Title of Regulation: 11VAC20-30. Texas Hold'em Poker Tournament Regulations (adding 11VAC20-30-10 through 11VAC20-30-210).

Statutory Authority: § 18.2-340.19 of the Code of Virginia.

Public Hearing Information:

Public Comment Deadline: May 10, 2023.

Agency Contact: Michael Menefee, Program Manager, Charitable and Regulatory Programs, Department of Agriculture and Consumer Services, 102 Governor Street, Richmond, VA 23219, telephone (804) 786-3983, or email michael.menefee@vdacs.virginia.gov.

Summary:

Pursuant to Chapters 554 and 609 of the 2022 Acts of Assembly and in conformance with Chapter 982 of the 2020 Acts of Assembly, the proposed regulatory action establishes the requirements for charitable organizations wishing to conduct Texas Hold'em poker tournaments to generate charitable funds. The proposed action prescribes the conditions under which a qualified organization may manage, operate, conduct, or contract with a separate operator to conduct Texas Hold'em poker tournaments. The proposed regulation (i) provides that a charitable organization wishing to conduct Texas Hold'em poker tournaments must obtain a permit from the department; (ii) establishes required documents that must be provided to the department, prohibited acts, procedures for recordkeeping and bank account maintenance, and contract and lease requirements; (iii) requires that any person administering a Texas Hold'em poker tournament for a charitable organization must register with the department as an operator; (iv) requires the registration of a landlord who rents, leases, or otherwise provides a premises to a charitable organization to hold a Texas Hold'em poker tournament; (v) establishes requirements for Texas Hold'em poker tournaments, including a fixed entry fee, use of poker cards and poker chips, posting house rules, and prohibited acts; and (vi) outlines training requirements for all persons working or volunteering at a poker tournament, including a prohibition of staff of the charitable organization or the operator from participating as a player in the poker tournament.

Chapter 30

Texas Hold'em Poker Tournament Regulations

11VAC20-30-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Administer" means the conduct of activities by an operator that are associated with production of a poker tournament.

"Agent" means any person authorized by an operator, charitable gaming supplier, or landlord to act for or in place of such operator, supplier, or landlord.

"Charitable Gaming Law" means Article 1.1:1 (§ 18.2-340.15 et seq.) of Chapter 8 of Title 18.2 of the Code of Virginia.

"Charitable host representative" means a person who (i) is a bona fide member, as defined in § 18.2-340.16 of the Code of Virginia, of the qualified organization; (ii) meets all other requirements for bona fide members set forth in the Charitable Gaming Law and regulations adopted pursuant thereto; (iii) does not receive remuneration pursuant to § 18.2-340.33 of the Code of Virginia; and (iv) is responsible for the oversight of the written contract between the qualified organization and operator during the poker tournament.

"Conduct" means the actions by a qualified organization associated with the provision of a poker tournament during and immediately before or after the permitted activity, which may include (i) dealing playing cards; (ii) distributing poker chips; (iii) distributing prizes; and (iv) any other services provided by a charitable host representative, volunteer game worker, or volunteer dealer.

"Dealer" means a volunteer or volunteer member of a qualified organization or an employee, contractor, volunteer, or agent of an operator whose primary function is to distribute cards to players and manage the action at the poker table during a poker game.

"Department" means the Virginia Department of Agriculture and Consumer Services.

"Fiscal year" means the 12-month period beginning January 1 and ending December 31 of any given year.

"Flush" means a hand consisting of five cards of the same suit.

"Four of a kind" means a hand consisting of four cards of the same rank, with four aces being the highest ranking four of a kind and four deuces being the lowest ranking four of a kind.

"Full house" means a hand consisting of three of a kind and a pair, with three aces and two kings being the highest-ranking full house and three deuces and two threes being the lowest ranking full house.

"Game manager" means a person who (i) is a bona fide member, as defined in § 18.2-340.16 of the Code of Virginia, of the qualified organization that is managing, operating, and conducting the poker tournament; (ii) meets all other requirements for bona fide members set forth in the Charitable Gaming Law and this chapter; (iii) does not receive remuneration pursuant to § 18.2-340.33 of the Code of Virginia; and (iv) is responsible for the operation of the qualified organization's poker tournament.

"Hi/Lo" means a variation of Texas Hold'em poker in which the highest or lowest poker hands split the pot.

"Immediate family" means a person's spouse, parent, child, sibling, grandchild, grandparent, mother or father-in-law, or stepchild.

"IRS" means the U.S. Internal Revenue Service or its successor.

"Landlord" means any person who owns or leases any premises devoted in whole or in part for use to hold a poker tournament or such person's agent, firm, association, organization, partnership, corporation, employee, or immediate family member thereof or any person residing in the same household as a landlord.

"Manufacturer" means a person that assembles from raw materials or subparts a completed piece of charitable gaming equipment or supplies. "Manufacturer" also means a person who or an entity that modifies, converts, adds, or removes parts to or from charitable gaming equipment or supplies.

"Operator" means a person who is not affiliated with a qualified organization pursuant to 11VAC20-30-90 and who has registered with the department in accordance with 11VAC20-30-50 to administer poker tournaments.

"Pair" means two cards of the same rank.

