DEFINITIONS OF NET GAMING PROFIT BY NEBRASKA SOS

300.01 Bingo, Lottery, Raffle, and Lottery by Pickle Card Regulations 35‑300 through 35‑318 are adopted to carry out the provisions of the Nebraska Pickle Card Lottery Act.

300.02 Definite profit means the gross proceeds or total possible receipts of a pickle card unit less all of the possible prizes from that pickle card unit. For example:

Gross proceeds (3,600 $1.00 pickle cards) $3,600.00

Less prizes ( 2,600.00)

Definite profit $1,000.00

300.03 Department means the Nebraska Department of Revenue.

300.04 Dispensing device means any machine or device into which a person inserts money, a token, or something of value in exchange for one or more pickle cards. The definition of dispensing device shall not include any machine or device that awards or dispenses any other type of prize including, but not limited to, free plays or any other item of value.

300.05 Flare card means a card, board, poster, flyer, or paper prepared by the manufacturer of a pickle card unit which is enclosed with each unit. The flare card shall identify the serial number for the unit; the state iden­tification stamp; the numbers, letters, symbols, or configurations which, when revealed by opening the tabs on a pickle card, represent the winning combina­tion(s); the number of cards in the pickle card unit which contain the winning combina­tions and their values; the form number of the game and the name, logo, symbol, design, or trademark of the manufacturer of the pickle card unit.

300.06 Gross profit means the definite profit from a pickle card unit less any commission paid to a pickle card operator for the sale of the unit. For example:

Gross proceeds (3,600 $1.00

pickle cards) $3,600.00

Less prizes ( 2,600.00)

Definite profit $1,000.00

Less pickle card operator’s

commission (30%) ( 300.00)

Gross profit $ 700.00

300.07 Member means an individual who meets the written membership requirements contained in the organization’s articles of incorporation, bylaws, charter, statement of purpose, or other written rules or statement governing membership of the organization.

300.07A One whose only participation in the activities of the organization involves the conduct of gaming activities shall not be considered a member.

300.08 Net profit means the gross profit from a pickle card unit less the unit cost and the allowable expenses incurred by the licensed organization for marketing the unit. For example:

Gross proceeds (3,600 $1.00 pickle cards) $3,600.00

Less prizes ( 2,600.00)

Definite profit $1,000.00

Less pickle card operator’s

commission (30%)* ( 300.00)

Gross profit $ 700.00

Less elements of unit cost

Cost of unit $56.00

Imprinting fee 7.00

Pickle card tax

(10%)* 100.00

State Sales Tax (5%)** 8.00

Federal tax, (.0025)***

if applicable 9.00

$180.00

Allowable expenses (8%)*

4% sales agents’

commission $ 40.00

Other Marketing Expenses 40.00

$ 80.00

Total unit cost and

allowable expenses $260.00 ( 260.00)

Net profit $440.00

* calculated on definite profit

** calculated on total unit cost

*** calculated on gross proceeds

300.09 Substantial interest means connected, interested in, or otherwise concerned directly or indirectly with an individual, organization, firm, or corporation as follows:

300.09A With respect to a sole proprietorship, an individual or his or her spouse who owns, operates, manages, or conducts directly or indirectly, a part of the sole proprietorship;

300.09B With respect to a partnership, an individual, his or her spouse, or a partnership, limited liability company, or corporation who owns, operates, manages, or conducts directly or indirectly a part of the partnership activity, or shares in any of the profits or potential profits of the partnership activities;

300.09C With respect to a limited liability company, an individual, his or her spouse, or a partnership, limited liability company, or corpora­tion who owns, operates, manages, or conducts directly or indirectly a part of the limited liability company activity, or shares in any of the profits or potential profits of the limited liability company activity;

300.09D With respect to a corporation, an individual, his or her spouse, or a partnership, limited liability company, or corporation who owns, operates, manages, or conducts directly or indirectly a part of the corporation activity, or who is an officer or director of the cor­pora­tion or is a holder directly or indirectly of ten percent or more of any class of stock in the corporation;

30.09E With respect to an individual, such individual or his or her spouse who provides ten percent or more of the capital, whether in cash, goods, or services for the operation of a manufacturer, distributor, or pickle card operator during a calendar year; and

300.09F With respect to an organization, association, or business not covered by subdivisions A, B, C, D, or E of this regulation:

300.09F(1) An individual or his or her spouse who is an officer or director of or manages the business affairs of the organization, association, or business; or

300.09F(2) An individual or his or her spouse who owns or controls ten percent or more of the assets of the organization, association, or business.

300.10 Ultimate use means the final purpose for which the proceeds or profits of a lottery by the sale of pickle cards are put by a licensed organi­za­tion. In the case of expenses incurred by the organization, the ultimate use of pickle card proceeds to pay such expenses shall mean payment directly to the individual, business or corporation with whom the organization has incurred that particular expense. In the case of a lawful purpose donation, the ultimate use of pickle card net profits shall mean that those monies are donated or directed by the licensed organization directly to the final recipient for the lawful purpose intended by the organization.

300.11 Unit cost means those costs incurred by a licensed organization connected with the purchase of a pickle card unit. Unit cost shall consist of the cost of the unit itself, the pickle card tax, any applicable sales or use tax, any federal gaming tax for which a licensed organization may be liable, the imprinting fee charged by a licensed distributor, and any shipping or delivery fee if invoiced from the distributor to the licensed organization.

300.12 Youth Amateur Athletics or Youth Sports means activities sponsored by an organization which organizes, supervises, or administers team or individual activities which consist of an element of enjoyment or recreation involving the practice of individual skill and in which all those participating on the team or in an individual activity are under the age of 19.