Quick Takeaways
- Illinois imposes tax on the net proceeds of charitable games, and operators, providers, and suppliers all have licensing or fee obligations. Operators pay a license fee every two years.
- A qualifying organization must generally be a religious, charitable, educational, veterans’, fraternal, or labor group, have been in Illinois for at least five years (or two years in some cases), operate without profit to members, and be federally tax-exempt under certain IRC sections.
- You can hold up to four charitable game events per year, but each event comes with filing, staffing, recordkeeping, and prize rules.
- The main return is Form RCG-18, Charitable Games Tax Return, which must be filed within 30 days of each event to avoid penalties and interest.
Why This Matters
If you run charity gaming events, tax compliance can feel intimidating. Between license applications, deadlines, event restrictions, and the difference between an operator, provider, supplier, and consultant, it is easy to miss something. The good news is that Illinois lays out the rules clearly — and once you understand the structure, the process becomes much more manageable.
What Are Charitable Games in Illinois?
Illinois says the tax is imposed on the net proceeds of charitable games. The state also says fourteen games are permitted: bang, beat the dealer, big six, blackjack, chuck-a-luck, craps, five-card stud poker, gin rummy, hold-em poker, keno, merchandise wheel, poker, pull tabs, and roulette. Profits from the games must support the organization’s goals, such as charitable work or education. A licensed organization may hold up to four charitable game events per year.
Who can qualify to conduct charitable games?
To be eligible, the group must generally:
- be a religious, charitable, educational, veterans’, fraternal, or labor organization,
- have existed in Illinois for at least five years in most cases,
- operate without profit to its members, and
- be exempt from federal income tax under IRC Section 501(c)(3), (4), (5), (8), (10), or (19).
Illinois adds one important exception: veterans’ organizations that are eligible for a bingo license are also eligible for a charitable game license regardless of federal tax status.
Key Terms You Should Know
Illinois uses several terms that determine who can do what at an event.
| Term | Meaning |
|---|---|
| Licensed organization (operator) | The qualified organization licensed to conduct the charitable games event. |
| Provider | The person or organization that owns, leases, or controls the premises where the event is held. |
| Supplier | The person or business that provides charitable games equipment. |
| Volunteer | A person recruited by the licensed organization who helps at the event. |
| Consultant company | A hired service provider that may assist with planning, training, security, or advertising, but does not manage or operate the event. |
That last category matters because Illinois allows consultants to help with event support, but they cannot take over event management or have a prohibited financial interest in the game.
How to Get Licensed
Illinois says organizations eligible to hold charitable games must submit an application at least 30 days before the event, and license fees must be paid when the application is filed.
Operator licensing
To apply, qualifying organizations must file Form RCG-1, Charitable Games Application for License, either electronically through MyTax Illinois or by mail. The application must include a sworn statement confirming the organization’s not-for-profit status and be signed by a person listed as an owner, officer, or day-to-day manager. Illinois also says the license is not assignable or transferable.
Operators must also complete Form RCG-2, List of Charitable Games Workers, and Form RCG-10, Diagram of Charitable Games Event Playing Area. If you are renewing, you must complete Form RCG-25, Expenditure of Funds Earned Through Charitable Games. If you later need to add or revise a scheduled event, you must file Form RCG-1-E at least 30 days before the event.
Supplier licensing
Suppliers must file Form RCG-7, Application for Charitable Games Supplier’s License, either electronically through MyTax Illinois or by mail.
Provider licensing
Providers must file Form RB-30, Provider of Premises License Application, either electronically through MyTax Illinois or by mail.
Rules You Must Follow During an Event
Illinois places strict limits on how charitable games are run. Here are the main operating rules:
- The police department or sheriff’s office with jurisdiction must be notified of all originally scheduled, changed, added, or cancelled events, and a copy of that notice must be emailed to IDOR.
- Only bona fide members, employees, or volunteers of the licensed organization may manage or operate the games.
- Volunteers may participate in only 12 events per year.
- No one may receive compensation or remuneration, directly or indirectly, for participating in event management or operation.