"Poker game" means a Texas Hold'em poker game as defined in § 18.2-340.16 of the Code of Virginia.

"Poker tournament" means a Texas Hold'em poker tournament as defined in § 18.2-340.16 of the Code of Virginia.

"Pot" means the total amount bet by players during a poker game.

"Rakes" or "cutting of pots" means the taking of a portion of the pot as a fee or other compensation for providing services during a poker game or tournament, including the services of a dealer.

"Remuneration" means payment in cash or the provision of anything of value for goods provided or services rendered.

"Re-buy" means a player's purchase of additional poker chips at a predetermined time and for a predetermined fee.

"Royal flush" means a hand consisting of an ace, king, queen, jack, and 10 of the same suit.

"Shuffler" means a device that randomizes playing cards.

"Straight" means a hand consisting of five cards of consecutive rank, regardless of suit, with an ace, king, queen, jack, and 10 being the highest ranking straight and an ace, two, three, four, and five being the lowest ranking straight provided, however, that an ace may not be combined with any other sequence of cards for purposes of determining a winning hand (e.g., queen, king, ace, deuce, three).

"Straight flush" means a hand consisting of five cards of the same suit in consecutive ranking with king, queen, jack, 10, and nine being the highest ranking straight flush and ace, deuce, three, four, and five being the lowest straight flush provided, however, that an ace may not be combined with any other sequence of cards for purposes of determining a winning hand (e.g., queen, king, ace, deuce, three).

"Suit" means one of the four categories of cards: club, diamond, heart, or spade, with no suit being higher rank than another.

"Three of a kind" means a hand consisting of three cards of the same rank, with three aces being the highest ranking three of a kind and three deuces being the lowest ranking three of a kind.

"Two pairs" means a hand containing two pairs.

"Tournament chip" or "poker chip" means a token used for wagering in a poker tournament that has no cash value.

"Tournament manager" means a person who is employed or contracted by an operator to administer poker tournaments for a qualified organization.

"Use of proceeds" means the use of funds derived by a qualified organization from its charitable gaming activities for the organization's lawful religious, charitable, community, or educational purpose.

11VAC20-30-20. General requirements.

A qualified organization permitted to conduct poker tournaments shall comply with all applicable provisions of the Charitable Gaming Law, all applicable provisions of 11VAC20-20, and all other regulations adopted pursuant to the Charitable Gaming Law.

11VAC20-30-30. Organization eligibility; permit requirements.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-20 regarding organization eligibility and permit requirements.

11VAC20-30-40. Permit application process for an organization.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-30 regarding the permit application process for an organization.

11VAC20-30-50. Operator registration.

A. No qualified organization shall conduct a poker tournament utilizing an operator that is not registered with the department.

B. Any person wishing to administer a poker tournament in Virginia shall obtain a registration from the department. A person seeking to administer a poker tournament on behalf of a qualified organization shall apply to the department for an operator registration on a form prescribed by the department.

C. Any operator that offers to sell, sells, or otherwise provides charitable gaming supplies, which includes playing cards for Texas Hold'em poker, poker chips, and any other equipment or product manufactured for or intended to be used in the conduct of a poker tournament, to any qualified organization must obtain a charitable gaming supplier permit in accordance with § 18.2-340.34 of the Code of Virginia.

D. An operator registration shall be valid for a period of one year from the date of issuance or for the period specified on the registration. The department may issue a registration for a period of less than one year.

E. If any information on the registration application changes or is found to be inaccurate, then the applicant shall notify the department and provide the updated or corrected information within three business days of the change or the discovery of the inaccuracy.

11VAC20-30-60. Requirements for administering, conducting, managing, or operating a poker tournament.

A. A person who has managed, operated, conducted, or administered charitable gaming without a valid license, permit, certificate, registration, or other similar authority related to gambling in any state, territory, or possession of the United States; the District of Columbia; or any political subdivision thereof shall not manage, operate, conduct, or administer a poker tournament.

B. A person who manages, operates, conducts, or administers a poker tournament shall not use or continue to use a poker product that has been recalled by the manufacturer.

C. A person shall not administer a poker tournament for a person who is not permitted to conduct a poker tournament or is not authorized to conduct business in the Commonwealth.

D. A person who administers or conducts a poker tournament must notify the department within 20 days of the occurrence, knowledge, or receipt of the filing of any administrative or legal action against the person relating to gambling or the administration of poker tournaments.

E. A person shall not breach any provision of the contract prescribed in 11VAC20-30-180 between an operator and a qualified organization.

F. A person who has been found to have violated any provision of the Charitable Gaming Law or a regulation adopted pursuant thereto shall not manage, operate, conduct, or administer a poker tournament.

G. A qualified organization shall ensure that all persons, including those employed by the operator, involved in the management, operation, conduct, or administration of a poker tournament are trained in the use of any equipment, on the policies and procedures relevant to the person's function, on the person's responsibilities, on the poker game, and on the Charitable Gaming Law and this chapter. The qualified organization shall ensure the completion of the training required by this subsection, and such completion shall be documented, maintained, and available for inspection by the department, at the department's request.

H. No person other than the charitable organization shall submit a permit application or financial report on behalf of a charitable organization.

I. If the department identifies through inspection, audit, or other means that a person is not in compliance with statutory or regulatory requirements or has ineffective internal controls, the department may impose restrictions consistent with the provisions of this chapter.

