Hosting Bingo Events Legally in Mesa, Arizona (Chat GPT Deep Research Report)

David Baxter
Aug 8
11 min read

NOTE FROM BEANCHAIN TEAM

We use ChatGPT to help us research reports on certain ideas and topics to get the ball rolling for our own research or to help us explore ideas. AI can hallucinate things, and for that reason, you should always be wary of AI-generated research. That being said, we have found this to be a helpful tool, and we wanted to share the results in an effort not to be wasteful. We hope this information can help you!

Query used to generate this report:

We want to do a bingo night! We're in Mesa Arizona and need to do thorough research on which laws apply specifically to bingo in our area. What do we need to do in order to be safe legally while hosting bingo events?

Bingo as Gambling under Arizona Law

Legal Status: Under Arizona law, bingo with paid entry and prizes is generally considered gambling because it involves paying for a chance to win something of value by chance. Arizona’s criminal code defines gambling as “risking something of value for an opportunity to win a benefit, which is awarded by chance”.
Permitted Exception: Bingo is legal in Arizona only if conducted in accordance with Arizona’s bingo statutes (Title 5, Chapter 4 of the Arizona Revised Statutes). In fact, Arizona explicitly allows bingo for certain purposes – primarily for recreational play or for approved nonprofit fundraising – subject to strict regulations. All other unlicensed gambling remains illegal.
Enforcement: Arizona’s Department of Revenue enforces the bingo laws and rules. Operating bingo outside these rules can lead to loss of license or even criminal charges. In short, a bingo night where participants pay for cards and win prizes is gambling, but it can be legally conducted only by following the state’s bingo licensing laws.

Applicable Laws and Local Regulations

State Statutes: The primary laws governing bingo are found in Arizona Revised Statutes (A.R.S.) Title 5, Chapter 4 (“Games of Bingo”), which covers licensing, operation, and restrictions for bingo games. Key provisions include who may run bingo games, prize limits, use of proceeds, and reporting requirements, all enforced by the Department of Revenue.
Mesa & Maricopa County Rules: There are no separate City of Mesa ordinances that override state bingo law; however, local approval is required as part of the state licensing process. In Mesa (located in Maricopa County), the local governing body (the Mesa City Council for events in Mesa, or the Maricopa County Board of Supervisors for unincorporated areas) must review and approve your bingo license application before the state will issue a license. This involves a public hearing at the city or county level per A.R.S. §5-404. For example, Maricopa County’s procedure (mirrored by Mesa for city applications) requires submitting your bingo application to the Clerk of the Board/City, a hearing within ~45 days, and an approval vote recommending the license to the state. In summary, state law preempts local law on bingo, but Mesa/Maricopa must sign off on the license application via a local hearing and recommendation.

Licensing Requirements for Bingo Events

Bingo License Needed: If you plan to charge for bingo cards/entry and award prizes, you must obtain a state bingo license before holding the event. Conducting a bingo game for money without a license is unlawful. Arizona’s Department of Revenue is the bingo licensing authority. The license is valid for one year and must be renewed annually if you continue games.
License Classes: Arizona has three classes of bingo licenses based on the scale and purpose of games:
- Class A: For small-scale or recreational bingo (gross receipts up to $75,000/year). Any individual or group can apply for a Class A license (you need not be a nonprofit), but all proceeds must be returned to players as prizes (no profit). Class A is often used for purely social bingo games where the organizers do not keep any money.
- Class B: For larger charitable bingo (gross receipts up to $500,000/year). Only a qualified nonprofit organization (see below) can hold a Class B license. Some proceeds can be used for the organization’s lawful purposes, and this class is intended for fundraising.
- Class C: For the largest charitable bingo operations (gross receipts over $500,000/year), also limited to qualified nonprofits.
Local Application Process: To get licensed, you must fill out the Arizona bingo license application (Form 832) and first submit it to the City of Mesa (or County, if applicable) for approval. Mesa’s licensing office forwards approved applications to the state. Tip: Mesa’s official guidance notes that you must submit the state bingo application packet to the City of Mesa to **“start the Bingo licensing process.”* Expect the city to charge a local processing fee and hold a council hearing as required by A.R.S. §5-404. Once the city endorses it, the Department of Revenue will issue the bingo license. No bingo event with paid entry can be held legally in Mesa without this license in hand.

Prize Restrictions and Limits

Arizona law places strict limits on bingo prizes and the types of prizes allowed:

Cash Prize Limits: No single bingo game may award more than $1,000 in prize value, and the total prizes in any one bingo session (“occasion”) may not exceed $3,000. These caps apply whether prizes are cash or merchandise. (There is an exception for certain special bonus games for charity bingo with state approval, but those are not available to Class A games.)
Door Prizes & Extras: Any door prize, raffle, discount, or other inducement given out during a bingo event cannot exceed $250 in value per occasion. This prevents offering high-value giveaways to attract players beyond the bingo prizes themselves.
Cash vs. Gift Cards: Cash prizes are allowed (subject to the above limits). Gift cards or merchandise prizes are also permitted, but note that the law treats gift cards as “merchandise.” The retail value of any merchandise prize counts toward the prize limit, and merchandise prizes cannot be redeemable for cash. In practice, this means if you offer gift cards (e.g. a store or Visa gift card), they must not be exchangeable for cash and must be counted at face value toward the $1,000/$3,000 limits.
Prohibited Prizes: Alcoholic beverages may NOT be given as prizes at bingo events. Additionally, offering lottery tickets or other forms of unlawful gambling as prizes would be illegal. Stick to money, gift cards, or tangible goods within the allowed values.
Age Restrictions: Although not explicitly asked, note that players must be at least 18 (since minors cannot gamble) – ensure your participants are adults as required by law.

