Subject of Possible Rule Making: Commercial and nonprofit licensees -- Problem gambling fee.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 9.46.070 and 9.46.071.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: After the 2004 legislative session, then Governor Locke requested the commission resume its contributions to problem gambling. In November 2004, the commission adopted a rule to establish a fee to provide a stable funding source of (hull 9/28/05) approximately $232,000 each year for a problem gambling helpline, and training and awareness services (RCW 9.46.071). The fee was to be paid by licensed charitable/nonprofit and commercial organizations and included language that the fee would automatically expire if the legislature adopted a law that appropriated funds for the same purposes.

     During the 2005 legislative session, a law was adopted to fund problem gambling treatment, education, and awareness. The law transfers state lottery revenue and creates a new business and occupation (B&O) tax on gambling businesses (Gambling Commission licensees and live horse racing tracks) that have annual gross income over $50,000. The B&O tax will be 0.1% of gross income (after prizes) through June 30, 2006, and 0.13% thereafter. The bill takes effect July 1, 2005. The bill prohibits the Gambling Commission, while the new B&O tax is in effect, from increasing license fees to fund a program for problem and pathological gambling. However, should the B&O tax later be repealed, the Gambling Commission, Horse Racing Commission, and the state lottery may contract for services to assist in providing treatment for problem and pathological gambling, and the Gambling Commission may increase license fees to fund the authorized services. As written, in the commission's original rule and the legislation that passed, the commission's problem gambling fee will expire. However, in the interest of being clear, this rule is up for repeal.

     Process for Developing New Rule: Rule change developed by agency staff. Interested parties can participate in the discussion of this proposed change by attending a commission meeting, or contacting the agency rules coordinator at the contact information below.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication by contacting Rick Day, Deputy Director, P.O. Box 42400, Olympia, WA 98504-2400, (360) 486-3446; Neal Nunamaker, Deputy Director, P.O. Box 42400, Olympia, WA 98504-2400, (360) 486-3449; and Susan Arland, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, (360) 486-3466, e-mail Susana@wsgc.wa.gov.

     [Meetings on] June 10, 2005, at the LaConner Maple Hall, 108 Commercial Street, LaConner, WA 98257, (360) 466-3101; and on August 12, 2005, at The Heathman Lodge, 7801 N.E. Greenwood Drive, Vancouver, WA 98662, (360) 254-3100.

May 17, 2005

Susan Arland

Rules Coordinator