J. Any records the department deems necessary to complete an inspection, audit, or investigation may be collected by the department from the premises of any location where a poker tournament is conducted or any location where the records are located or stored. The department shall provide a written receipt of such records at the time of collection.

K. A person who administers a poker tournament shall provide the charitable organization a detailed invoice for each tournament the person administers. The invoice shall reflect the following:

1. Name, address, and the organization number of the qualified organization;

2. Date and location of the poker tournament; and

3. Gross receipts, net receipts, and prize disbursement.

L. A person providing security for an organization's charitable gaming activity shall not participate in the charitable gaming activity and shall not be compensated with charitable gaming supplies, including poker chips.

M. A member of a qualified organization; a person associated with the qualified organization; or an immediate family member or person residing in the household of a director, officer, owner, partner, employee, independent contractor, a member of the qualified organization, or a person affiliated or associated with the qualified organization shall not receive compensation from an operator with whom the qualified organization contracts to administer a poker tournament.

N. A qualified organization shall prohibit an operator and the operator's directors, officers, owners, partners, tournament managers, employees, independent contractors, volunteers, and agents or the immediate family members or persons residing in the household of an operator's directors, officers, owners, partners, tournament managers, employees, independent contractors, volunteers, or agents from playing in a poker tournament the operator administers for the qualified organization.

O. A qualified organization shall ensure that any poker tournament the qualified organization conducts or contracts with an operator to administer has internal control policies and procedures that include segregation of duties, cash security, and cash controls based on generally accepted standards.

P. A qualified organization shall only pay a fixed fee to an operator for services. No qualified organization shall pay a gross aggregate compensation to the operator based on a percentage of the revenue the qualified organization collects for that tournament. No other fees, charges or assessments shall be paid by the qualified organization to an operator for administering a poker tournament except such fixed fee.

Q. All persons managing, operating, conducting, or administering a poker tournament shall wear a badge that meets the requirements set forth in 11VAC20-30-90 Q and shall possess a current photo identification, such as a driver's license or other government-issued identification, while managing, operating, conducting, or administering a poker tournament. All persons shall provide the badge and photo identification to the department upon request.

R. A qualified organization shall only contract with an operator (i) that purchases or receives its charitable gaming supplies from a permitted charitable gaming supplier pursuant to § 18.2-340.34 of the Code of Virginia or (ii) is permitted as a charitable gaming supplier.

S. Any house rules that shall govern the poker tournament shall be prominently displayed during each poker tournament. All house rules shall be preapproved by the department and shall be consistent with the Charitable Gaming Law, this chapter, and the official rules for poker tournaments established by the Poker Tournament Directors Association.

T. A qualified organization shall not rent, lease, or otherwise use any premises for the purposes of holding a poker tournament from a person who is not registered with the department as a landlord in accordance with 11VAC20-30-130.

11VAC20-30-70. Suspension, revocation, or denial of permit for organization.

A. Pursuant to § 18.2-340.20 of the Code of Virginia, the department may suspend, revoke, or deny the permit of any qualified organization to manage, operate, or conduct poker tournaments or to contract with an operator to administer the qualified organization's poker tournaments for cause, including any of the following reasons:

1. Any person involved in the management, operation, or conduct of the qualified organization's poker tournaments is found to be in violation of or has failed to meet any of the requirements of the Charitable Gaming Law or this chapter.

2. The qualified organization is found to be not in good standing with its state or national organization.

3. The IRS revokes or suspends the qualified organization's tax-exempt status.

4. The qualified organization willfully and knowingly provides false information in its application for a permit to conduct charitable gaming.

5. Any person involved in the management, operation, or conduct of the qualified organization's poker tournament has been convicted of any felony or any misdemeanor as follows:

a. For any person participating in the management or operation of any charitable gaming:

(1) Convicted of a felony; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years.

b. For any person participating in the conduct of charitable gaming:

(1) Convicted of any felony within the preceding 10 years; or

(2) Convicted of any misdemeanor involving fraud, theft, or financial crimes within the preceding five years.

6. The qualified organization fails to report a violation as required by 11VAC20-20-610.

7. The qualified organization is found to have managed, operated, or conducted a poker tournament or contracted with an operator or any person that administered a poker tournament on its behalf without a permit issued to the qualified organization to do so.

8. The qualified organization fails to comply with the requirements of 11VAC20-20-30.

9. If the qualified organization uses or intends to use an operator to administer its poker tournament, the qualified organization fails to submit or provide to the department a written contract that complies with 11VAC20-30-180, fails to submit or provide to the department a new or amended written contract with its operator within the 20 days following the date on which the contract is signed by all parties to the contract, or fails to submit or provide to the department a new or amended written contract with its operator that complies with 11VAC20-30-180.

10. The qualified organization, the members of the qualified organization, any persons affiliated or associated with the qualified organization, or immediate family members or persons residing in the household of a member of the qualified organization or a person affiliated or associated with the qualified organization shall not directly or indirectly receive a loan from a landlord, operator, charitable gaming supplier, or the agents, employees, immediate family members, or persons residing in the household of a landlord, operator, or charitable gaming supplier.

