How did House Bill 2013 change Kansas bingo laws and taxes effective July 1, 2000?

Plain-English summary

House Bill 2013, effective July 1, 2000, rewrote much of Kansas's bingo law and its two tax layers:

• Enforcement tax: the 3% bingo enforcement tax on bingo (hard) cards was replaced with a $0.002 per-face tax on every bingo face a distributor sells to a licensee (distributor collects and remits). The 3% tax still applies to hard cards and admission fees, and the 1% tax on instant bingo tickets was unchanged.
• Sales tax: receipts from bingo faces/hard cards, instant tickets, and admissions remained subject to the 4.9% state sales tax (but exempt from city and county sales tax); the state rate was set to fall to 2.5% on July 1, 2001 and be eliminated on July 1, 2002.

Regulatory changes: a new charitable-gaming Administrator; legalization of the 'Gator' and 'American Flash' instant games (while 'Seal Cards' and 'Take-A-Spin' stayed illegal); formal recognition of progressive games (initial prize up to $250, upper limit $1,000) and mini/early-bird games (up to $50 or 50% of receipts per game); mandatory monthly reports of faces purchased and their distributors; up to four small non-cash drawings per year; a phase-out of hard cards after July 1, 2003; and payment of any call bingo prize of $500 or more by check.

What this means for you

If you are a licensed bingo operator or a bingo face distributor in Kansas, the way bingo is taxed changed on July 1, 2000: distributors began collecting a flat $0.002 per face instead of the old 3% enforcement tax on those faces, and the state sales tax on bingo receipts began a scheduled wind-down to zero by mid-2002. Operators also had new monthly reporting duties and new prize and game rules.

Common questions

Q: Did the 3% bingo enforcement tax disappear entirely?
A: No. It was replaced by a $0.002-per-face tax only for bingo faces sold by distributors. The 3% tax still applied to hard cards and admission fees, and the 1% instant-ticket tax was unchanged.

Q: What happened to sales tax on bingo?
A: Bingo receipts stayed subject to the 4.9% state sales tax (exempt from city/county tax), scheduled to drop to 2.5% on July 1, 2001 and be eliminated on July 1, 2002.

Citations and references

• 2000 House Bill 2013 (Kansas bingo law changes effective July 1, 2000)

Subject

Bingo Law Changes Effective July 1, 2000

Source

• Landing page: Kansas Department of Revenue Policy Information Library
• Original document: Notice 00-01

Original ruling text

Notice
Notice Number: 00-01
Tax Type: Bingo
Brief Description: Bingo law changes effective July 1, 2000, as a result of House Bill 2013.
Keywords:
Approval Date: 06/23/2000

Body:
Kansas Department of Revenue

                                              NOTICE 00-01
                                               June 23, 2000
                                   Bingo Law Changes Effective July 1, 2000

The following is a summary of changes to Kansas Bingo laws created by passage of House Bill 2013, which will
become effective on July 1, 2000. If you have any questions, please contact Joyce Bartel at the Kansas City Metro
Assistance Center at (913) 631-0296 extension 206.

1. New Administrator position created. An administrator of charitable gaming is to be appointed and supervised by
   the Secretary of Revenue. The Administrator will coordinate bingo administration within the Department, including
   field inspections, audits, licensing, tax collection and education.

2. “Gator” instant bingo tickets. Under these games, the prizes for up to three instant bingo games per session may be
   selected by matching a letter, number or symbol under the tab of an instant bingo ticket with a letter, number or
   symbol in a designated call bingo game. This legalizes the instant bingo games known as “Gator” and “American
   Flash,” which had previously been ruled as illegal. A game is defined as one box of tickets. There is no limit on the
   number of tickets that can be in each box or game. More than one prize can be awarded in each game. A “Gator”
   game cannot be carried over from one session to the next. Other instant bingo tickets such as “Seal Cards” and “Take-
   A-Spin,” which select the winners by using a separate game of chance, remain illegal.

