Could a Washington nonprofit run a casino-style fundraising event without a gambling license in 1978?

Plain-English summary

A Washington senator asked whether a nonprofit formed by a political campaign committee could hold a “Reno night” without a State Gambling Commission license. The AG assumed, without deciding, that the corporation qualified as a bona fide nonprofit organization. Even on that assumption, it concluded in 1978 that a statutory “fund-raising event” required a license.

The key distinction was between an event category and individual games. RCW 9.46.030(3) allowed qualifying organizations to conduct bingo, raffles and amusement games without a license only under its detailed conditions. It did not list the separate “fund-raising event” category, which RCW 9.46.020(23) defined with Gambling Commission authorization and licensing. Meeting conditions for unlicensed individual games did not itself exempt the event category.

“this subsection of the law does not sanction the conduct of a fund-raising event, even by a bona fide charitable or nonprofit organization, without obtaining a license from the State Gambling Commission to do so.” (Official opinion)

Currency note

This opinion was issued in 1978. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did nonprofit status alone remove the license requirement for a fund-raising event?
A: No. The AG assumed qualifying status for the question and still said the separately defined event required licensing.

Q: Could some nonprofit gaming activities be held without a license under the 1978 law?
A: Yes. The opinion described a conditional exemption for bingo, raffles and amusement games, but did not extend it to the statutory fund-raising-event category.

Q: Did the AG decide that the campaign-related corporation qualified as a nonprofit under the gambling law?
A: No. It expressly assumed that point without deciding it, because licensing was required even if the organization qualified.

Background and statutory framework

RCW 9.46.020(23) then defined a licensed fund-raising event. RCW 9.46.030(1) placed it among authorized licensed gambling activities. RCW 9.46.030(3) separately allowed specified unlicensed games for qualifying organizations under conditions, but omitted fund-raising events. The AG treated that omission as controlling.

Citations and references

The opinion interpreted RCW 9.46.020(23), RCW 9.46.030(1) and RCW 9.46.030(3).

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/gambling-licenses-corporations-conduct-fund-raising-event

Original opinion text

Attorney General Slade Gorton

GAMBLING ‑- LICENSES ‑- CORPORATIONS ‑- CONDUCT OF FUND-RAISING EVENT

Although a bona fide charitable or nonprofit organization organized primarily for purposes other than the conduct of gambling activities may, under the circumstances set forth in RCW 9.46.030(3), conduct bingo, raffles and amusement games without obtaining a license from the State Gambling Commission to do so, that organization may not lawfully conduct a "fund-raising event" as defined in RCW 9.46.020(23) without obtaining such a license.

March 28, 1978

Honorable R. Ted Bottiger
State Senator, 2nd District
P.O. Box 44333
Parkland, Washington 98444

Cite as: AGO 1978 No. 9

Dear Sir:

This is written in response to your recent letter requesting our opinion on a question which we paraphrase as follows:

May a bona fide charitable or nonprofit organization organized primarily for purposes other than the conduct of gambling activities lawfully conduct a "fund-raising event" as defined in RCW 9.46.020(23), without obtaining a license from the State Gambling Commission to do so if it conforms to the conditions specified in RCW 9.46.020(3)?

We answer this question in the negative for the reasons set forth in our analysis.

[[Orig. Op. Page 2]]

ANALYSIS

Before turning our attention directly to your question, as above paraphrased, there are two preliminary matters to be noted. The first of these involves the proper legal characterization of the organization actually described in your letter; i.e.,

". . . a non-profit corporation . . . formed by a committee supporting the election of a candidate to a partisan political office under the provisions of chapter 24.03 RCW. . . ."

For the purposes of this opinion we are assuming, without deciding, that this organization would constitute a "bona fide charitable or nonprofit organization" as that term is defined in RCW 9.46.020(3); i.e.,

"(3) 'Bona fide charitable or nonprofit organization' means: (a) any organization duly existing under the provisions of chapters 24.12, 24.20 or 24.28 RCW, any agricultural fair authorized under the provisions of chapters 15.76 or 36.37 RCW, or any nonprofit corporation duly existing under the provisions of chapter 24.03 RCW for charitable, benevolent, eleemosynary, educational, civic, patriotic, political, social, fraternal, athletic or agricultural purposes only, or any non-profit organization, whether incorporated or otherwise, when found by the commission to be organized and operating for one or more of the aforesaid purposes only, all of which in the opinion of the commission have been organized and are operated primarily for purposes other than the operation of gambling activities authorized under this chapter; or (b) any corporation which has been incorporated under Title 36 U.S.C. and whose principal purposes are to furnish volunteer aid to members of the armed forces of the United States and also to carry on a system of national and international relief and to apply the same in mitigating the sufferings caused by pestilence, famine, fire, floods, and other national calamities and to devise and carry on measures for preventing the same. . . ."

[[Orig. Op. Page 3]]

The point, as explained below, is that even if the organization you have described thus qualifies under this definition, it still may not lawfully conduct a "fund-raising event," as that term is used for the purposes of this opinion, without obtaining a license from the State Gambling Commission to do so.

