Date of Adoption: June 15, 2001.

Purpose: These rules changes were requested at the net return task force and discussed during nonprofit study sessions in November 2000, and January, February, and March 2001. Currently bingo operators can offer a total of twelve promotional activities each year. These activities include player discounts, gifts and coupons. Amendments were made to increase the number of promotional activities from twelve to eighteen. Amendments were also made to allow bingo operators to offer an unlimited number of discount coupons for their games. Furthermore, only commercial pull-tab operators are allowed to offer happy hour pull-tab games, where pull-tab prize amounts are double. Now charitable/nonprofit organizations are able to offer these games too.

Citation of Existing Rules Affected by this Order: Amending WAC 230-20-125 and 230-30-106.

Statutory Authority for Adoption: RCW 9.46.070.

Adopted under notice filed as WSR 01-10-120 with a publication date of June 5 [May 16], 2001.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 2, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Effective Date of Rule: Thirty-one days after filing.

June 19, 2001

Susan Arland

Rules Coordinator

OTS-4808.2

AMENDATORY SECTION(Amending Order 371, filed 5/18/99, effective 7/1/99)

WAC 230-20-125   Discounts and promotional gifts -- Authorized -- Limits.   To increase profits from bingo games and enhance the entertainment aspect of such, licensees may conduct limited promotional activities. The following restrictions and procedures apply to promotional activities conducted as a part of bingo games:

Discounts and gifts.

(1) Licensees may promote bingo games by providing players discounts or gifts of nominal value on up to ((twelve)) eighteen occasions annually ((under the following conditions)): Provided, That coupons authorized under this subsection may be distributed and/or redeemed during an unlimited number of occasions. All promotions authorized under this section are subject to the following conditions:

Discount coupons.

(a) Licensees may offer players discounts or reductions in the price to play bingo for purposes of evaluating the effectiveness of advertising of bingo games if:

(i) Discounts are only awarded to players that present a coupon that was issued by the licensee for a specific date and session;

(ii) Coupons shall not be available on the licensed premises: Provided, That this section does not prevent the ((sale)) distribution of newspapers in which such coupons are printed on the licensed premises;

(iii) Coupons are printed in newspapers or similar media that are normally sold or delivered to an individual's residence;

(iv) The discount does not exceed fifty percent of the minimum cost to play or five dollars, whichever is less;

(v) Any conditions or restrictions of the discount are disclosed in all advertisements offering the discount; and

(vi) Records required by subsection (2) of this section are maintained.

Gifts.

(b) Licensees may award promotional gifts to players if:

(i) Only merchandise gifts with a cost to the licensee of no more than five dollars per gift are awarded;

(ii) The gifts are treated as prizes; and

(iii) A record is completed for each session setting out the criterion for selecting the recipients, the number of gifts, and total cost of the gifts.

Receipting.

(2) Licensees shall use the combination receipting method set forth in WAC 230-20-108 to record discounts awarded by this section. All discounts shall be recorded on the cash register receipt during the sales transaction;

Records.

(3) Records must be maintained as a part of the daily bingo records that provide full details of each discount or gift awarded. All discounts must be reconciled to sales and cash on the "Bingo daily record-Cash control" record. Such records must include at least the following details:

(a) Time and date of the activity;

(b) Full description of the activity, including any conditions or restrictions;

(c) A copy of all advertisements for such promotions; and

(d) All coupons or "frequent player" cards redeemed which shall include the name, address, and birth date of customers redeeming such.

Birthday gifts.

(4) Licensees may provide special recognition gifts to players during the calendar week of their birthday. These gifts are excluded from the ((twelve)) eighteen occasion limitation if the following requirements are met:

(a) Such gifts shall not exceed a value of five dollars;

(b) The recipient's name and date of birth are recorded; and

(c) These gifts are treated as prizes and applicable records are maintained.

Incentives.