3. Progressive games. The call bingo game named “progressive bingo” is formally recognized and has its own prize
   limits that are different from the prize limits on regular and special call bingo games. Progressive games are included
   in the limit of 25 games per session but not in the total limit of $1,200 in prizes that may be awarded for call bingo
   games during a session. The initial prize may not exceed $250 and may not be increased by more than $100 for each
   subsequent session in which the game is continued. The upper prize limit for this game is $1,000. The definition of a
   progressive game states that a licensee may raise the number of balls called to win from one session to another, or the
   licensee may raise both the number of balls called and the prize amount. However, licensees may not raise only the
   prize amount from one session to another. If there is no winner at a progressive game during a session, then a
   consolation prize not to exceed $250 may be awarded. Licensees will post house rules for each progressive game and
   the rules shall remain in effect until there is a winner. No more than two progressive games may be conducted each
   session and no progressive game may run for more than 20 consecutive sessions without awarding the established
   prize. The maximum charge for each face is $1. [Previous law did not mention “progressive” call bingo games. Some
   licensees previously conducted games called by this name, but these were actually just a form of “special” call bingo
   games as defined in current law, and were subject to the limits of 25 games and $1,200 in prizes per session.]

4. Mini or early bird games. The call bingo game named “mini or early bird” is formally recognized and has its own
   prize limits that are different from the prize limits on regular and special call bingo games. The limit on the prize paid
   for each game is $50 or 50% of the gross receipts from the game, whichever is less. The prizes awarded in mini games
   are exempt from the overall prize limit total of $1,200 per session. Mini games are exempt from the 25 games per
   session limit but a maximum of 20 mini games may be conducted each session. Mini games may be played only
   during the hour before the commencement of the first regular or special call bingo game. The maximum charge for
   each face is $1. [Previous law did not mention “mini” call bingo games. Some licensees have previously conducted
   games called by this name, but they were actually just a form “regular” or “special” call bingo games as defined in

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current law, and were subject to the session limits of 25 games and $1,200 in prizes.]

5. Monthly report. Licensees must file monthly reports which state the number of bingo faces purchased and the
   identity of the distributor(s) from which they were purchased during the preceding month. [Previous law did not
   require licensees to report this information.]

6. Drawings. Up to four drawings per calendar year may be conducted during bingo sessions by either the licensee or
   the premises lessor, with a maximum of one drawing per session. Only one non-cash prize may be awarded for each
   drawing and is limited to a value of no more than $25. There can be no charge for participation or any requirement to
   purchase something of value in order to participate in the drawings. [Previous law prohibited any game of skill or
   game of chance other than bingo from being conducted during bingo sessions as an inducement to play bingo.]

7. Discontinuation of hard cards. The distribution, sale or use of bingo (hard) cards for call bingo games is generally
   prohibited effective July 1, 2003. The administrator may adopt rules and regulations that provide for exceptions. The
   most likely exceptions will be for handicapped players and for licensees conducting occasional, small bingo games.

8. Prizes paid by check. Any call bingo prize of $500 or more must be paid by check. However, the winner of any
   prize may request payment by check. [Previous law provided that call bingo prizes of $100 or more had to be paid by
   check drawn on the licensee’s bingo trust account.]

9. Enforcement tax change. The 3% bingo enforcement tax will be replaced by a 2/10th of a cent ($0.002) per face tax
   on all bingo faces sold by distributors to licensees. The tax will be collected by the distributors at the time of sale and
   remitted to KDOR by the distributor.

The 3% bingo enforcement tax on the proceeds from the sale of (hard) bingo cards and admission fees to bingo games
will remain the same. Consequently, if a licensee sells mostly paper faces, but has a few people who continue to play
with the hard cards, it will be necessary for the licensee to calculate the enforcement tax on the hard cards and file a
monthly return with the tax payment.

The 1% bingo enforcement tax on the retail sales price of instant bingo tickets sold by distributors to licensees will
remain the same.

10. Sales tax decrease. Receipts from the sale of call bingo faces and hard cards, instant bingo tickets, and admission
    fees will continue to be subject to the state sales tax (4.9%) but are exempt from the sales taxes imposed by cities and
    counties. On July 1, 2001, the state sales tax rate on all bingo will drop from 4.9% to 2.5%. The sales tax on bingo
    will be dropped entirely on July 1, 2002.

Date Composed: 06/27/2000 Date Modified: 10/09/2001

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