Paddlewheel Prizes

Prize Limit 

Types of Prizes Allowed Types of Prizes Not Allowed

Prizes for a paddlewheel game without a table may consist of: 

  1. cash; 
  2. gift cards or gift certificates; and 
  3. merchandise, which includes certificates for merchandise or services. 

There is a maximum cash prize of $70 per spin and maximum merchandise prize of $200 per spin.
  • Prizes may not consist of lawful gambling equipment, i.e. paper pull-tabs, tipboard tickets, paddlewheel tickets, raffle tickets, or bingo paper. 

  • Cash may not be substituted for merchandise prizes, certificates for merchandise or services, gift cards, or gift certificates. 

  • Merchandise prizes or certificates are not allowed for a paddlewheel game conducted with a table.

Merchandise Prizes

Donated prize

 Merchandise prizes may be donated
Lessor restrictions

For a leased premises: 

  1. The lessor may donate prizes. 
  2. An organization may purchase from the lessor a certificate for merchandise or gift card to be redeemed for food or beverages at the premises if: 
    1. the certificate or card has a redeemable monetary cash value
    2. the certificate or card does not contain restrictions on its redemption, such as requiring a purchase of food or beverage of equal or greater value or redeemable for a specific item;
    3. the certificate or card may be redeemed at any time during regular business hours of the permitted premises; and
    4. the cost to the organization is 50% or less of the redeemable cash value.
Compliance with prize limit

To determine compliance with prize limits, merchandise prizes that are donated or purchased at a discount must be valued at their fair market value. 

The fair market value of a merchandise prize must not be an amount less than the purchase price.
Report on LG100A

For purposes of reporting on the monthly LG100A, Receipts and Expenses by Site: 

  • donated prizes have no value (not reported); and 
  • report merchandise prizes at the actual cost plus shipping and sales tax.

Certificate for Merchandise or Services—Required Information

A certificate for merchandise or certificate for services awarded as a prize must include: 

  • a complete description, including the value, of the merchandise or services; 
  • the vendor’s name from whom the certificate must be redeemed; and 
  • a statement expressly prohibiting the substitution of cash or another type of merchandise or services described on the certificate.

Ownership of Prizes Required; Payment

  • For paddlewheels consisting of 32 numbers or less, merchandise prizes may be paid for up to 30 days after your organization receives the prize. 
  • For all other paddlewheel without table games, an organization must pay in full for paddlewheel prizes or otherwise become the owner without lien or interest of others prior to the conduct of the paddlewheel game. 
  • Purchase merchandise prizes directly from the vendor and pay with a check drawn on the gambling account. Cash from the game may not be used to pay for merchandise prizes.

Prize Receipts

Gambling managers should be aware of an important recordkeeping requirement tied to the higher prize values. Organizations must complete and maintain prize receipts for paddlewheel merchandise prizes with a fair market value of $100 or more. Organizations should review their procedures to ensure that documentation is collected and retained whenever higher-value prizes are awarded.