B. The failure to meet any of the requirements of § 18.2-340.24 of the Code of Virginia shall be cause for the denial of the permit, and no qualified organization shall manage, operate, and conduct any poker tournaments or contract with an operator to administer the qualified organization's poker tournaments until the requirements are met and a permit is obtained.

C. If the department suspends a qualified organization's permit, the department shall set the terms of the suspension, which shall include the length of the suspension and a requirement that, prior to reinstatement of the permit, the organization shall submit a remedial business plan to address the conditions that resulted in the suspension.

11VAC20-30-80. Poker tournaments.

A. A Texas Hold'em poker tournament is a competition at which:

1. Players shall pay a fixed fee for entry into the competition and for a certain amount of poker chips for use in the competition;

2. Players may be allowed to pay an additional fee during set preannounced times of the competition to receive additional poker chips for use in the competition;

3. Players may be seated at one or more tables simultaneously playing Texas Hold'em poker games;

4. Players shall, upon running out of poker chips, be eliminated from the competition;

5. A set preannounced number of players shall be awarded prizes of value according to how long such players remain in the competition;

6. The tournament has a fixed and predetermined end time in accordance with this section; and

7. The poker chips have no monetary or cash value and no actual currency is wagered.

B. Any poker competition that does not meet the requirements established in subsection A of this section is not a poker tournament and is prohibited pursuant to § 18.2-340.22 of the Code of Virginia. A qualified organization shall ensure its poker tournament meets the requirements established in subsection A of this section.

11VAC20-30-90. Operation of poker tournaments; administration of poker tournaments.

A. A qualified organization shall only manage, operate, and conduct a poker tournament after a permit has been issued pursuant to 11VAC20-20-20 by the department. A qualified organization that contracts with an operator that is registered pursuant to 11VAC20-30-50 shall obtain a permit prior to the operator administering a poker tournament.

B. A person shall only administer a poker tournament for a qualified organization permitted by the department pursuant to 11VAC20-20-20 and shall only administer a poker tournament after the person is registered pursuant to 11VAC20-30-50.

C. A qualified organization's game managers, volunteer game workers, dealers, charitable host representatives, or the immediate family members or persons residing in the household of a qualified organization's game managers, volunteer game workers, dealers, or charitable host representatives shall not participate as a player or otherwise play in the poker tournament in which they served as a game manager, volunteer game worker, dealer, or charitable host representative conducted by or administered for the organization.

D. The qualified organization shall ensure an operator's directors, officers, owners, partners, tournament managers, dealers, employees, independent contractors, volunteers, agents, or the immediate family members or persons residing in the household of an operator's directors, officers, owners, partners, tournament managers, dealers, employees, independent contractors, volunteers, or agents do not participate as a player or otherwise play in the poker tournament for which the operator is contracted to administer.

E. A qualified organization is responsible for all actions performed by its game managers, volunteer game workers, dealers, and charitable host representatives. If a qualified organization contracts with an operator to administer its poker tournament, the qualified organization is responsible for ensuring the poker tournament is administered in compliance with the Charitable Gaming Law and this chapter.

F. A qualified organization may not hold concurrent poker tournaments.

G. A qualified organization may conduct poker tournaments only at a location within the county, city, or town in which the organization's principal office, as registered with the State Corporation Commission, is located or in an adjoining county, city, or town. A qualified organization may not conduct poker at an establishment that has been granted a license pursuant to Chapter 2 (§ 4.1-200 et seq.) of Title 4.1 of the Code of Virginia unless such license is held by the organization.

H. A qualified organization shall ensure that all persons, including the operator's employees, independent contractors, volunteers, or agents, involved in the management, operation, conduct, or administration of a poker tournament are trained in the use of any equipment, on the policies and procedures relevant to the person's function, on the person's responsibilities, on the poker game, and on the Charitable Gaming Law and this chapter. All training courses shall be approved in advance by the department.

Any person who will serve as a dealer shall be trained, at a minimum, in the following:

1. Procedures for opening and closing tables for the poker tournament, including the proper security procedures regarding poker chip inventories;

2. Procedures for distributing and removing gaming chips and plaques from the poker tournament table;

3. Procedures for accepting cash at the poker tournament table;

4. Procedures for shift changes at the poker tournament table;

5. Procedures for the proper placement of wagers by players and the proper collection of losing wagers and payment of winning wagers; and

6. Recognizing problem and compulsive gamblers at poker tournaments and procedures for informing supervisory personnel.

Before any person who will serve as a dealer is allowed to deal at a poker tournament, the prospective dealer shall pass a table test. A table test shall consist of the dealer demonstrating proficiency at the poker tournament to the satisfaction of the game manager or tournament manager. The qualified organization shall ensure the completion of the training required by this subsection and the successful completion of the table test by the prospective dealer. Such completion shall be documented, maintained, and available for inspection by the department, at their request.

I. The qualified organization shall be responsible for ensuring all house rules are followed during the poker tournament, including those house rules administered by an operator.

J. If a qualified organization is managing, operating, and conducting its own poker tournament, then a game manager must be physically present during the entire duration of the poker tournament. If an operator is administering a qualified organization's poker tournament, then the charitable host representative must be physically present during the entire duration of the poker tournament and ensure the tournament manager is physically present during the entire duration of the poker tournament.

