those attempting to persuade the public to adopt a particular view on a political issue;
• advocacy, self-help and other groups solely dedicated to the political, personal and financial advancement of their members;
  • However, if direct services that fall into one of the four charitable classifications are provided, advocacy or case management intended to represent individuals and secure appropriate charitable services for those individuals may be considered an eligible charitable purpose.
• political parties;
• adult hobby groups;
• for-profit, members-only or private sports clubs and for-profit adult sports teams and leagues;
• those promoting a political doctrine;
• those attempting to bring about or oppose changes in the law or government policy;
• municipal councils, municipal corporations and their administrative departments; and
• organizations established solely for the purpose of fundraising.

The above list is not intended to be exhaustive. Every organization must be reviewed, based on the documents provided, since all organizations are unique.

2.3.2.POLICIES: GOVERNMENTS

Governments are political bodies established for administrative purposes. Their primary mandate is to govern, which is not a charitable object. Services provided by governments may provide a public benefit and, if provided by a charitable organization, may be considered a charitable activity. However, a government is not a charitable organization and is not eligible for lottery licensing.

When reviewing organizations that are associated with governments, licensing officials must determine the extent to which the organization is:

• separate legally, administratively and financially from the government; and
• controlled by the government.

For example, conservation authorities established under the Conservation Authorities Act are not separate legally, administratively and financially from the government. Therefore, typically these types of organizations are not eligible for lottery licensing.

2.3.2 (A) Municipalities

A licensing authority must never issue a lottery licence to a municipality or one of its administrative departments. Municipalities derive their powers from the Municipal Act or, in some cases, a constituting act. As entities established primarily for local administration, they are not given the power to carry out charitable objects or to conduct lottery schemes. Therefore, municipalities and their operating committees or agencies do not meet the definition of a charitable organization and do not qualify for licensing under Section 207(1)(b) of the Criminal Code.

When reviewing organizations associated with a municipality, a licensing official must determine the extent to which the organization is controlled by the municipality and whether the organization is separate legally, administratively and financially from the municipality.

In addition to using lottery proceeds for the direct delivery of its eligible programs, an organization may also use lottery proceeds to pay some of the administrative expenses of those programs. To be considered an eligible use of lottery proceeds, these expenses must be essential for the direct delivery of the organization’s charitable objects. The licensing authority must give prior approval to requests to use lottery proceeds for administrative expenses on a case-by-case basis.

The licensing official may limit the use of proceeds to only those expenses that relate to the direct delivery of programs.

The licensing authority must monitor the use of lottery proceeds to ensure they are used as approved, for expenses related to the direct delivery of the eligible charitable services, for the benefit of Ontario residents.

2.4.0 (A) Uses in Ontario

All proceeds raised from lottery licences must be used for a charitable object or purpose that directly benefits the residents of Ontario. The funds do not necessarily have to be spent in Ontario, but an Ontario resident or community must benefit. This policy applies regardless of the beneficiary’s status  as a citizen of Canada. For example, refugees living in Ontario may be beneficiaries of programs set up for the relief of poverty in Ontario. However, lottery proceeds cannot be used to bring non-residents to Ontario to then benefit from lottery proceeds. Also, proceeds must be used to generate a charitable,  not an economic, benefit.

The following examples are eligible uses of lottery proceeds spent out-of-province to benefit a project or resident of Ontario:

• paying out-of-province medical expenses for an Ontario resident if the treatment is not available in the province, where the costs are not fully funded by the provincial government;
• buying medical equipment for an Ontario hospital from an out-of-province supplier; and
• paying the cost of an out-of-province educational opportunity for Ontario students enrolled in an accredited educational institution.

The following list provides some examples of projects that do not qualify:

• disaster relief provided to communities outside of Ontario;
• medical supplies for developing countries;
• foster child programs for children outside of Ontario;
• environmental projects outside of Ontario; and
• funding for foreign exchange students.

Although many of these activities are worthwhile projects, they provide a direct benefit to individuals outside Ontario. The Order-in-Council limits the allowable use of lottery proceeds to charitable activities that provide a direct benefit to the residents of Ontario.

2.4.1.POLICIES: ELIGIBLE USE OF PROCEEDS

2.4.1(a)(i) Donating to other eligible organizations

Eligible charitable organizations requesting approval to donate lottery proceeds to other eligible organizations must demonstrate that:

• their own charitable objects or purposes permit them to donate funds;
• the charitable organization has a proven track record of carrying out this activity;
• they have their own Board of Directors;
• they have budgets and banking procedures independent of the recipient organization;
• they are independent and have overall control over decision-making;
• the recipient organization in itself would be eligible for lottery licensing; and,
• the recipient organization will use the proceeds for an eligible use that is consistent with its charitable objects or purposes.

2.4.1 (a) (ii) Donating to other organizations

The same type of eligible charitable organization as described in Section 2.4.1(A)(i) may also in certain circumstances donate lottery proceeds towards goods or services for use by organizations that in themselves may not be considered charitable in nature, including those that are dependent upon municipal governments. In this instance it must be demonstrated that:

• the goods or services are not core goods or services historically provided by the recipient organization;
• there is no obligation for the recipient organization to provide the goods and services; and
• an agreement to protect the lottery proceeds is in place, prior to the transfer of funds.

An example of an eligible charitable organization donating lottery proceeds towards goods or services for use by another organization that in itself may not be considered charitable in nature:

A service club such as a Rotary Club raises funds for the inclusion of a public computer workstation for a public library established by a municipality. Raising funds for the inclusion of a computer may constitute a charitable use of funds by the club provided it can be shown that the proposed use is over and above the basic services that would normally be provided by the library.

An example of an ineligible use of proceeds:

A service club wishes to donate lottery proceeds to purchase jackets for a men’s baseball league.

2.4.1 (a) (iii) Donations for capital expenditures

In some cases, an eligible charitable organization that meets the criteria set out in 2.4.1(a)(i) may purchase or donate funds towards the purchase of a non-core item for another organization. The recipient organization must use the item for a purpose that provides a public, not a private benefit.

Prior to the purchase, the donating and recipient organizations must enter into a trust agreement outlining their respective responsibilities. The agreement must include the following information:

• who will hold title to the item;
• who maintains the item;
• the current value of the item;
• the item’s lifespan and residual value over a period of time;
• who insures the item;
• who decides on disposal of the item;
• what happens to the item’s residual value.

This agreement is necessary to ensure:

• that the lottery proceeds are used only for charitable purposes; and
• that the residual value of an item is used to support only those initiatives that have also been approved as eligible.

An example of an eligible use of proceeds when a charitable organization donates funds towards a capital expenditure:

A service club raises lottery proceeds towards the purchase of a van for a publicly owned long- term care home to transport patients. The purchase of the van may be an eligible use of proceeds provided the service club can demonstrate that the purchase of the van is over and above the services that the long-term care home would normally provide.

2.4.1 (B) Direct expenses vs. indirect expenses

Eligible organizations must provide very detailed information concerning their proposed use of lottery proceeds. Because many organizations do not have wholly charitable objects or purposes, it is sometimes difficult to determine whether a proposed use of proceeds can be considered a charitable purpose. In broad terms, proceeds may be used to offset the expenses that are integral to the charitable functions of the organization. These are known as “direct expenses.” A direct expense includes any expense that directly helps to fulfil the organization’s charitable mandate.

Organizations have costs that may be classified as direct or indirect expenses. A curling club that runs a youth program as a charitable function, in addition to its adult program, has costs that may be considered as direct or indirect depending on the program for which they are incurred. The cost of ice time necessary to deliver the youth program is eligible as a direct expense if it can be isolated from the cost for the adult program. If the cost of the ice time required for the youth program cannot be determined and isolated, it is not an eligible use of lottery proceeds.

Indirect expenses include the group’s general operating costs such as salaries, administration, rent, or utility expenses such as heat and hydro. Indirect expenses are not generally considered essential for the delivery of the charitable purpose and therefore may not be eligible uses of proceeds.

The licensing authority may approve these expenses if the applicant meets all of the following requirements:

• The need for the expense is justified as an integral part of the eligible charitable objects or purposes and activities.
• Salaries and wages may only be approved if the expertise level and time required cannot reasonably be provided by a volunteer.
• Salaries and wages must be reasonable and geared to the expertise and hours needed to do the work.

2.4.1 (C) Volunteer/staff training

Volunteer and/or staff training may be an eligible use of lottery proceeds. Generally, lottery proceeds may not be used to pay expenses associated with attending, organizing or running conferences or workshops. However, in certain circumstances conferences or workshops may constitute a charitable purpose.

In order to use lottery funds to attend, organize or run a training session, the organization must demonstrate that the training provides a significant charitable and community benefit related to an educational program. The following types of training may qualify:

• programs or workshops that directly provide education for youth, such as summer French programs or youth leadership courses;
• conferences or workshops that train volunteers to fulfil an organization’s charitable mandate, for example:
  • training volunteers for Big Brothers, halfway houses and to be counselors at rape crisis centres; or
  • training volunteers for community safety programs.

The following types of conferences and training are examples that do not qualify as a charitable use of lottery proceeds:

• professional development or upgrading for nurses, teachers, lawyers, doctors and other professionals;
• the payment of tuition fees for a volunteer or staff member of the organization to attend a college, university or any other educational institution;
• membership conferences for service clubs, the Royal Canadian Legion and other veterans’ organizations, and arts and cultural groups; and
• membership fees for the organization, its volunteers or staff in professional or recreational associations.

The licensing authority must determine whether or not the conference or training constitutes a charitable purpose. The following questions will assist in that determination.

• Is the conference/workshop/training directly related to the charitable mandate of the organization?
• Is the conference/workshop/training on the list of uses that do not qualify as outlined in Section 2.5.0, “Ineligible Uses of Proceeds”?
• Will the conference/workshop/training result in a personal or a public benefit?
• What is the charitable benefit the community would gain through the conference/workshop/ training?

Unless the answers to the above questions clearly indicate that a public charitable benefit will result, the licensing authority must not grant the organization permission to use lottery licensing proceeds for the conference, workshop or training expenses.

2.4.1 (D) Research

An eligible charitable organization that conducts research as an integral part of its charitable mandate may apply for a lottery licence to fund the direct costs of that research. Research may be funded through lottery proceeds if it advances human knowledge and if the resulting advances provide a public benefit either through instruction (“the advancement of education”) or by improving the health and well-being of the residents of Ontario (“other charitable purposes beneficial to the community: health and welfare”).

The licensing authority may grant approval on a case-by-case basis, under the following conditions:

• the applicant is an eligible charitable organization conducting the research as part of its charitable mandate; or
• the applicant is an eligible charitable organization that will donate the lottery proceeds to an eligible charitable organization conducting the research as part of its charitable mandate.

2.4.1 (E) Travel costs

The cost of travel for staff, volunteers and individuals benefiting from the charitable activities of the organization may be an eligible use of proceeds. These costs must directly benefit residents of Ontario and must be considered integral to the organization’s eligible charitable objects or purposes and activities.

The following examples are eligible uses of lottery proceeds for travel costs:

• renting a bus to transport an amateur youth sports team to a sanctioned tournament;
• paying for hotel accommodation for a group of students on a school trip which supplements and relates to the academic program.

In some cases, organizations may request approval to pay out-of-province travel costs. The organization must demonstrate that a direct benefit will be provided to the public of Ontario. If the travel provides only a private benefit, the travel costs are not eligible. A licensing official must determine the type of benefit provided on the basis of the organization’s charitable object or purpose and activity.

A licensing official must consider requests for approval to pay out-of-province travel costs with lottery proceeds on a case-by-case basis. For example, out-of-province travel to advance education, particularly for youth, is eligible.

On the other hand, out-of-province travel is not an eligible use of lottery proceeds for an arts or cultural organization. Arts and cultural organizations must provide a benefit directed towards the broader public of Ontario, not the individual members of the performing organization. When the performance is outside Ontario, the audience is not made up of Ontario residents. Therefore, the benefit of the travel is considered a private benefit directed to the individual performers. This also applies to school bands travelling out-of-province for the sole purpose of performing while travelling.

2.4.1 (F) Senior citizen centres and programs for senior citizens

The courts have recognized that support to “the aged” (senior citizens) through programs that improve physical and mental health may be considered charitable in nature.

These types of programs may fall under the eligible charitable category of “relief of poverty” or “other purposes beneficial to the community” depending upon the activity. For example, programs that provide relief from loneliness and isolation of the aged, and improve their mobility and fitness may be eligible under “Other purposes beneficial to the community: Health and welfare.” A non-profit organization that is established to operate and maintain a senior citizens’ centre or seniors’ social club to provide recreation, cultural activities and other programs for senior citizens may also be eligible for licensing.

The licensing authority may grant approval on a case-by-case basis, under the following conditions:

2.6.1. NEXT STEPS: EVALUATION GUIDELINES

2.6.1 (A) Evaluating the organization

To be eligible for lottery licensing, an applicant must have an established organizational structure. The applicant must be a legal entity and must have a formal document that establishes the organization. However, incorporation, whether provincial or federal, is neither a prerequisite nor a guarantee that a licence will be issued. No one may use lottery proceeds to start up an organization.

In order to be eligible, an organization must:

• have been in existence for at least one year;
• have provided charitable community services consistent with the primary objects and purposes of the organization for at least one year;
• have a place of business in Ontario;
• demonstrate that it is established to provide charitable services in Ontario;
• propose to use proceeds for charitable objects or purposes that benefit Ontario and its residents; and
• assume full responsibility for the conduct and management of its lottery events.

The terms and conditions for each lottery licence set specific application requirements, which are summarized in the relevant licensing policy sections of this manual.

When an organization first applies for any type of lottery licence, or whenever a review of its eligibility is required, it must provide all of the following information and documents that apply to it:

• a copy of its letters patent;
• a copy of its constitution and bylaws;
• a copy of its budget for the current year;
• a copy of its financial statements for the preceding year;
• a list of its Board of Directors;
• its latest report to the Public Guardian and Trustee;
• its charitable number for income tax purposes;
• a copy of its “Notification of Registration” letter from the Canada Revenue Agency with any supporting documentation, indicating the applicant’s status and terms of registration;
• copies of its charitable returns to the Canada Revenue Agency for the previous calendar year;
• a detailed description of its activities; and
• a copy of its annual report.

The organization must also provide any other information that will assist the licensing official to determine the charitable nature of its objects, purposes and activities.

After the review has been completed, the licensing officer may require additional information to process the application. The organization must provide any information that is requested.

If any changes are made to the documents submitted, the organization must provide the licensing authority with the amended documents as soon as they are available.

Because organizations change, an organization that is considered eligible for lottery licensing must continue to provide the licensing authority with any amended documents as soon as they are available.

Organizations that receive lottery licences will be subject to periodic eligibility reviews.

2.6.1 (B) Evaluating the use of proceeds

In order to determine eligible uses of proceeds, the organization must set out in detail its proposed uses of proceeds and to which programs the proceeds will be applied. The organization’s proposed use of proceeds must be for charitable programs and the programs must be consistent with the charitable objects and purposes of the organization. These objects and purposes must be of a charitable nature and fall within at least one of the four charitable classifications listed in Section 2.1.0.

In addition to the policies for “Use of Proceeds” and examples of “Eligible Uses of Proceeds” provided throughout this chapter, the following guidelines may be used to evaluate and determine eligible uses of proceeds:

• A copy of the most recent financial statements should show through past expenditures that contributions to support the charitable objectives of the organization have been made and that the organization is carrying out its charitable objects.
• The current operating budget should itemize each of the projected revenues and expenditures of the organization. The organization’s proposed use of proceeds (as detailed in the lottery licensing application) should coincide with the line items in their current operating budget. As well, the operating budget should demonstrate a need for the lottery proceeds.
• The use of lottery proceeds should be restricted to expenditures which are related directly to the delivery of the charitable programs provided by the organization. In other words, lottery proceeds must not be used for programs that are not part of the organization’s charitable objects and purposes identified in the constituting documents.
• In limited cases, certain administrative expenses related to the direct delivery of an eligible organization’s charitable objects may be considered eligible uses of proceeds. These costs must be essential to the direct delivery of the charitable services and must be approved by the licensing authority on a case-by-case basis. (See also “2.4.1(B) Direct expenses vs. indirect expenses” for further information.)

2.6.2. NEXT STEPS: ELIGIBILITY QUESTIONNAIRE

The licensing official must assess the applicant’s eligibility by asking the following questions. If the answer to any of these questions is “no,” the organization is ineligible.

1. Does the organization’s purpose fall within one of the four classifications of charitable objects?
2. If yes, which one:
   1. the relief of poverty;
   2. the advancement of education;
   3. the advancement of religion;
   4. other charitable purposes beneficial to the community, not falling under (a), (b) or (c);
   5. none of the above — stop here.
3. Does the organization have a place of business in Ontario?
4. Has the applicant been in operation for at least one year and does it have a proven charitable mandate that it has carried out throughout the year?
5. Is the organization established to provide charitable services in Ontario and use proceeds for objects or purposes that benefit only Ontario residents? If not, has the organization requested a use of proceeds that is restricted to meet these requirements?
6. Is the applicant properly organized so that it is separate organizationally, legally and financially from any other organization?
7. Are the proposed uses of proceeds eligible?
8. Is the intended use a direct delivery of services that is consistent with the charitable classification and the governing documents of the organization?
9. Are the proposed charitable benefits open to all segments of the community? Or, if the charitable benefits are directed to a specified group of the public, are the benefits open to all segments of that group?

2.6.3. NEXT STEPS: CONSTITUTING DOCUMENTS

Every applicant organization must have a document that establishes the organization, setting out the members’ common purpose and detailing how the organization will operate in order to achieve that purpose. Formal documents include letters patent, constitution, and memorandum of association. Informal associations that have not adopted formal written constituting documents are not eligible for lottery licensing.

• charitable and advance the charitable objects or purposes of the organization;
• required for the direct delivery of the charitable objects or purposes of the organization; and
• directed toward a large portion of the community or residents of Ontario with a common need.

When an application is approved, the application for the licence forms part of the licence itself. If the licensing authority does not approve all the requested uses of proceeds, the approved uses of proceeds and any restrictions must be specified on the licence when it is issued.

Licensees wishing to use proceeds for any purpose not requested on their original application must request a licence amendment and receive approval before using the proceeds for those purposes.

See also “2.4.0. Overview: Eligible use of proceeds”“2.4.1. Policies: Eligible use of proceeds”, “2.4.1(G) Amendments to the approved uses of proceeds” and “2.5.1. Policies: Ineligible use of proceeds” .

2.7.1. POLICIES: THE RELIEF OF POVERTY

2.7.1 (A) Eligibility guidelines for the relief of poverty

To be eligible in this classification, a charitable organization must meet all of the basic eligibility criteria set out in this chapter and must demonstrate that its programs and services assist those who are:

• in financial need;
• distressed or suffering as a result of their financial circumstances; or
• experiencing economic disadvantage.

2.7.1 (B) Eligible organizations for the relief of poverty

Examples of the types of organizations that may be eligible in this classification include:

• street patrols who work directly with homeless people;
• food banks;
• shelters for the homeless and economically disadvantaged; and
• meal programs.

With prior approval from the licensing authority, a charitable organization may use lottery proceeds to set up a fund to assist those in financial need. The fund must provide assistance to address a common need and must be available to anyone in the community who has that need. Approved uses of the fund may include the provision of short-term relief or a one-time payment to relieve an exceptional condition or circumstance (for example, floods that result in devastation to an Ontario community). More than one charitable organization may contribute to the fund, provided it falls within the charitable organization’s mandate. Payments must be made directly to the service provider/retailer.

2.7.1 (C) Eligible uses of lottery proceeds

The licensing authority may approve eligible organizations in this classification to use lottery proceeds for the direct delivery of services for:

• temporary shelter or subsidized rental accommodation;
• food, supplies and clothing;
• client life skills training, instruction and support intended to alleviate the effect of living in poverty;
• transportation costs for clients to attend programs or access services/resources;
• non-profit daycare services, where the funds are used:
  • for programs not historically funded, and
  • for the purpose of allowing access to those persons who could not otherwise afford the service (the organization must have criteria in place to determine eligibility); and
• out-of-pocket expenses for staff and volunteers, including travel costs, for the direct delivery of charitable services to the clients, where receipts are provided (for example, where staff or volunteers are required to use their own vehicle to deliver the service).

2.7.2. POLICIES: THE ADVANCEMENT OF EDUCATION

2.7.2 (A) Eligibility guidelines for the advancement of education

To be eligible in this classification, an organization must meet all the basic eligibility criteria and restrictions on uses of proceeds set out in this chapter. Proceeds cannot be used to fund core programs or services. They must demonstrate that its programs and services:

• provide significant scholastic or vocational training or instruction;
• develop intellectual capacity or teach necessary life skills; or
• engage in research that improves human knowledge, and disseminate that knowledge to the public.

Normally, the training or instruction provided will lead to a recognized degree, diploma or certificate.

• lottery proceeds are used to enhance the educational and extracurricular opportunities of a broad cross-section of students, over and above statutory requirements established and funded by the Province;
• programs and services do not simply promote a particular point of view; and
• programs and services confer a significant public educational benefit, not a private benefit.

Education for the professional development of a person or group (such as training courses for teachers, lawyers and nurses) is not an acceptable use of funds in this classification.

An organization that provides a program or curriculum that is contrary to the laws of Ontario or Canada or international law is not eligible for lottery licensing.

2.7.2 (B) Eligible organizations for the advancement of education

Examples of the types of organizations that may be eligible in this classification include:

• public and Roman Catholic schools (elementary and secondary) that are recognized and/or accredited by the Ministry of Education and lead to a secondary school graduation diploma;
• monastic and other religious schools and private schools that are registered with the Canada Revenue Agency as charitable organizations, and provide programs that are accredited by an appropriate government agency;
• colleges, universities and schools of the arts whose programs lead to a recognized certificate or degree;
• scholarship or bursary funds registered with the Canada Revenue Agency as charitable organizations, where:
  • beneficiaries are selected from a widely based group on the basis of merit and/or need,
  • there is non-restricted access to the programs, and
  • funds are directed to an accredited educational program; and
• organizations that provide formal educational activities and training in necessary life skills, such as “English as a Second Language” programs.

In the case of schools, the lottery licensing applicant must be the school itself, not a class or department within the school. However, parent/teacher associations or other groups may also be eligible for lottery licensing, provided that they:

• support one of the types of schools listed above; and
• are properly constituted as charitable organizations or non-profit organizations with charitable objects.

School councils required by the provincial government are not eligible for lottery licensing.

2.7.2 (C) Eligible uses of lottery proceeds for the advancement of education

Proceeds raised from lotteries cannot be used to fund core programs or services. The definition of core programs or services depends on what has been historically provided by the individual school and what is mandated by the provincial government. Additionally, eligible uses may vary between boards of education and schools in the same community.

The licensing authority may approve eligible organizations in this category to use lottery proceeds for the following purposes, so long as they are not historically provided by the organization or mandated by the provincial government:

• non-profit student publications such as newsletters and yearbooks that are provided at a nominal or no cost;
• educational student conferences and field trips within Ontario;
• student organizations such as arts/drama clubs and student councils/ unions;
• academic competitions;
• student athletics programs: uniforms, sports equipment, safety equipment, fees for qualified officials (where necessary) and facility rental fees;
• registered scholarships and bursaries open to Ontario residents (as per Section 2.7.2(E)); and
• travel, including out-of-province travel, provided that it complies with the requirements set out in Section 2.4.1(E).

Schools may only use lottery funds to purchase non-core services, items or equipment as approved by the lottery licence. Schools may not use lottery proceeds for the purchase, construction or renovation of facilities or buildings or to purchase other capital assets, such as school buses.

