Original Notice.

     Preproposal statement of inquiry was filed as WSR 07-08-038.

     Title of Rule and Other Identifying Information: WAC 230-30-045 Carry-over jackpot pull-tab series -- Definitions -- Requirements.

     Hearing Location(s): La Quinta Inn and Suites, 1425 East 27th Street, Tacoma, WA 98421, (253) 383-0146, on July 13, 2007, at 9:30 a.m.

     Date of Intended Adoption: July 13, 2007.

     Submit Written Comments to: Susan Arland, P.O. Box 42400, Olympia, WA 98504-2400, e-mail Susana@wsgc.wa.gov, fax (360) 486-3625, by July 1, 2007.

     Assistance for Persons with Disabilities: Contact Gail Grate, Executive Assistant, by July 1, 2007, TTY (360) 486-3637 or (360) 486-3447.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The petitioner is requesting that the maximum prize limit for pull-tab carry-over jackpots be increased from $2,000 to $5,000, and the maximum number of tabs per series be increased from 6,000 tabs to 10,000 tabs.

     Statutory Authority for Adoption: RCW 9.46.070.

     Statute Being Implemented: Not applicable.

     Rule is not necessitated by federal law, federal or state court decision.

     Name of Proponent: Richard Newgard, representing the Washington Charitable and Civic Gaming Association, private.

     Name of Agency Personnel Responsible for Drafting: Susan Arland, Rules Coordinator, Lacey, (360) 486-3466; Implementation: Rick Day, Director, Lacey, (360) 486-3446; and Enforcement: Mark Harris, Assistant Director, Lacey, (360) 486-3579.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement has not been prepared pursuant to RCW 19.85.025, and/or the proposed rule change clarifies language of rules without changing the effect.

     A cost-benefit analysis is not required under RCW 34.05.328. The Washington state gambling commission is not an agency that is statutorily required to prepare a cost-benefit analysis under RCW 34.05.328.

May 15, 2007

Susan Arland

Rules Coordinator

OTS-9720.1

AMENDATORY SECTION(Amending Order 410, filed 2/22/02, effective 7/1/02)

WAC 230-30-045   Carry-over jackpot pull-tab series -- Definitions -- Requirements.   Operators may utilize pull-tab series that are specifically designed to include carry-over jackpots. The following definitions and requirements shall apply to these series:

Definitions.

     (1) The following definitions apply to pull-tab series with carry-over jackpots:

     (a) "Carry-over jackpot" means a prize pool that is composed of accumulated contribution amounts from pull-tab series which, if not won, are carried over to other pull-tab series;

     (b) "Contribution amount" means the amount from each series which is added to the carry-over jackpot; and

     (c) "Guaranteed prizes" means all prizes available to be won, excluding the contribution amount or carry-over jackpot;

Prize payout requirements.

     (2) The following requirements apply to prizes and prize payout calculations for carry-over jackpots:

     (a) Guaranteed prizes must be 60% or more of gross receipts available from the pull-tab series;

     (b) The contribution amount for each series may not be more than five hundred dollars;

     (c) The contribution amount and the method of play shall be determined by the manufacturer and disclosed on the flare;

Maximum jackpot amount.

     (d) At no time shall an accumulated carry-over jackpot exceed ((two)) five thousand dollars. If the carry-over jackpot is awarded, the sum of the advance-level prize and the carry-over jackpot prize shall not exceed ((two)) five thousand dollars.

Jackpot must be carried over until won.

     (e) Accumulated carry-over jackpots shall be carried over to subsequent series until won;

Jackpot must be paid out.

     (f) The carry-over jackpot must be awarded. Failure to have sufficient funds available, or any attempt by an operator to utilize carry-over jackpots for personal or organizational purposes, shall be prima facie evidence of defrauding the players in violation of RCW 9.46.190;

Maximum prize amounts for series when jackpots are not awarded.

     (g) If the jackpot is not awarded and is carried over to a new series, the sum of the advance-level prize and the consolation prize shall not exceed five hundred dollars;

Distribution of jackpots when a licensee ceases to operate.

