N.H. Admin. Code § Lot 7104.04

Current through Register No. 36, September 5, 2024

Section Lot 7104.04 - Responsibilities of the Licensed Charitable Organization

Licensed charitable organizations shall:

(a) Immediately notify the commission if it no longer meets the qualifications for licensure, including the loss of its tax-exempt status, or failure to maintain its registration with the secretary of state or director of charitable trust, as required by RSA 287-E:1, V;

(b) Purchase lucky 7 deals only from licensed distributors;

(c) In accordance with RSA 287-E:23-A:

(1) Pay the licensed distributor for purchased deals no later than 30 calendar days after delivery; and

(2) Not purchase tickets from a different distributor when the organization has failed to comply with the provisions of (1) above;

(d) Develop and adopt house rules in accordance with Lot 7105.01 below;

(e) Prominently display the following documents within the hall in areas that are accessible to and easily seen by the public, including in the immediate area where the lucky 7 tickets are sold:

(1) The organization's current lucky 7 license, pursuant to RSA 287-E:20, V;

(2) At least one copy of RSA 287-E and this chapter; and

(3) At least one copy of any house rules that apply;

(f) Prominently display a sign in the immediate area where the lucky 7 tickets are sold advising the public of the phone number where complaints related to charitable gaming may be made;

(g) Only compensate for gaming related services when the individual or entity providing the services is a licensed gaming consultant with whom the organization has a written agreement;

(h) Only reimburse bona fide members of the organization for out-of-pocket expense in an amount not to exceed $8 per game date when such expenses are itemized and submitted in writing to the organization, in accordance with RSA 287-E:21, IV;

(i) Designate a member of the charitable organization or engage a gaming consultant to act as the gaming manager who shall be responsible for overseeing the gaming operation including:

(1) Ensuring that the games are conducted in accordance with RSA 287-E and this chapter, and that illegal gambling is not conducted on the premises;

(2) Ensuring that all receipts and disbursements have been properly accounted for, and all source documents and inventory records are complete and have been reconciled;

(3) Verifying proper accounting of all gambling expenditure, equipment, assets, and receipts; and

(4) Ensuring that all security measures and internal controls are in place to protect the integrity of the games and gaming assets;

(j) Only sell lucky 7 tickets and utilize ticket dispensing devices that have been:

(1) Purchased from a licensed distributor and manufactured by a licensed manufacturer, pursuant to RSA 287-E:23; and

(2) Approved by the commission in accordance with Lot 7108 below;

(k) Ensure that any lucky 7 tickets put into play are:

(1) For pre-printed tickets, as defined in Lot 7102.14(a) above, received as unopened deals with an original, unbroken manufacturer's seal; or

(2) For electronically generated tickets, as defined in Lot 7102.14(b) above, generated or transferred in a secure manner such as encryption, password protected files, or other means that prevent readability;

(l) Inspect all deals upon receipt, and immediately return any lucky 7 deals that were not received in a secure manner as described in (k) above, or that do not otherwise comply with existing laws or this chapter;

(m) Conduct lucky 7 ticket sales in accordance with RSA 287-E and this chapter;

(n) Develop, implement, and adhere to written internal control policies and procedures designed to ensure effective control over the gaming operation by discouraging and protecting against illicit behavior and safeguarding the integrity of the games, which:

(1) Ensure that:

a. Assets are safeguarded;

b. Financial records are accurate, reliable, and permit proper reporting of gaming revenue, fees and taxes;

c. Transactions are performed only in accordance with management's general and specific authorization;

d. Transactions are recorded adequately to permit proper reporting of gaming revenue and of fees and taxes due, and to maintain accountability of assets;

e. Recorded accountability for assets is compared with actual assets at reasonable intervals, and appropriate action is taken with respect to any discrepancies;

f. Functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound business practice by competent, qualified personnel, with no individual in a position that would allow them to perpetuate and conceal errors or irregularities in the normal course of duties;

g. The integrity of the game is preserved by preventing unauthorized access, misappropriation, forgery, theft, or fraud;

h. Controls that have been put in place are effective, and that any abnormalities are investigated and addressed; and

i. Accountability for assets is maintained in accordance with generally accepted accounting principles; and

(2) Include, at a minimum, the following:

a. Controls relative to the segregation of duties such that no one person or group within the organization has complete control over a business process or multiple steps within that process;

b. Controls relative to the access to lucky 7 tickets, including maintaining tickets in a secure location, and restricting accessibility to authorized individuals only;

c. Controls relative to the inventory of manual lucky 7 ticket to assure the integrity and accounting of the tickets, including:

1. Assigning the control of ticket inventories to individuals such that:

(i) The individual in control of the perpetual inventory is independent of the physical inventory and lucky 7 ticket sales; and

(ii) The individual in control of the monthly physical inventory is independent of the perpetual inventory and lucky 7 ticket sales;

2. Maintaining a perpetual inventory control log that continuously tracks and records the receipt and disposition of each lucky 7 deal purchased by the organization;

3. Transferring lucky 7 tickets from storage to the sales location in a secure and independently controlled manner that is fully documented;

4. Conducting monthly physical inventory counts;

5. Performing monthly reconciliations of:

(i) The ending balance of the perpetual inventory to the physical inventories to ensure that no inventory is missing; and