The lottery proceeds raised must be used for the overall benefit of the school. For example, lottery proceeds raised for athletic programs must be used to support all representative sports teams within the school, not just selected teams.

Schools may receive donations of lottery proceeds raised by eligible organizations for approved uses. In some cases, an eligible organization may purchase or donate funds towards the purchase of a non-core item that has not historically been provided by the school.

Prior to a capital expenditure, the board and the donating organization must enter into an agreement outlining their respective responsibilities. This agreement must include the following information:

• who will hold title to the item;
• who maintains the item;
• the current value of the item;
• the item’s lifespan and residual value over a period of time;
• who insures the item;
• who decides on disposal of the item; and
• what will happen to the residual value of the item and how will it be spent.

This agreement is necessary to ensure:

• that the lottery proceeds are used only for charitable purposes; and
• that the residual value of an item is used to support only those initiatives that have also been approved as eligible.

2.7.2 (E) Eligible use of lottery proceeds for bursaries and scholarships

Lottery proceeds may be used to establish or support scholarship or bursary funds for educational purposes, under the following conditions:

• the establishment or support of such a fund is integral to the organization’s mandate;
• the fund is registered with the Canada Revenue Agency as a charitable organization;
• the scholarships or bursaries are designed to allow a significant number of students in the community to apply; and
• the scholarships or bursaries are used for an educational program that leads to a recognized degree, diploma or certificate.

A scholarship fund that allows only a limited number of applicants, such as the children of members of a small service club, to apply would be considered too narrowly focused. Lottery proceeds may not be used for this purpose.

Scholarships or bursaries for the development of established professionals are also ineligible.

2.7.3 (A) Eligibility guidelines for the advancement of religion

The “advancement of religion” refers to promoting the spiritual teachings of a religious body and maintaining the doctrines and spiritual observances upon which those teachings are based.

To be eligible in this classification, an organization must meet all the basic eligibility criteria set out in this chapter and must demonstrate that its programs and services assist in the delivery of religious services and programs to the community. Additional objectives of religious organizations usually include support of the poor, sick and destitute as well as a host of other charitable objectives. In order to be eligible, an organization must demonstrate:

• one of its primary purposes is the advancement of religion;
• its credentials regarding the religion it advances;
• its affiliation with the religion it advances; and
• how it advances that religion.

Activities that advance religion may include:

• organizing and providing religious services and guidance;
• performing pastoral and missionary work for Ontario residents; and
• establishing and maintaining buildings for worship and other religious use.

2.7.3 (B) Eligible organizations for the advancement of religion

Examples of the types of organizations that may be eligible in this classification include:

• churches, synagogues, mosques, chapels, temples;
• missionary organizations; and
• other religious assemblies or congregations for religious observance and instruction.

Religious organizations may use lottery proceeds to provide direct benefits only to the residents of Ontario.

The licensing authority may also allow religious organizations to use lottery proceeds to provide programs falling within other classes of charitable purposes, such as the relief of poverty and the advancement of education, as long as these are included in the objects or purposes of the organization.

An organization that attempts to influence public opinion or actions on political issues is not advancing religion in the charitable sense. Therefore, advocacy, self-help groups and groups dedicated to the political, personal and financial advancement of their members are not eligible organizations in this category.

The licensing authority may approve eligible organizations in this classification to use lottery proceeds for the following purposes:

• the development and enhancement of religious programs for parishes, missions, synagogues, temples or other religious assemblies within Ontario;
• religious training, education and instruction;
• relief of poverty, provided it is within the mandate of the organization;
• the publication and distribution of religious literature and educational materials;
• administrative costs, including wages and salaries (except salaries for fundraising individuals);
• rent or mortgage payments, and utilities (heat, water, electricity and telephone) for buildings used for religious purposes;
• direct costs for travel within Ontario for religious purposes (see “2.4.1(E) Travel costs” for further information);
• the maintenance and repair of buildings used for religious purpose;
• capital projects, including:
  • the purchase or construction of facilities to be used for religious purposes, and
  • property improvements and renovations on buildings used for religious purposes (see “2.8.1. Policies: Building funds” for further information).

2.7.4. POLICIES: OTHER CHARITABLE PURPOSES BENEFICIAL TO THE COMMUNITY

In addition to meeting all the basic eligibility criteria set out in this chapter, an organization may be eligible under this classification if one of its main objects is a charitable purpose beneficial to the community and does not fall within one of the first three classifications.

An organization must have a purpose that provides a public benefit, but this alone is not enough to qualify it as charitable. To be eligible in this classification, an organization must demonstrate that it provides a broad public benefit directed toward an identifiable segment of the community or a significant portion of the community.

An eligible organization in this classification may also have objects or purposes that are not charitable, as long as those objects are secondary to the main purpose, which must be charitable. The organization must be operated on a non-profit basis.

For administrative purposes, eligible organizations with other purposes beneficial to the community have been divided into the following six categories:

1. culture and the arts;
2. health and welfare;
3. amateur sports organizations;
4. the enhancement of youth;
5. the enhancement of public safety; and
6. community service organizations.

The promotion of voluntarism, in itself, is not eligible for lottery licensing. Advertising for volunteers, matching individuals to volunteer placements and promoting volunteer activity are not eligible uses of lottery proceeds. However, volunteer training and support and providing direct charitable services, such as counselling for those in need, are eligible uses of proceeds.

See also “2.4.0. Overview: Eligible use of proceeds”, and “2.5.0. Overview: Ineligible use of proceeds”

2.7.4 (A) Culture and the arts

2.7.4 (a) (i) Eligibility guidelines for culture and the arts

To be eligible in this category, an organization must meet all the basic eligibility criteria set out in this chapter and demonstrate that:

• its primary purpose is to provide the public with an opportunity to experience artistic endeavours, including literature, dance, music, theatre, painting, sculpture, movies, photography and live performances, or specific cultural and heritage activities; and
• its programs and services are directed toward approved and recognized cultural and artistic purposes.

2.7.4 (a) (ii) Eligible organizations for culture and the arts

Examples of the types of organizations that may be eligible in this classification include:

• ballet companies;
• symphony orchestras;
• theatre groups;
• literary groups;
• groups advancing a specific culture, heritage or language beyond the members of the group, to the general public; and
• heritage conservation or historic organizations.

• 2.7.4 (a) (iii) Eligible uses of lottery proceeds for culture and the arts

  A licensing authority may approve eligible organizations in this category to use lottery proceeds for the following purposes:

• the preservation or enhancement of traditions, heritage and culture, provided there is a public, not private, benefit;
• the publication and distribution of literature and materials;
• the preservation of heritage and cultural art forms, provided there is a public benefit;
• underwriting the costs of cultural festivals, public performances or other community cultural sessions/presentations;
• direct costs for travel within Ontario for culture and arts purposes (out-of-province and out-of- country travel costs are not eligible); and
• capital acquisitions, renovations or maintenance where the buildings and capital assets are used for culture and arts purposes, where specifically approved by the licensing authority (see “2.8.1. Policies: Building funds” for further information).

2.7.4 (B) Health and welfare

2.7.4 (b) (i) Eligibility guidelines for health and welfare

To be eligible in this category, an organization must meet all the basic eligibility criteria set out in this chapter and demonstrate that:

• its primary purpose is to improve the health and well-being of the public or an identifiable segment of the community;
• its programs and services are directed towards the provision of medical and social service programs, support and prevention; or
• its primary purpose is to carry out medical research in Ontario.

Eligible organizations may provide programs dedicated to:

• the cure and prevention of disease;
• helping the sick and the dying;
• improving the physical and mental health and well-being of specified groups; and
• providing social and recreational programs to senior citizens so they remain active in the community.

2.7.4 (b) (ii) Eligible organizations for health and welfare

Examples of the types of organizations that may be eligible in this classification include:

• hospitals;
• non-profit extended care and residential facilities;
• organizations providing activity and home support programs for seniors;
• organizations that are established to operate and maintain a seniors centre or seniors social club (see “2.4.1(F) Senior citizen centres and programs for senior citizens” for further information);
• organizations dedicated to research and funding for the prevention of illness or finding a cure;
• organizations dedicated to assisting persons with physical and mental disabilities;
• organizations providing medical and social service support on an outpatient basis;
• substance abuse programs;
• hospital foundations and auxiliaries, if they are administratively, financially and legally separate entities from the hospitals.

2.7.4 (b) (iii) Eligible uses of lottery proceeds for health and welfare

The following are some examples of what a licensing authority may approve as eligible uses of lottery proceeds:

• programs that enhance health and well-being;
• medical research within Ontario;
• family counselling and health education;
• administrative costs related solely to the direct delivery of services;
• patient comforts and medical equipment (only if not already funded by the hospital);
• out-of-pocket expenses for staff and volunteers, including travel costs for the direct delivery of charitable services to the clients, where receipts are provided (for example, where staff or volunteers are required to use their own vehicle to deliver the service);
• capital projects, maintenance and repair of buildings (see “2.8.1. Policies: Building funds” for further information);
• out-of-province medical care, where it can be demonstrated that:
  • the provincial government is involved in the decision to seek treatment outside Ontario;
  • the required treatment is unavailable in Ontario;
  • the costs are not fully funded by the provincial government; and
  • residents of Ontario benefit from the care provided.

2.7.4 (C) Amateur sports organizations

2.7.4 (c) (i) Eligibility guidelines for amateur sports organizations

To be eligible in this classification, an organization must meet all the basic eligibility criteria set out in this chapter and must demonstrate that it provides programs and services to enhance health and fitness through organized, competitive physical activity.

An organization must demonstrate that:

• its primary purpose is to provide opportunities for participation in organized athletic activities at the community level; and
• its programs and services are directed toward approved beneficiaries that are eligible for lottery funding as noted below.

Three types of groups are eligible in this category:

1. Youth amateur sports organizations, where players are aged 21 and under.
2. Amateur sports organizations whose objects or purposes are to provide competitive sports opportunities for individuals with a physical, mental or developmental disability, regardless of age.
3. Adult amateur sports organizations, where some or all players are over the age of 21, and where the athletes represent Ontario or Canada in the Olympics, the Pan-American Games or Commonwealth Games as the result of:

• winning previous, sanctioned competitions; and
• meeting the guidelines of their governing sport bodies.

Only Ontario residents competing in amateur sports as individuals or as members of teams that are part of a recognized sports organization may benefit from lottery proceeds.

2.7.4 (c) (ii) Eligible youth amateur sports organizations

For the purposes of lottery licensing for youth amateur sports organizations, the term “youth” refers to anyone aged 21 and under. 100% of individuals benefiting from programs offered by organizations in this category must be 21 years of age and under at the start of the sporting season. Adult teams and leagues are not eligible.

To be eligible in this category, an organization must meet all the basic eligibility criteria set out in this chapter and must demonstrate that it is:

• dedicated primarily to supporting amateur athletes 21 and under, supported by a list of players and their birthdates; and
• an association or club that governs numerous individual competitors, teams, ages or expertise levels (individual teams involving a narrow age group and a small number of participants are too narrowly focused to be eligible for lottery licences or to receive funds or donations derived from lottery proceeds).

Examples of the types of organizations that may be eligible in this category include:

• local sports leagues and associations that serve youth;
• non-profit sports clubs that support a community-oriented program for youth aged 21 years and under; and
• Ontario and national associations for representative teams, such as the Ontario Hockey Association and the Ontario Amateur Softball Association.

• the individual team is a non-profit organization;
• 100% of the team’s signed players are aged 21 and under at the start of the association’s season;
• each application is made by the association on behalf of the team;
• the association supports the licence application with an original letter confirming that the team is a non-profit organization in good standing with the association; and
• the use of lottery proceeds is restricted to the direct delivery of the program to the players/team.

If a non-profit club runs both youth and adult programs, only direct expenditures for the youth programs may be considered as eligible uses of lottery proceeds. In order to be eligible, the club must be able to separate the costs of the youth and the adult programs in the budget and the financial tracking system.

2.7.4 (c) (iii) Eligible amateur sports organizations for athletes with a disability

Most of the individuals benefiting from programs offered by organizations in this category must have a demonstrated physical, mental or developmental disability.

To be eligible in this category, an organization must meet all the basic eligibility criteria set out in this chapter and must demonstrate that it is:

• dedicated primarily to supporting amateur athletes who have a physical, mental or developmental disability that limits their ability to participate fully in sporting activities for the general public;
• an association or club governing numerous individual competitors, teams, ages or expertise levels.

Examples of the types of organizations that may be eligible in this category include:

• local sports leagues and associations that serve individuals with a physical, mental or developmental disability;
• public non-profit sports clubs, encompassing all ages and expertise levels, as long as they provide programs primarily for individuals with a disability; and
• Ontario and national associations for representative teams, such as the Ontario Special Olympics.

2.7.4 (c) (iv) Eligible adult amateur sports organizations representing Ontario and Canada

Adult amateur sports organizations representing Ontario or Canada in the Olympics, the Pan American Games or the Commonwealth Games may be eligible to receive lottery licences.

To be eligible in this category, an organization must meet all the basic eligibility criteria set out in this chapter and must demonstrate that it is:

• primarily dedicated to the direct support of amateur athletes representing Ontario or Canada in the Olympics, the Pan American Games or the Commonwealth Games;
• an association or club governing numerous individual competitors, teams, ages or expertise levels (individual teams involving a narrow age group and small number of participants that are part of a competitive association or league, are too narrowly focused to be eligible for lottery licences).

Only Ontario residents may benefit from lottery proceeds, regardless of whether the organization is representing Ontario or Canada.

The types of organizations that may be eligible in this category include teams representing Canada in the Olympics, Pan American Games and Commonwealth Games, but lottery proceeds may only be directed towards the expenses related to Ontario residents.

2.7.4 (c) (v) Ineligible amateur sports organizations

In order to be eligible for lottery licensing, adult sports organizations that do not represent Ontario or Canada in competitions must fulfil some other purpose beneficial to the community. This means that an organization must demonstrate that it has a charitable mandate beyond its adult sports purpose. Lottery proceeds may only be used for the charitable objects of the organization, not for any adult sports objective.

The following types of organizations are not eligible to receive lottery licences:

• private, members-only clubs;
• teams with any combination of amateur and professional athletes;
• for-profit sports organizations or clubs;
• individual teams;
• sub-groups, auxiliaries, booster clubs and groups known as “friends of” ineligible sports organizations;
• professional or semi-professional sports organizations, such as the Canadian Football League;
• committees that support events designed to increase tourism;
• adult recreational or predominately adult-oriented sports; and
• organizations that are administrative in nature and do not directly support amateur athletes.

2.7.4 (c) (vi) Eligible uses of lottery proceeds by amateur sports organizations

A sports organization must provide detailed information regarding its proposed use of lottery proceeds. The licensing official must consider the proposed use of proceeds on a case-by-case basis.

The licensing authority may approve eligible organizations in this category to use lottery proceeds for the following purposes:

• salaries or wages for qualified coaches or instructors that are not members of the organization or the Board of Directors (see Section “2.7.4(C) Amateur sports organizations” );
• uniforms;
• equipment, program and safety supplies;
• staff and volunteer training, where necessary for the safety of the athletes, up to and including the level of “Community Sport” certification under the National Coaching Certification Program (see the Coaching Association of Canada website for more information);
• facility rentals for youth amateur sporting events (must be supported by rental receipts);
• facility rentals for adult amateur provincial or national competitions if the licensed sports organization is the host (must be supported by third-party receipts);
• necessary qualified competition officials; and
• direct costs for travel for youth amateur sports purposes to recognized competitions, sanctioned by the appropriate governing bodies, except for out-of-season or exhibition games (see the following section).

2.7.4 (c) (vii) Eligible uses of lottery proceeds for travel costs by amateur sports associations

Lottery proceeds may be used for travel and transportation costs for sanctioned out-of-town tournaments or competitions. These costs may include meals, accommodation, airline tickets, bus rental and other reasonable expenses incurred by the players, and a reasonable number of coaches and chaperones for any youth participants. Please note that third-party commercial receipts must be provided for travel.

Mileage costs for personal vehicles are not permitted.

The organization must provide the following information with its licence application:

• documents showing that the applicant organization complies with the eligibility requirements;
• a letter from the appropriate sports governing body, sanctioning the tournament/competition;
• a copy of the tournament itinerary, including the dates and time of the scheduled games/ competitions; and
• a membership list and a list of participants, noting their ages (approved use of proceeds will be restricted to those 21 and under).

Except in unusual circumstances, lottery proceeds may not be used to fund travel costs associated with out-of-province training. A sports organization requesting approval for such costs must demonstrate that:

• the need for the training program is justified as an integral part of the sports program;
• the training activity has been historically part of the organization’s mandate and activities;
• participants could not otherwise afford to pay the associated travel and accommodation costs;
• all participants in the training program have been chosen to represent Ontario or Canada; and
• the training cannot be provided in Ontario and must be provided out-of-province to be effective.
  
  See also “2.4.1(E) Travel costs”.

2.7.4 (c) (viii) Eligible uses of lottery proceeds for coaching fees

Coaching fees (salaries) are considered an indirect expense. However, it is recognized that in certain sports, coaching plays an important role in the development of the players. Therefore, coaching fees are considered eligible uses of lottery proceeds provided the following conditions are met:

• the need for a qualified coach is justified as an integral part of the sports program;
• the expertise level and hours of work required cannot be reasonably provided by a volunteer;
• salaries are reasonable and geared to the expertise required and hours worked; and
• individuals receiving salaries or wages for coaching or other instruction:
  • have recognized credentials in their field;
  • are removed from any involvement in the conduct and management of the lottery events;
  • are not officers or directors of the organization; and
  • do not have voting rights as members of the organization.

Sports organizations may also use proceeds for training or to develop coaches themselves to the level of ”Community Sport” certification under the National Coaching Certification Program.

2.7.4 (c) (ix) Payment of officials/referees

If the presence of officials and referees is integral to the proper conduct of the sport, the following types of organizations may use lottery proceeds to pay their fees:

• eligible youth amateur sports organizations; and
• eligible amateur sports organizations for athletes with disabilities.

The fees must be based on amounts authorized by the league or association and only be paid to individuals assigned by the league or association to officiate at the event.

Adult amateur sports organizations representing Ontario or Canada may not use lottery funds to pay officials or referees.

2.7.4 (c) (x) Ineligible uses of lottery proceeds for amateur sports organizations

The following costs are not considered eligible uses of lottery proceeds for any amateur sports organization:

• professional development/staff training beyond“Community Sport” certification under the National Coaching Certification Program;
• travel of a social, recreational or administrative nature, including travel for out-of-season or exhibition games or competitions;
• expenses for governing bodies and games committees;
• athletic awards and trophies; and
• the purchase, construction, renovation or repair of facilities or buildings.

In the case of sports organizations, administration costs such as administrators’ salaries, tournament and team registration fees, office expenses and utilities are considered to be indirect expenses that are not essential to the delivery of the sports program. Since these administration costs are not considered charitable, they cannot be paid using lottery proceeds.

2.7.4 (D) The enhancement of youth

2.7.4 (d) (i) Eligibility guidelines for the enhancement of youth

Organizations that support youth programs and services for youth that enhance human development, civic responsibility and pride in the community may be eligible for lottery licensing in this category.

An organization must meet all the eligibility criteria set out in this chapter and demonstrate that:

• its primary purpose is to provide services and programs for young people;
• its programs and services are directed toward programs and services for youth; and
• its programs have no access restrictions other than the age requirement.

2.7.4 (d) (ii) Eligible organizations for the enhancement of youth

Examples of the types of organizations that may be eligible in this category include organizations formed to:

• instruct youth in specific skills, such as 4-H clubs (farming) and Scout and Guide troops (life skills); or
• provide support and assistance to youth, such as Big Sisters and Big Brothers.

Cadet organizations associated with the Armed Forces, such as Air Cadets, may be eligible to receive lottery proceeds. In some circumstances cadet organizations may be controlled by the Provincial Command Provincial Command of the Royal Canadian Legion and may therefore not be constituted as separate legal and administrative organizations. The eligible organization may be the Provincial Command. In those cases, the Provincial Command must apply for and hold the lottery licence on behalf of each cadet group.

2.7.4 (d) (iii) Eligible uses of lottery proceeds for the enhancement of youth

The licensing authority may approve eligible organizations in this category to use lottery proceeds for the following purposes:

• salaries or wages for qualified instructors who are not members of the organization or the Board of Directors;
• uniforms, program supplies and equipment;
• the publication and distribution of material which is integral to the organization’s charitable activities;
• volunteer training (see “2.4.1(C) Volunteer/staff training” for further information);
• safety equipment and supplies;
• necessary, qualified competition officials, where competitions are integral to the organization’s mandate and activities; and
• direct costs for travel within Ontario for direct program delivery (third-party commercial receipts must be provided, as no mileage costs for personal automobiles or other motor vehicles are allowed).

2.7.4(E) Public safety programs

2.7.4 (e) (i) Eligibility criteria for public safety programs

To be eligible in this category, an organization must meet all the eligibility criteria set out in this chapter and demonstrate that:

• its primary purpose is to provide programs for the enhancement of public safety at the community level;
• its programs and services are available to the whole community;
• its programs and services are directed toward improving community safety;
• its programs and services are consistent with the public safety laws of the Province of Ontario; and
• it is legally, financially and administratively separate from all forms of government and is not carrying out a municipal, provincial or federal mandate.

2.7.4 (e) (ii) Eligible organizations for public safety programs

Examples of the types of organizations that may qualify in this category include those providing:

• community health and safety programs;
• community water safety programs;
• volunteer fire fighting services;
• community search and rescue programs; and
• anti-crime programs such as Crime Stoppers, that are not carried out under a municipal or provincial mandate (community policing programs are not eligible).

• they are organized as a non-profit organization in the manner approved by the Registrar; and
• the Federation supports the application.

2.7.4 (e) (iii) Eligible uses of lottery proceeds for public safety programs

The licensing authority may approve eligible organizations in this category to use lottery proceeds for the following purposes:

• the publication and distribution of non-profit promotional materials and literature related to public safety;
• public safety education programs, such as search and rescue and public signage;
• travel costs within Ontario (out-of-province travel is not eligible) for direct program delivery (third- party commercial receipts must be provided, as no mileage costs for personal automobiles or other motor vehicles are allowed); and
• capital acquisitions necessary for the delivery of public safety programs where specifically pre- approved by the licensing authority, except snowmobile trail groomers, which are not eligible.

Eligible member organizations of the Ontario Federation of Snowmobile Clubs may only use lottery proceeds for education and safety programs approved by the Registrar. Proceeds cannot be used for other activities, such as trail grooming and maintenance.

2.7.4 (e) (iv) Donations for capital expenditures

In some cases, an eligible charitable organization that meets the criteria set out in Section 2.4.1(a)(i) may purchase or donate funds toward the purchase of a non-core item for another organization. The recipient organization must use the funds for a purpose that provides a public benefit and is an eligible use of proceeds.

Prior to the purchase, the donating and recipient organizations must enter into an agreement outlining their respective responsibilities. The agreement must include the following information:

• who has title to the item;
• who maintains the item;
• the current value of the item;
• the item’s lifespan and residual value over a period of time;
• who insures the item;
• who decides on disposal of the item;
• what happens to the item’s residual value.

• that the lottery proceeds are used only for charitable purposes; and
• that the residual value of an item is used to support only those initiatives that have also been approved as eligible.

2.7.4 (F) Community service organizations

Community service organizations are established to provide funds to other organizations that carry out charitable activities for the benefit of the community. To be considered eligible for lottery licensing, a community service organization must have an object or purpose that allows them to make donations to eligible organizations. A community service organization must include a statement of how it intends to use the proceeds with its lottery licence application.

