WSR 05-03-114

PROPOSED RULES

GAMBLING COMMISSION


[ Filed January 19, 2005, 11:33 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 04-19-031.

Title of Rule and Other Identifying Information: WAC 230-20-335 Members-only raffles -- Procedures -- Restrictions.

Hearing Location(s): Red Lion Hotel - Olympia, 2300 Evergreen Park Drive, Olympia, WA 98502, (360) 943-4000, on February 11, 2005, at 9:30 a.m.; and at the DoubleTree Guest Suites, 16500 Southcenter Parkway, Seattle, WA 98188, on March 11, 2005, at 9:30 a.m.

Date of Intended Adoption: March 11, 2005.

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 March 1, 2005.

Assistance for Persons with Disabilities: Contact Shirley Corbett by March 1, 2005, TTY (360) 486-3637 or (360) 486-3447.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Charitable and nonprofit organizations may conduct raffles as a way to raise funds for their stated purpose. Tickets may be sold for up to $25 each (RCW 9.46.0277). Agency rules require specific ticket and record-keeping requirements to ensure funds collected from the sale of raffle tickets are properly accounted for. Anytime an organization wants to offer raffle tickets at a discount, it must first get a raffle license.

Operating requirements for members-only raffles are outlined in WAC 230-20-335. In 1995 the commission passed rules to reduce requirements for members-only raffles. This rule offers organizations simplified procedures when all phases of the raffle are completed during a meeting of its members. A members-only raffle may include guests, if the total number of guests attending the meeting does not exceed 25% of the total attendance. As part of the conditions for the reduced requirements, the maximum sale price of a ticket was reduced to $2, if any tickets were sold at a discount. For example, licensees may sell tickets for $2 each, or fifteen tickets for $20.

Reasons Supporting Proposal: We received a request to increase the price of a single members-only raffle ticket from $2 to $10, when tickets are sold at a discount. Because the risk is not substantial and oversight sufficient, staff does not oppose increasing the price of a single members-only raffle tickets from $2 to $10, when any tickets are sold at a discount. For example, one ticket for $10 or three tickets for $25.

Statutory Authority for Adoption: RCW 9.46.070 and 9.46.0277.

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.

January 19, 2005

Susan Arland

Rules Coordinator

OTS-7663.1


AMENDATORY SECTION(Amending WSR 01-23-054, filed 11/20/01, effective 1/1/02)

WAC 230-20-335   Members-only raffles -- Procedures -- Restrictions.   Organizations may conduct members-only raffles utilizing simplified procedures. For purposes of this section, "members-only raffle" means a raffle conducted by selling chances only to members of the organization and a limited number of guests, and determining the winners from among those members and guests that have purchased chances. The following procedures and restrictions supplement or modify WAC 230-08-070 and 230-20-325 and apply only to members-only raffles:


Licensed versus unlicensed.


(1) An organization may conduct an unlimited number of unlicensed members-only raffles if the combined gross revenue from the raffles does not exceed five thousand dollars during a calendar year. If the organization plans to exceed the five thousand dollar gross receipts limit, it must obtain a raffle license.


Raffle to begin and end during membership meeting.


(2) In order to conduct raffles utilizing these simplified procedures, all phases of the raffle must be completed during a meeting of the members, and the meeting must be completed on the same day and at the same location without interruption;


Limit on number of guests.


(3) If guests are allowed to participate, the total number of guests, as a percentage of the total attendance of the meeting, shall not exceed twenty-five percent. Records shall be maintained that will allow commission staff to determine compliance with this requirement;


Rules of play.


(4) All disclosures required to be imprinted on a raffle ticket or chance may be provided to participants by posting a sign at each ticket sales point;


Tickets.


(5) Chances to enter a raffle may be included as a part of a package that includes dues, entertainment, or other fund-raising activities if the value of each component of the package is disclosed to the purchaser and the value of each individual raffle chance does not exceed twenty-five dollars: Provided, That initial applications for membership and any fees paid for such shall not include chances to enter raffles or to participate in any gambling activities;


Modified pricing schemes for tickets.


(6) The director may authorize an organization to deviate from the "same price" requirements of WAC 230-20-325(1) when the following requirements are met:


License required.


(a) The organization must have a current raffle license.


Request for approval.


(b) A request for approval of a modified pricing scheme must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested.


Subsequent pricing schemes.