K. A qualified organization shall provide a badge that meets the criteria established in 11VAC20-30-90 Q for each of its game managers, the tournament manager, the charitable host representative, dealers, and other game workers. Each game manager, tournament manager, charitable host representative, dealer, or other game worker shall wear a badge so that the badge is visible to players and to the department during the duration of the poker tournament. Each game manager, tournament manager, charitable host representative, dealer, or other game worker shall also possess a current photo identification, such as a driver's license or other government-issued identification. The game manager, tournament manager, charitable host representative, each dealer, and all other game workers shall provide the badge, current photo identification, or both upon request by the department to do so.

L. If a qualified organization is managing, operating, and conducting its own poker tournament, then a game manager shall complete and sign a poker tournament reconciliation form within the 48 hours following the end of the poker tournament, as required by 11VAC20-30-100. If an operator is administering a qualified organization's poker tournament, then the charitable host representative shall complete a poker tournament reconciliation form, sign it, and ensure the tournament manager signs it within the 48 hours following the end of the poker tournament as required by 11VAC20-30-100.

M. All persons involved in managing, operating, conducting, or administering a poker tournament shall be 18 years of age or older.

N. During a poker tournament held by a qualified organization, no gambling or gaming may take place other than that specifically authorized by this chapter. During a poker tournament held by a qualified organization, no person may use currency, a token that is not an authorized tournament chip, or other thing of value as a wager.

O. No poker games utilizing any electromechanical device or other mechanism employing electronic chips, tubes, video display screens, or microprocessors may be used during a poker tournament.

P. Players must be physically present to play.

Q. During a poker tournament, all game managers, tournament managers, charitable host representatives, dealers, and all other game workers shall wear a badge that includes:

1. A recent photo of the person;

2. The first and last name of the person;

3. The name of the qualified organization or operator; and

4. The date the badge was issued to the person.

11VAC20-30-100. Tournament play.

A. All persons participating as a player in a poker tournament shall be 18 years of age or older.

B. Prior to a poker tournament, a qualified organization must establish the fixed fee that a player must pay in order to enter the poker tournament. The qualified organization must post or advertise the fixed entry fee for the poker tournament and the number of tournament chips received for that entry fee.

C. The qualified organization shall ensure a poker game meets the definition of Texas Hold'em poker game as stated in § 18.2-340.16 of the Code of Virginia.

D. The game manager, charitable host representative, dealer, volunteer game workers, or operator's employees, independent contractors, volunteers, or agents shall not:

1. Allow any wagering in any manner not set forth in this chapter;

2. Accept any direct or indirect tip or gratuity; or

3. Consume alcoholic beverages during the tournament.

E. The dealer shall only be responsible for dealing playing cards and handling tournament chips at the poker table during the poker tournament. The dealer shall not be assigned any other duties or responsibilities not directly related to dealing playing cards or handling tournament chips.

F. The following resources shall be used during a poker tournament:

1. A live dealer;

2. Physical playing cards;

3. Physical tournament chips; and

4. Tables large enough to ensure that players may examine their cards without disclosing the card value to other players. No single table shall have more than 11 players.

G. Re-buys may be allowed at preannounced times within the first three hours of tournament play or until the first break (consolidation or balancing of tables) of the tournament, whichever occurs first. These re-buys must occur at established times that are posted in the tournament rules prior to the beginning of the tournament. A re-buy must contain the predetermined number of poker chips established in the tournament rules. Re-buys may only occur before a player has lost all of his poker chips and may only bring the player up to the original amount of poker chips provided at the beginning of the tournament. A player who has lost all of his poker chips may not re-buy and is eliminated from the tournament.

H. No individual who is participating in the management, operation, or conduct of a poker tournament shall provide any information or engage in any conduct that alters or is intended to alter the outcome of any poker tournament.

I. Tournament chips.

1. All tournament chips used in a poker tournament must be purchased from a charitable gaming supplier permitted pursuant to § 18.2-340.34 of the Code of Virginia.

2. All poker tournaments shall be conducted using tournament chips approved by the department. The tournament chips shall bear the following:

a. The name, logo, or other identification of the charitable organization or operator issuing the tournament chip;

b. The word "Tournament;"

c. The tournament value of the poker chip. No monetary word or symbol, such as dollars ($) or cents (¢), shall be used on any poker chip; and

d. The phrase "No Cash Value."

3. A qualified organization or its operator shall store tournament chips in a secure area.

4. A qualified organization or its operator shall conduct an inventory of all tournament chips and include on a poker tournament reconciliation form prescribed or approved by the department any discrepancy in the inventory and shall include the balance for each tournament value of the poker chip on hand at the beginning of each tournament and the balance on hand at the end of each tournament.

5. Tournament chips are to be used in the play of the poker tournament and shall not be redeemed for cash or any other thing of value. A qualified organization or its operator shall not accept tournament chips as payment for any goods or services and shall not use tournament chips in any other transaction.

6. No person is permitted to sell or exchange a tournament chip for currency with another player, the operator, the qualified organization, or any other person or entity.

J. Playing cards.

1. All playing cards used in a poker tournament must be purchased from or provided by a charitable gaming supplier permitted pursuant to § 18.2-340.34 of the Code of Virginia.

