Original Notice.

     Preproposal statement of inquiry was filed as WSR 04-17-006.

     Title of Rule and Other Identifying Information: WAC 230-40-610 Player-supported jackpots -- Restrictions -- Manner of conducting -- Approval.

     Hearing Location(s): Red Lion Hotel, Yakima Center, 607 East Yakima Avenue, Yakima, WA 98901, (509) 248-5900, on November 19, 2004, at 9:30 a.m.

     Date of Intended Adoption: November 19, 2004.

     Submit Written Comments to: Susan Arland, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504, e-mail Susana@wsgc.wa.gov, fax (360) 486-3625, by November 1, 2004.

     Assistance for Persons with Disabilities: Contact Shirley Corbett by November 1, 2004, TTY (360) 486-3637 or (360) 486-3447.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Dolores Chiechi, on behalf of the Recreational Gaming Association, has submitted a petition for rule change to amend WAC 230-40-610. The petitioner requests an amendment to WAC 230-40-610 which sets operating restrictions for poker games offering player-supported jackpots. This rule limits cash payout of prizes to $500 and any remaining winnings must be paid by check. This rule also prohibits players from cashing checks from winnings at the card room where the check was issued.

     The petitioner requests that cash payouts be increased from $500 to $2500 and that players be allowed to cash checks at the card room where the check was issued.

     Reasons Supporting Proposal: At the September meeting, the commission filed the petition and anticipate staff providing a recommendation on whether to support the petition or not at the next meeting.

     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: Washington State Gambling Commission, governmental.

     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: Neal Nunamaker, Deputy Director, Lacey, (360) 486-3452.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. Not applicable.

     A cost-benefit analysis is not required under RCW 34.05.328. Not applicable.

October 5, 2004

Susan Arland

Rules Coordinator

OTS-7588.1

AMENDATORY SECTION(Amending Order 414, filed 8/13/02, effective 1/1/03)

WAC 230-40-610   Player-supported jackpots -- Restrictions -- Manner of conducting -- Approval.   A player-supported jackpot (PSJ) is a separate contest of chance directly related to the play and/or outcome of authorized nonhouse-banked card games but which is not the card game itself. Card rooms with a Class F or house-banked license may establish a prize fund for the purpose of operating a PSJ for nonhouse-banked card games. Any PSJ must be approved in writing by the director or the director's designee prior to play. A PSJ must meet the following requirements:

Funding a PSJ.

     (1) A licensee may provide house funds to establish a PSJ. The licensee shall issue a check from the general business account into the PSJ account to start the prize fund. Recouping of start up funds shall be done by issuing a check from the PSJ account to the business general account. Electronic bank transfers shall satisfy this requirement. Start up funds shall not exceed five thousand dollars per PSJ.

Using a rake to fund a PSJ.

     (2) A licensee may assess a portion of players' wagers for a jackpot prize. Such amount shall not exceed one dollar per hand or game for each PSJ. This assessment shall be separately collected using the rake method.

PSJ funds are player funds - exception from administrative fee.

     (3) The licensee acts only as the custodian of the PSJ funds, including any interest earned on this money, and maintains no legal right to the funds. All PSJ funds shall be awarded as prizes, based upon a format approved by commission staff. An administrative fee not to exceed ten percent of the amount collected for a PSJ may be imposed by the licensee. This administrative fee includes all expenses incurred by the licensee, including banking fees. No other expenses beyond the ten percent administrative fee shall be deducted from the PSJ account.

Prize fund custodian.

     (4) Each licensee shall designate at least one "prize fund custodian" who shall be responsible for safeguarding and disbursing funds to winners. A prize fund custodian may be an owner, partner, officer, or licensed individual designated by a card room owner, partner, or officer. The custodian shall have signature authority for prize fund bank accounts and ensure accountability of all funds collected for use in a PSJ. The licensee shall meet the deposit requirements of WAC 230-40-608.

Payout of prizes.

