Under Penal Code section 326.5, nonprofits may host bingo games if the local ordinances allow games to be conducted within the municipality. In addition to any regulations in the local ordinances, the nonprofit must follow specific regulations when conducting a bingo game, including but not limited to, it cannot commingle the proceeds from the bingo games with any other fund or account, it cannot permit minors to participate, it can only host the bingo game on property that it owns, leases or was donated to the nonprofit, and it must open the game to the public.
Existing law authorizes a nonprofit to use a portion of the proceeds from the bingo game for prizes, and overhead costs, such as rental costs, and bingo equipment, administrative expenses, security equipment, and security personnel. Existing law limits the amount the nonprofit may spend on overhead costs to twenty percent (20%) of the proceeds before the deduction for prizes, or $2,000 a month, whichever is less. The nonprofit must use all other proceeds for charitable purposes.
Beginning January 1, 2025, Senate Bill 1044 (SB 1044) increases the amount a nonprofit may spend on bingo overhead costs to twenty percent (20%) of the proceeds before the deduction for prizes or $3,000 per month, whichever is less. The $3,000 threshold will be increased annually by the annual average percentage in the California Consumer Price Index for All Urban Consumers for the preceding calendar year.
(SB 1044 amends section 326.5 of the Penal Code.)