Eligible Organizations and Permissible Hosts

Nonprofit Organizations: Arizona’s bingo laws were primarily designed to allow certain tax-exempt or nonprofit organizations to conduct bingo for fundraising. Qualified organizations include bona fide charities, religious or fraternal organizations, veterans’ groups, homeowners’ associations, volunteer fire departments, etc., that operate without profit and have existed in Arizona for at least two years. These groups can apply for Class B or C licenses to raise money for their charitable purposes. For example, a church, VFW post, or local charity in Mesa can host bingo and use the proceeds for their mission (after paying the required bingo taxes).
Recreational/Social Groups: For purely recreational bingo (no profit), any person or group can apply for a Class A license. This might include clubs, nursing homes, or even a group of neighbors, as long as all the money collected is paid back out in prizes. Class A is essentially a break-even entertainment license – it lets you charge for cards and award modest prizes, but you cannot make a profit from the games.
For-Profit Businesses: Regular businesses or individuals cannot run bingo for profit. If you are not a qualified nonprofit, you are limited to the Class A scenario where all gross receipts go back to players. Arizona law does not allow commercial bingo halls or cash bingo games run for private profit. Even Class A licensees are usually community-oriented; any net proceeds would have to be used for a lawful purpose (not personal gain). In short, unless you’re a charity or similar organization, you cannot pocket money from a bingo night.
Special Case – Social Gambling: Arizona does have a “social gambling” exemption (A.R.S. §13-3301(7)) for games among friends where nobody makes a profit except the players. However, that does not apply to organized bingo events where an organizer is charging entry. Once you sell bingo cards or seats and award prizes, you fall under the bingo licensing law, not the casual home game exception.

Reporting and Tax Obligations

Hosting licensed bingo events comes with ongoing reporting and tax duties to ensure compliance:

Financial Reporting: Bingo licensees must keep records of all funds collected and prizes paid. After each bingo occasion (or on a set schedule per license class), organizers must file a financial report with the Arizona Department of Revenue detailing gross receipts, prizes paid out, expenses, and net proceeds (if any). For example, Class B licensees file quarterly reports, while Class A may file annually, per the requirements of A.R.S. §5-407. Failing to report as required can lead to penalties or revocation of the license.
Use of Proceeds: All net proceeds (if any remain after paying prizes and allowed expenses) must be devoted to lawful charitable or organizational purposes. A licensed bingo operator cannot simply keep the profit. Nonprofits must use it for their charitable mission; Class A games typically have no net profit (or a trivial one) by design. The Department of Revenue may ask a licensee to show cause if they don’t use or report their bingo proceeds properly.
Bingo Tax: Arizona imposes a special bingo tax on the money collected:
- Class A: Taxed 2.5% of adjusted gross receipts (basically 2.5% of any net profit left after prizes). In practice, since Class A games return all receipts as prizes, often there is little to no tax due beyond the minimum.
- Class B: Taxed 1.5% of the gross receipts (total money taken in from games) for the quarter/year.
- Class C: Taxed 2% of gross receipts.These taxes are paid to the state’s general fund. The bingo operator must calculate the tax due based on their reports and remit payment to the Department of Revenue on the schedule provided (often accompanying the financial report filings).
Other Taxes: If the bingo event includes sales (concessions, etc.), normal sales taxes (transaction privilege tax) may apply to those non-gambling sales. However, the bingo revenue itself is only subject to the bingo tax, not sales tax. Nonprofits should also ensure compliance with any IRS rules (e.g. reporting large prizes to the IRS or withholding tax on big cash prizes over $600), though typical small bingo prizes usually fall below federal reporting thresholds.
Record Keeping: You are required to maintain records of each bingo session (income, prize payouts, expenses) and keep them available for inspection. The Department of Revenue and local law enforcement can inspect the premises and records at any time during games to ensure compliance. Proper bookkeeping is essential to demonstrate that all funds were handled according to law.