(c) After an organization has received approval for a modified pricing scheme, the organization may utilize the identical approved pricing scheme in subsequent raffles, unless approval is rescinded or commission rules change. The following modified pricing schemes may be approved by the director:


Different prices for tickets - one cent to ten dollars.


(d) Chances to enter a raffle may be sold for different values, ranging from one cent to a maximum of ten dollars, if the following conditions are met:

(i) The scheme for assigning the cost of the ticket must be disclosed to the player before selling them a chance to participate. This disclosure shall include the total number of tickets in the population and the number of tickets at each price level;

(ii) Participants must be allowed to randomly select their ticket from the population of remaining tickets. Participants pay the amount imprinted upon the ticket they select;

(iii) The scheme provides an adequate audit trail that will allow commission staff and taxing authorities to determine gross gambling receipts;

(iv) The total gross gambling receipts available from raffles utilizing such schemes are limited to five thousand five dollars for each drawing;

(v) No more than two such drawings are conducted during a meeting of the members.


Discount based on number of tickets purchased.


(e) Chances may be sold for a discounted price that is based on the number of tickets a player purchases if:

(i) Participants are allowed to purchase a single ticket;

(ii) Only one discount scheme is allowed for each raffle. The amount of the discount must be set prior to beginning sales for the raffle;

(iii) The cost of a single ticket, without a discount, does not exceed ((two)) ten dollars;

(iv) The total cost of a discount package does not exceed twenty-five dollars;

(v) The cost of a single ticket shall be imprinted on each ticket (i.e., one dollar a piece or twelve for ten dollars; or two dollars a piece or fifteen for twenty dollars); and

(vi) The licensee shall establish an audit system that includes controls and procedures that will allow commission agents and taxing authorities the ability to determine gross gambling receipts from the sale of tickets utilizing discounts. Such system shall be submitted to the director or the director's designee as a part of the approval request;


Other pricing schemes.


(f) Multiple tickets to enter one or more drawings may be sold as a package as long as the total price of the package does not exceed twenty-five dollars; and

(g) Alternative pricing schemes may be used if specifically authorized by the director. Approval will be issued on an individual basis and will require a detailed written request;


Alternative drawing formats.


(7) The director may authorize an organization to determine the winners utilizing an alternative drawing format when the following requirements are met:


License required.


(a) The organization must have a current raffle license.


Request for approval.


(b) A request for approval of an alternative drawing format for a members-only raffle must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. Requests for approval of alternative drawing formats shall be signed by the organization's raffle manager.


Subsequent alternative drawing formats.


(c) After an organization has received approval for an alternative drawing format, the organization may utilize the identical alternative drawing format in subsequent raffles, unless approval is rescinded or commission rules change.


Incentives for selling tickets.


(8) The limitations on noncash incentive awards for an individual raffle, set forth in WAC 230-20-325(11), are modified to allow awards that do not exceed five percent of the combined gross gambling receipts for all raffles conducted during a membership meeting if a record of the name, address, and telephone number is maintained for all persons receiving awards valued in excess of fifty dollars;


Prizes.


(9) Prizes must be owned by the organization conducting the raffle prior to drawing the winning tickets. Raffle prizes must meet the following requirements:

(a) Firearms shall not be awarded as prizes: Provided, That a raffle licensee may award firearms as prizes under the provisions set forth in WAC 230-12-040;

(b) Unopened containers of liquor may be awarded as a prize when the proper permit is obtained from the liquor control board;

(c) Prize limits must meet the requirements set forth in WAC 230-20-015; and

(d) Prizes shall be controlled as set forth in WAC 230-20-300.


Records.


(10) Raffle records, as required by WAC 230-08-070, are modified as follows:

(a) The threshold value for maintaining a record of the name, address, and telephone number of each winner of a prize is increased to include only prizes valued in excess of fifty dollars;

(b) Ticket disbursement records are not required; and

(c) Minimum record retention period is reduced to a period that is not less than one year following the date of each individual raffle drawing.

[Statutory Authority: RCW 9.46.070. 01-23-054, 230-20-335, filed 11/20/01, effective 1/1/02. Statutory Authority: RCW 9.46.070 (3), (8), (11) and (14). 98-08-052, 230-20-335, filed 3/27/98, effective 7/1/98. Statutory Authority: RCW 9.46.0277 and 9.46.070. 96-07-077, 230-20-335, filed 3/19/96, effective 7/1/96. Statutory Authority: RCW 9.46.070. 95-07-093, 230-20-335, filed 3/17/95, effective 7/1/95.]

Washington State Code Reviser's Office