A Michigan bingo license is issued by the Charitable Gaming Division of the Michigan Lottery under the Traxler-McCauley-Law-Bowman Bingo Act, and it is required for any qualifying nonprofit that runs bingo as a fundraiser. Annual fees run from $25 for a short-term event to $150 for a full ongoing operation, and the rules governing eligibility, prizes, proceeds, and records are strict enough that record-keeping mistakes can cost you the license faster than the games themselves ever will.1State of Michigan. Charitable Gaming Division
Which Organizations Qualify
Eligibility is limited to bona fide religious, educational, service, senior citizens, fraternal, and veterans’ organizations that operate without profit to their members. On top of that, the organization must either have existed continuously for at least five years or hold tax-exempt status under Section 501(c) of the Internal Revenue Code. One of the two is enough.2State of Michigan. Traxler-McCauley-Law-Bowman Bingo Act, Act 382 of 1972 – Section: 432.103a Definitions
Political committees, campaign committees, ballot question committees, and other entities organized under Michigan’s campaign finance act are excluded outright, no matter how old they are or what their tax status looks like.3State of Michigan. Traxler-McCauley-Law-Bowman Bingo Act, Act 382 of 1972 – Section: 432.103a(e)
License Types, Fees, and Prize Limits
Michigan issues three bingo license categories. Your choice depends on how often you plan to run games and how large the prizes will be.
- Large bingo, $150 annual fee. Covers a regular, ongoing series of occasions. Total prize value at a single occasion cannot exceed $3,500, and no single game’s prize can exceed $1,100.
- Small bingo, $55 annual fee. Also covers a regular series, but with tighter caps: $300 total prizes per occasion, and $25 maximum for any single game.
- Special bingo, $25 fee. A short-term license for events lasting up to seven consecutive days, with prize caps matching large bingo. An organization can receive up to four special bingo licenses per calendar year.
These fees and caps come directly from the statute.4State of Michigan. Traxler-McCauley-Law-Bowman Bingo Act, Act 382 of 1972 – Section: 432.104a Issuance of License Progressive jackpot games are a separate category with their own rules: the jackpot starts at no more than $500, uses a coverall pattern, carries forward if uncalled, and only one progressive game can run at any given occasion.5Michigan Legislature. MCL 432.105c – Michigan Progressive Jackpot Bingo
How to Apply
Applications go to the Charitable Gaming Division of the Michigan Lottery. The Michigan Gaming Control Board handles casinos, not charitable gaming, so applications sent there will not reach the right office.1State of Michigan. Charitable Gaming Division
You will need to submit documentation showing the organization qualifies, including articles of incorporation or equivalent organizational documents and proof of either 501(c) status or five continuous years of existence. Expect to describe the organization’s purpose and structure, provide details on the planned bingo events, and include the license fee. The Charitable Gaming commissioner reviews the application to confirm eligibility and may ask for more information, so allow several weeks.
How the Money Has to Be Used
This is where organizations most often get in trouble. Net proceeds from bingo must be devoted exclusively to the lawful purposes of the licensed organization. Before you calculate those net proceeds, only a limited set of expenses can be paid from bingo revenue:
- Purchase, rental, or repair of bingo equipment
- Cash or merchandise prizes
- Rent for the event location
- Janitorial services
- The bingo license fee itself
- Other reasonable expenses permitted by rule of the commissioner
Everything left after those allowable expenses goes to the organization’s charitable mission.6State of Michigan. Traxler-McCauley-Law-Bowman Bingo Act, Act 382 of 1972 – Section: 432.109 Use of Net Proceeds Diverting proceeds to anything outside the organization’s stated purpose is one of the quickest ways to lose a license.
