"Allowable expense" is defined by MN Statute 349.12, subd. 3a as, "the percentage of the total cost incurred by the organization in the purchase of any good, service, or other item which corresponds to the proportion of the total actual use of the good, service, or other item that is directly related to conduct of lawful (charitable) gambling."
All allowable expenses must be paid from an organization’s gambling checking account, either by check or electronic transaction. Allowable expenses are reported to the Gambling Control Board monthly on form LG100A, Receipts and Expenses by Site. The LG100A is filed with the Board each month in electronic format along with the LG100C and LG100F.
A person may make an expenditure and be reimbursed from the gambling account with membership approval. The person must provide itemized receipts for the expenditure. An organization must maintain documentation regarding the expenditure to support the reimbursement.
All expenditures for allowable expenses require membership approval before the check is issued or the electronic transaction is made. Gambling managers have no legal authority to expend gambling funds without first obtaining the approval of the organization's membership.
In some cases, an organization may use gambling funds to help purchase an item that will not be used exclusively for lawful gambling. However, first determine the percentage of the expenditure that applies directly to gambling.
EXAMPLE—A portion of the cost to purchase or lease a copy machine used to copy gambling reports and other items related to gambling may be taken as an allowable expense. If 25% of the machine use is related to gambling, then 25% of the cost of the copy machine is an allowable expense:
Maintain documentation verifying that the 25% allowable expense portion is directly related to gambling.
Organizations are responsible for providing proof that the expenditure was for an expense directly related to the conduct of charitable gambling. If any expenditure is determined to not be an allowable expense, the organization will be required to reimburse its gambling account with funds from a non-gambling source.