WSR 03-20-009

PERMANENT RULES

GAMBLING COMMISSION


[ Order 424 -- Filed September 18, 2003, 3:15 p.m. , effective January 1, 2004 ]

Date of Adoption: September 12, 2003.

Purpose: Housekeeping package related to card rooms rules: Repeal Washington Blackjack because the three card rooms grandfathered to operate the game no longer offer it. Clarify procedures for reducing jackpots. Clarify record-keeping requirements. Several housekeeping changes to update references.

Citation of Existing Rules Affected by this Order: Repealing WAC 230-40-125; and amending WAC 230-08-010, 230-40-010, 230-40-040, 230-40-805, and 230-40-821.

Statutory Authority for Adoption: RCW 9.46.070.

Adopted under notice filed as WSR 03-13-135 on June 18, 2003.

Changes Other than Editing from Proposed to Adopted Version: The commission did not adopt WAC 230-12-340 with this package. Staff are reviewing the agency's philosophy being [used] restricting credit and the commission chose not to adopt this change to allow staff time to do so. As such, this rule will not be adopted under WSR 03-13-135.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.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: January 1, 2004.

September 18, 2003

Susan Arland

Rules Coordinator

OTS-6232.3


AMENDATORY SECTION(Amending WSR 95-19-069, filed 9/18/95, effective 1/1/96)

WAC 230-08-010   Monthly records.   Every person or organization licensed to operate any gambling activity shall maintain permanent monthly records of all financial transactions directly or indirectly related to gambling activities. Each record shall include, but not necessarily be limited to, all details of the following:


Compliance with other rules.


(1) All financial transactions completed by the licensee ((and)) must contain enough detail to determine compliance with the requirements of WAC 230-04-024, 230-04-080, ((and)) 230-08-122, and 230-40-821;


Activities to be recorded separately and within thirty days - exception.


(2) Each licensed activity shall be recorded separately and include all transactions occurring during a calendar month. These records shall be complete in every detail and available for audit or inspection by agents of the commission or other law enforcement personnel no later than thirty days following the end of each month: Provided, That businesses licensed to operate punch boards and pull-tabs as commercial stimulants shall complete monthly records no later than fifteen days following the end of each month and such shall be available for audit or inspection the next day;


Records required for all licensees.


(3) The gross gambling receipts from the conduct of each of the activities licensed;

(4) Full details on all expenses related to each of the activities licensed;

(5) The total cost of all prizes paid out for each of the activities licensed;


Charitable and nonprofit records.


(6) With respect to those organizations licensed as qualified bona fide charitable or nonprofit organizations, except agricultural fairs, records shall clearly show in detail how the proceeds from each licensed activity obtained by the licensee were used or disbursed by that licensee. These records shall provide an audit trail satisfactory to allow verification that the funds were used for the organization's purpose(s). These records will include, but not be limited to, canceled checks for the subject disbursements;


Commercial stimulant records.


(7) With respect to commercial stimulant licensees, records shall include at least the following details:

(a) Gross sales of food and drink for consumption on their licensed premises;

(b) Gross sales of food and drink for consumption off the licensed premises; and

(c) Gross sales from all other business activities occurring on the licensed premises.


Punch board and pull-tab games removed from play.


(8) In addition to any other requirement set forth in these rules, licensees for the operation of punch boards and pull-tabs shall be required to prepare a detailed monthly record for punch boards and pull-tab series removed from play during that month. This detailed monthly record shall be recorded in a standard format prescribed by the commission: Provided, That punch board and pull-tab monthly records may be stored in computer data bases if:

(a) Computer data base records are not the primary storage medium and all original input control documents supporting data maintained in computer data bases are retained by the licensee;

(b) A "hard copy" report organizing the data maintained in the computer data base is generated for each month. This report must be completed and available for review no later than thirty days following the end of the month;

(c) An up-to-date "hard copy" report is provided within three days upon request of commission agents, law enforcement personnel, or local tax authorities;

(d) Reports generated from the computer data base provide all data required by subsection (9) of this section; and

(e) Reports generated from the computer data base organize the required data in an order that approximates the standard format and does not impede audit.