     (5) Prize amounts paid in cash shall not exceed two thousand five hundred dollars. Prize amounts not awarded in cash shall be paid within twenty-four hours, by check, the type which provides a duplicate copy((, which shall not be cashed on the licensee's premises)). A record of all prizes paid shall be maintained in the format prescribed by commission staff and shall include:

     (a) For prizes less than one hundred dollars, a system of accounting denoting each individual prize may be utilized.

     (b) For prizes one hundred dollars and above, the following information shall be recorded on a prize record:

     (i) Full printed name;

     (ii) Date of birth;

     (iii) Street address;

     (iv) Type of identification reviewed;

     (v) Amount of the prize awarded;

     (vi) Description of the winning hand;

     (vii) Time and date awarded; and

     (viii) The supervisor's and dealer's initials.

     (c) Upon awarding a prize of five hundred dollars or more, the dealer shall fan the winning hand in view of the surveillance camera. The hand shall be collected and sealed with the prize record. The winning hand and remaining deck shall be maintained on the premises as part of daily card room records for a period of seven days, unless released by a commission agent.

Owners and employees competing for a PSJ.

     (6) Owners, custodians and on-duty card room employees may participate in card games that offer a PSJ, but may not share in the winnings of any prize awarded. Any prize winnings an owner or on-duty employee may be entitled to under game rules, must be divided equally among the other players at the table: Provided, That off-duty employees may participate in card games that offer a PSJ and share in the prize winnings.

Owners and employees showing cards.

     (7) Owners and on-duty card room employees must turn their cards face up at the end of each game so they may be observed by other players at the table and surveillance if:

     (a) Playing in a game with a PSJ;

     (b) The prize is not based upon a predetermined hand; and

     (c) There is a qualifying hand at the end of a game (such as a "bad beat" hand).

House dealer required.

     (8) All card games offering a PSJ must utilize a house dealer.

Security requirements.

     (9) Each gaming table offering a PSJ shall be required to install a closed circuit television system as outlined in WAC 230-40-625: Provided, That licensees operating any house-banked card games shall follow the security requirements set forth in WAC 230-40-825 for all tables in the card room, including those offering a PSJ.

Removing a PSJ from play.

     (10) The following procedures shall be followed for all discontinued player-supported jackpots:

Discontinued.

     (a) In the event a licensee elects to discontinue a PSJ, the balance, less any nonrecouped seed money, shall be distributed to players within sixty days of discontinuance by offering an approved promotion or card tournament of the same game under which the PSJ was originally accrued.

Closure of business.

     (b) In the event a licensee ceases to operate a card room, or fails to maintain a valid card room license, all funds associated with the PSJ shall be distributed to the Washington state council on problem gambling.

Posting rules.

     (c) The licensee shall conspicuously post a sign stating how PSJ money will be distributed in the event the PSJ is discontinued or the business closes. The sign must be posted at the inception of the PSJ.

House rules.

     (11) House rules, to include administrative fees shall be posted in a location readily visible by all players and disclose the conditions under which prizes may be won, the prize amount, cost to participate, and any other conditions which may affect the outcome of the game.

Dispute resolution.

     (12) If a dispute arises involving the outcome of a PSJ, the licensee shall preserve the video recording, the winning hand and remaining deck, and all records for the game where the dispute occurred and shall notify commission staff within twenty-four hours. The licensee shall document all information pertaining to the dispute including:

     (a) The names, addresses, and phone numbers of all players, card room staff, and any witnesses involved;

     (b) Amount of the advertised PSJ; and

     (c) A full description of the circumstances surrounding the dispute.

     (13) All disputes involving a PSJ will be investigated by commission staff, with a report submitted to the director. A written decision will be issued by the director, or the director's designee, and such decision shall be final.

     (14) During the course of dispute resolution, the commission may become the temporary custodian of any and all prize funds. The PSJ will be suspended until the dispute is resolved.

[Statutory Authority: RCW 9.46.070. 02-17-033 (Order 414), § 230-40-610, filed 8/13/02, effective 1/1/03; 01-13-091 (Order 403), § 230-40-610, filed 6/19/01, effective 7/20/01; 00-09-052 (Order 383), § 230-40-610, filed 4/14/00, effective 5/15/00.]

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