- No single bet at any house-banked game may exceed $20.
- Participants may cash in chips for currency up to $500 in cash winnings when leaving. Gift cards with broad acceptance, such as Visa gift cards, are treated as cash prizes. Noncash prizes have no limit, but participants must sign a receipt, and the licensee must keep a list of prizes awarded.
What counts as managing or operating the event?
Illinois says management or operation includes selling admission tickets, selling or redeeming chips or play money, dealing or acting as pit boss, and supervising or instructing anyone conducting a game. It does not include setup, cleanup, food or drink sales, or security for people or property.
Return, Report, and Recordkeeping Requirements
The most important filing is Form RCG-18, Charitable Games Tax Return. Illinois says you must file a separate return for each event within 30 days of the event, either electronically through MyTax Illinois or by mail. Filing late can trigger penalties and interest. You must also complete, but not submit, Form RCG-32, Charitable Games Event Workers Attendance List, and keep it in your records.
Illinois also says organizations must complete an annual report for charitable games equipment they own on Form RCG-9, Application or Annual Report for Charitable Games Equipment Ownership Permit. Keep that report in your records and make it available when requested.
License Fees at a Glance
| Item | Fee | Notes |
|---|---|---|
| Organization charitable games license | $400 | Valid for 2 years. Application may include up to 4 events per year. |
| Supplier license | $500 annually or $1,500 for 3 years | For gaming equipment suppliers. |
| Provider’s fee | $50 annually or $150 for 3 years | For those who rent space for charitable games. |
If you do not request all four event dates at the time of application, Illinois says you may amend or add dates by requesting an amendment in writing at least 30 days before the event.
Who Can Help Run the Event?
Illinois is strict about who may manage or operate a charitable games event. Only members, employees, or volunteers recruited by the licensed organization may do that work. Consultants hired for support tasks — like planning, training, security, or advertising — may not participate in management or operation under any circumstance.
Illinois also says consultants and others may not have a proprietary interest in the event, and they may not be paid based on a percentage of gross or net proceeds. That means if you are hiring outside help, you need to be very careful about the compensation structure.
What Happens If You Break the Rules?
Illinois warns that violations can result in license revocation, civil penalties of up to $250 per violation for each individual involved, or both. There can also be referral to local authorities for prosecution under Illinois illegal gambling law.
IDOR may also require a licensed organization to obtain, at its own expense, a certified and unqualified financial statement and verification of records from an Illinois CPA firm. If the organization fails to comply within 90 days after notice, its license may be suspended or revoked.
Common Mistakes to Avoid
1) Filing too late
The application must be filed at least 30 days before the event, and event changes also have deadline rules.
2) Letting the wrong people work the event
Only members, employees, or approved volunteers may manage or operate the game. Consultants cannot step into that role.
3) Forgetting the separate event return
You must file a separate Form RCG-18 for each event within 30 days.
4) Overlooking prize limits and cash-out limits
Illinois limits house-banked bets to $20 and cash winnings to $500 when participants leave.
5) Missing recordkeeping
Forms like RCG-2, RCG-10, RCG-25, RCG-32, and RCG-9 must be kept in your records and made available on request.
Pro Tips
- Build a compliance calendar for your event dates, amendment deadlines, and the 30-day return deadline.
- Keep a single binder or digital folder for all charitable games forms and supporting documents.
- Review compensation arrangements carefully so no consultant or worker receives prohibited profit-sharing tied to proceeds.
- If you are unsure whether your group qualifies, verify the organization type and tax-exempt status before applying.
Final Thoughts
Illinois charitable games rules are detailed, but they are manageable when you break them into three parts: who can qualify, how the event must be run, and what forms must be filed on time. If you handle the licensing and recordkeeping carefully, you can focus more on the fundraising purpose and less on compliance stress.
Disclaimer
This article is for educational purposes only and is not personal tax, legal, or accounting advice. Tax and licensing rules can change, and your specific facts may affect how the rules apply to you. Please consult a qualified CPA, attorney, or tax professional for advice about your situation.