Disclosing punch board/pull-tab information.


(9) Monthly records for punch boards and pull-tabs shall disclose for each punch board and pull-tab series the following information:

(a) The name of the punch board or pull-tab series;

(b) The Washington state identification and inspection services stamp number recorded by attaching a records entry label: Provided, That in lieu of the records entry label, licensees may use a facsimile of the bar coded Washington state identification and inspection services stamp number which is generated by a printer interfaced with a computer data base, if the following standards and procedures are followed:

(i) The Washington state identification and inspection services stamp number must be electronically input into the data base by scanning the stamp with a bar code reader;

(ii) Records must be printed on white paper. Facsimiles of the bar coded Washington state identification and inspection stamp numbers must be at least one-quarter inch in height with a "quiet zone" on at least one-quarter inch of each side of the bar code;

(iii) Bar code facsimiles must be code "interleaved two of five" (USS-12/5) with a readability rate of at least 99.0% with a maximum of three passes with commission bar code reading equipment. Each licensee will be responsible for the accuracy of printouts and ensuring that bar codes are electronically readable. It is recommended that specifications of a printer be reviewed for capability to meet minimum standards prior to purchase or lease and that the printer be equipped with a serviceable ribbon.

(c) The date removed from play;

(d) The total number of tabs in each pull-tab series or the total number of punches in each punch board;

(e) The number of pull-tabs or punches remaining after removal from play;

(f) The number of pull-tabs or punches played from the pull-tab series or punch board;

(g) The cost to the players to purchase one pull-tab or one punch;

(h) The gross gambling receipts as defined in WAC 230-02-110;

(i) The total prizes paid, including both cash and merchandise (calculated by the cost to the licensee) prizes;

(j) The net gambling receipts (gross gambling receipts less total prizes paid);

(k) The cash over or short determined by:

(i) Subtracting actual cash from net gambling receipts for punch boards and pull-tabs which award cash prizes; and

(ii) Subtracting actual cash from gross gambling receipts for punch boards and pull-tabs which award merchandise prizes.

(l) The actual cash received from the operation of each pull-tab series or punch board: Provided, That when more than one series of pull-tabs is sold from a single dispensing device and the dispensing device is equipped with recording devices or meters which provide an accounting of the number of tabs dispensed from each individual series, the actual cash received may be computed by use of the meter readings. If this method is used to account for actual cash, all series in each dispensing device shall be played out at least once each calendar quarter and the combined cash over or short calculated for all series played from each dispensing device during the period by reconciling the total cash removed from the dispensing device to the total tabs sold from that dispensing device. The combined cash over or short shall be recorded as required by (k) of this subsection;

(m) With written commission approval, licensees operating pull-tabs to stimulate food and drink sales may record (k) and (l) of this subsection in total on a daily, weekly, or monthly basis, if their recordkeeping procedures meet commission standards.


Supporting documents.


(10) Copies of all additional financial data which support tax reports to any and all governmental agencies; and


Records to be maintained for three years.


(11) Each of these records shall be maintained by the licensee for a period of not less than three years from the end of the fiscal year for which the record is kept unless released by the commission from this requirement as to any particular record or records.