2. The qualified organization or its operator shall conduct an inventory of all boxes containing decks of playing cards at the beginning of each tournament and at the end of each tournament to ensure that the boxes of cards are intact, unbroken, and free from alteration or tampering.

3. Decks of cards shall be stored in a secure location that minimizes alteration or tampering.

4. The dealer shall verify that all cards are present in the deck and visually inspect the backs of the cards for any defects that might compromise the integrity or fairness of the poker game and shall offer an opportunity for each player at the dealer's table to visually inspect the cards. The game manager or charitable host representative shall remove any deck of cards that is missing a card or contains damaged or altered cards or other card flaws that would affect the integrity of the poker game. Any deck found to be defective or missing a card or to contain damaged or altered cards or other card flaws shall be made unplayable.

5. Unless the Poker Tournament Directors Association rules differ, the ranking of hands, from highest to lowest, shall be as follows:

a. Royal flush;

b. Straight flush;

c. Four of a kind;

d. Full house;

e. Flush;

f. Straight;

g. Three of a kind;

h. Two pairs;

i. One pair; and

j. High card.

K. The order of finish for a poker tournament shall be determined by one of the following methods only:

1. If play continues until all but one player is eliminated before the predetermined end time, the order of finish shall be the order of elimination from last to first. The last remaining player shall be declared the winner; or

2. If play stops at the predetermined end time, the order of finish shall be determined by the ranking value of the tournament chips held by each player at the end of play from highest to lowest. The player with the highest value of tournament chips shall be declared the winner.

L. The following restrictions apply to method of play:

1. Wild cards are prohibited;

2. Hi/Lo games are prohibited;

3. Rakes or cutting of pots is prohibited;

4. A player shall only bet on his hand in a poker game;

5. A players is prohibited from exchanging information concerning his hand;

6. A players who folds from the poker game of play shall not reveal his pocket cards; and

7. No player may play more than one hand during a poker game.

M. A qualified organization shall prominently display its charitable gaming permit during the poker tournament, and if the qualified organization uses an operator to administer its poker tournament, the qualified organization shall also prominently display the operator's registration.

N. The qualified organization shall prominently display the department's poster advising the public of a telephone number where complaints relating to the poker tournament may be made. Such posters shall be in a format prescribed by the department, as required by 11VAC20-20-610.

O. The qualified organization shall prominently display a poster that bears a toll-free telephone number for "Gamblers Anonymous" or another organization that provides assistance to compulsive gamblers.

P. The qualified organization shall prominently display any house rules that shall govern the poker tournament beyond the official rules for poker tournaments established by the Poker Tournament Directors Association. Any house rules shall be consistent with the Charitable Gaming Law, this chapter, and the official rules for poker tournaments established by the Poker Tournament Directors Association.

Q. The qualified organization shall ensure all mechanical poker equipment is fully functional and maintains the integrity of the poker tournament prior to, during, and after the poker tournament. Any mechanical poker equipment that is not fully functional or that does not maintain the integrity of the poker tournament shall be removed immediately from the poker tournament by the qualified organization.

R. A qualified organization shall not manage, operate, or conduct its poker tournament or have its poker tournament administered by an operator on a premises where gambling or gaming activities occur, unless such activities are authorized by the Charitable Gaming Law or regulations adopted pursuant thereto; Chapter 40 (§ 58.1-4000 et seq.) or Chapter 41 (§ 58.1-4100 et seq.) of Title 58.1 of the Code of Virginia; or Chapter 29 (§ 59.1-364 et seq.) of Title 59.1 of the Code of Virginia.

S. Only a qualified organization or a permitted charitable gaming supplier shall advertise a poker tournament. Any printed advertisement is permitted, provided the name of the qualified organization shall be in a type size equal to or larger than the name of the premises used for the poker tournament, name of the operator, or any word referring to the poker tournament.

T. A game manager or, if a qualified organization uses an operator to administer its poker tournament, the charitable host representative shall ensure any tournament chips, playing cards, or mechanical poker equipment used to conduct the poker tournament are not counterfeit or tampered with or do not otherwise affect the integrity of the poker tournament prior to, during, and after the poker tournament. Any tournament chips, playing cards, or mechanical equipment found to be counterfeit or tampered with shall be removed immediately from the poker tournament. Such incidents shall be reported by the qualified organization or jointly by the qualified organization and operator to the department.

11VAC20-30-110. Charitable gaming supplies; approval of mechanical card shuffler and dealer shoes and other mechanical equipment.

A. All charitable gaming supplies, including cards, tournament chips, and mechanical equipment, shall be purchased from or provided by a charitable gaming supplier permitted pursuant to § 18.2-340.34 of the Code of Virginia.

B. Mechanical equipment may be used to conduct poker games or tournaments, provided that such equipment is preapproved by the department in accordance with and subject to this section and technical standards adopted by the department.

