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Recommendations to Bingo/Lucky 7 Organizations

The following are recommendations for typical observations in the Bingo and Lucky 7 audits performed by the Racing and Charitable Gaming Division auditors.

Recommendations are in order of importance

  • Source Documentation - Maintain documentation for all Bingo/Lucky 7 related transactions. Records of all Lucky 7 tickets sold and cash received should be verified and retained. Lucky 7 tickets that have been redeemed for prizes and completed seal cards with the accompanying paid winning tickets, serve as documentation of prizes paid and should be kept. A beginning and ending count, with serial numbers, should be recorded of the various "packages" and Bingo game cards sold each game night. A log of miscellaneous items sold should be maintained to verify the amount listed each game night.
  • Gift Certificates - Maintain a sales log or worksheet to document purchases, redemptions and the outstanding liability. Indicate on the Nightly Summary or Reconciliation Sheet the purchase and/or redemption of Gift Certificates. The organization must retain redeemed gift certificates to verify the amount shown on the Nightly Summary or Reconciliation Sheets.
  • Nightly Bingo/Lucky 7 Summary Sheets and Bank Deposits - At the end of each game date an audit trail should be established that (1) identifies all the various sources of income and expenses related to the nightly activity and (2) can be matched to the actual dollar amounts deposited into the appropriate bingo bank accounts.
  • Game Schedule - Game schedules should not be altered without proper approval from the Division. If a charitable organization wishes to alter their game schedule in any manner, they should submit a revised game schedule request for any game(s) or type of game(s) to the division at least 30 days before the first game date identified in the game schedule change request.
  • Free Play Approval - Before offering any type of free play, the organization must submit, to the Division, the criteria for awarding the free play. The value of any free play should be clearly identified and explained on the Nightly Summary or Reconciliation Sheets. Paperwork (copies of redeemed certificates etc.) must be retained to validate free plays awarded to players.
  • Winner-Take-All Prizes - The total amount awarded in a Winner-Take-All game may not exceed the total amount collected from the participants in the game.
  • Deposit of Carryover-Coverall Funds - All funds collected in the carryover-coverall game, less cash prizes paid, should be deposited into the carryover-coverall checking account. A check for 7% (reimbursement fee) should then be written to the organization and deposited in the bingo/lucky 7 checking account. The balance in the carryover coverall checking account should equal the amount of the outstanding prize pool plus any accrued taxes. The failure to transfer the reimbursement fee in a timely manner would prevent those funds from being used for their intended charitable purpose.
  • Deposit of Bingo and Lucky 7 Revenue - the organization should separately and clearly identify money deposited from Bingo revenue and Lucky 7 revenue on each deposit slip. Proper banking procedures are critical to any system of internal controls, and provide both protection and accountability over funds. Sound procedures result in banking records that can support and verify other documentation generated to account for the receipt and disbursement of funds.

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  • Paying Expenses and Prizes - All expenses and all prizes of $500.00 or more should be paid by consecutively numbered checks. All void checks must be retained, thus maintaining a complete audit trail.
  • Criminal Background Checks - Anyone who has been convicted of a class A misdemeanor within the previous 10 years, or a class B misdemeanor within the past 5 years, which has not been annulled by a court, is not allowed to operate the game of bingo or participate in the sale of lucky 7 tickets. The integrity of the games and the protection of the wagering public require constant vigilance to insure that only people who meet the minimum standards of a law-abiding past may be permitted to operate the game of Bingo or participate in the sale of Lucky 7 tickets.
  • Leadership Information - It is the responsibility of the Organization to keep the Commission informed of any changes to the information it provided on the original application, including changes to its leadership. To ensure effective oversight, and to allow the agency to resolve issues and questions as they arise, it is essential that the Organization provide the Commission with current contact information for each individual holding a leadership role. Such individuals include the leader of the Organization (i.e. chairperson or president), the Organization’s treasurer or financial officer, and any individuals overseeing the gaming operations. Within 15 days of the change taking effect, this Organization must provide written notification to the Commission with the name, title held within the organization, mailing address, phone number and e-mail address of  each individual.
  • Volunteer Reimbursement - Members of a charitable organization who sell lucky 7 tickets may be reimbursed for out of pocket expenses in an amount not to exceed $8 per day, and volunteers who operate or assist in the operation of bingo games may be reimbursed for out of pocket expenses in an amount not to exceed $25 per game date. To qualify for reimbursement, expenses must be itemized and submitted in writing to the charitable organization.
  • Accurate Reporting - To ensure accuracy, review all reports for omissions and errors prior to submission to the RCG Division.
  • Proper Federal Withholding - To avoid potential loss of non profit status with the Internal Revenue Service, game operators must be cognizant of federal rules and statutes relative to proper withholding from winnings and issuance of form W-2G to eligible winners.
  • Deficiencies That Weaken Safeguards and Internal Controls - Weak or nonexistent internal controls and several practices or situations that have the potential for problems have been observed. Many organizations have not instituted the proper internal controls and follow procedures that have been in place for years without re-examining their effectiveness or the potential hazards that exist. The following are some instances that have been noted.
    • Storage of Supplies - Bingo and Lucky 7 supplies should be stored in a locked closet, or cabinet, inaccessible to unauthorized persons. The lock should be changed when there is a personnel change.
    • Bingo Console - Security measures should be in place to prevent unauthorized tampering.
    • Protection of Money - Exercise caution on both the visibility of cash and access to the cage to avoid potential loss of funds.
    • Unwritten or "Understood" Agreements - All contracts or "agreements" should be in writing clarifying the expectations and responsibilities of each party.
    • Inventory Control - Bingo Paper and Miscellaneous Items for Sale - A continual "revolving" bingo paper inventory should be maintained. When a shipment is received, the date, item number, description (including serial number) and quantity should be recorded. As paper is sold, the quantity should be deducted, noting the date, item number and description (including serial number). At any point in time, should a physical count be made it should match the count recorded on the revolving inventory. A similar "revolving" inventory of miscellaneous items for sale should be maintained.
    • Oversight by the Non-Bingo Governing Body - The charity's governing body should implement a system of internal audit controls to oversee the operation of the game of bingo and the sale of Lucky 7 tickets. At a minimum, charity non-bingo volunteers should periodically review policies and procedures to ensure compliance with the rules and statutes and perform internal audits on all bank accounts and items for sale.
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New Hampshire Lottery Commission
14 Integra Drive  |  Concord, NH 03301
(603) 271-3391   |  (603) 271-6289