[Statutory Authority: RCW 9.46.070 (8), (9). 95-19-069, 230-08-010, filed 9/18/95, effective 1/1/96. Statutory Authority: Chapter 9.46 RCW. 94-24-054 (Order 261), 230-08-010, filed 12/5/94, effective 1/5/95. Statutory Authority: RCW 9.46.070 (7), (8), (9) and (17). 93-13-063 (Order 241), 230-08-010, filed 6/17/93, effective 7/18/93. Statutory Authority: RCW 9.46.070. 92-19-107 (Order 231), 230-08-010, filed 9/18/92, effective 10/19/92. Statutory Authority: RCW 9.46.070 (7), (17), (8) and (9). 91-13-070 (Order 223), 230-08-010, filed 6/17/91, effective 7/18/91. Statutory Authority: RCW 9.46.070 (4), (11) and (14). 89-24-002 (Order 201), 230-08-010, filed 11/27/89, effective 12/28/89. Statutory Authority: RCW 9.46.070 (8), (11) and (14). 88-13-060 (Order 179), 230-08-010, filed 6/14/88. Statutory Authority: RCW 9.46[.070] (8) and (14). 87-17-052 (Order 171), 230-08-010, filed 8/18/87. Statutory Authority: Chapter 9.46 RCW. 86-19-056 (Order 161), 230-08-010, filed 9/15/86, effective 1/1/87. Statutory Authority: RCW 9.46.070 (4), (8), (11) and (14). 86-07-037 (Order 155), 230-08-010, filed 3/14/86. Statutory Authority: RCW 9.46.070 (8), (11), and (14). 83-13-050 (Order 134), 230-08-010, filed 6/14/83. Statutory Authority: RCW 9.46.070(8). 82-01-065 and 82-03-033 (Order 115 and 116), 230-08-010, filed 12/18/81 and 1/18/82; Order 74, 230-08-010, filed 8/17/77; Order 18, 230-08-010, filed 5/21/74; Order 9, 230-08-010, filed 12/19/73, 1:26 p.m.; Order 5, 230-08-010, filed 12/19/73, 1:25 p.m.]

OTS-6243.1


AMENDATORY SECTION(Amending Order 405, filed 7/13/01, effective 1/1/02)

WAC 230-40-010   Social card games -- Rules of play -- Types of card games authorized.   Social card games shall be played using rules and procedures as set forth in this section. Only card games that have been specifically authorized are allowed to be played in public or social card rooms.


Rules of play for all card games.


(1) Social card games shall be played in the following manner:

(a) The game must be played with one or more standard decks of playing cards or with approved electronic card facsimiles which meet the requirements of WAC 230-40-070 (1)(c): Provided, That cards may be removed to comply with rules of a specific game, such as pinochle;

(b) Players shall compete against all other players on an equal basis for nonhouse-banked games or against the licensee for house-banked games;

(c) Each player shall receive their own hand of cards and be responsible for decisions regarding such hand, such as whether to fold, discard, draw additional cards, or raise the wager;

(d) Players shall not place wagers on any other player's or the house's hand and no side bets between players are allowed: Provided, That the following shall not be in violation of this section:

(i) An insurance bet placed in the game of blackjack;

(ii) A tip wager made on behalf of a dealer; or

(iii) "Envy" provisions which allow a player to receive a prize if another player wins a jackpot or odds wager;

(e) A player's win or loss shall be determined during the course of play of a single card game; and

(f) No more than two separate games shall be played with a single hand of cards. For purposes of this section, bonus features and progressive jackpots are considered a game: Provided, That bonus features that allow a player to receive an additional prize if another player achieves a specific hand, such as "envy" or "share the wealth" features, shall not be considered a separate game if the player does not have to place a separate wager to participate.


Nonhouse-banked card games authorized.


(2) Nonhouse-banked card games shall only be played in the manner set forth in The New Complete Hoyle, Revised, Hoyle's Modern Encyclopedia of Card Games, or a similar authoritative book on card games approved by the director: Provided, That each licensee may make immaterial modifications to each authorized game set out in Hoyle. The following nonhouse-banked card games are authorized:

(a) Poker;

(b) Hearts;

(c) Pinochle;

(d) Cribbage;

(e) Rummy;

(f) Panguingue (Pan);

(g) Pitch;

(h) Bid Whist;

(i) ((Washington blackjack, if the business was licensed and operating the game on April 1, 2000, and under the restrictions set forth in WAC 230-40-125;

(j))) Other games or modifications to approved games may be approved by the director, or the director's designee, on a case-by-case basis. Requests for approval of a game must be submitted in writing, and include the rules of play and all wagering schemes.


House-banked card games authorized.