Secondly, although you have next alluded in your letter to the conduct of ". . . a Reno night pursuant to the 1977 amendments to chapter 9.46 RCW . . ." we have substituted the term "fund-raising event" in paraphrasing your question simply because that is the statutory term which the legislature actually used in the amendments to which you have referred. See, in particular, subsection (23) of § 1, chapter 326, Laws of 1977, 1st Ex. Sess., a new definitional subsection of RCW 9.46.020, supra, which reads as follows:

"(23) 'Fund raising event' means a fund raising event conducted during any three consecutive days and not more than once in any calendar year or a fund raising event conducted not more than twice each calendar year for not more than one calendar day by a bona fide charitable or nonprofit organization as defined in subsection (3) of this section other than any agricultural fair referred to thereunder, upon authorization therefor by the commission, which the legislature hereby authorizes to issue a license therefor, with or without fee, permitting the following activities, or any of them, during such event: Bingo, amusement games, contests of chance, lotteries and raffles: PROVIDED, That (a) gross wagers and bets received by the organization less the amount of money paid by the organization as winnings and for the purchase cost of prizes given as winnings do not exceed five thousand dollars during the total calendar days of such fund raising event in the calendar year; (b) such activities shall not include any mechanical gambling or lottery device activated by the insertion of a coin or by the insertion of any object purchased by any [[Orig. Op. Page 4]] person taking a chance by gambling in respect to the device; (c) only bona fide members of the organization who are not paid for such service shall participate in the management or operation of the activities, and all income therefrom, after deducting the cost of prizes and other expenses, shall be devoted solely to the lawful purposes of the organization; and (d) such organization shall notify the appropriate local law enforcement agency of the time and place where such activities shall be conducted. The commission shall require an annual information report setting forth in detail the expenses incurred and the revenue received relative to the activities permitted."

By a further amendment in chapter 326, supra, the legislature added "fund-raising events" (as above defined) to the preexisting list of gambling activities which may lawfully be conducted by bona fide charitable or nonprofit organizations ". . . when licensed, conducted or operated pursuant to the provisions of this chapter and rules and regulations adopted pursuant thereto. . . ." The other gambling activities thus authorized, all by legislation enacted prior to 1977, are bingo games (as defined in RCW 9.46.020(2)), raffles (as defined in RCW 9.46.020(19)), amusement games (as defined in RCW 9.46.020(1)), the utilization of punchboards and pulltabs (RCW 9.46.020(18)) and, finally, the conduct of social card games (as defined in RCW 9.46.020(20)) under certain limited circumstances. See, RCW 9.46.030(1), as amended.

Your question, as we understand it, is whether subsection (3) of this same statute (RCW 9.46.030) may be utilized by a bona fide charitable or nonprofit organization in order to conduct a "fund-raising event," as above newly defined and authorized by the legislature, without a license issued for that purpose by the State Gambling Commission. We therefore turn next to the full text of RCW 9.46.030(3), as it also has been amended by chapter 326, Laws of 1977, 1st Ex. Sess., supra. As thus amended this subsection reads as follows:

"(3) Bona fide charitable or bona fide nonprofit organizations organized primarily for purposes other than the conduct of such activities are hereby [[Orig. Op. Page 5]] authorized to conductbingo, raffles, and amusement games, without obtaining a license to do so from the commission but only when:

"(a) Such activities are held in accordance with all other requirements of chapter 9.46 RCW as now or hereafter amended, other applicable laws, and rules of the commission; and

"(b) Said activities are, alone or in any combination, conducted no more than twice each calendar year and over a period of no more than twelve consecutive days each time, notwithstanding the limitations of RCW 9.46.020(2) as now or hereafter amended: PROVIDED, That a raffle conducted under this subsection may be conducted for a period longer than twelve days; and

"(c) Only bona fide members of that organization, who are not paid for such services, participate in the management or operation of the activities; and

"(d) Gross revenues to the organization from all the activities together does not exceed five thousand dollars during any calendar year; and

"(e) All revenue therefrom, after deducting the cost of prizes and other expenses of the activity, is devoted solely to the purposes for which the organization qualifies as a bona fide charitable or nonprofit organization; and

"(f) The organization gives notice at least five days in advance of the conduct of any of the activities to the local police agency of the jurisdiction within which the activities are to be conducted of the organization's intent to conduct the activities, the location of the activities, and the date or dates they will be conducted; and

[[Orig. Op. Page 6]]

(g) The organization conducting the activities maintains records for a period of one year from the date of the event which accurately show at a minimum the gross revenue from each activity, details of the expenses of conducting the activities, and details of the uses to which the gross revenue therefrom is put." (Emphasis supplied)

What will immediately be noted upon a careful reading of this last quoted subsection, however, is that unlike subsection (1) of RCW 9.46.030, supra, as amended, subsection (3) doesnot include the conduct of a "fund-raising event"; instead, it continues to apply only to bingo, raffles and amusement games by bona fide charitable or nonprofit organizations under the specific conditions enumerated. Therefore, this subsection of the law does not sanction the conduct of a fund-raising event, even by a bona fide charitable or nonprofit organization, without obtaining a license from the State Gambling Commission to do so.1/

It is hoped that the foregoing will be of some assistance to you.

Very truly yours,

SLADE GORTON
Attorney General

PHILIP H. AUSTIN
Deputy Attorney General

*** FOOTNOTES ***

1/It is also notable, we think, that although the general licensing functions of the Gambling Commission are contained in RCW 9.46.070 insofar as all other licensable gambling activities are concerned, the Commission's authority to license "fund-raising events" is contained in the new statutory definition of such events itself ‑ RCW 9.46.020(23), supra.