Steps for Organizers to Stay Compliant

If you intend to host a bingo event in Mesa with paid entry and prizes, follow these key steps to remain compliant:

Determine Eligibility: Decide under what category you will operate. Are you a qualified nonprofit conducting a fundraiser (Class B/C license)? Or a private group running a social game with all money paid out as prizes (Class A license)? Ensure you meet the requirements (e.g. nonprofits need 2+ years of existence in AZ). If you do not fit the allowed categories, do not proceed – running unlicensed or for-profit bingo is illegal.
Familiarize Yourself with the Law: Obtain and read the Arizona bingo statutes and rules. The Department of Revenue encourages prospective hosts to thoroughly understand the requirements before applying. Key areas to note are prize limits, use of proceeds, and reporting duties.
Apply for a Bingo License: Acquire the Arizona Bingo License Application (Form 832 and related forms) from the Department of Revenue’s website or office. Complete the forms, which will ask for details about your organization (if applicable), the premises, the games schedule, the intended use of proceeds, and the designated bingo manager and assistants. Do not sell any bingo cards or hold games until you have the license.
Submit to Local Governing Body: File your completed application with the City of Mesa (or Maricopa County, if outside city limits) for local approval before sending it to the state. In Mesa, submit the application and the city’s bingo license fee to the City Clerk or Licensing office. The City will schedule a public hearing on your application within 45 days. Be prepared to attend the hearing (for Mesa City Council or County Board of Supervisors) where they will review your application and ensure it meets the criteria.
Obtain Local Approval: Secure a recommendation of approval from the Mesa City Council (or County Board). The local governing body will endorse the application with an approval (or disapproval) and forward it to the Arizona Department of Revenue. If disapproved, you’ll be informed of the reasons and you cannot proceed with bingo. If approved locally, you’re almost there.
State License Issuance: After local approval, submit the endorsed application and state license fee to the Arizona Department of Revenue’s Bingo Unit (if the city hasn’t forwarded it for you). The Department will issue your official Bingo License, assigning you a class (A, B, or C) as appropriate. The license must be conspicuously displayed at the bingo event location once you start games. Remember, the license expires in one year, so mark your calendar to renew timely if you plan to continue beyond that.
Conduct the Bingo Games Legally: When running the event, adhere to all the rules:
- Charge only the posted prices for cards/entries and do not exceed your licensed prize limits. For instance, do not give any single winner more than $1,000, and keep total payouts under $3,000 for the session.
- Do not offer prohibited prizes like alcohol, and value any non-cash prizes at fair retail value.
- Ensure all bingo equipment and draw methods are fair and random, and that only people 18 or older play (Arizona law requires players to be adults, given gambling laws).
- Make sure no unlicensed gambling occurs on the side (e.g. no unauthorized raffles or side bets around your bingo). Stick to the activities allowed by your bingo license.
Use Proceeds Properly: If you’re a nonprofit, track all income and expenses. After paying prizes, bingo law allows only certain legitimate expenses (like bingo equipment, rent, and advertising) and no one can be paid a salary from bingo except as allowed by law. All net profit must go to the organization’s lawful charitable purposes, not into anyone’s pocket. If you’re Class A, ideally there will be no net proceeds (any small overage should be minimal and still used for a lawful purpose or added to prizes).
Keep Records & Submit Reports: Maintain a ledger of each bingo occasion (sales, prizes, expenses). On a regular schedule (monthly, quarterly, or annually depending on license class), file the required Bingo Financial Report with the Department of Revenue (forms are provided by the state). Pay the bingo tax along with your report, calculated per the class tax rate on your revenue. For example, a Class B charity in Mesa would file a quarterly report of gross receipts and pay 1.5% of that to the state. Class A operators must file at least an annual report. Timely filing is important; late reports can incur penalties.
Comply with Oversight: Be aware that your bingo events can be audited or inspected. The Department of Revenue or law enforcement may visit to ensure you’re following the rules (they can inspect the premises and records at any time during a game). As long as you’re operating transparently and within the law – prizes paid correctly, no underage gambling, no unauthorized payouts – these checks should be routine. Non-compliance (e.g. paying out over-the-limit prizes or diverting funds) can lead to suspension or revocation of your license and potential criminal charges.

By following the above steps and adhering to Arizona’s bingo regulations, an organizer can host a bingo night in Mesa legally and responsibly. Always consult the latest official resources or legal counsel if unsure, as Arizona’s laws and administrative rules can be updated. The Arizona Department of Revenue’s Bingo Unit is also a helpful contact for any questions during the process. Compliance not only avoids legal trouble, but also ensures a fair, fun bingo event for all participants within the bounds of the law.

Sources:

Arizona Department of Revenue – “Bingo in Arizona” (official overview of bingo laws and licensing)
Arizona Revised Statutes Title 5, Chapter 4 – Arizona Bingo Statutes (A.R.S. §§ 5-401 to 5-415, including licensing, operation, and prize rules)
Arizona Revised Statutes Title 13, §13-3301 – Arizona gambling definition (criminal code, defining gambling and exemptions)
Maricopa County Clerk of Board – “Bingo Licenses” (county guidance on local bingo license approval process)
A.R.S. §5-404 – Bingo license application process (requirement for local governing body hearing and approval).
A.R.S. §5-406 – Bingo conduct and prize limitations (restrictions on prizes, equipment, and use of proceeds).
A.R.S. §5-413 – License classifications (who may apply for Class A, B, or C licenses and gross receipt limits).
Arizona Dept. of Revenue – Bingo Forms and FAQs (for application forms and additional rules).