(3) House-banked card games shall be approved by the director, or the director's designee, on a case-by-case basis. Request for approval of a house-banked card game must be submitted in writing, including the rules of play and all wagering schemes. A list of all approved games, modifications to games, and rules of play shall be available at all commission offices. The director may approve games in which the determination of whether a player wins or loses depends upon one or more of the following:

(a) The player's hand is a specific:

(i) Pattern or ranking of cards (pair, straight, flush, royal flush, etc.);

(ii) Combination of cards (two queens of hearts, ace and jack of spades, three sevens, etc.); or

(iii) Value of the cards (seventeen, twenty-one, etc.); and/or

(b) The player has a higher ranking or value hand than the house/dealer/banker.


Removing an approved game from play.


(4) Once a game is approved for play, the director shall not remove it from the authorized list of games without providing licensees written notice. Licensees shall be afforded an opportunity to object to the director's decision. If an objection is filed, an administrative law judge shall review the director's decision utilizing the brief adjudicative procedures set forth in WAC 230-50-010.


Procedures for when a proposed game is denied.


(5) The licensee shall be notified in writing when the director denies a request for a new game or modification of a game. The notification shall include reasons for the denial and provide the petitioner all information necessary for a formal petition to the commission for rule making, amendments, or repeal, as set forth in WAC 230-50-800.

[Statutory Authority: RCW 9.46.070. 01-15-054 (Order 405), 230-40-010, filed 7/13/01, effective 1/1/02; 00-09-052 (Order 383), 230-40-010, filed 4/14/00, effective 5/15/00; 99-13-103 (Order 373), 230-40-010, filed 6/15/99, effective 8/1/99. Statutory Authority: RCW 9.46.0281, 9.46.070 (1), (2), (14) and (20). 96-11-073, 230-40-010, filed 5/13/96, effective 7/1/96. Statutory Authority: RCW 9.46.070. 94-13-098 (Order 252), 230-40-010, filed 6/15/94, effective 7/16/94. Statutory Authority: RCW 34.05.220(4), [34.05].230 and 9.46.070 (11) and (14). 90-05-032 (Order 205), 230-40-010, filed 2/14/90, effective 3/17/90. Statutory Authority: RCW 9.46.070. 88-19-038 (Order 183), 230-40-010, filed 9/13/88. Statutory Authority: Chapter 9.46 RCW. 86-19-056 (Order 161), 230-40-010, filed 9/15/86. Statutory Authority: RCW 9.46.070(11). 82-23-050 (Order 125), 230-40-010, filed 11/15/82. Statutory Authority: RCW 9.46.070(10) (see RCW 9.46.020(20)). 80-09-067 (Order 103), 230-40-010, filed 7/17/80; Order 78, 230-40-010, filed 11/17/77; Order 67, 230-40-010, filed 3/11/77; Order 40, 230-40-010, filed 6/26/75; Order 23, 230-40-010, filed 9/23/74.]

OTS-6234.1


AMENDATORY SECTION(Amending Order 383, filed 4/14/00, effective 5/15/00)

WAC 230-40-040   Fees for house-banked card games -- Prohibited -- Exception.   No person shall be charged a fee, directly or indirectly, to participate in house-banked card games: Provided, That a licensee may collect a commission of not more than five percent from a winning hand ((of pai gow poker)).

[Statutory Authority: RCW 9.46.070. 00-09-052 (Order 383), 230-40-040, filed 4/14/00, effective 5/15/00.]

OTS-6229.2


REPEALER

     The following section of the Washington Administrative Code is repealed:
WAC 230-40-125 Washington blackjack -- Rules of play -- Wagering limits.

OTS-6235.2


AMENDATORY SECTION(Amending Order 403, filed 6/19/01, effective 7/20/01)

WAC 230-40-805   Progressive jackpot prizes -- Procedures -- Restrictions -- House-banking.   Licensees are authorized to operate progressive jackpot prizes in conjunction with approved house-banked card games. Entry into a progressive jackpot is based upon a separate wager by a player, part of which accrues to a progressively increasing prize. A player wins the jackpot prize, or portion thereof, based upon achieving a predetermined pattern or combination of cards. Each licensee operating such games shall ensure they are closely controlled, all the funds collected are accounted for, and prizes and methods of winning are adequately disclosed to players. The following procedures and restrictions apply to progressive jackpots:


Restrictions.