(ii) The amount of lucky 7 tickets sold as recorded by the perpetual inventory control log to the amount of revenue realized to ensure that revenue is not missing; and

6. Investigating and resolving all discrepancies discovered by the monthly reconciliation performed in accordance with 5. above;

d. Controls relative to ticket sales, including:

1. Ensuring that tickets exchanged between individuals involved in the operation of the lucky 7 ticket sales are secured and independently controlled;

2. Requiring that the total sales of all manual ticket sales are verified by an authorized individual independent of the ticket sales being verified;

3. Maintaining records that adequately record, track and reconcile all lucky 7 ticket sales and voids, including a minimum of the following:

(i) The date(s) the tickets were sold or voided;

(ii) The location where the tickets were sold;

(iii) The serial and game form numbers of the deal;

(iv) The name and description of the game; and

(v) The total number of lucky 7 tickets sold from the deal;

4. Implementing a receipting system for the sale of the tickets comparing cash register receipt or manual receipt summaries to calculated sales based on the selling price of the tickets sold, where the calculated sales are based on the quantity of tickets sold, determined by the quantity of tickets issued out of inventory at the beginning of the specified time period, less the quantity of tickets returned to inventory at the conclusion of the designated time period, where the designated time period is no less frequent than once per month; and

5. Restricting access to the lucky 7 ticket sales records;

e. Controls relative to payouts of winning tickets, including:

1. Recording, tracking and reconciling all redeemed tickets and payouts;

2. Defacing or otherwise voiding all redeemed paper tickets and vouchers so they cannot be redeemed for payment again; and

3. Requiring that all prize payouts of $600 or more are documented and verified by at least 2 authorized individuals; and

f. Controls relative to operating funds, including:

1. Recording and accounting for all funds used to operate the lucky 7 games;

2. Verifying all transfers of cash or cash equivalent;

3. Requiring that all funds used to operate the lucky 7 are independently counted and verified by at least 2 authorized individuals and reconciled to the recorded amount at the end of each game;

4. Paying all expenses by check, or electronic transfer from the lucky 7 bank account;

5. Assigning an individual who is independent of both the inventory and the sale of lucky 7 tickets to reconcile the funds deposited into the lucky 7 bank accounts to the funds generated from the sale of lucky 7 tickets; and

6. Limiting access to the funds in the lucky 7 bank accounts created in accordance with Lot 7106.03(a)(1) to authorized executive members of the organization;

(o) Retain control over funds jointly held in a cooperative agreement, and ensure that such authority is not extended to a facility owner, or other outside agents;

(p) Not allow an individual to serve as both the treasurer and the chairperson of the charitable organization or their designee;

(q) Maintain, at a minimum, the following records pertaining to lucky 7 gaming activities:

(1) Copies of all policies and procedures related to lucky 7 games, including play, surveillance, security, revenue collection, and accounting for, reporting, and auditing the results produced;

(2) When electronic lucky 7 ticket dispensing devices are used, documentation of procedures and controls, including monitoring systems for security incidents, data back-up, and periodic test and maintenance to ensure that the system is functioning properly and the integrity of games is preserved;

(3) Bank statements, check registers, reconciliations, and cancelled checks and bank deposit slips for lucky 7 bank accounts;

(4) Documentation of all prize payouts of $600 or more including:

a. The date of the transaction;

b. The amount of the payout;

c. The serial number of the winning ticket, the serial number of the dispensing device, or any other information that will help identify the winning transaction;

d. The initials of the person who issued the payout; and

e. The name and address of the person receiving the payout;

(5) Documentation of the calculation of charity allocation and state tax;

(6) All written contracts and agreements or any other statement of understanding regarding the operation of lucky 7 games;

(7) Work schedules and assignments;

(8) Logs relative to the access of lucky 7 ticket dispensing devices that include the date, time, name of the individual(s) accessing the device; and

(9) Copies of by-laws, articles of incorporation and organization chart listing titles, roles, and responsibilities;

(r) Institute written protocols for receiving cash, including the stipulation that at least 2 persons be present when opening cash collection boxes, with each person counting the cash and attesting to the accuracy of the count by completing a receipt document that includes at a minimum:

(1) The amount of cash withdrawn from the lucky 7 ticket dispensing device;

(2) The date and time of the cash withdrawal; and

(3) The signature of each person involved in the withdrawal;

(s) Comply with the financial and reporting requirements set forth in Lot 7106 below; and

(t) Take actions to ensure compliance with RSA-E:7, VI such that no person who has been convicted of a felony or class A misdemeanor within the previous 10 years, or a class B misdemeanor within the past 5 years, neither of which has been annulled by the court, or who has violated any of the statutes or rules governing charitable gaming in the past in this or any other state are permitted to participate in the sale of lucky 7 tickets licensed under this chapter.

N.H. Admin. Code § Lot 7104.04

Derived from Volume XL Number 28, Filed July 9, 2020, Proposed by #13068, Effective 6/27/2020, Expires 6/27/2030 (See Revision Notes #1 and #2 at chapter heading for Lot 7100).

Amended by Number 15, Filed April 11, 2024, Proposed by #13913, Effective 3/22/2024, Expires 3/22/2034.