Community service organizations are divided into three categories:

1. service clubs;
2. veteran service organizations such as the Royal Canadian Legion; and
3. the United Way and Federated Health.

2.7.4 (f) (i) Service clubs

Service clubs are generally set up to perform activities and undertake projects that benefit eligible charitable organizations or to operate programs that provide a direct charitable benefit to the public.

To be eligible for lottery licensing, a service club must meet all of the basic eligibility criteria set out in this chapter.

Each branch or chapter of larger service clubs, such as the Rotary or Lions clubs, which have regional, provincial or national mandates, may be eligible, providing the branch:

• meets the eligibility criteria;
• has a specific regional or community mandate;
• is a separate legal entity;
• has its own Board of Directors;
• has independent budgets and banking procedures;
• has its own objects or purposes that are recognized in law as being of a charitable nature; and
• has overall control over its decision-making.

• organizations historically considered to be service clubs, such as the Lions Club and Rotary Club; and
• social and professional organizations that:
  • have expanded their mandate to include a charitable object, and
  • have provided charitable services to the community for at least one year.

Eligible uses of lottery proceeds by service clubs

The service club must give the licensing authority detailed lists of how it proposes to use the lottery proceeds. The service club may only donate lottery proceeds to an organization that is itself eligible to receive a lottery licence and has been approved by the licensing authority. The service club must ensure that donated lottery proceeds are used for purposes consistent with the receiving organization’s mandate and approved uses of funds.

The licensing authority may approve service clubs to use lottery proceeds for the following purposes:

• projects that are consistent with the organization’s charitable objects or purposes and provide a direct charitable benefit to the community;
• donations to other organizations for their own charitable purposes, which may include the relief of poverty, the advancement of education, the advancement of religion and other purposes beneficial to the community; and
• the general maintenance of their own club premises, if the premises are used for the benefit of the community, up to an amount of twenty (20) per cent of net lottery proceeds. This percentage may be increased if the facility is used free of charge by the community more than twenty (20) per cent of the time (see "2.7.4(f)(iii) General Operating and Maintenance Costs for Service Clubs and The Royal Canadian Legion and similar veterans’ service organizations for additional information.); "; and
• building funds (see “2.8.1. Policies: Building funds”).

Ineligible uses of lottery proceeds by service clubs

In addition to their charitable objects and purposes, service clubs have a mandate to provide membership- oriented activities. These activities provide a private, not a public, benefit to the members of the service club. Membership-oriented activities do not qualify as charitable and service clubs may not use lottery proceeds for these purposes.

The following types of costs do not qualify as eligible uses of proceeds for service clubs:

• expenses related to the members’ lounge;
• any program that is membership-oriented, including trips to conferences for members; and
• any programs restricted to members and their families.

The Royal Canadian Legion and its branches may use lottery proceeds for:

• donations to a broad base of eligible charitable organizations;
• the Royal Canadian Legion bursary fund;
• building maintenance; and
• building funds (see also “2.8.1. Policies: Building funds”).

Eligible uses of lottery proceeds

The licensing authority may approve the Royal Canadian Legion to use lottery proceeds for the following purposes:

1. Projects that are consistent with the organization’s charitable objects and purposes and provide a direct charitable benefit to the community.
2. The development and maintenance of an educational bursary fund established by the Royal Canadian Legion, which meets the following criteria:

• the fund is registered with the Canada Revenue Agency as a charitable organization;
• the bursaries are available to a significant number of students in the community; and
• the bursaries are applied to an educational program that leads to a recognized degree, diploma or certificate.

3. Donations to organizations for their own charitable purposes, which may include the relief of poverty, the advancement of education, the advancement of religion and other purposes beneficial to the community. The branch must provide the licensing authority with specific details on how the recipient will use the donation before approval will be given. The branch may request licence amendments.
   
   (See also “2.4.1(G) Amendments to the approved uses of proceeds”.)
4. The general maintenance of their own club premises, if the premises are used for the benefit of the community, up to an amount of twenty (20) per cent of net lottery proceeds. This percentage may be increased if the facility is used free of charge by the community more than twenty (20) percent of the time (see 2.7.4(f)(iii) General Operating and Maintenance Costs for Service Clubs and The Royal Canadian Legion and similar veterans’ service organizations for additional information.); and
5. The costs of building construction or renovations may be eligible uses of lottery proceeds as outlined in the building fund guidelines.

Royal Canadian Legion building funds Guidelines:

A number of Royal Canadian Legion branches provide their facilities free of charge to eligible charitable organizations. At times, the branches may need to use lottery proceeds to construct new buildings or to cover the costs of renovations. In addition to the general policies set out in “2.8.1. Policies: Building funds”, the Registrar has established supplemental building fund policies that apply to the Royal Canadian Legion and its branches. In addition to the usual approval from the licensing authority (who has the final decision), a branch’s proposal to use lottery proceeds for building funds must be reviewed and approved by the Ontario Provincial Command of the Royal Canadian Legion.

Eligibility criteria

The licensing authority may grant approval for a branch of the Royal Canadian Legion to use up to a maximum of 50 per cent of net lottery proceeds to cover the capital costs of construction, repair or the leasehold improvement of branch buildings. Capital repairs do not include the normal painting, decorating (interior and exterior) and service calls that are included in the percentage of net lottery proceeds allowed for general maintenance of the building.

The licensing authority may approve a building fund under the following conditions:

1. The branch provides a public charitable benefit by allowing charitable organizations in the community to use the building free of charge for their approved purposes.
2. The branch may only apply to use lottery funds to renovate or make additions to buildings it owns or leases on a long-term basis from a non-profit organization. The branch must comply with the procedures set out by the Ontario Provincial Command if it is constructing a new building or renovating an existing one.
3. The branch must obtain prior approval from the licensing authority before using funds for this purpose. The licensing authority must base its decision upon need and the extent to which the community uses the building.
4. Special terms and conditions will apply to maintaining this fund.

Approval process

Prior to using lottery proceeds for renovations or the construction of new buildings, branches must comply with the procedures set out by the Ontario Provincial Command of the Royal Canadian Legion. In addition, branches must follow the general policies for building funds. (See “2.8.1. Policies: Building funds” for further information.)

If the branch does not comply with this approval procedure, the licensing authority must refer the matter to the Administrative Committee of the Ontario Provincial Command for any action it may deem necessary.

This policy also applies to Legion branches in northwestern Ontario. However, they are not required to obtain approval from the Ontario Provincial Command, since they do not fall under its jurisdiction, but they must follow the general policies for building funds. (See “2.8.1. Policies: Building funds” for further information.)

Application requirements

If a branch proposes to use lottery proceeds for building fund purposes, it must supply the following information with its licence application:

• a written estimate of the amount needed for the building fund, an explanation of the capital expenditure, and the amount of net lottery proceeds to be used (up to a maximum of 50 per cent);
• a letter of approval from the Ontario Provincial Command authorizing the expenditure and the amount of net lottery proceeds to be used (up to a maximum of 50 per cent of the net proceeds); and
• the documents required in Section “2.8.1. Policies: Building funds”.

The Ontario Provincial Command may request additional documentation to support building fund proposals. The Command must make these documents available to the licensing authority upon request.

Eligible uses of proceeds

Once the licensing authority has approved the use of proceeds for a building fund, the branch may use up to 50 per cent of net lottery proceeds for the following building fund purposes:

• building repairs;
• replacements and additions of a capital nature; and
• the full amount of the mortgage payments, including the principal and interest, approved for a new building project or for an existing mortgage (not to exceed 50 per cent of the net lottery proceeds over the period of the licence).

Please note that lottery funds may be used to renovate the portions of a building used by the public but not the members’ lounge.

Ontario Provincial Command: Construction and renovation procedures

Each branch must comply with the procedures set out by the Ontario Provincial Command of the Royal Canadian Legion for branch construction. These procedures are outlined below:

1. Present a motion and get it approved by members
   
   Prior to purchasing property or engaging the services of an architect or consultant, the branch must present a motion in a notice mailed to each member.

The notice must include:

• the proposed purchase price of the property; or
• the estimated cost of the new building or renovation in accordance with the branch’s ability to pay; and
• the name and address of the architect and/or consultant to be engaged.

A branch cannot apply for a lottery licence to raise funds to purchase property or hire an architect and/or consultant until this motion has been approved.

2. Engage architect/consultant and get estimate

Once the branch has approved the motion and the Provincial Command has granted permission, the branch may engage the services of an architect and/or consultant and obtain an estimate for the proposed plans.

3. Present “Notice of Motion to General Meeting”

When the branch receives the estimate, it must present a Notice of Motion to a General Meeting. The Notice of Motion must include the following details:

• the names of the chairman and members of the Branch Building Committee;
• the total cost of the project, in accordance with the information received;
• a statement of the assets of the branch, as per the last audited financial statement as of May 31st of the preceding fiscal year; and
• the amount of the mortgage required and the relevant interest rate.

The branch must mail a copy of the Notice of Motion and the date of the General Meeting at which it will be considered, to each member in good standing. The branch must also send a copy of each Notice of Motion and certified copies of the minutes of the General Meeting at which the motion was approved, to the Provincial Command.

4. Get approval from Ontario Command for expenditures

The branch must obtain prior written approval from the Ontario Command for each expenditure from the building fund in excess of $5,000 during the course of the fiscal year. The branch must send a copy of this approval to the licensing authority.

The Royal Canadian Legion branch must submit regular financial reports as per the terms and conditions of the lottery licence.

Royal Canadian Legion: Selling property purchased with a building fund

The branch must obtain prior approval from the licensing authority before selling or mortgaging any property acquired or renovated through a building fund made up of lottery proceeds. The branch must prepare a document outlining the value of the lottery proceeds applied to the building fund.

When the property is sold, the branch must calculate the value of the lottery funds contributed to the building fund and must direct that amount of money to other eligible charitable organizations in the community. The branch may reduce this amount by the amount of money the branch could have made on an annual basis by renting the facility instead of providing it free of charge (foregone revenue).

Please note that if the sale occurs after the obligation has been reduced to zero, the branch does not have to distribute any funds from the sale of the property to charitable organizations in the community.

The licensing authority may approve a building fund under the following conditions:

• The operation of the building is required for the direct delivery of the charitable objects or purposes of the organization.
• The building provides a public charitable benefit to the community or is available free of charge to other non-profit organizations within the community and used for their approved charitable purposes.
• The organization must obtain prior approval from the licensing authority before accumulating lottery proceeds in a building fund.
• The licensing authority must add special terms and conditions to ensure protection of the building fund.
• If the organization does not own the building, it may still be eligible to set up a building fund if it has a valid long-term lease in a building owned by a non-profit organization.

Where the building is not used solely for eligible purposes, the maximum amount of lottery proceeds approved for the building fund must be proportional to the percentage of time the building is used to provide a public charitable benefit.

If the applicant organization wishes to use lottery proceeds for the renovation or construction of a building, it must submit the following information to the licensing authority for review prior to, or with the licence application:

• an explanation of the capital expenditure, a written estimate of the amount needed for the building fund, and the amount of net lottery proceeds to be used (up to a maximum of 50 per cent );
• a budget of the proposed project, including an itemized description of all individual costs;
• the total cost to be incurred;
• a budget for the organization, listing all expenses and all income for the appropriate fiscal year;
• architectural plans (where applicable), especially for new facilities or extensive renovations;
• an explanation of how the use of lottery proceeds for the building fund will affect the organization’s service delivery and why the operation of the building is required for the direct delivery of its charitable objects or purposes;
• proof of ownership or a copy of the lease and documentation regarding the non-profit organization that owns the building;
• a plan of how the assets will be disbursed in case of the organization’s dissolution;
• copies of written estimates, including labour and material costs for the project;
• details of the main uses of the proposed building or renovation project and an explanation of other uses for the facility; and
• other sources of funding available for the project.

3.2.1 GAMES PROHIBITED BY THE CRIMINAL CODE (CANADA)

The Criminal Code (Canada) prohibits the following lottery schemes:

Three-Card Monte

In Three-Card Monte, the dealer shows three cards (usually aces), two red and one black, then shuffles them face down. The player tries to guess the location of the black ace. A variation of the game is played with three cups or walnut shells and a pea.

Coin table

A coin table is enclosed by a rail and has a highly polished square surface, with many small, coloured circles. The players toss pennies or other coins from outside the rail onto the layout and receive a prize if the coin lands inside the circle.

Punchboard

A punchboard is made of pressed paper full of holes each containing a printed slip. Players pay to punch out a slip, and win a prize if the slip has a lucky word or number.

3.2.2. GAMES FOR WHICH A LICENCE IS NOT AVAILABLE

The Registrar will not issue licences for the following lottery schemes. This is not an exhaustive list; any new lottery schemes should be proposed to the Registrar for review before any further action is taken.

• Razzle dazzle—This game is also known as razzle, bolero, football game, hundred yards or roll down. It can be played two ways: with darts or with a roll board. The object of the game is to score points.
• Swinger game—A bowling ball is suspended from an overhead board by a hook and chain. Beneath and slightly to one side of the suspended ball, a bowling pin is placed on a table. The object of the game is to knock over the pin on the return swing of the suspended ball.
• Pea wheel—A pea wheel is a type of wheel of fortune that has not been approved.
• Dice games—Dice games are illegal at carnivals, designated fairs or exhibitions and are prohibited as lottery schemes for charitable licensing purposes under the Criminal Code (Canada). The Criminal Code (Canada) does allow dice games to be played in casinos under provincial licensing authority.
• Lottery schemes in public places of amusement—Any lottery schemes proposed to be conducted and managed at public places of amusement will not be licensed.

For details on specific circumstances and any applicable taxes, please contact the appropriate financial authority.

For pooling bingo halls, please see also “10.11.1. Application of Harmonized Sales Tax (HST)”.

3.4.3. REGISTRATION

3.4.3 (A) Classes of registration

Licensees may employ Gaming-Related Suppliers and Gaming Assistants to provide the goods and services and professional assistance necessary for the conduct and management of lottery schemes.

The Gaming Control Act, 1992 and its Regulations govern the commercial sector that supplies the charitable gaming industry. Gaming-Related Suppliers and Gaming Assistants must be registered under the Act. Sections 2–10 of Regulation 78/12 define classes of Gaming-Related Suppliers and Gaming Assistants that require registration. These include:

Category 1 Gaming Assistant—An individual who is employed in the conduct, management or operation of a lottery scheme or in the operation of a charitable gaming site and who, in the opinion of the Registrar, exercises a significant level of decision-making authority or has significant supervisory or training responsibilities with respect to the lottery scheme or the site.

Category 2 Gaming Assistant—An individual who is employed in the conduct, management or operation of a lottery scheme or in the operation of a gaming site and who, in the opinion of the Registrar, does not exercise a significant level of decision-making authority or have significant supervisory or training responsibilities with respect to the lottery scheme or the site.

Gaming-Related Supplier—A person who manufactures, provides, installs, tests, maintains or repairs gaming equipment or who provides consulting or similar services directly related to the playing of a lottery scheme or the operation of a gaming site.

The licensed organization must perform the following general administrative functions:

1. filing applications;
2. placing and paying for any advertisements;
3. setting up and maintaining the lottery trust account(s) and separately distributing the proceeds for approved purposes;
4. reconciling all receipts, providing a float for making change, and depositing all receipts into the designated lottery trust account;
5. keeping all necessary records;
6. preparing the financial report and submitting it to the licensing authority; and
7. communicating with the licensing authority.

3.5.2 BONA FIDE MEMBERS

According to the terms and conditions for lottery licences, bona fide members of the eligible charitable organizations must conduct and manage the licensed lottery scheme. This is a legal requirement. Without the participation of bona fide members, as set out in the licence, the lottery becomes illegal. In such a case, the licensing authority may suspend licences for future lottery events. A bona fide member for the purposes of lottery licensing is an individual who:

• meets the membership criteria set out in the constituting documents for the organization;
• has been admitted as a member in accordance with the requirements set out in the constituting documents;
• remains a member in good standing in accordance with the constituting documents; and
• participates in the activities of the organization.

A bona fide member cannot be a member of convenience. That is, he or she cannot have been admitted to the organization solely to assist in the operation of the lottery scheme.

A bona fide member of an organization that is a member of a Hall Charities Association cannot be a bona fide member of another member organization of the Hall Charities Association, unless that individual meets the membership requirements for the other organization as well.

A licensed organization must open and maintain a separate lottery trust account, designated as a trust account by the branch of a recognized financial institution, in the Province of Ontario. The designated lottery trust account must be in Canadian funds. If the licensee (except for a Hall Charities Association in a non-pooling bingo hall) conducts more than one type of lottery event, it may hold either one designated lottery trust account for all lottery proceeds or a separate designated lottery trust account for each type of lottery.

A Hall Charities Association in a non-pooling bingo hall may hold either a separate designated lottery trust account for each type of lottery event to account for all lottery proceeds or a minimum of two (2) designated lottery trust accounts as permitted under the Financial Management and Administration of Non-Pooling Bingo Halls Terms and Conditions.

Licensees that are permitted to accept American currency must also maintain a trust account in American funds, as set out in Section 3.6.5, “Lottery trust accounts for American currency.”

If the licensee maintains only one lottery trust account, the licensee must keep a separate ledger for each type of lottery event and for each licence issued. The bookkeeping and accounting requirements for each type of lottery are covered in detail in the licence terms and conditions.

The trust account(s) must:

• be a chequing account;
• require at least two (2) authorizing signatures;
• be held in the name of the licensee, in trust;
• have duplicate deposit slips, with one copy kept for the licensee’s records;
• provide monthly statements; and
• include either the return of all cheques with the monthly statements or the return of electronically scanned images of the front and back of each cancelled cheque with the monthly statements.

The fact that it is a trust account must be stated on the face of the cheques. If a licensee’s cheques do not currently state this fact, the licensee should ensure that the information is added when cheques are reordered.

The licensee must keep all records for a minimum of four (4) years. In addition to the account information, the licensee must keep a general ledger of all expenses supported by receipts and/or original invoices.

1. The licensee must pay all eligible expenses and disbursements for approved uses of proceeds (except bona fide member expenses) by cheque, or by electronic funds transfer (EFT), where permitted. All expenses must be supported by a receipt and cancelled cheque or EFT report. See also “3.6.10. Electronic funds transfer (EFT)”.
2. The licensee must keep all deposit slips; bank receipts from automatic tellers are not acceptable.
3. The licensee cannot make cash withdrawals.
4. The licensee may pay the bona fide member expenses in cash. The bona fide member must acknowledge in writing that he or she received the reimbursement in cash.
5. The licensee may only make cheques payable to cash when it requires a float for the purposes of conducting and managing lottery schemes, including payments to reimburse bona fide member expenses, prizes or making change.
6. Any interest earned on the trust account must be treated as proceeds of the lottery scheme.
7. The licensee must disburse lottery proceeds by cheque or EFT where approved by the licensing authority.
8. Organizations are not permitted to move funds by any means from the designated lottery trust account(s) into their operating or general account(s).
9. All expenses (except bona fide member expenses) must be paid directly by cheque or EFT from the lottery trust account(s). The movement of funds to another account(s), such as the licensee’s general operating account(s), or a head office’s bank account(s), would create a loss of accountability for those lottery proceeds and is not permitted.
10. The licensee may make temporary investments in instruments insured by the Canada Deposit Insurance Corporation (CDIC) if it receives prior approval from the licensing authority and maintains a careful audit trail. All principal and interest earned on the investment must be returned to the lottery trust account(s) and used for the licensee’s approved charitable purposes. These investments cannot exceed the maximum insured by the CDIC.

See “9.12.1. Lottery trust accounts for bingo events” for further information. For pooling bingo halls, please see “10.8.1. Lottery trust accounts”.

3.6.2. START-UP COSTS FOR LOTTERY EVENTS

The licensee must pay start-up costs, also commonly known as “seed money,” for the conduct and management of a licensed lottery event from the designated lottery trust account. However, if there are no funds or insufficient funds in the designated lottery trust account the licensee may write a cheque or make an electronic transfer from its general operating account to its lottery trust account to pay for the start-up costs.

3.6.3. INDEMNITIES AND LIABILITY INSURANCE

Licensing authorities may approve a portion of lottery proceeds to be used to pay for insurance premiums or the indemnification of officers, directors or trustees in some circumstances. Approval must be received prior to making the expenditure. The licensing authority must review each request on a case-by-case basis. To be an eligible use of proceeds, the charitable organization must demonstrate that this expense is necessary to advance its objects and purposes and is in compliance with the Charities Accounting Act. Hall Charities Associations must show that this expense is necessary in relation to the conduct and management of their licensed lottery events. If approved, the insurance or indemnity can be paid for within the maximum allowable administrative expenses set out by the Registrar.

3.6.4. ACCUMULATING LOTTERY PROCEEDS

In general, lottery proceeds cannot be accumulated. They are intended to provide a public benefit and must be used to do so in a timely manner. However, with the prior approval of the licensing authority, an eligible organization may accumulate lottery proceeds, subject to the terms and conditions  imposed by the licensing authority.

To ensure compliance with lottery licensing policy and the terms and conditions of lottery licences, the licensing authority must monitor the use of revenues and the level of funds in the lottery trust account(s).

When an organization wishes to accumulate lottery proceeds it must apply to the licensing authority and demonstrate that:

• the charitable activities of the organization justify the accumulation of funds
  • (for example, certain activities are seasonal and an organization may be required to accumulate funds when the activity, such as the operation of a youth hockey association, does not take place.)
• the accumulation of funds would be allowed under the Trustee Act;
• if the funds are transferred out of the lottery trust account(s) while accumulating:
  • they will be placed only in instruments that are insured by the Canada Deposit Insurance Corporation (CDIC),
  • all principal and interest earned on the investment will be returned to the lottery trust account(s) and used for the licensee’s approved charitable purposes,
  • these investments will not exceed the maximum insured by the CDIC, the licensee will maintain a careful audit trail, and revenue generated will only be used for purposes approved by the licensing authority.

3.6.5. LOTTERY TRUST ACCOUNTS FOR AMERICAN CURRENCY

Eligible organizations conducting bingo events in communities that border the United States may accept American currency during the conduct of bingo events, which may include break open ticket sales.

If a patron purchases bingo paper in American funds, any prizes won must be paid out in American funds. If the paper is purchased in Canadian funds, the prizes must be paid out in Canadian funds. House rules may be applied that may or may not require patrons to buy all bingo paper, including specials, in the same currency. These rules must be clearly displayed.

Eligible organizations that accept American currency must keep separate Canadian and American lottery trust accounts that have been designated as trust accounts by the branch of a recognized financial institution in Ontario, and must deposit the funds into the corresponding account. Hall Charities Associations in non-pooling bingo halls must maintain a separate American trust account for each type of licensed event.

All lottery expenses and eligible uses of proceeds must be paid from the Canadian account. The American account may only be used to deposit the American currency collected during the event, with the exception of withdrawals for a cash float for the conduct of a bingo event. Expenses, donations or any other withdrawals cannot be made from this account unless the licensing authority grants permission.

The maximum amount that may be accumulated in this account must not exceed the total value of the estimated prize board. When accumulated funds in the American account exceed the estimated prize board, they must be transferred to the Canadian lottery trust account. The date of the transfer, the exchange rate, and the premium or loss (at buying rate), as well as any eligible expenses (uses of proceeds) made from the Canadian account, must be recorded in the Bingo Hall Charity Association Report and in the financial ledgers.

Funds may be transferred from the American account to the Canadian account without the preapproval of the licensing authority but must be moved if the licensing authority requires them to be moved.