(5) Licensees may promote bingo games by offering incentives to players which are based on the customer participating in games for a specific number of sessions, playing during a session when promotional gifts are awarded to players, as authorized by subsection (1)(b) of this section, or for spending a specific dollar amount to play bingo over a period of time if:

(a) These "frequent player" incentives are redeemed only for promotional marketing gifts; or merchandise with a cost of twenty dollars or less;

(b) These incentives are accumulated in the form of "credits" or "points" that equate to a specified number of dollars spent by the player;

(c) The redemption value of points or credits awarded under this section does not exceed:

(i) Two percent of the total dollar amount spent by a player and recorded through the cash register method of recording bingo sales; or

(ii) Five dollars for each occasion that points or credits are awarded as promotional gifts under authority of subsection (1)(b) of this section;

(d) Such credits or points shall have no cash or partial redemption value;

(e) Players shall be informed of any expiration date of points or credits earned;

(f) The licensee shall develop a control system to account for points or credits issued, redeemed, or expired. Credits or points shall be controlled by issuing points at the time of cash register receipting method sale and recorded either with a computer-based tracking system or approved manual system. The following conditions apply to accumulation records:

(i) If cards are used, cards shall meet all of the requirements set forth for tickets used for receipting for bingo income in WAC 230-20-104 and the recording of credits on such cards shall be accomplished by means under control of the licensee, such as stamps, punches, employee initials, etc.; and

(ii) Computer-based records used to record points shall be approved by the commission staff.

[Statutory Authority: RCW 9.46.070. 99-11-078 (Order 371), 230-20-125, filed 5/18/99, effective 7/1/99; 98-19-131 (Order 364), 230-20-125, filed 9/23/98, effective 1/1/99. Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075. 96-24-008 (Order 303), 230-20-125, filed 11/21/96, effective 12/22/96.]

OTS-4807.1

AMENDATORY SECTION(Amending Order 359, filed 7/15/98, effective 1/1/99)

WAC 230-30-106   Punch board and pull-tab flares restrictions -- Standards -- Substitute flares.   The following restrictions, standards, and procedures apply to the use of flares and substitute flares:

Only manufacturers to produce flares - exception.

(1) Except as set forth in subsection (6) of this section, the flare advertising prizes available from the operation of any punch board, or any series of pull-tabs, shall be made by the manufacturer only and shall not be altered by any operator or distributor;

One flare per game.

(2) No person shall place or have out in public view more than one flare advertising the prizes available from the operation of any punch board, or from any series of pull-tabs;

Displaying flares.

(3) Flares shall be placed as follows:

(a) Only upon the upper face, or on the top of any punch board; or

(b) In plain view and in the vicinity of any pull-tab dispensing device or container. If the flare is not attached to the dispensing device or container, a numerical or alphabetical reference shall be included directly on the flare and dispensing device or container clearly indicating which flare corresponds to which series.

Standards for flares.

(4) ((Standards for flares:)) Flares shall meet the following standards:

(a) Flares must clearly set out each of the prizes available and the numbers or symbols which win each prize. For progressive jackpot series, the progressive jackpot meter board shall be considered a supplement to the flare. Reference to such shall be made on the flare;

(b) Flares must set out the winning numbers or symbols for prizes of over twenty dollars in cash, or merchandise worth more than twenty dollars at retail, in such a manner that each may be easily and clearly deleted or marked off as each prize is won and awarded. For the purposes of this subsection the retail value of a merchandise prize shall be the amount actually paid by the licensed operator plus fifty percent of that actual cost;

(c) The cost to the player for each punch or pull-tab shall be clearly posted on the flare;

(d) The manufacturer shall clearly set out on the flare the series number assigned to that punch board or pull-tab series by the manufacturer. For pull-tab series, this number shall be clearly displayed on the face of the flare. This series number shall not be altered by the distributor or operator;

(e) The flare shall contain the Washington state identification and inspection services stamp number assigned to the board or series, as required by WAC 230-08-017;

(f) For pull-tab series, the total number of pull-tabs originally in the series shall be clearly disclosed on the face of the flare. Effective July 1, 1997, the following flares shall prominently display the ticket count in one-half inch size lettering on the flare;

(i) Any newly designed flare;

(ii) Any previously designed flare for pull-tab series with a ticket count over six thousand, which has not yet been packaged;

(g) Flares must contain the manufacturer of the board or series. A stamp, seal, or label which identifies the manufacturer may be substituted if the commission has been informed of such prior to its use.

Bonus pull-tab flares.