C. The department shall set testing criteria for all mechanical card shufflers and dealer shoes and other mechanical equipment used during a poker tournament. A mechanical card shuffler and dealer shoe or other mechanical equipment used during a poker tournament shall not be sold, leased, or otherwise furnished to any person in the Commonwealth for use during a poker tournament until an identical sample mechanical card shuffler and dealer shoe or equipment containing identical software has been certified by a testing facility that has been formally recognized by the department as a testing facility that upholds the standards of integrity established by the department. The testing facility must certify that the mechanical card shuffler and dealer shoe, other mechanical equipment, associated hardware, and associated software conform, at a minimum, to the requirements of this chapter. Once the testing facility reports the test results to the department, the department will either approve or reject the mechanical card shuffler and dealer shoe or other mechanical equipment and inform the manufacturer of the results. If any such approved system or equipment fails to meet the department's criteria, that system or equipment shall be recalled and shall not be distributed in the Commonwealth. The cost of testing shall be borne by the manufacturer of such equipment.

D. Notwithstanding any other testing criteria established by the department, the mechanical card shuffler and dealer shoe shall be tested to the standards established in GLI 29: Card Shufflers and Dealer Shoes, Version 1.0, produced by Gaming Laboratories International.

11VAC20-30-120. Rules of play.

All persons conducting, managing, operating, or administering a poker tournament shall adhere to the official rules of the Poker Tournament Directors Association.

11VAC20-30-130. Requirements regarding renting premises, agreements, and landlord participation.

A. A qualified organization shall not rent or use any leased premises to hold a poker tournament unless all terms for rental or use are set forth in a written contract provided to the department prior to the issuance of a permit to conduct the poker tournament.

B. A person who rents, leases, or otherwise provides a premises to a qualified organization to hold a poker tournament shall obtain a landlord registration from the department. A landlord shall obtain a landlord registration regardless of whether the landlord charges or intends to charge a rental fee for providing a premises to a qualified organization.

C. All persons who rent, lease, or otherwise provide a premises to a qualified organization to hold a poker tournament shall apply to the department for a landlord registration on a form prescribed by the department. The application for a landlord registration shall include:

1. The names of all owners, directors, and partners; and

2. All current rental agreements between the landlord and a qualified organization.

D. A landlord registration shall be valid for a period of one year from the date of issuance or for the period specified on the registration. The department may issue a registration for a period of less than one year. If any information on the registration application changes or is found to be inaccurate, the applicant shall notify the department and provide the updated or corrected information within three business days of the change or the discovery of the inaccuracy.

E. A landlord, the landlord's agents, or the landlord's employees or an immediate family member or person residing in the household of such landlord, agent, or employee shall not directly or indirectly make a loan to a qualified organization, a member of a qualified organization, a person affiliated or associated with a qualified organization, an operator, a supplier of poker supplies, or an immediate family member or person residing in the household of a member of a qualified organization, a person affiliated or associated with a qualified organization, an operator, or a supplier of poker supplies.

F. A landlord, the landlord's agents, the landlord's employees, or the immediate family members or persons residing in the household of such landlord, agent, or employee shall not directly or indirectly make any payment to a qualified organization, a member of a qualified organization, a person affiliated or associated with a qualified organization, an operator, a charitable gaming supplier, or an immediate family member or person residing in the household of a member of a qualified organization, a person affiliated or associated with a qualified organization, an operator, or a charitable gaming supplier.

G. A landlord, its agent, or its employees or the immediate family members or persons residing in the household of such landlord, agent, or employee shall not:

1. Participate in the management, operation, conduct, or administration of any poker tournament operated, conducted, or administered on the landlord's premises;

2. Sell, lease, or otherwise provide any charitable gaming supplies, including playing cards, poker chips, or other game pieces, for use during a poker tournament operated, conducted, or administered on the landlord's premises;

3. Require as a condition of the lease that a qualified organization use a particular charitable gaming supplier or operator; or

4. Provide, advise, or direct a qualified organization or operator to use a particular person to manage, operate, conduct, or administer a poker tournament that is to be held in the landlord's premises.

H. A member of a qualified organization who participates in the management, operation, or conduct of a poker tournament shall not provide services to a landlord or be remunerated in any manner by the landlord of the premises that the qualified organization uses to manage, operate, or conduct its poker tournament.

I. A qualified organization shall only lease a premises by means of a fixed rental payment. The fixed rental payment shall reflect the current fair market rental value of the property and shall not be based upon or determined by a percentage of the proceeds derived from the operation of the poker tournament or to the number of people in attendance at such tournament.

J. No contract for the rental or leasing of a premises for a poker tournament shall be contingent upon the qualified organization's agreement that it will contract with a particular business for a particular premises, equipment, or service. A landlord, owner, lessor, or lessee of a premises where a poker tournament is being played is prohibited from serving in any capacity with any qualified organization that is leasing from such landlord, owner, lessor, or lessee.

K. A charitable gaming supplier is ineligible for a landlord registration issued pursuant to the Charitable Gaming Law and this chapter.

L. A landlord shall provide to the department the records, including financial records, that the department deems necessary to complete an inspection, audit, or investigation. The department shall provide written receipt of such records at the time the landlord provides requested records to the department. The department may suspend or revoke the registration of a landlord who refuses to provide the requested record.

M. If the department determines through inspection, audit, or other means that a landlord is not in compliance with a provision of the Charitable Gaming Law or regulations adopted pursuant thereto, the department may deny, suspend, or revoke the landlord’s registration.

11VAC20-30-140. Bank accounts.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-80 regarding bank accounts.

11VAC20-30-150. Recordkeeping.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-90 regarding recordkeeping.