     (3) If a licensee ceases to operate gambling activities due to a sale, closure, or failure to maintain a valid gambling license, the carry-over jackpot shall be:

     (a) Transferred to the new licensee, which has a valid gambling license. The new licensee shall operate the carry-over jackpot game until the prize is awarded;

     (b) Awarded to a player by playing out the game prior to closure;

     (c) Distributed to the Washington state council on problem gambling; or

     (d) Distributed to a charitable or nonprofit organization licensed by the Washington state gambling commission;

Bonus pull-tab series.

     (4) The following additional requirements apply to bonus pull-tab series with carry-over jackpots:

     (a) The odds of winning the carry-over jackpot shall not exceed one winner out of ten chances, or the probability of winning the carry-over jackpot shall be .10 or higher, at the jackpot level;

     (b) There may only be one advance level on the flare;

     (c) There shall be at least one guaranteed chance to win the carry-over jackpot;

     (d) All chances that are included on the flare shall be covered in a manner that prevents determination of the concealed numbers or symbols prior to being opened by the player. If perforated windows are used, the numbers or symbols must be covered by latex, foil, or other approved means; and

     (e) Standards for bonus pull-tab flares, as set forth in WAC 230-30-106, shall apply;

Maximum number of tickets.

     (5) The maximum ticket count for pull-tab series with carry-over jackpots shall be six thousand tickets;

Secondary win codes.

     (6) The secondary win codes on pull-tab series with carry-over jackpots must not repeat within a three-year period;

Replacing series.

     (7) Once it has been determined that no chances to win the carry-over jackpot remain in a series and the jackpot has not been won, the series shall be removed from play and replaced with a new series within seven operating days;

Transferring a jackpot to another game.

     (8) If a carry-over jackpot is not won prior to removing a series from play, it shall be carried over to a new series within one operating day from when the series was removed from play. The accrued contribution amounts from all previous series shall be added to the contribution amount from the new series, up to two thousand dollars;

Recording names of winners.

     (9) For carry-over jackpots in the amount of six hundred dollars and over, the winner's full name, address, and Social Security number shall be recorded on a separate form for income tax purposes;

Retention requirements.

     (10) Each pull-tab series contributing to a specific carry-over jackpot must be retained as one series. The retention period for these series shall be as required by WAC 230-30-072(3): Provided, That the retention period shall start on the last day of the month in which the carry-over jackpot was awarded rather than when the series was removed from play; and

Documenting the flow of jackpots.

     (11) Operators are required to maintain a separate record documenting the flow of carry-over jackpots from one game to another in a format prescribed by the commission;

Recordkeeping on cash basis only - exception.

     (12) For the purposes of monthly records set forth in WAC 230-08-010, all operators shall record carry-over jackpots on a cash basis. This means that carry-over jackpot contribution amounts shall not be recorded on monthly records until the prize is awarded: Provided, That punch board/pull-tab licensees who also hold a Class F or above bingo license may accrue carry-over jackpot contribution amounts on their monthly records if the following conditions are met:

     (a) Prior approval is received from the director;

     (b) The contribution amounts, up to the point where the jackpot reaches the maximum, shall be recorded as prizes paid on the monthly records;

     (c) When the jackpot is awarded, only amounts not previously accrued, if any, shall be recorded as a prize paid;

     (d) No more than five carry-over jackpot series shall be in play at once; and

     (e) If the contribution amount is not deposited with the net receipts (required by WAC 230-12-020), a proper audit trail and adequate security over the funds must be maintained; and

Director approval required.

     (13) The director shall approve the following aspects of all pull-tab games with carry-over jackpots prior to sale in Washington state:

     (a) The design, payout, method of play, and flare for each pull-tab series;

     (b) The manufacturing process for the pull-tab series and flares; and

     (c) The secondary win code system for the pull-tab series.

[Statutory Authority: RCW 9.46.070. 02-06-007 (Order 410), § 230-30-045, filed 2/22/02, effective 7/1/02; 98-24-089 (Order 368), § 230-30-045, filed 12/1/98, effective 1/1/99; 98-15-074 (Order 359), § 230-30-045, filed 7/15/98, effective 1/1/99. Statutory Authority: RCW 9.46.070 (2), (11) and (14). 97-19-083, § 230-30-045, filed 9/16/97, effective 1/1/98.]

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