Most gaming, if regularly carried on for profit, is an unrelated trade or business activity, which may produce unrelated business taxable income (UBTI). Publication 3079 PDF provides questions and answers that can help determine if an organization it has taxable income from gaming. “Gaming” refers to all forms of games of chance, from bingo and raffles to pari-mutuel betting and video games. 41 Taxation of Gaming Activities Conducted by Tax Exempt Organizations Publication 3079, Tax-Exempt Organizations And Gaming PDF.Audit Technique Guide (ATG) – Organizations Conducting Gaming Activities PDF.1996) Taxpayer’s “Instant Bingo” was not “any game of bingo” as defined under Section 513(f) because players did not place markers over randomly called numbers and the winners were not determined in the presence of all persons placing wagers Resources (Court Cases, Chief Counsel Advice, Revenue Rulings, Internal Resources) Section 1.513-5 Certain bingo games not unrelated trade or business. IRC Section 513(d)(2) “Qualified public entertainment activity,” conducted by a “qualifying organization” described in Section 501(c)(3), (4), or (5), and conducted in conjunction with public fairs or expositions, is not an unrelated trade or business.Section 1.513-1(e) Any trade or business in which substantially all the work in carrying on such trade or business is performed for the organization without compensation is not an unrelated trade or business.

IRC Section 511 Imposition of tax on unrelated business income.

IRC Section 513(f), for example, provides that “traditional” bingo is not an unrelated trade or business. Gaming is treated as an unrelated trade or business activity, unless a specific statutory exception applies.

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