11VAC20-30-160. Financial reporting, penalties, inspections, and audits.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-100 regarding financial reporting, penalties, inspections, and audits.

11VAC20-30-170. Use of proceeds.

An organization that will conduct a poker tournament is subject to the provisions of 11VAC20-20-110 regarding use of proceeds.

11VAC20-30-180. Requirements regarding contracts.

A. If a qualified organization elects to use an operator to administer its poker tournament, then it shall obtain a written contract with the operator.

B. A written contract between a qualified organization and an operator shall identify the conditions and cost for the operator to administer a poker tournament for the qualified organization. This written contract shall:

1. Require the operator to register with the department and comply with the requirements established in 11VAC20-30-50.

2. Require the operator to report to the qualified organization and the department within 20 days if there is any action taken against any valid license, permit, certificate, registration, or other similar documents related to gambling held by the operator in any state, territory, a possession of the United States, the District of Columbia, or any political subdivision thereof.

3. Require the operator to report to the qualified organization and the department within 20 days if the operator fails to file or has been delinquent in excess of one year in the filing of any tax returns or the payment of any taxes due the Commonwealth or has failed to establish a registered office or registered agent in the Commonwealth if so required by § 13.1-634 or 13.1-763 of the Code of Virginia.

4. Require the operator to provide the qualified organization and the department with access to the operator's financial record for each poker tournament administered on the qualified organization's behalf for a minimum of the previous three fiscal years and, if necessary, to provide the qualified organization with copies or the department with the originals of these records or any other records deemed necessary to complete an inspection, audit, or investigation without hindrance from the operator. The department shall provide a written receipt for the originals of the records at the time of collection.

5. Require the operator to provide the qualified organization with a copy of a detailed invoice for each poker tournament that the operator administers on behalf of the qualified organization. The invoice shall include the information required 11VAC20-30-60 K.

6. Require the operator to retain all bank account records, including monthly bank statements, canceled checks or facsimiles thereof, and reconciliations for a minimum of three years following the close of a fiscal year.

7. Require the operator to display prominently its operator's registration during each poker tournament the operator administers on the qualified organization's behalf.

8. Require the operator to comply with any restrictions or additional recordkeeping and financial reporting requirements imposed upon the qualified organization by the department due to deficiencies identified through inspection, audit, or other means.

9. Require the operator to pay all expenses other than prizes that the operator incurs in the administration of the tournament by check or electronic fund transfer directly from its bank account.

10. Specify the duration of the written contract period and the termination rights for the qualified organization and operator.

11. Specify the terms of any arrangement agreed upon by the qualified organization and the operator regarding the deposit of the receipts received by an operator due to the operator's administering of a poker tournament for a qualified organization through an electronic fund transfer into the qualified organization's charitable gaming bank account. A written agreement specifying the terms of this arrangement shall be required prior to any electronic fund transfer occurring between the two parties.

12. Require the tournament manager to be physically present at all times during a poker tournament the operator is administering.

C. A qualified organization shall only contract with an operator that adheres to the provisions of the Charitable Gaming Law and this chapter.

D. An organization shall provide a copy of all written contracts between the organization and the operator to the department upon application for a permit or upon the entering into any contract with an operator following the submission of an application or receipt of a permit.

11VAC20-30-190. Charitable gaming suppliers.

A supplier of charitable gaming supplies used during a poker tournament is subject to the provisions of 11VAC20-20-130.

11VAC20-30-200. Procedural rules for informal fact-finding conferences and hearings.

A person who manages, operates, conducts, or administers a poker tournament or a landlord is subject to the provisions of 11VAC20-20-600 regarding procedural rules for informal fact-finding conferences and hearings.

11VAC20-30-210. Reporting violations.

A person who manages, operates, conducts, or administers a poker tournament or a landlord is subject to the provisions of 11VAC20-20-610 regarding reporting violations.

FORMS (11VAC20-30)

Annual Financial Report, Form 101 (rev. MM/YYYY)

Charitable Gaming Permit Application – New Applicants, Form 201-N (rev. MM/YYYY)

Charitable Gaming Permit Application – Renewal Applicants, Form 201-R (rev. MM/YYYY)

Destruction of Unused Charitable Gaming Supplies, Form 112 (rev. MM/YYYY)

Landlord Registration, Form 501 (eff. MM/YYYY)

Permit Amendment, Form 202 (rev. MM/YYYY)

Quarterly Financial Report Form, Form 102 (rev. MM/YYYY)

Report of Game Termination, Form 0 (rev. MM/YYYY)

Texas Hold'em Poker Tournament Operator Registration Application, Form 307 (eff. MM/YYYY)

Texas Hold'em Poker Tournament Operator Registration – Personal Information Form, Form 307a (eff. MM/YYYY)

Texas Hold'em Poker Tournament Reconciliation Summary, Form 114 (eff. MM/YYYY)

DOCUMENTS INCORPORATED BY REFERENCE (11VAC20-30)

GLI-29: Card Shufflers and Dealer Shoes, Gaming Laboratories International, LLC, Version 1.0, July 20, 2012, www.gaminglabs.com.

Poker Tournament Directors Association Rules, Poker Tournament Directors Association, 2019, September 17, 2019, https://www.pokertda.com/.