(5) Additional standards for bonus pull-tab flares:

(a) The manufacturer shall develop and use at least twenty-five different versions of flares (face sheets) for each form number of a bonus series. Flares which contain prizes that are determined after the player receives the corresponding winning chance shall be constructed so that it is impossible to determine the prizes prior to removing the prize covering, in any manner or by any device. Face sheets shall be utilized in such a manner so as to ensure random distribution during the manufacturing and packing process;

(b) The middle or advance level shall be labeled with the term "ADVANCE SECTION" with a minimum one-quarter inch size lettering;

(c) The top tier level shall be labeled with the term "BONUS SECTION" with a minimum one-quarter inch size lettering;

(d) The number of winners which could be awarded in the top tier level shall be clearly noted on the flare with a minimum three-eighths inch size lettering. In addition, the number of winners and the number of advances in each advance level shall be clearly displayed;

(e) All prizes for each advance and bonus level shall be clearly displayed so that only the winners within the possible combinations are shown. Where applicable, the word "OR" shall be used to illustrate the possible combinations in which the bonus prizes can be won. Duplicate references to prizes shall not be shown on the flare.

(((6))) Substitute flares((:)).

(((a))) (6) A substitute flare may be utilized on punch boards or pull-tabs, unless otherwise restricted by commission rules, provided all the requirements of this subsection are met((.)):

(((i))) (a) Distributors may apply manufacturer-produced substitute flares to punch boards and pull-tab series;

(((ii))) (b) Licensed operators or distributors may make and use substitute flares on punch boards and pull-tab series which offer merchandise or combination merchandise-cash prizes.

(((iii))) (c) The responsibility for ensuring the substitute flare meets the requirements set forth in this section shall rest with the manufacturer, distributor, or operator who changes the original flare and attaches the substitute flare.

(((b) Substitute flare requirements:

(i))) (d) All substitute flares must comply with the requirements of subsections (4) and (5) of this section;

(((ii))) (e) All substitute flares shall have the Washington state identification and inspection services stamp number and series number assigned to the punch board or pull-tab series permanently recorded in ink on the face of the substitute flare;

(((iii))) (f) The original manufacturer's flare shall be permanently defaced so it is unusable and the substitute flare shall be attached to the original manufacturer's flare so that the original Washington state identification and inspection services stamp and series number can be accessed for inspection;

(((iv))) (g) For flares converted from cash prizes to combination merchandise-cash prizes, at least fifty percent of the total value of prizes offered shall be merchandise; and

(((v))) (h) Substitute flares which offer merchandise, or combination merchandise-cash, must utilize numbers, not symbols, to denote winners. The winning numbers on the substitute flare shall be selected from the winning numbers on the flare made by the manufacturer, or from the optional numbers placed on the back of the board by the manufacturer. Prizes must be assigned to the winning numbers consecutively, starting with the highest value prize being assigned the lowest available winning number.

Happy hour pull-tab games.

(7) In addition to prizes established by manufacturers, ((commercial stimulant)) pull-tab licensees may increase prizes or add additional prizes to punch boards or pull-tab series ((if)) under the following conditions:

(a) Such prizes ((are)) shall be cash or merchandise;

(b) The manufacturer's flare shall not be changed;

(c) Full details of the prizes, including requirements to qualify, shall be disclosed to players by means of an additional sign or notice that is permanently attached to the manufacturer's flare;

(d) The increase or additional prizes must be added to every prize that is within a tier or section of the flare; ((and))

(e) Documentation regarding all additional prizes shall be stapled or otherwise permanently attached to the winning punch or pull-tab for which such a prize is awarded. Minimum documentation shall include a description of the prize awarded and the name of the winner; and

(f) Bona fide charitable or nonprofit organizations shall limit games authorized in subsection (7) of this section to only one game in play at any point in time.

[Statutory Authority: RCW 9.46.070. 98-15-074 (Order 359), 230-30-106, filed 7/15/98, effective 1/1/99. Statutory Authority: RCW 9.46.070 (5), (6), (11), (14). 97-14-012, 230-30-106, filed 6/20/97, effective 7/21/97. Statutory Authority: RCW 9.46.070 (1)-(4), (7), (8), (11), (12), (14), (20) and 9.46.110 (3), (4). 95-23-109, 230-30-106, filed 11/22/95, effective 1/1/96. Statutory Authority: RCW 9.46.070(8), 9.46.0325 and 9.46.070. 93-10-005 (Order 238), 230-30-106, filed 4/21/93, effective 7/1/93. Statutory Authority: RCW 9.46.070 (8), (11) and (14). 89-11-048 (Order 192), 230-30-106, filed 5/16/89. Statutory Authority: RCW 9.46.070 (11) and (14). 87-24-016 (Order 173), 230-30-106, filed 11/23/87. Statutory Authority: RCW 9.46.070(10). 79-09-029 (Order 91), 230-30-106, filed 8/14/79; Order 43, 230-30-106, filed 11/28/75.]

Washington State Code Reviser's Office