3.6.6 (A) Annual financial statements

The terms and conditions of lottery licences require organizations to provide the licensing authorities with a verified financial statement within 180 days of the organization’s year-end. The type of financial review required depends upon the licensee’s gross annual revenues from all sources. Licensees that receive less than $250,000 in gross annual revenues must prepare financial statements in accordance with the standards set out in the CPA Canada Handbook. Licensees that receive $250,000 or more in gross annual revenues must prepare financial statements in accordance with the standards set out in the CPA Canada Handbook and which have been audited by a public accountant.

The licensing authority may require an audited financial statement to be prepared at the licensee’s expense at any time.

Organizations that already obtain audited financial statements from an independent accounting firm may submit these statements. In addition, the organization must provide a Review Engagement Report or an Auditor’s Report addressing compliance with the terms and conditions and regulations of their lottery licence(s). A public accountant must prepare the audited compliance report in accordance with Section 5815 of the CPA Canada Handbook.

Organizations that realize less than $250,000 from all sources during their fiscal year must provide an annual financial statement verified by the two signing officers of the lottery trust account(s) and the organization’s Board of Directors. At its discretion, the licensing authority may also request a compliance report. The compliance report must be verified by the licensee’s Board of Directors.

For pooling bingo halls operating under the Bingo Revenue Model, see Section “10.7.1. Reporting requirements” for further information.

3.6.6 (B) Audited financial statements on request

The licensing authority may require a complete financial picture of a licensee’s gaming operations before the expected delivery of an annual financial statement, or the licensing authority may require a thorough review by a third party. The licensing authority may require a licensee to provide an audited financial statement within the time period set out in the licence, or as specified by the licensing authority.

In order to safeguard the interests of both the public and the licensee, and to ensure that all prizes can be awarded, the licensing authority may require that an organization submit a financial guarantee covering the total value of prizes.

The licensing authority must require a financial guarantee for lotteries with a total fixed prize value of $10,000 or more, including taxes. When the total fixed-prize value is $10,000 or more, the licensing authority requires an irrevocable standby letter of credit as the form of financial guarantee. (See 3.6.8, “Letters of credit” for further information.)

Where deemed appropriate, the licensing authority may also require a financial guarantee for lotteries with a fixed prize amount below $10,000 where the prize is a percentage of the gross ticket sales.

Acceptable forms of financial guarantees are:

• an irrevocable standby letter of credit from a recognized financial institution acceptable to the licensing authority;
• a bank draft or money order.

The Registrar may specify the form of financial guarantee that must be provided.

Guarantees for municipally issued licences must be made payable to the municipality and guarantees for provincially issued licences must be made payable to the Minister of Finance. A guarantee must begin on the date of the licence application and expire no sooner than 45 days after the licence expiry date. The financial guarantee must indicate the purpose for which it was issued and must be in a form acceptable to the licensing authority.

If a licensee is unable to award the prizes approved by the licence, the licensing authority may draw upon the financial guarantee to ensure that the prizes are awarded.

The licensing authority will return the financial guarantee to the organization as soon as the organization has distributed all prizes and submitted the list of winners and the required financial reports. Therefore, it is in an organization’s best interest to fulfil these obligations as soon as possible.

In the case of municipal licences, the municipality must inform the Registrar if the licensee is unable to award the prizes as approved in the licence. This information may have implications for future applications from the licensee.

With the exception of 50/50 draws, licensing authorities must obtain irrevocable standby letters of credit for lottery licences with a total prize value of $10,000 or greater, including taxes. A licensing authority may also require a letter of credit for a lower prize amount. A letter of credit or other financial guarantee may be required for 50/50 draws where deemed appropriate.

The letter of credit must:

• be issued by a recognized financial institution,
• be made payable on presentation of the original letter of credit at the issuing financial institution,
• cover the full value of all prizes offered, including any bonus prize,
• permit partial draws (that is, can be cashed in part),
• be valid for a minimum of 45 days after the licence expiry date, and
• indicate the purpose for which it was issued.

The licensing authority may accept a letter of credit set up and paid for by a third party that permits draws to secure the licensee’s obligations.

A letter of guarantee is not an acceptable financial guarantee. A letter of credit must be made payable independent of any occurrence of default on any obligation by the licensee.

Payment under a letter of credit must not require the Minister of Finance or municipal licensing authority to provide a statement that amounts paid will be retained or used in connection with any obligation or pursuant to any agreement between the licensing authority and the licensee.

The licensing authority will return the letter of credit to the licensee once the licensee has distributed the prizes and submitted the list of winners and a financial report. If a licensee is unable to award the prizes as approved on the licence, the licensing authority may draw upon the letter of credit to ensure that the prizes are awarded as approved on the licence.

A municipality must inform the Registrar if a licensee is unable to award the prizes. A licensee’s inability to award prizes may have implications for the licensee’s future applications.

3.6.9. STANDARD FINANCIAL REPORTS

Licensees must complete accurate standard financial reports for each lottery event. The reports must be filed with the licensing authority in accordance with the reporting requirements of the terms and conditions of the lottery licence. Licensing authorities will report any inconsistencies to the AGCO.

Where there is a Hall Charities Association (HCA), it must provide the licensing authorities and the Registrar with a financial report for each monthly period. The report is due 30 days following month-end and must include the necessary information, which includes all licensed lottery events held within the bingo hall. Further details are provided in chapter 10.

3.6.10. ELECTRONIC FUNDS TRANSFER (EFT)

Electronic funds transfer (EFT) allows for the transfer of funds between accounts by electronic means. EFT may be used:

• by a licensee to pay for expenses, to deposit monies into its designated lottery trust account, or to distribute net proceeds derived from the conduct of its lotteries to eligible recipients; and
• by an HCA to pay for expenses, to deposit monies into its consolidated designated trust account (CDTA) or to distribute net charitable gaming event proceeds to its member organizations.

The provisions for licensees and HCAs that choose to implement EFT are detailed in the Financial Management and Administration of Pooling Bingo Halls Terms and Conditions (4242). In general:

• Licensees must decide in accordance with their constitution whether to implement EFT.
• In the case of an HCA, it must obtain written authorization from each member organization that is agreeing to the use of EFT. Each participating member organization is responsible for providing to the HCA its banking information, approved by two (2) authorized signing officers, for each designated lottery trust account to receive funds electronically.
• An HCA must designate four (4) bona fide members to administer EFT funds and be signing officers for the HCA. The four (4) bona fide members must be representatives of four (4) different member organizations of the HCA. Licensees must designate at least three (3) bona fide members to administer EFT funds and be signing officers for the licensee.
• The licensee or HCA must ensure that its financial institution’s EFT system has the capability of supporting electronic dual authorization, as the transfer of funds must be authorized by two (2) of the bona fide members that have been designated to administer EFT.
• The licensee or the HCA must obtain reports from the financial institution confirming the electronic transfer of funds and any discrepancies.
• These reports must be reviewed and signed by one of the bona fide members designated to administer EFT who did not authorize the transfer of funds.. This member must also prepare a summary setting out any discrepancies in the report received from the financial institution to be presented to the licensee’s or HCA’s Board of Directors, as the case may be.

Under a bazaar licence, a licensee may conduct a bingo lottery with a maximum of $5,500 in prizes. The licensee may sell bingo cards for cash only. The bingo cards may be sold only on the day of the event.

The caller must announce the arrangement of winning numbers immediately before the game begins. All prizes must be awarded as outlined and approved on the licence application.

See also “9.2.1. General bingo licensing policies”.

4.1.1 (C) Raffles and penny auction raffles

Raffles

Under a bazaar licence, a licensee may conduct a raffle lottery with a maximum of $50,000 in prizes. The licensee must sell tickets by cash transactions only. The tickets must be consecutively numbered. All prizes must be awarded as outlined and approved on the licence application.

For raffles where tickets are sold at a single premise and tickets are drawn on the same day as they are sold, the licensee is exempt from general raffle policies requiring a licensee to print complete raffle information on the ticket and retain unsold tickets for one year.

Penny auction raffles

For a set price, participants purchase a certain number of tickets that are usually detachable from the stub portion (retained by the purchaser). Participants may enter as many tickets as they possess on any item (prize) they are interested in by depositing the tickets into a container assigned to that item (prize). The item (prize) is awarded to the person whose ticket is drawn, at random, from the container.

The raffle is limited to a maximum prize board of $50,000 and individuals must be present to win. A prize list is not required with the application.

See also “5.1.2. General raffle licensing policies”.

5.1.1(A) Provincial licensing authority

The Registrar has sole authority to issue lottery licences for raffles where the total value of the prizes to be awarded is greater than $50,000 or where the raffle lottery is to be conducted and managed in conjunction with another licensed gaming event.

Only the Registrar may issue a raffle licence permitting an eligible organization to conduct a raffle lottery event in an unorganized territory, on Crown lands or in First Nations communities that do not have their own Order in Council.

Only the Registrar issues licences for electronic raffles, regardless of prize amount.

5.1.1(B) Municipal licensing authority

Municipalities may only issue licences permitting eligible organizations to conduct non-electronic raffle lotteries where the total value of the prizes to be awarded, including any taxes is $50,000 or less.

5.1.2.GENERAL RAFFLE LICENSING POLICIES

The following general policies apply to all types of raffle lottery events:

1. Licensing authorities may issue concurrent raffle licences based on their evaluation of the licensee’s capacity to successfully conduct and manage multiple events at one time. Licensees may conduct and manage a maximum of four online raffles at the same time.
2. With the exception of a 50/50 draw, the licensee must award fixed prizes that are set out in the lottery licence application and approved by the licence. The maximum prize value for a 50/50 draw must be determined by the maximum number of tickets issued as set out in the application.
3. Raffle licensees must obtain goods and services only from registered suppliers. Suppliers, whether contracted directly by the licensee or not, must possess an appropriate current registration certificate, issued under the Gaming Control Act, 1992. Each applicant must include a description of all the goods and services to be obtained from each supplier, in order for the licensing authority to determine whether or not the supplier must be registered under the Gaming Control Act, 1992.
4. Subject to the policies outlined in 5.16.1(c), the licensee may offer Ontario Lottery and Gaming Corporation (OLG) tickets as early-bird or other raffle prizes. The prize value of OLG tickets must be based on the face value (purchase price) of the tickets. The maximum value of these tickets must not exceed five (5) per cent of the prize board for the licensed lottery event.

5. The licensee may offer its own licensed raffle tickets as early-bird prizes. The prize value of the raffle tickets must be based on the face value (purchase price) of the tickets. The number of these tickets must not exceed a maximum of five (5) per cent of the total number of tickets issued for the licensed lottery event. The licensee must include the cost of these tickets in the overall prize board for the raffle event.
6. Raffle tickets must not be sold to anyone under the age of 18, or the age of 19 if alcohol is included in the prize.
7. Raffle tickets must not be offered by the licensee as contest or promotional prizes through any public medium.
8. Prizes:
   1. The retail market value of the prizes to be awarded must not be less than 20 per cent of the total value of all tickets issued.
   2. The licensee must pay any duty, sales tax or other additional costs related to the prizes. These costs must be included in the stated value of the prizes.
   3. Only new (and unused) merchandise purchased from a reputable vendor/supplier may be offered as prizes (with some exceptions for antiques—see 5.16.1[d]).
   4. The prizes must be awarded free and clear of any mortgage, lien or any other encumbrances. The licens- ee must not offer leased prizes. All prizewinners must be awarded unconditional ownership of the prize.
   5. Livestock must not be awarded as prizes.
   6. For any prizes worth more than $500, the licensee must obtain legible copies of a firm price quotation and a letter of intent, invoice or agreement to purchase for each prize.
   7. If the applicant is proposing to offer fixed prizes totalling $10,000 or more, including taxes, the applicant must present an irrevocable standby letter of credit to the licensing authority. The licensing authority may also require a financial guarantee for a prize of a lesser value. (See “3.6.7. Financial guaran- tees” and “3.6.8. Letters of credit”.)
   8. Licensees may use electronic commerce channels, such as e-transfers and online gift cards, to distrib- ute prizes. Note: Gift cards with depreciating value or user fees are not allowed. Applicants must provide information about prize distribution methods as part of their licence application.
9. Raffle lottery tickets sold under a licence issued in Ontario must not be advertised, offered for sale, sold or ordered from outside of Ontario. However, while they are in Ontario, residents of other countries or provinces may purchase raffle tickets sold under a licence issued in Ontario.
10. The licensing authority may require the applicant to include a complete ticket sales plan, including an explanation of how credit card and debit card sales, as well as dishonoured cheques will be handled.
11. The licensee must ensure that all advertising complies with the Raffle Licence Terms and Conditions, any additional terms and conditions for the lottery licence and with all relevant federal, provincial and municipal laws.
12. The licence application must state the number of tickets to be issued.

5.2.1 (A) Stub draw

A stub draw is a raffle lottery with two-part tickets. The purchaser keeps one part of the ticket and the licensee keeps the other part, known as the “stub,” which contains purchaser information. The stubs of all sold tickets are placed in a container and a winner is determined by a random selection.

The lottery advertising and rules pertaining to the raffle must clearly state the sequence of draws and include a listing of all the prizes that will be given for each draw. The advertising and rules must also state whether the prize-winning tickets will be returned to the draw to be eligible for all other prizes. If prizes are drawn from lowest value to highest value, the ticket must be re-entered in the draw for all subsequent draws.

The licensee must ensure that all the rules approved by the licensing authority for the conduct of the draw and awarding of prizes are carefully followed. Any variation from the format approved by the licensing authority would constitute a breach of the terms and conditions of the licence.

5.2.1 (B) Elimination draw

An “elimination draw” is a variation on the stub draw in which all tickets are drawn from the container one at a time, until only one ticket is left. The last remaining ticket is the grand prizewinner. The licensee may also award lesser prizes at specific intervals. For example, every 50th ticket pulled could win $100.

The applicant must establish a procedure for conducting the raffle draw if not all tickets have been sold. This procedure must be submitted as part of the licence application.

In order to minimize complications and ensure that all prizes are awarded as advertised, elimination draws may only be licensed under the following additional conditions:

• Only sold ticket stubs may be put into the container.
• If all tickets are not sold, the licensee must adjust the interval of winning tickets to ensure that all prizes are awarded as originally advertised.
• When all tickets are not sold, the licensee must announce/advertise the altered format prior to conducting the draw.

5.2.1 (C) Calendar draw

In a “calendar draw,” the ticket purchaser buys a calendar on which prizes are identified for a series of draws to take place on selected days. A purchaser wins a prize by matching the number on the calendar with the number drawn from a container on the specific date. Depending on the rules established for the lottery, a winning calendar number may be placed back in the container for subsequent draws or it may be eliminated from future draws. The rules for winning must be clearly stated on the licence application and on the calendar itself.

5.2.1 (D) “Golf ball drop” raffle lottery

A “golf ball drop” raffle lottery is a lottery in which participants buy a numbered ticket that corresponds to a numbered golf ball. The golf balls that are inscribed (in indelible ink) with the corresponding numbers are transported to the venue of the drop by mechanical means (for example, crane, cherry picker) or lifted into the air, and dropped over a pre-determined/designated drop area. The drop must be witnessed by the designated members-in-charge and an auditor.

In addition to the basic application requirements to conduct and manage a raffle lottery event, the applicant must include the following:

• A safety/security plan for the event, approved in writing by the local law enforcement agency or agencies. In the event the “drop” is made from an aircraft or other mechanical lifting device the applicant/licensee must ensure that the operator of the aircraft or other device conforms to all other applicable laws. Please note that any additional equipment used for the dropping of the golf balls must be certified under the airworthiness regulations.
• A copy of written approval for the event, from any other authority with jurisdiction over the lands over which the drop is to take place.
• Liability insurance from the charity and the equipment provider (that is, mechanical equipment/ aircraft provider) against damage, injury and loss of life. Liability insurance must name His Majesty the King in Right of Ontario, the Registrar, and the Alcohol and Gaming Commission of Ontario and its employees and agents as additional insureds. The policy must be submitted for the Registrar’s approval. In the event the licence is issued by a municipal authority, the municipality and municipal officials must also be named insureds in the policy.
• A copy of the municipal approval permitting the drop to take place in the municipality with the confirmation that this is a “golf ball drop” lottery event.
• A written agreement from the owner of the property on which the drop is to take place, indemnifying His Majesty the King in Right of Ontario, the Registrar, and the Alcohol and Gaming Commission of Ontario and its employees and agents of any liability. In the event the licence is issued by the municipality, the municipality must be indemnified from any liability. The agreement must ensure ticket-holders are given access to witness the event.
• A complete site map of the area in which the drop is to take place, inclusive of the safe area for the viewing public. If an aircraft is used for the “drop” the plan must conform with all applicable legal requirements.
• A process for determining the winner(s) of the event after the drop has taken place.
• A procedure for the retrieval of the balls after the event and matching of the balls to ensure that all the balls that were dropped have been accounted for.
• A procedure in the event that the balls have not landed on the designated area.
• A procedure in the event that bad weather prevents the drop from taking place as planned.

The licensee is responsible to ensure that safety precautions, safety equipment and safety procedures are in place in the conduct and management of this lottery. For operation of aircraft or other mechanical lifting device, the licensee and aircraft and/or mechanical lifting device operator must conform to all applicable regulations.

Should the licensee choose to insure the lottery event against loss (in the conduct and management of the event), the premium cannot be paid from lottery trust funds.

The licensee must ensure the rules of play submitted for the conduct and management of the event and the awarding of prizes are carefully followed. Any variation from the format approved by the licensing authority would constitute a breach of the terms and conditions of the licence.

The prize board must be a fixed amount and consist of cash, merchandise or a combination of the two.

5.2.1(E) “Rubber duck” race

A “rubber duck” race is a lottery in which participants buy numbered tickets that correspond to numbered artificial, inanimate floating objects of uniform size, shape and weight, such as rubber ducks. All the “ducks” are placed into a river or other naturally moving body of water. The use of any device to create a moving body of water for this type of event is strictly prohibited. The winner is the ticket holder with the number corresponding to the number on the “duck” that crosses the finish line first.

The licensee may award a bonus prize, in addition to the first prize, on a pre-selected “duck” if that duck wins the race. The pre-selected duck must be chosen by a separate draw, prior to the conduct of the event. This draw must be properly witnessed by the designated members-in-charge and/or the auditor. The licensee must keep the identifying number of the pre-selected duck confidential until after the race.

In addition to the basic application requirements for all raffle lottery events, applications to conduct and manage a “rubber duck” race must include:

• a security plan for the race, approved in writing by local law enforcement agencies; and
• written approval for the event from any authority with jurisdiction over the lands and waters to be used for the race (for example, provincial or municipal authority).

The supplier of the “ducks” does not have to be registered under the Gaming Control Act, 1992 as a Gaming-Related Supplier.

5.2.1 (F) 50/50 draw (paper-based)

A paper-based (that is, non-electronic) 50/50 draw (including a Split the Pot draw based on a 50/50 split of the gross proceeds) is a raffle lottery in which the total prize is one half the value of all tickets sold during the event or a defined period of the licence. The purchaser receives a ticket containing a number. A ticket stub with the same number is placed in a drum or other container for a draw.

If roll-type tickets are used, the purchaser must be present at the draw in order to collect his or her prize. If the holder(s) of the winning ticket number(s) is/are not present when the number(s) is/are drawn, the licensee must draw another ticket. This information must be included in the rules and any advertising for the event. 

A blanket raffle licence allows eligible organizations to obtain a single lottery licence to conduct and manage more than one type of raffle event within a fixed period and from one location within a capped prize amount of $50,000 for total prizes.

The types of raffle events that a licensee may conduct under a blanket raffle licence include:

• stub draws
• elimination draws
• paper-based 50/50 draws
• meat spins/turkey rolls
• “name the raffle” lottery.

See “5.2.1(H) Meat spins/turkey rolls” and “5.2.1(I) “Name the raffle” lottery” for further information.

A licensee may apply to the licensing authority for a blanket licence to conduct any number of these raffle events or combination of these raffle events for up to a maximum of a year and for a total prize board not to exceed $50,000.

In addition to the basic application requirements for all raffle lottery events, each application for a blanket raffle licence submitted to the licensing authority must include the following information:

• types of raffle lottery events to be conducted during the period;
• the number of raffle events to be conducted;
• the total number of tickets to be printed for each individual raffle event and the total value of all tickets printed for each of the events;
• the cost per ticket for each event and the price per set of cards for “name the raffle” lotteries;
• the cost per ticket for each event;
• the location where the events will take place;
• the scheduled dates for each type of raffle event to be held;
• a detailed explanation of the rules for each type of raffle event;
• a description of all prizes to be awarded and the total retail value of all prizes to be awarded for each raffle event;
• total value of all prizes to be awarded for the period; and
• the licence fee.

A “name the raffle” lottery is a small-scale type of event conducted under a blanket raffle licence (see “5.2.1(G) Blanket raffle licence (issued by municipality only)”). A “name the raffle” lottery allows licensees to award edible products such as porchetta, meats and desserts as prizes.

The game differs from a typical raffle in a few ways:

• Players use playing cards purchased in sets of three (3) instead of purchasing tickets.
• The winner is determined by matching the set of cards with the cards turned by the “dealer”.
• The winner is the first player whose three (3) cards all match cards turned up by the dealer and who calls out “bingo.”

Players purchase three playing cards at the price approved on the application for licence. Before the start of each game, the dealer announces the number of sets of cards in play. The first game begins when the dealer turns up the first card. The winner is the first player whose set of cards all match the cards turned up by the dealer and who calls out “bingo.”

5.2.1 (l) (i) Terms and conditions and rules of play for “name the raffle“ lotteries

In addition to the Raffle Licence Terms and Conditions, a licensee conducting the “name the raffle“ lottery must operate the event in accordance with the rules of play. The rules of play are set out on the following page. The municipality must ensure a copy of these rules is supplied with each licence issued.

1. Players must be 18 years of age or older.
2. The minimum price for a set of cards is $1.00.
3. The maximum price for a set of cards is $5.00.
4. The maximum value of prizes awarded per game cannot exceed $10.00. In the event there are multiple winners in a game, the payoff may exceed $10.00. However, there will be a reduction in the number of games remaining in order to remain within the prize payout as authorized on the licence except where there are multiple winners in the last game in a draw.
5. All sets of cards must be purchased prior to the first card being called by the Dealer.
6. The games must be played with a minimum of 4 decks of cards (inclusive of the Dealer’s deck). The Dealer’s deck must have a different back design to the cards sold to the players.
7. The Dealer must announce the number of sets of cards sold prior to calling the first card. The Dealer must ensure that unsold sets of cards are put in a secure place prior to the commencement of the game.
8. Prior to the commencement of the game the Dealer must shuffle the Dealer’s deck of cards so that they are randomly intermixed and offer the stack of cards to any one of the players to cut.
9. The Dealer’s deck must be placed in a Dealers “shoe” or container that will permit one card to be turned over at a time from the top.
10. On completion of a draw, the Dealer will ensure that all sets of cards are retrieved from the players. Upon completion of a review to ensure that all cards have been returned, the sets of cards may be re-sold for the next draw. In the alternative, the licensee may use a different set of cards for the next draw. These cards must have a different back design to those that have already been sold for previous events.
11. It is the responsibility of the licensee to post the time of each draw and the games that are to be held in each of the draws. Details respecting the draws, times of draws, games and rules

pertaining to the “Name the Raffle” Lottery are to be submitted to the licensing authority with the application. The documents as approved by the licensing authority must be posted at the venue of the event prior to the event.

12. The licensee must submit reports on the event using Section 1(d) of the Blanket Raffle Lottery Report.

“Bossy bingo” or “cow patty bingo” is a raffle event conducted using a large area divided into many squares. Participants draw a number representing a square. A cow is then placed in the designated area. The prizewinner is the person holding the number of the square upon which the cow’s bowel movement lands.