(1) House-banked progressive jackpot restrictions:

(a) The amount of funds accrued to the primary and reserve or secondary jackpots shall increase by a predetermined amount of each wager made, in accordance with the rules of the game;

(b) The amount of the progressive jackpot eligible to be awarded as a prize shall be prominently displayed at each gaming table;

(c) The beginning amount of each progressive jackpot offered must be recorded, including explanations for any increase or decrease in the amount of the prize offered. This documentation shall be maintained with the progressive jackpot records; and

(d) A licensee may establish a maximum limitation on a progressive jackpot prize. If such a limit is established:

(i) The amount must be equal to or greater than the amount of the jackpot when the limit is imposed; and

(ii) A notice of the limit must be conspicuously posted at or near the game;


Adjusting jackpot amounts and prize payouts.


(2) A licensee shall not reduce the amount of a progressive jackpot prize, that has been accrued and displayed to players except as authorized by this section. The following adjustments are allowed to accrued progressive jackpot prizes:

(a) Jackpot prizes of five thousand dollars or less shall be paid out immediately. For prizes over five thousand dollars, a minimum of five thousand dollars must be paid immediately and the remaining balance paid, by check, within twenty-four hours: Provided, That a check shall be issued for the entire prize balance within twenty-four hours, at the player's request. The jackpot and advertised amount shall be reduced only by the amount won;

(b) An adjustment may be made to correct malfunctioning equipment or to prevent the display of an amount greater than a predetermined maximum prize limit; or

(c) A reserve or secondary jackpot may be reduced as long as the funds removed are recorded as gross receipts and are properly documented in the records. A reserve or secondary jackpot may also be reduced to recover seed money that was not taken from gross receipts, provided that those funds are properly documented in the records;


Removing all or portion of a jackpot from play.


(3) House-banked progressive jackpot prizes, which are advertised or displayed in any manner are deemed to be funds for which players have a vested interest and may only be removed from play under the following conditions:


Disbursement.


(a) The director or the director's designee provides the licensee written approval of a plan to disburse all jackpot funds back to the players. The request for approval shall include full details of the distribution plan and shall be conspicuously posted at least ten days prior to distribution. Licensees shall disburse the funds utilizing one or more of the following methods:

(i) By offering the prize on a different house-banked game;

(ii) Offering the prize through means of an approved tournament. All funds must be distributed within sixty days from the date of approval by commission staff; or

(iii) Donating the money to the Washington state council on problem gambling; and


Discontinued jackpot-player notification.


(b) The licensee must notify players of any planned discontinuance, including closure of the business, by conspicuously posting notice for a period of ten days prior to beginning the discontinuance process;


Awarding merchandise prizes with jackpot funds.


(c) Licensees may ((use a portion of these funds to purchase)) reduce the jackpot only by the dollar amount paid for the merchandise to be awarded as prizes under the following conditions:

(i) The licensee discloses to the public that a specific portion of these jackpot funds were used to purchase merchandise to be awarded as prizes, as well as the specific prize to be awarded;

(ii) The merchandise is awarded as a prize on the specific outcome of a game and is included in the game rules;

(iii) The merchandise prizes shall be owned by the licensee and paid for in full, without lien or interest of others, prior to the prize being awarded: Provided, That when the winner has an option to receive a cash prize in lieu of such merchandise, a licensee may enter into a contract to immediately purchase a merchandise prize after the winner chooses their option;

(iv) The licensee must disclose the value of the merchandise to be awarded. This value must be true and verifiable; and

(v) Detailed records, including purchase invoice, are maintained on premises and available for review by commission staff;


Temporarily removing a jackpot from play.


(4) A licensee may temporarily remove a progressive jackpot game from play subject to the following conditions:

(a) The removal and reasons must be approved in writing by commission staff; and

(b) The disruption is caused by circumstances beyond the control of the licensee, or for other good cause (for example: Remodeling the card room); and

(c) Players are notified of the disruption and the estimated date of continuance.