Records and Financial Reporting
Licensees have to keep detailed financial records for all bingo activity: income, expenses, prizes, bank deposits, canceled checks, and invoices for every expenditure. Records must stay available to the Charitable Gaming Division and be retained for the current calendar year plus three additional years.7Legal Information Institute. Michigan Admin Code R 432.21334 – Bingo Financial Records Retention
Large bingo licensees file financial statements quarterly, due by the tenth day of the month after each reporting period ends.8Legal Information Institute. Michigan Admin Code R 432.21335 – Financial Statement Requirements If your organization also sells charity game tickets at bingo events, that activity gets reported on the same statement.9Legal Information Institute. Michigan Admin Code R 432.21624 – Financial Statement Requirements
Loans or donations from individuals to fund bingo operations are allowed, but only under a written, witnessed agreement that includes a repayment schedule. A copy of that agreement has to be kept with the financial records.7Legal Information Institute. Michigan Admin Code R 432.21334 – Bingo Financial Records Retention
Age and Volunteer Rules
Nobody under 18 may play bingo, run or assist with a bingo game, or handle bingo equipment. The same age minimum applies to selling or buying raffle tickets and charity game tickets at bingo events.10Legal Information Institute. Michigan Admin Code R 432.21309 – Minimum Age
Most operations rely on volunteers. Under the Fair Labor Standards Act, individuals may volunteer for charitable and religious nonprofits without triggering wage-and-hour rules, as long as they serve freely, aren’t displacing regular employees, and aren’t performing the same services they get paid to do elsewhere for the same organization.11U.S. Department of Labor. Fact Sheet 14A – Non-Profit Organizations and the FLSA Pay a volunteer a regular stipend or hourly wage and you have likely created an employment relationship, with minimum wage and overtime attached.
Federal Tax Obligations
State licensing is only half the compliance picture.
Unrelated Business Income
Revenue from activities outside a nonprofit’s core mission normally triggers federal tax under the unrelated business income rules. Bingo has a specific carve-out under 26 CFR 1.513-5: bingo income is excluded from unrelated business taxable income if the games are conducted legally under state and local law and are not played in a jurisdiction where bingo is ordinarily carried out on a commercial, for-profit basis.12eCFR. 26 CFR 1.513-5 – Certain Bingo Games Not Unrelated Trade or Business Because Michigan restricts bingo licensing to nonprofits, licensed organizations here generally meet both conditions.
Prize Reporting on Form W-2G
For 2026, bingo winnings of $2,000 or more must be reported on IRS Form W-2G, filed by the organization running the game. Regular gambling withholding does not apply to bingo, but 24 percent backup withholding kicks in when a winner at the reporting threshold does not provide a Taxpayer Identification Number.13IRS. Instructions for Forms W-2G and 5754 (Rev. January 2026)
Schedule G on Form 990
An organization reporting more than $15,000 in gross gaming income on Form 990 must also complete Schedule G, Part III, breaking out bingo revenue separately from other gaming and detailing direct expenses such as cash prizes, noncash prize values, facility rental, labor, payroll taxes, and any wagering or occupational taxes.14IRS. Instructions for Schedule G (Form 990)
When a License Isn’t Required
Recreational bingo at senior citizens clubs, groups, or homes is exempt from licensing when the games are played solely for the amusement of members and guests and are not used for fundraising. All revenue must go to prizes and reasonable operating expenses, and nobody may be paid solely for helping run the games.15Michigan Legislature. MCL 432.105a – Recreational Bingo Conditions The moment the game is used to raise money, the exemption is gone and you need a license.
Suspension, Revocation, and Penalties
The Charitable Gaming commissioner can summarily suspend a bingo license for up to 60 days while an investigation or prosecution is pending. A formal suspension or revocation is a contested case under Michigan’s Administrative Procedures Act, so the organization is entitled to notice and a hearing before the license is pulled for good.16Michigan Legislature. MCL 432.116 – Suspension and Revocation of License
A willful violation of the Bingo Act is a misdemeanor punishable by a fine of up to $1,000, imprisonment for up to six months, or both.17Michigan Legislature. Michigan Code 432.117 – Violations Penalty The penalty applies per violation, so an organization running unlicensed games across several occasions can face fines that stack. Late or inaccurate financial reports can also draw administrative penalties, including fines and suspension.