Technically, this scheme has the three elements necessary for a lottery scheme: consideration, chance and prize; therefore a lottery licence is required.

A municipality may issue a licence for this type of event should it wish to do so. The municipality must ensure that the licensee is able to comply with the terms and conditions of a raffle licence and is able to ensure the integrity of the event.

The licensee must establish rules for playing the game and determining a winner in a case where more than one square is “marked.” These rules must be approved by the municipality.

5.2.1 (K) Auction-style raffles

An “auction-style” raffle is a raffle in which a series of draws is made during a single event, with one prize for each draw. Elements of the game use terminology and actions reminiscent of an auction, but the game does not involve the purchase and sale of items at agreed-upon prices as in an ordinary auction setting.

In an auction-style raffle, participants “bid” by indicating that they wish to enter the draw. A “bid” is the participant’s entry into a draw. During play, the opportunity to enter a “bid” will be announced. Prior to conducting the draw, the licensee may announce additional opportunities to enter the draw by inviting additional entries in an “auction style”; that is, by soliciting second “bids,” third “bids,” and so on until no further participants want to increase their number of entries for the draw. When no further entries are forthcoming, the opportunity to enter the draw is closed and a draw is made from all tickets entered.

5.2.1 (k) (i) Auction-style raffle rules of play

1. Licensees must require that tickets be used for the draw.
2. Each ticket must have a set price (for example, 50 cents per ticket). The only cost of participating in an auction-style raffle is the cost of entering the draw through the use of tickets.
3. The licensee may use stub or roll tickets. Where events will include multiple draws, the licensee may choose to have a set number of tickets per draw or may choose to allow participants to allocate tickets over a series of draws during the course of the event. Prior to each draw, the type of ticket to be used in the round of play (for example, the colour of the tickets, or the numerical range of the tickets) must be announced.
4. The licensee must announce, prior to the selling of tickets for a particular prize, the value of the prize and how many tickets are required per “bid” to participate in the draw. Participants may purchase as many tickets as they wish. Where a “bid” requires more than one ticket, participants must provide a number of tickets that corresponds to the number of “bids” they seek to enter. Fractional “bids” are not permitted. For example, if a single “bid” requires two tickets, a participant must provide two tickets for a single “bid” and four tickets for two “bids.” In this example, entering three tickets is not permitted.

5. For entertainment purposes only, each participant in an auction-style raffle may be given a “paddle” or other device. Licensees must not sell or otherwise charge any fee whatsoever for a “paddle” or similar device. Paddles are used by the participants to signal to the “Auctioneer,” that is, the person that facilitates each round of play by announcing opportunities to “bid,” that the participant wishes to enter the draw.
6. Admission to an event does not require participation in the auction-style raffle.
7. The Winner is determined by drawing a ticket at random from the container and matching the number of the drawn ticket to a corresponding ticket held by a participant.
8. Several prize items may be offered at the auction-style raffle, with one draw per item.
9. Each prize may consist of a single item or several items bundled as a single prize (for example, a gift basket).
10. The prize items must be in the possession of the licensee before the draws take place.
11. Prize items may be donated to or purchased by the licensee. However, the prizes must comply with the restriction on prizes detailed in 5.1.2 (8).
12. An approximate market value for each prize must be determined before the event. The maximum total prize value may not exceed $10,000.
13. All funds generated by the auction-style raffle go the licensee conducting and managing the event and must be used for the approved purposes detailed in the licence application.

5.2.1 (L) Catch the Ace progressive raffle lottery (non-electronic)

A “Catch the Ace” progressive (accumulating jackpot) raffle lottery is a multiple-draw game in which:

• all ticket holders have a chance to win a prize consisting of 20% of ticket sales for an initial draw;
• the winner of the draw has a chance to win a prize consisting of 30% of ticket sales from each draw held to date, which progresses from draw to draw until the winner of the initial draw selects the Ace of Spades from a regular deck of cards.

If the card selected is not the Ace of Spades, the selected card is removed from the deck and the progres- sive prize portion of the ticket sales for that draw is rolled over into the progressive jackpot for the next scheduled draw. The licensee conducts the scheduled events using the playing cards remaining from the original deck until the Ace of Spades has been selected and the progressive jackpot has been awarded.

The prize structure must be as follows:

• 20% of event ticket sales—awarded to the bearer of the winning ticket at each draw
• 30% of event ticket sales—allocated to the progressive jackpot
• 50% of event ticket sales—retained by licensee, from which all allowable expenses will be paid.

5.2.1 (L) (i) Catch the Ace progressive raffle lottery policies

1. The playing cards from a standard deck of 52 cards (the 2 through to the ace of diamonds, hearts, clubs and spades, totalling 52 cards) are each placed in identical, opaque envelopes and sealed. Those sealed envelopes are shuffled, randomly numbered from 1 to 52 and placed on public display, in a secure fashion, at each draw.
2. As an alternative to using a deck of playing cards, the licensee may also use approved gaming supplies from a registered supplier.
3. Tickets:

• Roll tickets or stub tickets may be used.
• Tickets (serialization) must be unique from draw to draw.
• There must be no duplicate ticket numbers for all draws under a licence. There must be a documented process in place showing how the licensee will ensure there are no duplicate tickets for all draws.
• Tickets are only eligible for the draw for which they are purchased. At the conclusion of the draw, all non-winning tickets must be removed from the container. Non-winning tickets may be destroyed after 30 calendar days.
• Winning tickets must be kept in accordance with the requirements outlined in the Raffle Terms and Conditions.
• The licensee will keep a log of all draws, recording the sequence numbers and other characteristics for all tickets in play.

4. It is not mandatory for the purchaser of the ticket selected at a draw to be in attendance. However:
   1. If the licensee is using roll tickets, the licensee is required to include in the Rules of Play the amount of time within which the winner must claim the prize before another ticket is drawn.
   2. If stub tickets are used, the licensee shall require purchasers to provide their name and contact informa- tion and to indicate in a designated area on the stub the envelope number selected by the purchaser in the event that his or her ticket is drawn. The licensee must also set out a procedure to be followed in the event that that envelope number has already been chosen and is no longer available.
5. Once sales for a draw have closed, a ticket must be selected as the winning ticket for that draw. The number on the ticket will be announced at the draw and the prize shall be awarded accordingly.

6. The licensee must use a container that is large enough to hold all sold tickets or stubs.
7. All prizes must be paid by cheque in Canadian funds.
8. The Rules of Play must be posted at the location of the draw and be readily available to the public.
9. The ConnexOntario name and phone number (1-866-531-2600) must appear on the Rules of Play, in all print advertising and on all stub tickets.
10. Once the Ace of Spades card is selected, the event and licence are concluded. If the licensee wishes to conduct another Catch the Ace event, a new licence must be obtained.
11. Draw Process:
    1. Immediately prior to the draw, the ticket sales for the draw, the draw prize and the current progressive jackpot amount must be announced.
    2. In the event that the Ace of Spades is not drawn, the licensee will immediately destroy the card selected by the winner of the draw.
    3. The licensee must maintain a log to record the destruction of all cards. The log must include the draw date, complete card details and verification by the bona fide member who destroyed the card, and by another bona fide member in charge of the lottery.
12. All draws will be video recorded by the licensee. The following requirements must be met:
    1. Participants will be advised in the Rules of Play that all raffle draws will be video recorded in order to en- sure raffle integrity.
    2. Video recordings must be secured by the licensee and made available to the licensing authority upon re- quest. All video recordings must be maintained for at least 30 calendar days after the draw date, after which they may be deleted or destroyed.
    3. The video recording shall in be high definition (minimum resolution — 720p) in a well-lit environment, have an unobstructed view of all raffle activities and show:
    • selection of the winning draw ticket;
    • selection of the envelope by the bearer of the winning draw ticket;
    • reveal of playing card within selected envelope; and
    • destruction of the playing card.

In addition to completing the required application form, applicants will also submit a proposed draw schedule along with a safety and security plan describing the control measures that will be put in place as the progressive prize amount grows. Control measures should address issues including (but not limited to) how the applicant will address the potential for increased attendance and traffic at the draw venue, and how the money from ticket sales will be secured.

5.2.1 (L) (iii) Catch the Ace progressive raffle lottery terms and conditions

The following Terms and Conditions are applicable to Catch the Ace progressive raffles:

Under a Raffle Lottery Licence:

• Lottery Licence Terms & Conditions 
• Raffle Licence Terms & Conditions 
• Financial Management and Administration of Non-Pooling Bingo Halls Terms and Conditions

The following Raffle Licence Terms and Conditions do not apply to Catch the Ace events:

• Section 4.3 (a) (vii): total number of tickets printed does not have to appear on the tickets.
• Section 7.2 (a) (v): the price of the ticket must be included in all print advertising, but the total number of tickets printed does not.
• Section 8.5 (a) & (b): Ticket sellers are not permitted to be paid a sales commission.
• Section 9.2: Licensees shall keep winning tickets throughout the period of the licence and for reporting requirements. All unsold tickets or counterfoils may be destroyed 30 calendar days after the date of the draw. Winning tickets must be kept in accordance with the requirements outlined in the Terms and Conditions.

Under a Bingo Revenue Model Lottery Licence:

• Charitable Gaming Events Conducted and Managed in Pooling Bingo Halls Terms & Conditions 
• Financial Management and Administration of Pooling Bingo Halls Terms and Conditions

Licensed charities are permitted to accept sponsorship for their electronic raffles in the form of fixed cash or merchandise prizes. Charities must also ensure that sponsorships are clearly communicated to customers. As the amounts received from sponsors become part of the prize board, licensing fees, which are set at one per cent of the prize board, are calculated to include any sponsorship funds.

5.3.1 (a) (iv) Notification Matrix

Any incidents, such as suspected cheating or gaming supply/system malfunctions, occurring before or during the electronic raffle event must be reported by the licensee to the Registrar within a specific timeframe. The Notification Matrix—Electronic Raffles lists all the incident types that must be reported, when and to whom.

5.3.1 (a) (v) Supplier information

In order to assist charities that wish to conduct electronic raffles, a list of registered suppliers and their technical solutions is posted on the AGCO website. As part of their conduct and management responsibilities, it is up to charities to ensure that they are working with a registered supplier and using the approved version of a supplier’s technical solution.

5.3.1 (a) (vi) Financial guarantees

An irrevocable standby letter of credit is required for all fixed-prize electronic raffles. For other electronic raffle types, licensing authorities may require a financial guarantee for prizes.

5.3.1 (a) (vii) Combining online and in-person ticket sales

Licensees have the flexibility to sell tickets for an electronic raffle both in person and online. For an electronic raffle that combines both in-person and online sales, such as a 50/50, licensees must conclude the draw before they can open sales at the same venue(s) for another raffle of the same type that combines in-person and online sales.

5.3.1 (a) (viii) Limit on concurrent online raffles

Licensees may conduct and manage a maximum of four online raffles at the same time. (The term online refers to sales that occur when a customer uses the internet to purchase a ticket.)

5.3.1 (a) (ix) Electronic raffle solutions

There are a number of registered Gaming-Related Suppliers with AGCO-approved electronic raffle solutions that charities may use. Licensees may also develop their own online raffle sales platform. All proposed solutions, including charity-developed sales platforms, are subject to review and approval by the AGCO’s Technical and Laboratory Services.

5.4.1 (A) Sports pools

A sports pool, based on any combination of chance and skill, must not be licensed. The Criminal Code prohibits lottery schemes involving pool selling or bets on any race, fight or other single sporting event or athletic contest.

With the exception of “rubber duck” races, a licensing authority may not issue a licence for any scheme where the winner of a prize is decided on the outcome of a single sporting event, contest or race.

Similarly, sports pools based on a series of sporting events, contests or races are not allowed if the purchaser chooses the team or player or results on which his chances to win are based.

5.4.1 (B) Raffles by “donation”

The use of the word “donation” in lieu of a purchase price for tickets does not alter the fact that consideration is being paid for a chance to win a prize. Accordingly, this type of raffle constitutes a lottery scheme under Section 206(1) of the Criminal Code. A licensing authority must not issue a licence for a raffle in which part of or the entire purchase price of a ticket is a “donation”.

5.4.1 (C) “Scratch and win”

5.13.1 (A) General advertising and ticket sale guidelines

The licensee is responsible for ensuring the accuracy of the information used in its advertising. The licensee should have its advertising materials reviewed by its legal counsel for compliance with all applicable federal and provincial legislation.

A municipality may only approve lotteries within its own boundaries and the Registrar may approve lotteries within Ontario. Therefore:

• raffle ticket orders must not be solicited or accepted from outside Ontario;
• raffle tickets must not be mailed or otherwise distributed to persons outside Ontario; and
• raffle tickets must not be advertised, promoted or marketed to persons outside of Ontario.

See “3.3.0. Advertising licensed lottery events” for further information.

5.13.1 (B) Advertising content guidelines

1. The content of lottery promotion and advertising must not imply that participating in gaming activity promotes or is necessary for:

» financial success;

» social acceptance;

» professional achievement;

» personal success;

» sexual opportunity;

» the fulfillment of any goal; or

» the resolution of financial, social, physical or personal problems

2. With the exception of public service advertising, content must not appeal, either directly or indirectly to persons under the age of 18, or be placed in media targeted specifically at people under the age of 18.
3. Content must not compare one form of gaming to another.

See “3.3.2. Advertising Content guidelines” for further information.

5.13.1 (C) Celebrity advertising

Celebrities and other well-known personalities may endorse or otherwise promote raffles, but only if they provide such assistance to the licensee free of charge.

5.16.1 (A) Houses as prizes

In addition to the general raffle licensing policies, the following policies apply to house raffle applications.

1. As a prize, a licensee may only offer a new home if the home is:

» covered by the Ontario New Homes Warranties Plan Act;

» ready for occupancy prior to the draw; and

» situated in the Province of Ontario.

2. The following additional information is required for house raffle applications:

• an accepted Offer to Purchase/Agreement of Purchase and Sale, including any addenda agreed to by the builder;
• if a house is being donated, a legal document is required showing the terms of the donation;
• a statement of whether or not the house has been completed and if the organization has access to it for the purpose of selling tickets;
• if the house has not been completed: the anticipated completion date, which must be a date before the date set for the draw for that house;
• the closing date for the transfer to the winner;
• the builder’s addendum or appendix with a complete description of the home, site plan and all items included or excluded;
• proof that the house is insured against fire, vandalism, etc.; and
• a statement of who (the donor or licensee, not the winner) will be responsible for other fees incurred, such as legal and title search fees, land transfer tax, retail sales tax and municipal occupancy fees.

3. Licensees offering homes or land as prizes must submit proof of title/deed transfers to the prizewinners as part of the financial report for the lottery.

5.16.1 (B) Motor vehicles as prizes

In addition to the general raffle lottery policies, the following policies apply to all motor vehicle raffle applications:

• The licensee must award the vehicle free of any hidden costs (such as taxes, pre-delivery inspection [PDI] costs and dealer’s fees). This fact must be advertised. The licensee may choose to make the winner responsible for vehicle licence and insurance costs, provided these conditions are fully disclosed.
• The licensee may only award new vehicles, obtained through a registered dealer in Ontario, as prizes for raffle lotteries (except as detailed below). The dealer must be registered through the Ontario Motor Vehicle Industry Council.
• The licensee may not award leased or rental cars as prizes.
• The licensee must inform the winner of the point of delivery of the prize(s). The point of delivery must be in Ontario.
• The licence application must include a purchase agreement or a letter from the dealer indicating the type, model, and options of the car to be awarded and the full retail value of the car, including taxes, freight, PDI costs, duty and any other applicable costs.

5.16.1 (b) (i) Antique motor vehicles as prizes

An organization may offer an antique motor vehicle as a prize in a licensed raffle lottery, provided the vehicle meets the requirements set by the Ministry of Transportation of Ontario (MTO) to be qualified for historic motor vehicle licence plates.

In the interests of consumer protection and to ensure that any advertising represents the true full retail value of the items offered, these types of prizes will be allowed only where the following documents accompany the application:

• a certificate from two independent certified antique appraisers listing the appraised value of the automobile (value based on the lower appraisal) and attesting to its status as an antique automobile;
• proof that the item is insured against theft, fire, and so on;
• a copy of the ownership certificate;
• certification that there are no liens on the automobile;
• a safety certificate; and
• a statement, signed by the applicant’s authorized signing officers, that the applicant will pay any taxes on the transfer of title to the prizewinner.

5.16.1 (C) Ontario Lottery and Gaming Corporation tickets as prizes

Raffle lottery licensees may award Ontario Lottery and Gaming Corporation (OLG) tickets as secondary prizes for raffle lottery events provided that the following conditions are met:

• Any raffle advertising that includes OLG product names or logos must be directed to the OLG for approval. A letter of approval from the OLG must be submitted to the licensing authority.
• The OLG logo must be no more than half the size of the licensee’s logo.
• The prize value of OLG tickets must be based on the face value (purchase price) of the tickets. The maximum value of these tickets must not exceed five (5) per cent of the prize board for the licensed lottery event.

Occasionally, organizations conducting raffle lotteries offer antiques or art objects as the main prize for their event. In the interests of consumer protection and to ensure that any advertising represents the true market value of the item(s) offered, these types of prizes will be allowed only if the following documents accompany the application:

• a certificate from two independent, certified art/antique appraisers listing the appraised value of the object (value based on the lower appraisal);
• proof that the item is insured; and
• a statement of ownership.

5.16.1 (E) Vacations as prizes

Organizations conducting raffle lotteries may offer vacations as prizes, provided the travel agency is registered with the Travel Industry Council of Ontario (TICO). Where vacations are offered as prizes for raffle lotteries, the locations and dates of the arrivals and departures for all portions of the vacation package must be included in the licence application. The summary of the vacation package offered must include a full description of all services, including hotel accommodations, meals, complete travel arrangements including points of departure and entry (which must be in Ontario), limousine services, airline tickets, carriers and boat cruises.

5.16.1 (F) Liquor as prizes

Liquor may be awarded as a prize for a raffle lottery provided that the organization conducting the raffle lottery ensures that:

• any such prize is purchased from the Liquor Control Board of Ontario (LCBO), Brewers Retail (The Beer Store) or liquor manufacturer’s retail store;
• any such prize is awarded only to persons 19 years of age or older; and that
• this condition is disclosed to all ticket purchasers.

5.16.1 (G) Firearms as prizes

Prohibited and restricted firearms as defined in the Criminal Code (Canada) must not be used as prizes for raffle lotteries.

Licensees may only use non-restricted firearms (long guns) such as shotguns and rifles, which are reasonably used for hunting and sporting purposes, as prizes for raffle lotteries provided the following conditions are met:

6.3.1 (A) Examples of acceptable locations

Examples of facilities that may qualify as acceptable locations for a special occasion gaming licence include:

• municipal community centres;
• service club halls;
• church halls;
• banquet halls and ballrooms available for private functions, including those in hotels; and
• convention centres.

6.3.1 (B) Criteria for acceptable locations

In order to be an acceptable location for the conduct of a special occasion gaming licence, a location must meet the following standards:

• The location must comply with all municipal bylaws, including zoning and parking bylaws and fire regulations. The location must also have a public hall licence or authorization for public assembly purposes, including a designation of the maximum number of persons permitted for an assembly.
• The hall must be separated from other activity areas by permanent walls or a floor to ceiling accordion door that locks from the inside.

• The special occasion gaming licence location must have a separate entrance that is not shared by patrons of any other activity conducted on the premises. Patrons of the special occasion gaming event must have direct access to the washrooms and food services. If patrons must pass through other activity areas to reach the washrooms or food services, the location is not acceptable.

• A location must be used primarily for lease or rent to the general public for various functions, such as weddings, parties and meetings. A location that must close down all or part of its regular facility/business in order to hold a special occasion gaming event is not an acceptable location.

• The Registrar may not issue special occasion gaming licence at locations where the owners and/or operators have been charged and/or convicted of gaming-related offences or had their registrations suspended or revoked.

• The Registrar may not issue special occasion gaming licences at locations where owners and/or operators have been charged and/or convicted of liquor-related offences or had their liquor licence suspended or revoked.

• If the applicant proposes to permit the consumption of liquor during a special occasion gaming licence, the applicant should contact the Alcohol and Gaming Commission of Ontario for information regarding liquor licence laws and Special Occasion Permits.

Similar to the seal card game, a “bingo event ticket” game also provides players a chance at a secondary/ special prize. The difference is that these games are conducted in conjunction with licensed bingo events and feature “hold” tickets that contain bingo ball numbers or symbols based on the number of bingo balls being used in the bingo event. The winner of the bingo event ticket game prize(s) is determined by matching the bingo ball symbol(s) on the hold ticket with one or more of the bingo numbers called during a licensed bingo event or dabbing a pattern of bingo ball numbers or symbols on the game ticket during a bingo event.

See “7.4.1(B) Bingo event ticket game policies”, and the Break Open Ticket Licence Terms and Conditions for further information.

For pooling bingo halls operating under the Bingo Revenue Model, see the Charitable Gaming Events Conducted and Managed in Pooling Bingo Halls Terms and Conditions and and Financial Management and Administration of Pooling Bingo Halls Terms and Conditions for further information.

7.1.1. APPROVED BREAK OPEN TICKETS

In order to be approved for sale in Ontario, all break open tickets, including seal card games and bingo event game tickets, must comply with the Registrar’s requirements and standards related to break open tickets, including the Standards for Suppliers of Goods and Services: Break Open Tickets.

Schedules of approved break open tickets are available from the Registrar and can be found on the AGCO website.

7.1.2. KEY DEFINITIONS FOR BREAK OPEN TICKETS

Break open tickets are packaged in “boxes” within “deals” and are identified by “type” and “style.”

Deal: Refers to each separate series of break open tickets with the same serial number.

Box: Refers to a separately sealed box of break open tickets within a deal, as shipped by the Gaming- Related Supplier.

Type: Refers to the number of tickets per deal, the price of each ticket and the total prize value per deal.

Style: Refers to the combination of approved graphics (such as bells, boats or fruit) and prize structure used for the break open tickets. There may be many different styles within a break open ticket type, as approved graphics may be used with any type, and several different prize structures may be approved for each type.

1. In addition to a break open ticket licence(s) for a location(s) in a municipality, a licensee may also have a break open ticket licence issued by the Registrar to sell tickets in conjunction with another licensed lottery event.
2. Licensees selling tickets from locations in municipal boundaries prior to their amalgamation may be permitted to continue sales from those locations for a period not to exceed 18 months. After this time the newly amalgamated organization must conform to the break open ticket licensing policies established by the licensing authority.

See also “2.2.4. Policies: Organizations that amalgamate” for further information.

3. Where there is no Hall Charities Association at a bingo hall, individual licensees may apply to the Registrar for a licence to conduct and manage break open ticket events in conjunction with their regular bingo events.
4. Eligible organizations may apply for a licence to sell multiple ticket types under one licence. This includes tickets from multiple ticket manufacturers. Separate licences are required for each sales location.
5. All tickets sold under the same licence will be imprinted with the same licence number. To differentiate between different ticket types sold under the same licence, a unique identifier is required to be imprinted on the ticket and noted on the licence (for example, licence 12345 distinguishes ticket types by identifying as 12345-a, 12345-b, and so on.)
6. All break open tickets, including seal card games and bingo event ticket games sold in pooling bingo halls operating under the Bingo Revenue Model, must be imprinted with the registration number of the bingo hall, instead of the licence number.
7. The period for a break open ticket licence cannot exceed five (5) years, including any amendments and/or extensions.
8. The licensing authority may apply risk-based criteria to determine whether a licence period may be extended and to determine the length of the licence period. Criteria may include: licensee’s experience with charitable gaming; demonstrated level of compliance with all policies, procedures and applicable terms and conditions; and the licensee’s history of timely and accurate reporting to the licensing authority.
9. If all the tickets are sold before the licence expiry date, the licence will be deemed to have expired.
10. The licensing authority may grant an amendment extending the licence period, provided that:

• all the tickets authorized by the licence have been imprinted with the licence number and name of the licensee but not sold;
• the licensee makes the request for the extension in writing before the current licence expires; and
• the total licence period does not exceed five (5) years.