[Statutory Authority: RCW 9.46.070. 01-13-091 (Order 403), 230-40-805, filed 6/19/01, effective 7/20/01; 00-09-052 (Order 383), 230-40-805, filed 4/14/00, effective 5/15/00.]

OTS-6236.4


AMENDATORY SECTION(Amending Order 403, filed 6/19/01, effective 7/20/01)

WAC 230-40-821   General accounting records -- House-banking.   Every licensee authorized to offer house-banked card games shall keep and maintain a complete set of records, which have been approved by commission staff. Such records shall include all details of activities related to the conduct of the licensed activity. The following requirements shall apply:


Revenue and expenses.


(1) Each licensee shall maintain legible, accurate and complete records of all transactions relating to the revenues and costs of the gaming operation. These records shall be maintained in a format to ensure consistency, comparability, and effective disclosure of financial information.


General accounting records.


(2) General accounting records shall be maintained on a double entry system of accounting with transactions recorded on an accrual basis, to include detailed, supporting, subsidiary records, sufficient to meet the requirements below.


Recordkeeping.


(3) The detailed, supporting and subsidiary records shall include, but not necessarily be limited to:

(a) Records of all patrons' checks initially accepted, deposited, and returned as "uncollected," and ultimately written off as "uncollectible";

(b) Statistical game records to reflect drop and win amounts for each table, for each game, and for at least each period for which the drop boxes are removed, which shall be at the minimum, the end of each gaming day;

(c) Records of investments in property, including, but not limited to, equipment used directly in connection with the gaming operation;

(d) Records of amounts payable by the gaming operation;

(e) Records which identify the purchase, receipt, and destruction of all cards and gaming chips used in wagering; and

(f) Records of services provided for the operation of gaming activities.


Copies.


(4) Whenever duplicate or triplicate copies are required of a form, record or document:

(a) The original, duplicate, and triplicate copies shall be color-coded;

(b) If under these standards, forms, records, and documents are required to be inserted in a locked dispenser, the last copy shall remain in a continuous unbroken form in the dispenser; and

(c) If under these standards, forms or serial numbers of forms are required to be accounted for or copies of forms are required to be compared for agreement and exceptions noted, such exceptions shall be reported immediately to the commission for investigation.


Storing documents.


(5) All forms, records, documents and stored data required to be prepared, maintained and controlled shall:

(a) Have the title of the form, record, document, or stored data (such as "fill slip," "request for fill," "credit slip," "request for credit," "reconciliation," etc.), imprinted or preprinted thereon or therein; and

(b) ((Be located at the licensed premises for three years: Provided, That the director or the director's designee may waive parts of this section if requested by the licensee.)) All records shall be maintained for a period of not less than three years. At least the past six months of records must be available for inspection on premises.


Employee records.


(6) Licensees shall maintain a records system that ensures all applicable employees have met licensing requirements. The system shall be maintained on the premises and include the following:

(a) Employee names;

(b) Gambling license numbers;

(c) Gambling license expiration dates; and

(d) Photocopies of all current employees' licenses.


Record of employees who have not yet received a license.


(7) If an employee license has not yet been issued, the licensee shall maintain a copy of the following:

(a) Temporary employment authorization;

(b) Documentation that the required payment (license or transfer fee) has been made; and

(c) Proof that the employee has adhered to the ten-day waiting period, if applicable.


Notification - new license not received.


(8) The licensed card room operator shall ensure commission staff is notified if an employee license has not been received within sixty days of employment.

[Statutory Authority: RCW 9.46.070. 01-13-091 (Order 403), amended and recodified as 230-40-821, filed 6/19/01, effective 7/20/01. Statutory Authority: RCW 9.46.070 and 34.05.230. 01-01-016 (Order 396), 230-08-027, filed 12/6/00, effective 1/6/01. Statutory Authority: RCW 9.46.070. 00-09-052 (Order 383), 230-08-027, filed 4/14/00, effective 5/15/00.]

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