A pull tab business centers on selling instant-win tickets, also known as break-opens or pickle cards. Players purchase small paper tickets and open perforated tabs to see if they have won a prize. The concept offers immediate results, similar to a lottery scratch card. This venture is often used by non-profit organizations for fundraising or as an additional revenue source for commercial establishments like bars and bingo halls.
Verify Legality and Eligibility
Operating a pull tab business is a regulated activity, with laws that vary significantly by state. Before investing resources, you must confirm that this type of gaming is permitted in your jurisdiction. State gaming commissions or gambling control boards are the governing bodies that oversee these activities. Their websites are the best source for legal information, found by searching for your state’s name and “gaming commission.”
Eligibility to sell pull tabs is restricted to specific types of entities. In many states, only registered non-profit organizations like 501(c)(3) charities, veterans’ groups, and fraternal organizations can conduct charitable gambling. These groups must provide proof of their non-profit status. Some states also permit for-profit businesses, like bars, to sell pull tabs, but this may require a different license or a contract with a non-profit.
Secure Licensing and Create a Business Plan
Once eligibility is confirmed, the next step is applying for a license from your state’s gaming authority. This process requires submitting detailed paperwork, undergoing background checks, and paying application fees. The application will ask for information about your organization, its officers, and your intended gaming operations. Some jurisdictions may also require a specific premises permit for the sales location.
While navigating the licensing process, you should also develop a business plan. This document outlines the financial and operational aspects of your venture. It should include estimated startup costs, such as licensing fees, initial inventory, and any necessary equipment like a dispenser. The plan must also detail your pricing structure, prize values, and revenue projections, as it is often a required part of the license application.
The financial section of your business plan must detail the profit model. Profit is calculated by subtracting the total value of prizes from the total revenue of a sold-out game. For instance, a game with 3,000 tickets sold at $1 each generates $3,000 in revenue. If the total prize board is $2,200, the net profit for your organization is $800. Your business plan should project these figures across various games to forecast overall profitability.
Partner with a Distributor and Select Games
After securing a license, you must source pull tab tickets from a state-licensed distributor. These games cannot be self-produced or purchased from an unlicensed supplier. Your state’s gaming commission maintains a public list of approved distributors on its website. This ensures all games sold within the state meet regulatory standards for fairness and security.
When choosing a distributor, you will also select the specific games, or “deals,” to offer. Each deal comes in a box with a set number of tickets and a predetermined prize structure. You should weigh the ticket cost for the player, the number of tickets per deal, and the prize payout schedule. Some games offer frequent small wins to encourage repeat play, while others feature large jackpots to attract players seeking a significant win.
Consider offering a variety of price points and themes to cater to a broader audience. Distributors can provide data on which games are most popular in your region. You should also analyze the “flare card,” which displays the winning combinations and prize amounts for each deal. Balancing high-profit-margin games with those that have better odds can create an engaging environment for customers.
Establish Your Operational Procedures
With games selected, you must set up the physical environment and daily sales procedures. A common method is using a secure pull tab dispenser, or “jar bar,” which can be leased or purchased. These machines provide a structured way to sell tickets in a busy setting. Alternatively, a staff member can sell tickets directly from a secured box for a specific deal.
Your operational plan must include cash handling protocols, such as using a secure register and documenting all prize payouts. Regulations may require that winners of larger prizes sign a receipt, creating a paper trail for accounting and compliance. Secure storage for unsold ticket inventory is necessary to prevent theft or tampering. You must also prominently display the flare card and any required gaming permits at the point of sale.
Maintain Ongoing Compliance and Reporting
Operating a pull tab business requires long-term adherence to state regulations. This includes record-keeping for every game sold, such as maintaining detailed sales logs, tracking prize payouts, and keeping organized deposit slips. These records are subject to audit by the state gaming commission to ensure transparency and lawful conduct.
Most jurisdictions mandate that operators file regular financial reports with the gaming commission. These reports summarize gaming activity, detailing gross sales, prizes paid, and net profit. For non-profits, rules often govern how these profits can be used, requiring funds to be allocated toward the organization’s stated charitable mission and accounted for separately. Failing to maintain records and submit accurate reports can lead to fines or license revocation.