11. Only one eligible organization may be licensed to sell break open tickets per address, or location at one time.

12. Each separate business in a building, such as a shopping mall, may be considered as a separate location for licensing purposes.
13. The licensee may sell only break open tickets where the types, prize structures and graphics have been approved by the Registrar.
14. The licensee must ensure that different ticket types or styles are not mixed within a single compartment of a transparent container or break open ticket dispenser.
15. The licensee is permitted to carry over partially sold deals from one licence period to the next. Once tickets have been carried over from one licence period to the next, they are prohibited from being carried over to any further subsequent licence periods. The carry-over of any unopened boxes from one licence period to another is prohibited. There is no limit on the number of tickets that can be carried over to a new licence period as long as they come from an opened deal of tickets that has already been put into sale.
16. Any unsold tickets remaining at the end of the subsequent licence period that have been carried over from one licence period to the next must be removed from sale and then the deal collapsed at the end of the subsequent licence period. Tickets must be retained and destroyed in accordance with the Registrar’s policies.

See Section “7.9.1. Retention and destruction of break open tickets” for further information.

17. A deal of tickets must not be split between dispensers or containers.
18. Licensees may sell break open tickets from any location on the premises indicated on the licence.
19. Licensees must use break open ticket dispensers approved by the Registrar. The dispensers must be manufactured and supplied by registered suppliers.
20. Licence fees may be refunded once a licence has been issued if the licensee can demonstrate that:

• the break open tickets have not been imprinted; or
• the break open tickets were damaged, lost or destroyed as a result of circumstances beyond the licensee’s control and the licensee can account for all sold, damaged, lost and remaining tickets.

21. A licensing authority may not issue a break open ticket licence for events to be conducted on any conveyance that moves or is capable of moving including boats, trains and airplanes.

See “7.5.1. Municipal licensing policies”, and “7.6.1. Provincial licensing policies” for further information.

The following policies apply specifically to seal card games:

1. A seal card game may only be conducted and managed in conjunction with a licensed bingo event, licensed charitable gaming event or at premises used by members of a service club.
2. The licensee must only put a deal of seal card game tickets out for sale if there is a reasonable expectation that the deal will sell out during the course of the bingo event or, in the case of service club premises where bingo is not being played, that the deal will sell out within one operating day.
3. The licensee must remove the seal card window to reveal the seal card winner(s) as soon as the entire deal of seal card tickets has been sold.
4. It is not necessary for a player to be present at the time the seal card window is revealed. If a player who has a hold ticket will not be present at the time the winning numbers or symbols for the seal card prize is revealed, he/she must leave contact information with the licensee.
5. Some seal card games have rules of play that allow the licensee to choose between different options of how the game is played and the special prizes that are awarded. For example, the licensee could have the option of opening one seal on a seal card to reveal a $1,000 special prize or two seals to reveal two $500 prizes.
6. Where the licensee has options for how prizes are to be awarded, one option must be chosen and the licensee must ensure that it is posted and announced to players before starting the sale of the deal of tickets for that game.

See the Break Open Ticket Licence Terms and Conditions for further information.

For Hall Charities Associations in pooling bingo halls operating under the Bingo Revenue Model, see the Charitable Gaming Events Conducted and Managed in Pooling Bingo Halls Terms and Conditions.

7.4.1 (B) Bingo event ticket game policies

The following policies apply specifically to bingo event tickets:

1. A bingo event ticket game may only be licensed in conjunction with licensed bingo events conducted in registered charitable gaming sites or premises exempt from registration and may only be licensed by the Registrar.
2. A bingo event ticket game must be played and completed within one bingo event. If all bingo event tickets have not been sold during the bingo event, the licensee must submit a discrepancy report to the Registrar that sets out the number of tickets in the deal, the number of unsold tickets, prizes awarded and total gross receipts within 30 days of the event.
3. When the bingo event ticket game is won by dabbing a pattern of bingo ball numbers or symbols, the player must be present in order to win the bingo event ticket game prize.
4. Some types of bingo event ticket games have rules that allow the licensee to choose how the game is played. For example, the licensee could use bingo numbers called during the bingo event and have players dab a pattern of bingo ball numbers or symbols on the game ticket or simply open a seal card to determine the winner of the bingo event ticket game prize.
5. Where the licensee has options for how prizes are to be awarded, one option must be chosen and the licensee must ensure that it is posted and announced to players before starting the sale of the deal of tickets for that game.

See the Break Open Ticket Licence Terms and Conditions for further information.

2. A municipality may set its own licence fee, provided it does not exceed the amount prescribed by the Registrar. Municipalities may choose a set fee or a fee based on a percentage of the prize board, provided that the fee does not exceed the maximum prescribed by the Registrar.
3. Local charities and Provincial Break Open Ticket (PBOT) licensees are permitted to sell Break Open Tickets (BOTs) from more than one sales location within a municipality or area covered by a given licensing authority, subject to any limits imposed by the licensing authority.
   
   It is expected that limitations imposed by licensing authorities on the number of BOT licences issued to any eligible organization will be the result of detailed analysis and only used where the limitation is warranted (for example, where a waiting list of new eligible organizations awaiting BOT sales locations exists).
   
   The Registrar retains the authority to issue PBOT licences. However, the Registrar may place a limit on the number of retail locations permitted per PBOT licensee in a municipality or area covered by a given licensing authority if a similar limit, that is warranted, has been placed on the number of retail locations that may sell BOTs for each charity by the local licensing authority.
4. If a licensee wishes to change the ticket type, or add a new ticket type to be sold, the licensee must apply for an amendment to the existing licence. Licensees do not have to apply to the licensing authority for an amendment in the following circumstances:

• The licensee wants to cease selling a specific ticket type or style mid-licence; or
• The licensee sells out of a particular ticket type mid-licence and does not wish to order more inventory of that ticket type for the remainder of the licence period.

However, the licensee may choose to apply for an amendment to remove that ticket type from the licence in order to reduce the reporting requirement. Otherwise, the licensee must report nil sales for the remainder of the licence period.

5. The licensee must notify the municipality in writing if it wishes to make any changes to the licence. The licensee cannot make any changes to the conduct and management of ticket sales unless it has first received approval in writing.
6. Municipalities may only issue a licence on a form provided by the Registrar. The licence must state:

• the name and address of the licensee;
• the ticket type(s);
• identification of each ticket type with a unique identifier
• the number of deals approved, if applicable;
• the name and address of the location at which tickets will be sold;
• the duration of the licensing period;
• the name(s) of the registered Gaming-Related Suppliers supplying the break open tickets and any other gaming-related equipment or services to the licensee.

7. An eligible organization wishing to sell break open tickets at a special community event must obtain prior written approval from the board governing the event. The letter must state that the board has not, and will not apply, for a break open ticket licence to be conducted and managed at its event, and it will not participate in ticket sales or share in the net proceeds of the break open ticket lottery. (See also “7.7.1(C) Special occasions” for further information.)

7.6.1 (A) Licences issued to Hall Charities Associations in non-pooling bingo halls

The following licensing policies apply to break open ticket licences issued by the Registrar to Hall Charities Associations in non-pooling bingo halls:

1. Where a Hall Charities Association (HCA) exists, only the HCA may apply to conduct a break open ticket event in conjunction with a licensed bingo event. Organizations must be members of the HCA in order to participate in the sale of tickets and share in the proceeds.
2. An HCA may use bona fide members of the licensee managing and conducting the bingo event to sell break open tickets at a bingo event, or utilize employees of the Operator of the bingo hall that are registered as Gaming Assistants under the Gaming Control Act, 1992 to sell the tickets.
3. An HCA that applies to sell break open tickets must comply with the following policies:

• The HCA must enter into a written agreement with the Operator of the bingo hall, outlining the roles and responsibilities of each party.
• The agreement with the Operator of the bingo hall must be signed by each organization that is a member of the HCA.
• Break open tickets ordered by an HCA may not be sold during any lottery event held by organizations that are not members of the HCA.
• A licence permitting an HCA to sell a variety of ticket types is valid for a period of up to five (5) years or until the licensee sells the number of boxes permitted under the licence, whichever is less.
• An HCA must submit a report of ticket sales every three (3) months.

7.6.1 (B) Provincial break open ticket (PBOT) licensing  policies

In order to sell break open tickets throughout the province, an eligible organization must demonstrate that it provides a direct benefit to communities across Ontario and its services are accessible throughout the province.

Examples of programs ineligible to receive PBOT proceeds include:

• programs that supplement or are provided to other organizations that deliver programs and services to residents of Ontario; and
• competitions, contests and scholarship programs.

The following policies apply to PBOT licence applications:

1. To qualify for a PBOT licence:

• The organization’s provincial mandate must be stated in its governing documents.
• The organization must have a volunteer Board of Directors, with representation from all regions of the province.
• The organization must have the structure, financial resources and membership capacity to provide services province-wide, to all Ontario residents.
• The organization must have a demonstrated track record of providing direct services province-wide.
• The organization must have a presence (usually through local chapters or branches) that encompasses all regions of Ontario and allows it to provide direct services to individuals.
• A “presence” usually refers to an organization’s physical presence. For example, an organization may maintain a web site, but this alone is not enough to qualify it as having a province-wide presence for lottery licensing purposes. However, an organization’s programs may also be delivered to areas of the province where the organization has no physical presence. For example, if particular programs and services cannot be brought to the client, then the client may be brought to the program.

2. Local charities and PBOT licensees are permitted to sell BOTs from more than one sales location within a municipality or area covered by a given licensing authority, subject to any limits imposed by the licensing authority.
   
   It is expected that limitations imposed by licensing authorities on the number of BOT licences issued to any eligible organization will be the result of detailed analysis and only used where the limitation is warranted (for example, where a waiting list of new eligible organizations awaiting BOT sales locations exists).
   
   The Registrar retains the authority to issue PBOT licences. However, the Registrar may place a limit on the number of retail locations permitted per PBOT licensee in a municipality or area covered by a given licensing authority if a similar limit, that is warranted, has been placed on the number of retail locations that may sell BOTs for each charity by the local licensing authority.

3. In an amalgamated municipality, the Registrar may permit an organization to maintain its status quo by selling tickets at each of its previous locations in the former municipalities, provided:

• circumstances and market conditions warrant multiple locations; and
• the licensee can justify the need.

The Registrar will permit licensees selling from locations in an amalgamated municipality to continue sales from their former locations for an 18-month period. After 18 months, they must comply with the new municipality’s licensing policies.

7.6.2. PROVINCIAL LICENSING PROCEDURES

7.6.2 (A) Licences issued by the Registrar

Eligible organizations applying for a break open ticket (BOT) lottery licence from the Registrar must follow the procedures listed below. If the organization is an HCA in a non-pooling bingo hall, it must also observe the additional procedures set out in 7.6.2(B).

For pooling bingo halls operating under the Bingo Revenue Model, see Chapter 10, “Bingo—In Pooling Bingo Halls,” for further information.

Eligible organizations applying for a provincial break open ticket (PBOT) licence must follow the procedures outlined in 7.6.2(C).

1. The applicant must submit a fully completed application, on the form issued by the Registrar. The applicant must include all supporting materials with the application. The licensing authority may request additional information or documents.
   For first time applicants, please refer to the documents outlined in “7.1.0. Introduction”.
2. Cheques and money orders must be made payable to the Minister of Finance.
3. An eligible organization wishing to sell break open tickets at a designated fair or exhibition must obtain prior written approval from the board governing the event. In the approval letter the board must state that it has not, nor will it be applying for a break open ticket licence to be conducted and managed at its event, and it will not participate in ticket sales or share in the net proceeds of the break open ticket lottery. This letter of approval must be attached to the licence application.
4. The break open ticket licence must state the type(s) of ticket and, if applicable, the number of deals authorized to be sold under the licence.
5. An eligible organization must include on the application each type of ticket it would like to sell. If the licensee wishes to change the ticket type(s), add new ticket type(s) or sell additional deals, it must apply for an amendment.

6. The licensee must notify the Registrar in writing if it wishes to make any changes to the information on the original application. The licensee cannot make any changes to the conduct and management of ticket sales unless it has first received approval in writing.

7.6.2 (B) Licences issued to HCAs in a non-pooling bingo hall

In addition to the general requirements set out in 7.6.2(A), HCAs applying for break open ticket lottery licences in a non-pooling bingo hall must observe the procedures listed below.

An HCA must submit the following additional information with its application:

• a copy of the written agreement between the HCA and the Operator of the bingo hall;
• a list of all member organizations, with the names and signatures of an authorized representative from each, plus the signatures of two authorized representatives from the HCA;
• for first-time applicants, the HCA`s constitution and bylaws, including provisions for the handling of break open ticket sales, signed by at least three (3) current officers; and
• any changes to the HCA constitution and bylaws, signed by at least three (3) current officers.

7.6.2 (C) Provincial break open ticket (PBOT) licensing procedures

1. The eligible organization must submit a fully completed application, on the form issued by the Registrar, accompanied by the following items:

• complete copies of the applicant’s governing documents (letters patent, any supplementary letters patent, constitution, bylaws, charter, trust deed, memorandum or articles of association);
• a complete copy of the Notification of Registration letter from the Canada Revenue Agency (where registered) and any documentation that the Canada Revenue Agency has supplied to the organization (for example, any terms of registration or changes in status);
• complete copies of the two (2) most recent Registered Charity Information Returns (form T3010) and Public Information Returns as submitted to the Canada Revenue Agency;
• a copy of the organization’s verified financial statements for the two (2) previous fiscal years and a copy of the current operating budget;
• copies of the organization’s monthly bank statements for the last fiscal year and up to the current date;
• a copy of the organization’s last two (2) annual reports;
• a list of the organization’s local chapters or member/affiliated agencies and their addresses, including a detailed outline of the legal, administrative and financial relationships between the applicant and all chapters or member/affiliated agencies;
• a list of the organization’s Board of Directors and the cities in which they reside;
• a detailed outline of the programs and services that the organization provides to residents of Ontario, how these programs and services are delivered across the province and the costs incurred in delivering the programs and services;
• an outline of sales tracking procedures, including a list of ticket sales locations and their respective registration numbers, noting the municipality for each location;
• a list of bona fide members who will be assisting with the break open ticket administration/sales; and
• the type and style or styles of tickets to be ordered under the licence (no ticket samples are required).

2. If an application is incomplete, the Registrar will send the applicant a letter outlining the deficiencies in the application and requesting the required documents.
3. Prior to selling tickets in a municipality, the organization must notify the municipality of its intention to sell break open tickets at a specific location and provide it with a copy of the licence.
4. Once a PBOT licence has been issued, the licensee must provide the following information to the Registrar:

• break open ticket lottery reports;
• when changes occur, an up-to-date list of all locations where the licensee sells or intends to sell break open tickets;
• an annual, up-to-date list of the Board of Directors;
• any changes to governing documents as they occur; and
• verified or audited annual financial statements.

5. A licensee must pay the prescribed PBOT licence fee. The amount owed is based on the tickets ordered in the previous quarter. The cheque for licence fees must be made payable to the Minister of Finance.

7.6.3. ADMINISTRATIVE RESPONSIBILITIES OF HCA IN A NON-POOLING BINGO HALL

When an HCA wishes to sell multiple ticket types under a single licence, it must enter into an agreement with the Operator of the bingo hall, outlining a division of roles and responsibilities. Only the HCA may perform certain duties required for the conduct and management of the lottery event.

7.6.3 (A) Duties an HCA must perform

• supervising both hall sales and cash counting;
• determining and purchasing the types and styles of tickets to be sold;
• completing and filing the lottery reports;
• maintaining a designated trust account to administer the BOT lottery;
• keeping financial records;
• distributing proceeds to the HCA members on a pro rata basis; and
• advertising, marketing and promoting ticket sales.

If an eligible organization proposes to sell break open tickets at a location other than a bingo hall or a premises it owns or leases for its own charitable activities, the location must be registered as a Seller under the Gaming Control Act, 1992. The Seller’s registration number must be included with the licence application.

In order to sell break open tickets at a registered Seller location, the licensee must enter into a contract with the Seller. This contract must contain a termination clause allowing either party to terminate the contract upon at least 90 days written notice prior to licence expiry, to be effective upon licence expiry. The termination clause must also provide for immediate cancellation of the contract should the organization’s licence or the Seller’s registration be suspended or revoked. In the event that a licence is suspended or revoked, the Seller may enter into a contract with another licensee.

The licensee may pay the Seller the allowable commission for the sale of break open tickets. The licensee may choose to request its net proceeds (gross proceeds minus sales commissions) when the break open tickets are delivered to the Seller. Alternatively, the licensee may choose to allow the Seller to pay the net proceeds for all break open tickets within 30 days after they have been delivered for sale.

If a licensee cancels a contract with a Seller and the Seller does not sell all the deals but has paid the full net proceeds, the licensee must refund to the Seller the full amount of the net proceeds for the unsold deals.

For purposes of reconciliation, the Seller is responsible for the security of the break open tickets once the seal on the deal package is broken. The Seller must return all the unsold deals and partial deals to the licensee, to allow the licensee to do a full reconciliation.

7.7.1 (C) Special occasions

A municipality may issue break open ticket licences allowing eligible organizations to sell break open tickets at special community events of limited duration, such as community festivals, regardless of whether or not they have licences to sell tickets at break open ticket Seller locations, provided that:

• the applicant has obtained the written approval of the board of the event, signed by an authorized board member;
• only one licence for a special occasion is issued per organization, per year;
• only one organization is licensed during the community festival regardless of the size of the event; and
• the licence is not issued for more than five (5) consecutive days.

An eligible organization with a current break open ticket licence may apply to be licensed to sell tickets at a community festival in one of two ways:

7.8.1 (A) Break open ticket dispensers

Break open ticket dispensers are electrical or mechanical devices, and do not include “containers” as defined in 7.1.2, used to dispense break open tickets. They may be used in bingo halls, Seller locations registered to sell break open tickets under the Gaming Control Act, 1992 and at other locations exempt from registration, provided the following conditions are met:

1. Break open ticket dispenser models must be approved by the Registrar and supplied by a registered Gaming-Related Supplier.
2. The registered Gaming-Related Supplier must be able to provide proof, in writing, that the Registrar has approved the break open ticket dispenser.
3. A licensee may choose to purchase or rent a dispenser from a registered Gaming-Related Supplier.
4. If the licensee chooses to purchase a dispenser, the licensee must enter into a purchase agreement with a manufacturer that is a registered Gaming-Related Supplier.

If the licensee chooses to rent a dispenser, the licensee must enter into a written contract with the registered Gaming-Related Supplier. Any rental contract must state the terms and duration of the rental and outline what will happen in the event that the licence is suspended, revoked or cancelled.

5. The licensee must pay for the purchase or the rental of a break open ticket dispenser with a cheque from the lottery trust account.
6. The maximum allowable expenses set by the terms and conditions allow licensees the option of expensing an additional amount prescribed by the Registrar towards the purchase or rental costs of a break open ticket dispenser.

7.8.1 (B) Seal card display

The Break Open Ticket Licence Terms and Conditions require that the seal card be prominently displayed identifying the dollar value of the seal card prizes available to be won.

7.8.1 (C) Bingo event ticket game poster

The Break Open Ticket Licence Terms and Conditions require that a bingo event ticket game poster be displayed to identify the dollar value of prizes available to be won.

7.8.1 (D) Bona fide members

In order for a lottery scheme to be legal it must be conducted and managed by bona fide members of the licensed organization. The licensee must designate at least one bona fide member to be responsible for the conduct of the break open ticket lottery. If the tickets are to be sold by an HCA in a non-pooling bingo hall, the association must designate a minimum of two bona fide members.

The licensee must submit the names of the designated bona fide members to the licensing authority and must be prepared to provide documentation proving that the designated individuals are bona fide members and not members of convenience. The designated members must be at least 18 years old. (See also “3.5.2 Bona fide members”.)

9.1.1.AUTHORITY TO LICENSE BINGO

9.1.1 (A) Provincial licensing authority

The Order-in-Council gives the Registrar sole authority to issue lottery licences allowing eligible organizations to conduct and manage:

• bingo events conducted in conjunction with other licensed lottery events;
• bingo events with prize boards over $5,500;
• bingo events conducted in an unorganized territory, on Crown lands or in some First Nations communities; and
• bingo events where a prize or prizes not awarded at one event may be added to the amount of the prize to be awarded at a subsequent event or events.

9.1.1 (B) Municipal licensing authority

The Order-in-Council authorizes municipalities to issue licences permitting eligible organizations to conduct Regular Bingo games with maximum prize boards of up to $5,500.

9.1.2. BINGO HALL REGISTRATION

The Registrar has established criteria and procedures for opening, upgrading, relocating and reopening bingo halls. 

9.1.2 (A) Bingo locations that must be registered

The Gaming Control Act, 1992, governs the registration of Operators of bingo halls, which include:

• charitable gaming sites where four (4) or more bingo events are conducted in any seven-day period (formerly Class A and Class B bingo halls).
• charitable gaming sites where no more than three (3) events are conducted in any seven-day period (formerly Class C bingo halls).

9.1.2 (A) (I) BINGO LOCATIONS THAT MAY REQUIRE REGISTRATION

Licensees that rent out their premises and/or equipment to another licensee may require registration as prescribed by Regulation.

1. Licensees may not permit their bona fide members or persons acting as runners, cashiers or in other capacities for the licensed organization to play bingo while they are conducting the bingo, or play any other games held in conjunction with their event.
2. Employees who are involved in the conduct of the bingo events, whether they are registered or not, may not play bingo at that hall at any time.
3. Members of a licensee’s Board of Directors, including a HCA, may not personally benefit or profit in any way from a lottery event conducted and managed by the licensee or play bingo at that hall at any time.
4. Bingo hall employees and managers cannot act as bona fide members for the conduct of any licensed bingo event or a break open ticket lottery held in conjunction with the bingo event.

This section contains information on municipally issued licences for the following types of bingo games and events:

1. Regular Bingo
2. Merchandise Bingo
3. Loonie Pot Bingo
4. Decision Bingo
5. Table Board Bingo
6. Media Bingo.

9.3.2 (A) Regular Bingo

Pursuant to the Order-in-Council, a municipality may issue licences allowing eligible charitable organizations to conduct Regular Bingo events with prize boards that do not exceed $5,500.

The licensee’s game schedule may include any combination of fixed prize and variable prize games. Variable prize games must show a minimum and maximum prize payout for each game on the schedule.

If all the games on a licensee’s schedule are variable prize games, the maximum prizes to be awarded cannot exceed 60 per cent of gross sales for each game. The total prizes paid out can never exceed the licensed prize board.

9.3.2 (B) Merchandise Bingo

“Merchandise Bingo” is a bingo game or event where the prize board consists of items of merchandise. An eligible organization may be licensed to conduct Merchandise Bingo as a regular bingo event, as part of a Regular Bingo event or at a “black tie event”.

At a “black tie event”, participants play by invitation only. They pay a fixed amount to participate in the event. The entrance fee covers the cost of playing bingo.

