A leader in providing expert solutions and strategic advisory in the global gaming industry, SCCG Management is continuously delivering high-quality tools and academic materials about the sector.
In this case, as part of its deal with G&M News, the company is sharing an exclusive excerpt of its study on “Charitable Gaming & Advance Deposit Wagering (ADW): Definitions, Relevance, and Strategic Framing”, which has been officially launched. Let’s take a closer look at this very insightful document.
1.1 Defining Charitable Gaming
Charitable gaming encompasses a regulated category of gambling conducted by nonprofit organizations for the purpose of raising funds for charitable, religious, educational, or civic purposes.
Common formats include bingo, raffles, pull-tabs, charitable poker tournaments, and “casino nights”.
These activities are conducted under strict state-level regulation and licensing requirements. Some jurisdictions also permit more advanced operations such as electronic pull-tab devices or charitable electronic gaming machines in limited locations.
In the United States, the Internal Revenue Service (IRS) classifies charitable gaming income under specific tax codes and requires reporting on Form 990, outlining how proceeds benefit qualified purposes. State regulators generally require both 501(c)(3) tax-exempt status and registration with a gaming authority.
Some states impose caps on prize values or restrict the number of gaming days per year, while others have more liberalized policies, especially where charitable gaming is a legacy source of nonprofit funding.
Charitable gaming has evolved beyond church basements and veterans’ halls. In states like Minnesota, charitable gaming now includes tens of millions of dollars in annual revenue driven by e-pull tabs, electronic bingo terminals, and centralized reporting systems. The Minnesota Gambling Control Board, for example, oversees one of the most structured charitable gaming markets, generating over USD 200 million annually in gross revenue from licensed nonprofits.
Globally, similar systems operate under lottery-linked charitable frameworks, such as the People’s Postcode Lottery (UK) or provincial charitable gaming in Canada through platforms regulated by iGaming Ontario or the British Columbia Lottery Corporation (BCLC). These models often formalize the nonprofit’s role within a national lottery structure, offering a hybrid between state-controlled gambling and civil society benefit.
1.2 Defining Advance Deposit Wagering (ADW)
Advance Deposit Wagering (ADW) is a method of pari-mutuel wagering in which bettors deposit funds into an account before placing wagers remotely, typically through online platforms, mobile apps, or telephone interfaces.
ADW is most closely associated with horse racing, though new market entries are exploring applications across greyhound racing and even fantasy sports wagering.
The legal basis for ADW in the U.S. hinges on the Interstate Horseracing Act of 1978 (IHA), amended in 2000 to explicitly permit interstate and online ADW with proper consent from host states, racetracks, and horsemen’s groups.
While ADW is exempt from the Unlawful Internet Gambling Enforcement Act (UIGEA) as pari-mutuel betting, operators must still comply with:
- Know Your Customer (KYC)
- Geolocation requirements
- Anti-money laundering (AML) protocols
- State-by-state registration processes
Prominent ADW providers include:
- TwinSpires (Churchill Downs Inc.)
- FanDuel Racing / TVG
- Xpressbet (Stronach Group)
- NYRA Bets (New York Racing Association)
Each operator offers wagering access to hundreds of racetracks globally, often integrating live streaming, handicapping tools, and mobile-first interfaces.
ADW revenues support racetrack purses and operations via a revenue-sharing model that splits profits among operators, host tracks, and state racing commissions. While horse racing attendance has declined over the past two decades, ADW has sustained the industry’s economic foundation, with annual handle exceeding USD 12 billion nationally.
The growth of mobile betting apps and real-time streaming has made ADW the technological backbone of American horse racing, one of the first fully digital, legally regulated forms of gambling in the U.S.
1.3 Why These Two Models Belong in a Joint Report
Charitable gaming and ADW represent two of the most regulated yet socially differentiated forms of wagering in the broader gambling ecosystem. Unlike commercial casino or sportsbook operations, both are legally justified by public interest rationales, either to support nonprofit missions or to preserve legacy industries and cultural heritage.
Shared characteristics include:
- Regulatory Carve-Outs: Charitable gaming operates under nonprofit exemptions; ADW functions within the IHA’s niche carve-out. Both are exempt from UIGEA’s prohibitions and often don’t require full commercial gambling licenses.
- Mission-Aligned Wagering: Charitable gaming proceeds must support social goods; ADW revenues support horse racing and related agricultural sectors.
- Barriers to Entry & Public Trust: Entry requirements are lower than commercial gambling but higher than unregulated apps, striking a balance that fosters trust.
- Potential for Innovation: Both sectors are modernizing with technology and alternative payments, creating opportunities in jurisdictions where broader iGaming or sports betting is restricted.
Analyzing them together offers a broader view of how niche wagering models can serve public, economic, and cultural interests while staying viable in the digital age.
You can access this interesting document here.