Boards of designated fairs or exhibitions, or concession operators at designated fairs or exhibitions, may apply to the Registrar to conduct Merchandise Bingo events during the fair or exhibition.

See also “Chapter 8: Fair and Exhibition Gaming Event”.

The following licensing policies apply to Merchandise Bingo games conducted as a Regular Bingo event, as part of a regular bingo event or at a “black tie event”:

1. The retail value (including taxes and duties) of the merchandise offered at Merchandise Bingo events cannot exceed $5,500.
2. A receipt or invoice is required for any prize with a retail value of $500 or more, including applicable taxes.
3. The prizes must be awarded without encumbrances of any kind. For example, the prizes cannot be leased.
4. If two or more players have a winning combination on the same number called, the game must continue to a full card. If the game is still tied after a full card has been called, the tied participants must be given new cards to play a supplementary game. The supplementary game must be conducted in the same manner as the tied game, until a winner is declared. These rules must be clearly announced before the game begins.
5. An organization may be licensed for only one Merchandise Bingo event at a time.

9.3.2 (C) Loonie Pot Bingo

A Loonie Pot Bingo is a special, variable prize game within a Regular Bingo game schedule. Bingo patrons pay a dollar to have their bingo paper stamped for the designated Loonie Pot Bingo game. Before the game begins, a number is selected, announced and put back into the machine. If a player with stamped bingo paper calls bingo and their winning number arrangement contains the pre-selected number, they also win the Loonie Pot Bingo prize. (Note that “Loonie Pot Bingo” is different from “Loonie Progressive Bingo”; see “9.4.1(G) Loonie Progressive game”, and “9.4.2(E) Loonie Progressive game” for more information.)

9.3.2 (c) (i) Loonie Pot Bingo licensing

The following licensing policies apply to Loonie Pot Bingo:

1. The maximum prize payout is $100. Any surplus collected for the Loonie Pot Bingo prize becomes part of the net proceeds to be used for the charitable objects or purposes as approved on the application for licence.
2. The licensee must determine which game will be played for the regular game prize plus the Loonie Pot Bingo prize, and must have the game approved by the licensing authority as part of the game schedule.
3. The Loonie Pot Bingo prize cannot be carried over to another bingo event. The licensee must establish a procedure for awarding the Loonie Pot, if the winner of the designated game is not eligible for the Loonie Pot prize.
4. The Loonie Pot Bingo prize must be part of the up to $5,500 prize board for the regular game schedule.
5. Only one Loonie Pot Bingo game is allowed per Regular Bingo event.

6. The terms and conditions for the Regular Bingo and the general licensing policies regarding variable games apply to the Loonie Pot Bingo game.

9.3.2 (D) Decision Bingo

Decision Bingo differs from Regular Bingo in two ways:

• players use chips to purchase bingo paper, and
• during each game, players have the option of ending play or continuing to play by using chips to ante.

Players purchase chips at $0.25 each for (a) buying regular bingo paper in single strips and/or books for an amount authorized by the licensing authority, and (b) upping the ante.

Before the start of each game, the caller announces the number of cards in play. After three numbers have been called, the players must decide whether or not to continue playing. If a player continues, the player must ante one chip ($0.25) after each three numbers have been called. The game continues until a one-line bingo winner is declared. The prize awarded is the total value of the antes received during the game, up to a limit of $100.

9.3.2 (d) (i) Decision Bingo licensing

The following licensing policies apply to Decision Bingo:

1. Municipalities may license Decision Bingo events under a Regular Bingo licence, for prize boards up to $5,500.
2. Decision Bingo may only be played on a program made up entirely of Decision Bingo games.
3. The municipality must issue a licence for a specific time period and must indicate the maximum number of games allowed during that period.
4. Applicants for Decision Bingo licences must submit all documents required for Regular Bingo events.
5. Municipalities may charge a Decision Bingo licence fee of up to three (3) per cent of the maximum prizes to be awarded.
6. Decision Bingo may not be conducted in conjunction with any other bingo event.

• the number of players for each game;
• the number of cards sold for each game; and
• the amount of antes paid for each game.

9.3.2 (E) Table Board Bingo

Table Board Bingo, also known as “shutter board” bingo, is a bingo game played on a mechanical table board bingo device. This device contains permanent bingo cards and shutters. A player marks a number by covering it with a shutter. The prize amount is variable and is determined by the number of boards in play.

A municipality may license an eligible organization to conduct Table Board Bingo as a Regular Bingo event or as part of a Regular Bingo event, where the total prize board for the event does not exceed $5,500.

See “9.4.1(E) Table Board Bingo”, for licences issued by the Registrar.

The following policies apply to municipally issued licences for Regular Bingo events that are made up entirely of Table Board Bingo or include Table Board Bingo games as part of the Regular Bingo prize board:

1. No limit is set on the number of Table Board Bingo games that may be played within a licensed event, provided that the prizes awarded do not exceed the licensed prize amount.
2. If a Regular Bingo event is made up entirely of Table Board Bingo games, the prizes paid out cannot exceed 60 per cent of the gross proceeds for the event, up to a maximum of $5,500. If the municipality has set a lower prize limit for Regular Bingo events, the prizes cannot exceed that amount.
3. Prize amounts for Table Board Bingo games must be based on a percentage of the revenue collected for each game. While the percentage may vary from game to game, the Table Board Bingo prizes paid out cannot exceed 60 per cent of the total revenues collected for the licensed bingo event. The percentage payout for the Table Board Bingo game must be noted on the game schedule and in the licence application.
4. A Table Board Bingo event must be conducted during the time appearing on the licence.
5. A licensee may not hold a Super Jackpot game in conjunction with a Regular Bingo event made up entirely of Table Board Bingo games.
6. All other policies for Regular Bingo events licensed by a municipality, as outlined in Section 9.3.1, apply to Table Board Bingo games.

Pursuant to the Order-in-Council, a municipality may issue licences allowing eligible organizations to conduct a Media Bingo event with prize boards that do not exceed $5,500.

Media Bingo is operated through the public media including radio, newspaper, or television. Media Bingo differs from Regular Bingo in that the licensee may only sell bingo cards that have a clearly visible, consecutively numbered serial number. This is for tracking purposes, as bingo cards are usually distributed to local merchants who sell the bingo cards on behalf of the licensee organization. The licence number must appear on all Media Bingo cards.

Persons who have covered the specified arrangement of numbers required to win would call a local telephone number to register their “bingo” and provide their card to the licensee in order to collect their prize.

Radio Bingo

Games may be aired on the radio in one of two ways:

1. on a half- to one-hour program, where numbers are called and all games are completed during this time period; or
2. for a period of two to four weeks on the radio where a few numbers are drawn and called daily at a specified time (for example, three numbers a day are called until a winner is declared).

Newspaper Bingo

The bingo numbers are published in a local newspaper and run for a period of time, usually two to four weeks in length, with a few called numbers being published each day. The game proceeds until a winner has been declared.

Television Bingo

This type of bingo is usually aired over a local cable television station in a half-hour or hour-long program. The winner is the first person to phone in and claim a bingo during the broadcast.

9.3.2 (f) (i) Media Bingo licensing policies

The following licensing policies apply to Media Bingo:

1. Municipalities may license Media Bingo events for prize boards of up to $5,500.
2. An eligible organization may be licensed for only one Media Bingo event at a time and the licence cannot be issued for more than six (6) months.
3. If a licensee wishes to sell its bingo cards in municipalities outside of the one where the bingo is being managed and conducted, the licensee must obtain a letter of approval from each municipality in which it proposes to sell bingo cards.
4. Licensees must conduct the Media Bingo in accordance with the Media Bingo Licence Terms and Conditions.

2. Only the Registrar may issue a lottery licence for a Special Bingo event. When considering an application, the Registrar takes marketplace conditions into consideration. Licences may only be issued three to four months before the event date.
3. Licences are limited to one (1) licence per 30-day period, per 100-km radius. The 30-day period is not based on the calendar month.
   ​except

• Special Bingo events are limited to one licence per 15 days, per 30-km radius, in the following areas:
  • Durham, York, Peel, Halton, Haldimand-Norfolk, Niagara, Hamilton-Wentworth (known as the Golden Horseshoe), and
  • in the Ottawa-Carleton area, including the amalgamated municipalities of Kanata, Nepean, Ottawa, Vanier and Gloucester.
• Special Bingo events are limited to one licence per 15 days, per 15-km radius in Toronto.

4. Special Bingo events licensed in the Golden Horseshoe or Ottawa-Carleton region will not influence the licensing of events in the adjacent 100-km radius.
5. To be eligible for a Special Bingo licence, an eligible charitable organization cannot have a Regular Bingo licence with event dates within three (3) months (before and after) of the date of a Special Bingo event, regardless of where the Regular Bingo event is held.
6. The licensee is permitted to sell tickets that allow customers to prepay for bingo paper before the date of the event.
7. The Registrar may issue a licence permitting an eligible organization that does not normally conduct Regular Bingo to conduct and manage a Special Bingo event.
8. No more than 12 Special Bingo licences may be issued in each calendar year for events to be conducted and managed in one bingo hall.
9. If the organization licensed to conduct the Special Bingo event agrees, the HCA may conduct and manage bingo games for which it receives licences from the Registrar during the Special Bingo event.
10. Once the Registrar approves a Special Bingo event date, it cannot be changed.
11. The Registrar will authorize one (1) event date per licence.
12. The licensee must provide a letter of credit for all Special Bingo events where the prize board is $10,000 or more. The letter of credit must have an expiry date of at least 45 days after the event date.
13. The Registrar requires a minimum of 45 days to process an application for a Special Bingo event licence.

Example: Horizontal Super Jackpot Licences

A, B, C = Separate Horizontal Licences

# = Number of Balls called in Super Jackpot Game

* = Super Jackpot Winner

- A “vertical” licence allows licensees to offer Super Jackpot games only at Regular Bingo time slots that have the same Super Jackpot prize board. With a “vertical” licence, the Super Jackpot is carried over to the next time slot with the same prize board, until it is won. For example, it can be carried over from the 2:00 p.m. slot to the 7:00 p.m. slot, providing they have the same Super Jackpot prize board.

Example: Vertical Super Jackpot Licence

V = Vertical Super Jackpot Licence

# = Number of Balls called in Super Jackpot Game

* = Supper Jackpot Winner

9.4.1 (E) Table Board Bingo

Table Board Bingo may be licensed by the Registrar in one of the two following ways:

1. The Registrar may license HCAs to conduct Table Board Bingo games, in conjunction with a licensed Regular Bingo event. The Table Board Bingo prizes are in addition to the maximum Regular Bingo prize board.
2. The Registrar may license HCAs to conduct Table Board Bingo games in conjunction with Special (Monster) Bingo events. The Table Board Bingo prizes are in addition to the Special (Monster) Bingo prize board.

9.4.1 (e) (i) Provincial licensing policies for Table Board Bingo

The following policies apply to Table Board Bingo events licensed by the Registrar:

1. No limit is set on the number of Table Board Bingo games that may be played under a licence issued in conjunction with a Regular or Special (Monster) Bingo event. However, the total value of the prizes awarded for the Table Board Bingo event cannot exceed 60 per cent of the licensed prize board for the Regular or Special Bingo event.
2. Only one Table Board Bingo event may be licensed per Regular or Special Bingo event time slot.
3. The licensee must offer variable prize amounts for Table Board Bingo games, based on a percentage of the revenue collected for each game. While the percentage may vary within the licensed Table Board Bingo event, the total amount of prizes paid out cannot exceed 60 per cent of the total revenues collected for the event. The percentage for the Table Board Bingo game must be noted in the licence application and on the game schedule.
4. Table Board Bingo games will be licensed for a maximum period of six (6) months.
5. The HCA must apply for and administer the Table Board Bingo licences. The following policies apply:

• A principal officer of each member organization must sign the licence application.
• The HCA must:
  • set up a separate designated lottery trust account to administer Table Board Bingo games;
  • combine the net proceeds from all Table Board Bingo games and divide the proceeds monthly among member organizations on a pro rata basis, determined by the number of regular events held by each organization;
  • maintain a separate ledger for each Table Board Bingo licence;
  • prepare a separate Table Board Bingo report for each Table Board Bingo licence; and
  • submit a monthly Table Board Bingo activity report to the Registrar by the 15th day of the following month.

6. If an HCA is applying to conduct a Table Board Bingo event in conjunction with a Special Bingo event, it must obtain the written support of the Special Bingo licensee.

7. A Table Board Bingo event must be conducted in a fixed time slot. That is, the licensee must hold the event in the same time slot each day and cannot move it to another time slot.
8. A Table Board Bingo event held in conjunction with a Regular or Special Bingo event must be completed during the time allocated for the Regular or Special Bingo event.
9. The Table Board Bingo licence application must specify the days and time slots when each Table Board Bingo event will be conducted.
10. Each Table Board Bingo event must be conducted at the time slot specified on the licence.
11. A licensee may not hold a Super Jackpot game in conjunction with a Regular Bingo event made up entirely of Table Board Bingo games.
12. The prescribed licence fee for Table Board Bingo is payable in the form of a cheque made payable to the Minister of Finance.

9.4.1 (e) (ii) Approved Table Board Bingo devices

The following policies apply to the use of Table Board Bingo devices:

1. Licensees must use Table Board Bingo devices approved by the Registrar, or that meet the criteria established by the Registrar.
2. Licensees must obtain Table Board Bingo devices from Suppliers that are approved by the Registrar and registered under the Gaming Control Act, 1992.

See 9.3.2 (E), “Table Board Bingo,” for information about municipal Table Board Bingo licensing.

9.4.1 (F) Progressive Bingo game

A Progressive Bingo game is a separately licensed bingo game, held in conjunction with a Regular Bingo event, where the prize amount increases from event to event. If the progressive prize is not won at

one event, it is added to the amount of the prize to be awarded at the next Progressive Bingo game. The progressive prize increases at each successive event until the specified limit is reached or until the progressive prize is won.

The licensee must award a consolation prize at every event whether or not the main Progressive Bingo game prize is won. The structure of the consolation prize must be described on the game schedule of the Regular Bingo event during which the Progressive Bingo game will be conducted.

The dollar amounts of the Progressive Bingo game prize and the consolation prize must be announced prior to the commencement of each game.

9.4.1 (G) Loonie Progressive game

The Loonie Progressive game is a separately licensed game that is played during the Regular Bingo event where the prize amount increases from event to event. If the Loonie Progressive game prize is not won, it is added to the amount of the prize to be awarded at the next Loonie Progressive game event. The Loonie Progressive game prize is allowed to increase at each successive event to a maximum of $5,000 or until the prize is won. Players must purchase a Loonie Progressive game ticket and paper for the Regular Bingo event in order to play the Loonie Progressive game. Licensees may offer the Loonie Progressive game in two game formats each of which is governed by its own set of Rules of Play.

9.4.1 (g) (i) Rules of Play

The Loonie Progressive game must be conducted and managed in accordance with the Rules of Play that are attached to and form part of the Loonie Progressive Game Licence Terms and Conditions:

• Loonie Progressive Rules of Play: Game “A”, and
• Loonie Progressive Rules of Play: Game “B”.

9.4.1 (g) (i) 1 Game process: Game A

Prior to the commencement of each licensed Regular Bingo event, a bingo ball is randomly drawn from the bingo blower. The number on the drawn bingo ball becomes known as the “Indicator Number.”

The “Indicator Number” (bingo ball) must be clearly shown and announced to all players in the hall and returned to the bingo blower before the bingo session begins. If the Indicator Number is drawn, the bingo ball drawn immediately after the Indicator Number is the Loonie Progressive game number.

The player or players who have a valid Loonie Progressive Game “A” ticket and complete the specified arrangement of numbers when the Loonie Progressive Game Number is called win the Loonie Progressive Game “A” prize. Whether or not the Loonie Progressive Game “A” prize is won, no amount may be awarded as a consolation prize.

The Loonie Progressive game prize must be calculated and awarded in accordance with the Loonie Progressive Rules of Play Game “A” attached to and forming part of the Loonie Progressive Game Licence Terms and Conditions.

9.4.1 (g) (i) 2 Game process: Game B

In order to play Game B, players must purchase a Loonie Progressive Game “B” ticket. Unlike in Game A, there is no indicator number drawn.

The Loonie Progressive Game “B” prize is awarded to the player who completes the specified arrangement of numbers on the bingo paper within a designated number of calls and has a valid Loonie Progressive Game “B” ticket.

• a letter of support from the local licensing authority;
• copies of the game schedule for the licensed Regular Bingo event in conjunction with which the Loonie Progressive game is to be conducted and managed; and a void cheque from the Loonie Progressive game lottery trust account.

On the financial report licensees are required to specify the ticket numbering system used for the Loonie Progressive Game “B” tickets. Any tickets that are void must be accounted for on the financial report and the original void tickets must be submitted with the financial report.

The following policies apply to an HCA with respect to Loonie Progressive game licences in a non-pooling hall:

• A principal officer from each participating member organization of the HCA must sign the Loonie Progressive game licence application.
• The HCA must use a separate lottery account designated as a “Trust Account” by the bank or other financial institution to administer their Loonie Progressive game licences and use and distribute proceeds in accordance with the banking requirements set out in the Regular and Special Bingo Licence Terms and Conditions.
• The HCA must maintain a separate ledger for each Loonie Progressive game licence.
• In its application, the HCA must specify the days and time slots for each Loonie Progressive game.
• The licensee must conduct and manage the Loonie Progressive game only during the Regular Bingo games specified on the application for licence.
• The HCA must prepare a separate Loonie Progressive game report for each Loonie Progressive game licence.
• The HCA must submit a prescribed financial report to the Registrar by the 15th day of the following month.

9.4.2. PROCEDURES FOR LICENCES ISSUED BY THE REGISTRAR

9.4.2 (A) Regular or Special bingos

The following procedures apply to bingo licences issued by the Registrar: Applications must include:

1. A completed application on a form issued by the Registrar, signed by at least one (1) of the designated members-in-charge and two (2) principal officers of the organization.
2. The prescribed licence fee in the form of a cheque made payable to the Minister of Finance.
3. A game schedule outlining:

» the bingo games to be played;

» the winning arrangement of numbers for each game;

» the value of the prize for each game;

» the minimum and maximum payouts for variable prize games;

» the prices of the bingo paper;

» the total value of all prizes offered for the bingo event;

» any special purchase provisions for used bingo paper exchanged for new bingo paper (for example, $0.25 instead of $0.50); and

» the start and end time for the time slot during which the Regular Bingo event and any licensed lottery events/games conducted in conjunction with it will be held.

4. The name and address of the premises where the bingo event is to be held.

First-time applicants must allow a minimum of 45 days for the Registrar to process their licence application.

The Registrar will:

• notify an applicant if its application is deficient, requesting the missing documents; and
• communicate only with the appropriate contact person of the HCA as listed on the application form (for example, a member-in-charge or a principal officer of the HCA), regarding applications, licences and amendments.

9.4.2 (B) Super Jackpot Bingo

Super Jackpot licence applicants must comply with the following procedures:

1. In addition to the requirements for Regular or Special Bingo event licences, applicants for Super Jackpot licences must submit the following information:

• copies of the game schedule for the Regular Bingo event during which the Super Jackpot game will be conducted;
• game schedules of all bingo events licensed in the hall;
• a list of the bingo events during which Super Jackpot games will be played, on a weekly basis, including the day and time of each event, indicating any days the bingo hall will be closed for holidays during the licensing period;
• a list of all organizations that are members of the HCA; and
•  the signature of an authorized principal officer from each member organization, verifying that he or she has read, understands and agrees to comply with the Super Jackpot Bingo Terms and Conditions.

2. The Registrar may also request that the HCA submit a copy of its current membership, constitution and bylaws.

9.4.2 (C) Table Board Bingo

Organizations submitting Table Board Bingo applications to the Registrar must comply with the following procedures.

1. In addition to the requirements for Regular or Special Bingo event licences, Table Board Bingo licence applicants must submit the following information:

• copies of the game schedule for the licensed Regular or Special Bingo event specifying:
  • the set percentage used to calculate the variable prizes for the individual Table Board Bingo games;
  • which events are made up entirely or partly of Table Board Bingo games; and
  • the start and end times for the Regular or Special Bingo time slot;
• game schedules for all municipally-licensed bingo events in the hall;
• a list of the bingo events during which Table Board games will be played, on a weekly basis, including the day and time of each event, indicating any days the bingo hall will be closed for holidays during the licensing period; and
• the signature of an authorized principal officer from each member of the HCA verifying that he or she has read, understands and agrees to comply with the Table Board Bingo Terms and Conditions.

2. The Registrar may also request that the HCA submit a copy of its current membership, constitution and bylaws.

9.4.2 (D) Progressive Bingo game

Progressive Bingo game licence applicants must comply with the following procedures:

1. In addition to the requirements for Regular or Special Bingo event licences, applications for a Progressive Bingo game licence must also include:

• which Progressive Bingo Game Rules of Play will apply, “A”, “B”, “C” or “D”;
• a list of the days and the time slots when the Progressive Bingo will be conducted;
• copies of the game schedule for the Regular Bingo event during which the Progressive Bingo game will be conducted; and
• the Progressive Bingo game lottery trust account number.

2. Where the application is for Rules of Play “A” the applicant must specify:

3. Where the applicant is an HCA applications must also include:

» a list of all organizations that are members of the association; and

»   the signature of an authorized principal officer from each member organization, verifying that he or she has read, understands and agrees to comply with the Progressive Bingo Game Licence Terms and Conditions.

4. The Registrar may also request that an HCA submits a copy of its current membership, constitution and bylaws.

9.4.2 (E) Loonie Progressive game

1. Applications for a Loonie Progressive game licence must include:

• a completed application on a form issued by the Registrar, signed by at least one of the designated members-in-charge and two principal officers of the organization;
• the licence fee in the form of a cheque made payable to the Minister of Finance;
• the name and address of the premises where the Loonie Progressive game event is to be held;
• a list of all Regular Bingo session start times at which the Loonie Progressive game will be conducted;
• copies of the game schedule for the Regular Bingo event, clearly identifying those games where the Loonie Progressive game will be managed and conducted.

2. Where the applicant is an individual charity the application must also include the account number of the designated bingo trust account that will be used to administer the game.
3. Where the applicant is an HCA in a non-pooling bingo hall applications must also include:

• a list of all organizations that are members of the association;
• the account number of the designated Loonie Progressive game lottery trust account; and
• the signature of an authorized principal officer from each participating member organization, verifying that he or she has read, understands and agrees to comply with the Progressive Bingo Game Licence Terms and Conditions.

4. First-time applicants must also include:

• a sample copy of the two-part Loonie Progressive game ticket; and
• a void cheque from the trust account that will be used to administer the Loonie Progressive game.

5. For reporting purposes:

• a separate Loonie Progressive game report must be prepared for each Loonie Progressive game licence; and
• the ticket numbering system used on the Loonie Progressive game ticket must be submitted with the financial report. Any tickets that are void must be accounted for on the financial report and the original void tickets must be submitted with the financial report.

9.5.1 (A) Super Ball Bingo

Super Ball Bingo is a Regular Bingo game where the prize value is based on a dollar amount multiplied by the number called from a designated ball.

Super Ball Bingo may only be licensed if:

1. the prize value is based on an amount multiplied by a number drawn and called before the game starts; or
2. before the game starts, the caller announces:

» a minimum and maximum potential prize payout, and

» the rules for determining the prize (for example, an amount multiplied by the last or first number called).

9.5.1 (B) “Pay as you play” bingo

“Pay as you play” bingo (or “walk-in” bingo) refers to a way of playing bingo, rather than a specific type of game. At “pay as you play” bingo, patrons purchase bingo paper for only the games they wish to play and are not required to buy bingo paper for the whole event.

“Pay as you play” bingo games may be licensed, provided the following conditions are met:

1. The bingo games must be conducted and managed according to a structured game schedule that includes a cap on the prizes to be awarded for each game.
2. The licensee must set up internal financial controls to reconcile all the transactions involved in the conduct of the bingo event.

4. The licensee is responsible for the following financial functions:

» supervising the handling of all revenues generated from its own licensed events;

» paying expenses, including hall rental, advertising and reimbursement for bona fide member expenses; and

» setting up and maintaining the lottery trust account(s), including depositing all incoming monies.

5. The licensee is responsible for creating an official record of the game by recording the numbers called. The numbers may be recorded by electronic verifying equipment, videotaping or handwriting.
6. The licensee must resolve any conflicts by referring to the official record.

9.6.1 (B) Tasks that may be carried out by the Operator

1. The Operator of the bingo hall may prepare a draft game schedule, suggested prize allocation and suggested bingo paper prices for review and final approval by the licensee.
2. Bingo hall employees may check and validate a patron’s bingo paper once “bingo” has been called. However, the licensee’s designated person in charge is responsible for making the decision to recognize a winner, including in the case of a dispute, as outlined in Section 9.6.1 (a)(6).
3. The Operator may place bingo paper orders, store bingo paper and monitor inventory.
4. In addition, the licensee may delegate the following responsibilities to the Operator:

» selling bingo paper and tracking sales;

» cash counting and reconciliation; and

» responding to customer complaints.

9.6.2. STAFFING BINGO EVENTS

Each licensee is responsible for deciding how to staff its bingo events, as long as the minimum of three (3) bona fide members of the licensed organization are present to conduct and manage the event.

1. In addition to three (3) bona fide members, licensees may staff their events with any combination of:

1. bona fide members and full-time employees of the charitable organization:
   • The organization’s full-time employees may volunteer to assist at bingo events, provided that their primary duty is not providing gaming services.
2. employees of the bingo hall:
   • The organization may negotiate with the Operator to provide registered staff for certain services such as calling the game or selling break open tickets.
3. runners employed by the bingo hall:
   • The licensee may choose to negotiate with the Operator to provide all the runners. In this case, the licensee and the Operator may share the staffing costs for the runners as permitted by the terms and conditions.
4. volunteers, who may be members of the licensees in the HCA or family, friends or volunteers from other member organizations, who receive no reimbursement for out-of-pocket expenses.

The licensee must keep a minimum of 60 per cent of the Base Amount and pay the Operator either a maximum of 40 per cent of the Base Amount, or up to 15 per cent of the gross receipts, whichever is less.

9.6.3 (B) Where the Operator supplies only the runners or only the bingo caller

The licensee must keep a minimum of 60 per cent of the Base Amount and pay the Operator either a maximum of 40 per cent of the Base Amount or 14 per cent of the gross receipts, whichever is less.

9.7.3. ADVERTISING AND PROMOTION CONTENT

The content of all bingo advertising and promotion, including graphics, must comply with the policies outlined in “3.3.2. Advertising Content guidelines”, and the policies listed below:

1. All “event specific” advertising must state:

» the name of the eligible charitable organization conducting the event, and

» the lottery licence number(s).

2. Licensees must not combine prize values for more than one event to create the impression of a large single prize board.
3. The terms and conditions of the licence prohibit promotional or advertising material on bingo paper, unless it promotes the licensee and is placed by the licensee.

9.7.4. JOINT MARKETING PLANS

The licensees in an HCA may decide to market their events together or in conjunction with the Operator of the bingo hall. Each licensee who wishes to participate must consent in writing to the marketing plan. Licensees may develop only one joint marketing plan per hall. A licensee may choose to opt out of the joint marketing plan and conduct its own advertising and promotion.

The licensees must develop a joint marketing plan through the HCA. If the Operator is sharing the cost of the plan, the Operator will be involved in the development of the plan as well.

The joint marketing plan must outline:

• the proposed advertising and promotion plans;
• the estimated timeline for implementation;
• the projected costs;
• the cost sharing proposal; and
• a description of the expected outcome or benefit of each proposed activity.

Joint advertising costs must be shared between the HCA and the Operator on a 60/40 (HCA/ Operator) basis. The licensee or HCA must contribute its 60 per cent from the up to two (2) per cent it is allowed to spend for advertising. The two (2) per cent must cover the total amount of a licensee’s advertising and promotional activity, including amounts spent independently or jointly.

See “9.7.5. Setting aside funds for advertising and promotion” for further information.

9.7.5 (A) Licensees

Licensees may set aside an amount of up to two (2) per cent of the Regular Bingo and Table Board Bingo prize board for advertising and promotion activities and up to two (2) per cent of the actual prizes awarded from their Super Jackpot, Progressive Bingo Game and Loonie Progressive Game events.

Members of the HCA who are participating in the joint marketing plan as described in 9.7.4 must submit the agreed upon amounts to the HCA.

Licensees who participate in joint advertising may also conduct their own independent advertising plan, provided they have funds remaining within the allowable limits.

9.7.5 (B) Operators of bingo halls

No limit has been set on the amount an Operator of a bingo hall can spend on its own independent advertising and promotional activities.

When an Operator is participating in joint advertising and/or promotion with an HCA, the Operator’s contribution is limited to 40 per cent of the entire cost of the activities.

9.7.6. DESIGNATED TRUST ACCOUNT FOR ADVERTISING EXPENSES

Licensees who advertise and promote their events independently must deposit funds, up to the prescribed limits, in a separate designated trust account used solely for advertising expenses. Each licensee member of an HCA must submit a report to the HCA outlining:

• the cost of advertising and promotion in the previous quarter;
• the amount of money remaining in the account; and
• a plan for returning excess funds to the licensee’s lottery trust account and to the Operator of the bingo hall.

9.7.7 (A) Hall Charities Associations (HCAs)

HCAs must provide member organizations and the Operator of the bingo hall with a quarterly report, including:

• total advertising and promotion expenditures during the previous quarter;
• total disbursements of unused funds returned to the member organizations and the Operator during the quarter;
• the total remaining accumulated advertising and promotion funds; and
• plans for returning excess funds to the member organizations and the Operator, if required.

At any time, an HCA may return accumulated, unused advertising and promotion funds to the Operator and licensees. The amount returned must be based on the amounts contributed by the individual licensees and the Operator.

9.7.7 (B) Licensees

Licensees who are carrying out independent advertising and promotion activities must submit quarterly reports on these activities to the HCA.

9.7.8. BINGO ADVERTISING AND PROMOTION ACTIVITIES

9.7.8 (A) Giveaways

Licensees and Operators may offer giveaways of non-gaming products to customers and prospective customers. The following policies apply to giveaways:

• A giveaway may be in the form of a coupon that may be redeemed for merchandise or a discount on an item. Coupons cannot be redeemed for cash.
• Any restrictions on the redemption of a coupon, such as when or what it may be redeemed for, must be stated on the coupon.
• Items to be used as giveaways may be donated by third parties (someone other than the licensee or the Operator) in exchange for promotional considerations only. No other forms of payment are permitted.

• Only licensees may stage promotional contests in the form of a bingo or break open ticket game;
• Operators may host other types of promotional contests including those that extend across more than one bingo hall.

A third party or an Operator may donate prizes to be given away as part of an Operator or licensee- run promotional contest in exchange for promotional consideration only. No other form of payment is permitted. Operators and licensees may not contract with a third party to offer inducements, such as gifts or the chance to receive a gift, to play games of chance. Operators and licensees must ensure that all promotional contests comply with the relevant municipal, provincial and federal legislation.

9.7.8 (C) Customer loyalty programs

9.7.8 (c) (i) Programs

Operators and/or licensees may establish customer loyalty programs that reward customers for their patronage, based on the frequency of their visits. A “visit” is defined as one session of not less than 1.5 hours. Customers may redeem their accumulated loyalty points for rewards in the form of giveaways of non-gaming products. Customer loyalty points cannot be redeemed for cash.

If customer loyalty programs are part of a joint marketing plan between licensees and the Operator of the bingo hall, the licensees’ share of the costs, including administration and rewards, must fall within the prescribed limits for advertising and promotion.

Customer loyalty programs may be shared across charitable gaming sites, including those belonging to different Operators, and across geographic/municipal boundaries.

If the organization discontinues the program or ceases operation, the program will constitute a liability, based upon points and/or rewards earned by customers. An organization offering a customer loyalty program must be able to fund this liability.

Customer loyalty programs must be pre-approved by the Registrar in writing. Licensees and/or Operators must submit a detailed proposal containing:

• a description of how the program will function;
• the role and responsibilities of each party participating in the program;
• a description of how the points will be tracked (for example, manually or through an automated tracking system);
• a detailed description of each reward, its retail dollar value and its designated point value;
• the redemption value of each point awarded;
• a plan for funding the liability, in the event of a closure or bankruptcy;
• the proposed cost sharing arrangement, if any, between the Operator and licensees/HCA; and
• the written agreement of the Operator and/or HCA.

9.7.8 (c) (ii) Customer tracking systems

Licensees and Operators may use customer tracking systems to record the information necessary to operate their customer loyalty programs. The tracking system may be as simple as punch cards or as sophisticated as electronic cards. In most cases, the suppliers of the customer tracking systems will not be required to register under the Gaming Control Act, 1992. However, the Registrar may require that a supplier be registered under the Act in order to contract with an Operator and/or licensee to track points or guarantee liability.

The Registrar will make registration decisions on a case-by-case basis, prior to granting program approval. Also, at any time the Registrar may require that a supplier be registered.

9.7.8 (D) Direct mail to existing customers

Licensees and Operators may use direct mail advertising to communicate with existing customers only. The mail must be addressed to the intended recipient. The licensees/ Operator must compile a formal mailing list of the names and addresses of actual customers at that bingo hall. The list must be available for inspection by the licensing authority.

9.7.8 (E) Gift certificates

Licensees and Operators may sell gift certificates or offer them as promotional items. These gift certificates may only be redeemable for cash or non-gaming products. Each gift certificate must state its restrictions, such as what it may be redeemed for, when it may be used and its expiry date. The cost of a gift certificate must be the same as its redemption value.

Gift certificates produced by a licensee may only be sold during that licensee’s events. This must be stated on the certificate.

As gift certificates are the equivalent of cash, they represent a liability for the issuing organization. Licensees and Operators must:

• reserve sufficient funds to redeem all gift certificates in circulation;
• set up accounting practices and procedures to ensure that their financial statements reflect gift certificates in circulation; and
• institute security measures, such as serial numbers and original signatures, to validate gift certificates.

Licensees and Operators who intend to sell gift certificates must develop a policy outlining:

• how the program will operate;
• the security measures;
• restrictions on redemption;
• a plan to address liability for outstanding gift certificates; and
• any other outstanding issues.

While the Registrar does not have to approve the policy or the accounting measures in advance, the licensee or Operator must be able to provide them for inspection or audit purposes.

9.7.8 (F) Advertising outside the bingo hall

The Registrar permits three types of advertising outside the bingo hall:

1. Shared cost/joint event-specific and non–event specific advertising
2. Non–event specific only advertising
3. Event-specific only advertising

9.7.8 (f) (i) Shared cost/joint event-specific and non–event specific advertising

For advertising that contains both event-specific and non–event specific advertising, a licensee or an HCA may share the cost with an Operator of a bingo hall. Such advertising may contain, for example, information about specific games to be played and general information about the hall, including promotional activities.

When licensees or HCAs and Operators wish to engage in such joint advertising, they must develop a joint marketing plan, as outlined in Section 9.7.4. and make it available upon request by a licensing authority.

9.7.8 (f) (ii) Non–event specific only advertising

Operators and licensees/HCAs may engage in non–event specific advertising, either jointly or independently.

9.7.8 (f) (iii) Event-specific only advertising

Only licensees, either individually or through a HCA, may engage in event-specific only advertising.

Up to one (1) per cent of the gross Super Jackpot receipts, break open ticket receipts, Table Board Bingo receipts, Progressive Bingo game receipts, Loonie Progressive game receipts and up to one (1) percent of the gross pooled bingo receipts may be used to pay for bookkeeping and administrative costs, (including HST) associated with each type of lottery. The HCA must pay for these costs from the HCA’s share of the net proceeds. Only actual expenses may be charged. The one (1) per cent is a maximum allowable expense and must be supported by invoices. Funds to pay for administrative costs may not be pooled into a separate account.

The HCA cannot pay any of the one (1) per cent allowed for bookkeeping and administrative tasks to:

• Operators of bingo halls;
• any individuals or companies that do not operate at arm’s length from the Operator;
• members of the HCA’s Board of Directors; or
• cover legal fees.

9.8.1 (C) Transportation to bingo events

Operators and licensees may contract with transportation companies to bring customers to a bingo hall only under special circumstances and with the prior written approval of the licensing authority. The following policies apply to transportation to bingo halls:

• Both the licensee and the Operator of the bingo hall should agree that there is a need to arrange and provide the transportation;
• Where the route crosses one or more municipal boundary, all municipalities involved must approve this arrangement in writing;
• Transportation arrangements for a licensee may only be approved on an event-by- event basis;
• Operators and licensees may not compensate transportation providers on the basis of the number of players brought to the hall, the amount the players spend or lose, or the amount of time spent in the hall;
• Operators and licensees may provide directly to passengers coupons, contest entries, or other in-hall giveaways;
• Under no circumstances can transportation providers sell gaming products or provide a “package deal” that includes gaming products; and
• Transportation providers such as buses and taxis that deal directly with the public for the sole purpose of picking customers up, taking them to the bingo hall and returning them at the end of the evening do not require municipal pre-approval unless there are other restrictions that the municipality has imposed.

10.2.2 (A) Overview: Bingo game flexibility framework for pooling halls

A key component of the framework is that it allows for flexibility in designing games and game schedules as the charities, with the advice of the hall, best see fit to meet their market needs. However, recognizing that accountability and public confidence in the games must be maintained, the following set of guidelines may be used to assist in game development and as a review tool for the licensing official for determining appropriate game schedules. If a licensing official receives an application for a bingo game that he or she is not familiar with, the official must first ensure that the bingo game in question is one for which a licence is available.

10.2.3. GUIDELINES FOR PERMITTED GAMES

10.2.3 (A) Base for bingo and game flexibility

• Games must be conducted using a fixed combination of numbers and/or symbols to a maximum of 90. Examples: B,I,N,G,O, and numbers one (1) to seventy-five (75), or numbers one (1) to ninety (90), or numbers one (1) to eighty (80).
• Customers may choose the numbers or symbols to appear on their bingo paper provided that specific controls have been implemented to track all numbers in play.
• Programs may include any number of games or combination of games.

10.2.3 (B) Prizes

• Prizes may be fixed, variable, progressive or a combination. (Example: variable prizes could include using the value of the final number called when a bingo game is won as the multiplier to determine the total value of the prize awarded.)
• Games may include non-fixed prize payouts and have no guaranteed prizes provided that specific controls have been implemented.
• There are no restrictions on minimum or maximum payouts per game/event (that is, minimum prizing may be set out in the house rules).
• There are no restrictions on the base amount for the purpose of developing the prize for any game, including progressive-type games (that is, seeding of prize pots).
• Prizes may increase by percentages or a set amount.

10.2.3 (C) Win based on pattern

• Winning combinations to achieve bingo may be based on a pattern or combinations such as fixed or rotating symbols or full card.
• Games may include wild numbers provided that specific controls have been implemented to track all numbers in play.

10.2.3 (D) Pre-calls

Pre-called games are bingo games where a large number of calls are required to determine a winner, so some numbers are called at the beginning of the event to allow the game to be played more quickly. Pre- called games are usually games that will offer larger prizes and are often referred to as ``Special`` games. Sealed bingo cards must be used for pre-called games.

• There is no restriction on the number of pre-calls allowed provided only sealed bingo cards are used and no ancillary prize (line prize) is awarded.
• Buy-back cards may be offered at a reduced price provided sealed cards are used and proper controls have been implemented to identify and track the card.

10.2.3 (E) U Pick game

The U Pick game (also known as “pick a bingo” or “do-it-yourself bingo”) allows players to choose the numbers on their game cards. The following procedures must be followed for this game to be approved on the schedule:

• Paper may only be sold in sequential order and only from a stationary location; floor sales are not permitted.
• The name of the bingo hall must appear on the paper.
• A breakdown of eligible tickets in play for each specific game must be provided to the caller prior to the start of each U Pick game (for example, 001 to 120).
• The licensee’s portion of the bingo card must be separated and bundled for each game and retained for a period of at least 30 days from the event.

• Games may be based on achieving a winning combination within any number of ball calls.
• In the case of a progressive game the number of ball calls may increase until the prize is won provided the manner in which it increases is applied consistently throughout the duration of the progressive game.
• Increasing the number of ball calls may be based on different factors such as time period elapsed, wagering level achieved or prizing level reached.
• Games may be based on obtaining a winning combination containing a certain number which may be determined as the number following an indicator number or some other means (also allows new factors such as colours to establish distinctions for tiered prizing).

10.2.3 (G) Exit strategy/determination of winner

• An exit strategy or manner in which the game is guaranteed to conclude must be identified.
• The conclusion may be based on a specified time period, a prize level being reached or the game may be designed in such a fashion as to guarantee a conclusion. (Example: a game based on the number of ball calls that increase would be guaranteed to conclude at some point however a game based on an indicator number would require a conclusion point to be identified as either a prize maximum or a pre-established must-go date.)

10.2.3 (H) Additional guidelines

• Numbers in play must be determined using bingo balls or bingo playing cards in accordance with the terms and conditions.
• All games must be played on paper, laminated paper, hard card, plastic cards or through a table board device.
• Bingo must not be played solely on a Personal Bingo Verifier (PBV). (See “10.10.1(e) Personal bingo verifiers (PBVs)”, for more information.)
• All prizes must be awarded in cash, merchandise or a combination of the two.
• There are no minimum time periods required between sessions.
• There is no minimum or maximum number of games that may be played per session.
• Multiple sessions may be played in separate areas within the same bingo hall.
• Overall bingo prize board across all games conducted and averaged over each quarter must not exceed the maximum average of wagering prescribed by the Registrar.
• Monthly interim reports must be submitted in order to identify any potential issues with reaching the maximum prize board percentage prescribed by the Registrar.

• a Charitable Gaming Summary form
• a Charitable Gaming Spreadsheet
• signed Member Declaration forms
• Game Schedules
• Game Rules
• House Rules.

Step 3.0: Package received

Upon receipt of all of the documentation noted in step 2.0 above, the municipal licensing authority is responsible for:

1. Fully reviewing the CGAFs, including conducting eligibility reviews as required in order to issue the individ- ual charity authorizations. All charitable gaming authorizations that the municipal licensing authority issues must be sent to the HCA Administrator to be posted at the bingo hall.
2. Reviewing the supporting documentation (Gaming Summary Package) and recording all municipal authori- zation numbers that it has issued onto the Charitable Gaming Spreadsheet.
3. Returning the following package of information to the Bingo Hall Charity Association for submission to the AGCO.

• a Bingo Hall charity Association form
• a Charitable Gaming Spreadsheet
• signed Member Declaration forms
• Game Schedules
• Game Rules
• House Rules.

Step 4.0: HCA administrator submit gaming summary package to AGCO

HCA Administrator required to complete Bingo Hall Charity Association Licence application to the Registrar.

Step 5.0: Bingo lottery events conducted

10.3.2. OVERVIEW: ROLES AND RESPONSIBILITIES OF MUNICIPAL LICENSING AUTHORITY AND REGISTRAR

Step 3: Bingo Hall Charity Association Report

The HCA Administrator compiles the individual Event Reports on behalf of the member organization into a Bingo Hall Charity Association Report. The report must be submitted, to both licensing authorities, 30 days following month-end and include the following information:

• wagering for each type of lottery
• prizes for each type of lottery
• all gaming and non-gaming revenues
• authorization fees for the month
• out-of-pocket expenses for each event
• shortage (if any) for each event
• total deposits for the period
• administrative expenses paid in the month
• HST and any other applicable taxes paid in the month
• other revenue from Operator
• amount of overall revenue paid to Operator
• list of members of HCA and their share of net proceeds for the month
• marketing fund information.
• where American currency is accepted, the date of the transfer of accumulated American funds from the American currency account to the Canadian currency account, the exchange rate and the premium or loss on the transaction (see “3.6.5. Lottery Trust Accounts for American Currency”).

This report, along with the Operator Report (see item 4), must be filed with the municipal licensing authority and the Registrar.

• The municipality uses this information to monitor wagering activities and charity disbursements.
• The Registrar uses this information to ensure that the prize board has not exceeded the maximum prize board percentage prescribed by the Registrar (see “10.7.2. Maximum prize board” for further information).

Step 3.A: Provincial licence fee

The provincial licence fee is prescribed by the Registrar and is calculated as a percentage of gross wager on bingo, break open tickets and raffles. The fee must be submitted along with the Bingo Hall Charity Report on a monthly basis.

Step 4: Operator Report

The Operator Report must be completed by the Operator of the bingo hall and submitted to the HCA Administrator on a monthly basis.

10.10.1 (A) Out-of-pocket expenses

The licensee may reimburse bona fide members for “out-of-pocket expenses” that are related to the charitable gaming event. These bona fide member expenses may include items such as meals,

transportation and babysitting expenses. Bona fide members may be reimbursed up to $20 per event, with receipts. Reimbursement of out-of-pocket expenses for volunteers is not permitted.

10.10.1 (B) Municipal fees

The licensing authority may charge fees not to exceed the amounts prescribed by the Registrar.

The fee, collected by the licensing authority, is submitted by the HCA Administrator on behalf of each licensee as part of its application package.

The HCA Administrator may pay the fee either by one cheque or individual cheques from HCA members.

The Registrar’s fee has been prescribed as a percentage of the gross wager (actual monies wagered) on bingo and break open ticket events.

The Registrar collects licence fees on a monthly basis in arrears.

The fee is reported on and submitted with the Bingo Hall Charity Association Report.

10.10.1(D) Marketing fund

An amount of eight (8) to twelve per cent of all Bingo Win (gross bingo wagering minus prizes) must be set aside for a marketing fund within the hall (see “10.6.1. Revenue splits”, Figure B).

The purpose of the fund is to support the establishment of a marketing plan and the marketing activities it calls for. There must be joint decision making between the licensees and Operator to determine how best to spend this revenue.

The revenues for the marketing fund must be deposited into a designated marketing fund trust account.

Licensees must ensure that the HCA follows the terms and conditions prescribed by the Registrar for the administration of the marketing fund.

10.10.1 (E) Personal bingo verifiers (PBVs)

A personal bingo verifier (PBV) is a hand-held device that individual bingo players may use to track and verify numbers as they are called by the bingo caller during the bingo game. Under no circumstances does a PBV replace the conventional method of playing bingo with bingo paper and dabbers; rather, it is meant to assist players in keeping track of numbers that have been called.

No prize is paid to a player unless that person has dabbed, at minimum, the winning combination of numbers or symbols required to win on bingo paper prior to calling “bingo”.

• bingo must be played using bingo paper;
• while PBVs may be used by players to keep track of numbers called, players must dab their paper contemporaneously with the numbers being called (licensees should allow a moment for players to ensure that all numbers have been dabbed);
• prizes must not be paid unless the winning combination of numbers or symbols has been dabbed on the bingo paper;
• all bingos must be verified on paper and not through the use of a PBV; and
• lease, rent or purchase of equipment (PBVs) must be from suppliers that are registered under the Gaming Control Act, 1992.

See the Charitable Gaming Events Conducted and Managed in Pooling Bingo Halls Terms and Conditions.