WSR 05-19-020

PERMANENT RULES

GAMBLING COMMISSION


[ Order 450 -- Filed September 9, 2005, 3:57 p.m. , effective October 10, 2005 ]


Purpose: The commission approved a reduced budget for the 2005-07 biennium. This rules package supports those budget reductions by simplifying raffle regulations. Requirements for selling raffle tickets at a discount or selecting winners using an alternative drawing format are now incorporated into the rules. As such, staff will no longer review and provide written approval for raffles that offer discounts or draw tickets using an alternative drawing format.

Citation of Existing Rules Affected by this Order: Amending WAC 230-20-325 and 230-20-335.

Statutory Authority for Adoption: RCW 9.46.070, 9.46.0315, 9.46.0321.

Adopted under notice filed as WSR 05-13-115 on June 20, 2005, with a published date of July 6, 2005.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 2, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 2, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 2, Repealed 0.

Date Adopted: September 9, 2005.

Susan Arland

Rules Coordinator

OTS-8097.4


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

WAC 230-20-325   Manner of conducting a raffle.   ((Only charitable and nonprofit organizations may conduct a raffle. All raffles, except as authorized in WAC 230-02-335 (members-only raffles), shall be conducted utilizing the following operating procedures:))


Price per ticket - maximum $25.


(1) Each raffle ticket may not be sold for more than twenty-five dollars. Every raffle ticket for a particular raffle must be sold for the same price: Provided, That tickets may be bundled together and sold at a discount, as authorized by subsection (2) of this section.


Discount schemes for tickets.


(2) The director may authorize a raffle licensee to sell tickets at a discount when the following requirements are met:


License required.


(a) The organization must have a current Class E or higher raffle license: Provided, That Class C or Class D raffle licensees may offer discounted tickets if all recordkeeping requirements of WAC 230-08-070 are followed.


Request for approval.


(b) A request for approval of discounted sales must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. The request for approval shall include, at a minimum, the following information:

(i) A full description of the discount scheme;

(ii) The account controls and records that will be used; and

(iii) A copy of a raffle ticket and the booklet cover to be used in the raffle.


Subsequent discount schemes.


(c) After a licensee has received approval for a discount scheme, the licensee may utilize the identical discount scheme in subsequent raffles, unless approval is rescinded or commission rules change.


Cost of approval.


(d) The licensee shall reimburse the commission for costs incurred to review discount schemes: Provided, That the licensee will not be charged for the first two hours of service (WAC 230-12-315).


Amount of discount.


(e) Only one discount scheme is allowed for each raffle. The amount of the discount must be set prior to selling any raffle tickets and must not be changed during the raffle.


Bundling tickets.


(f) Raffle tickets bundled to be sold at a discount must meet the following requirements:

(i) Discounted tickets must be bundled into booklets that contain the number of tickets set forth in the approved scheme. For example, if single tickets are sold for five dollars each, the discount scheme may allow three tickets to be bundled together and sold for ten dollars;

(ii) Tickets bundled into booklets shall not be removed from the booklet and sold individually; and

(iii) The cover of each ticket booklet shall be imprinted with the following:

(A) A description of the sales scheme;

(B) The number of tickets in the booklet;

(C) The total cost of the booklet; and

(D) A control number that meets the requirements of subsection (3) of this section.


Accounting.


(g) Accounting procedures must be established and provide controls necessary to allow commission staff the ability to audit gross gambling receipts from ticket sales.


Numbering of tickets.


(3) To provide an adequate audit trail, all raffle tickets shall be:

(a) Consecutively numbered; or

(b) Imprinted with letters or symbols which are not repeated within the population of all tickets sold for a particular raffle.


Purchasing tickets.


(4) No person shall be required to purchase more than one raffle ticket.


No free tickets or chances to win.


(5) Free tickets, or an opportunity to participate in a raffle drawing without purchasing a ticket, are not allowed for any reason, including, but not limited to, the following:

(a) Awarded or given away as a prize;

(b) For purchasing a certain number of raffle tickets; or

(c) As a reward for selling raffle tickets.


Ticket stub information.


(6) Raffle tickets sold to the general public or for raffles that do not require the winner to be present at the drawing shall include a stub or other detachable section bearing a duplicate number, letter, or symbol corresponding to the number, letter, or symbol on the ticket or object representing the player's chance. The portion retained by the raffle operator shall include the participant's name, complete address, telephone number, and/or other information necessary to notify the winner.


Ticket stubs to be placed in receptacle for drawing.


(7) Each person that sells a raffle ticket shall give the raffle licensee all ticket stubs or other detachable section of all tickets sold. The licensee shall place each stub or other detachable section of each ticket sold into a receptacle from which the winning tickets will be drawn.


Drawing the winning tickets.


(8) The ticket collection receptacle shall be designed so that each ticket has an equal opportunity to be drawn: Provided, That an alternative drawing format to determine the winners may be utilized, as authorized by subsection (9) of this section.


Alternative drawing format.


(9) The director may authorize a raffle licensee 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 for an alternative drawing format must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. The request shall include, at a minimum, the following information:

(i) The type of random selection process to be used and complete details of its operation;

(ii) The name and telephone number of the raffle manager; and

(iii) The signature of the organization's chief executive officer.


Subsequent alternative drawing formats.


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


Cost of approval.


(d) The licensee shall reimburse the commission for costs incurred to review alternative drawing formats: Provided, That the licensee will not be charged for the first two hours of service (WAC 230-12-315).


Additional requirements.


(e) The alternate drawing format must meet the definition of a drawing as defined by WAC 230-02-500;

(f) The random selection process used in the alternative format shall be fully disclosed to each player prior to selling a ticket; and

(g) The alternate drawing format must be closely controlled by the licensee.


Selling tickets.


Members only to sell - exception.


(10) Tickets must be sold by members of the organization or volunteers under the supervision of a member under the requirements set forth in WAC 230-20-070(1).


Compensation or incentives for sales.


(11) Members shall not be paid for selling tickets, managing or operating a raffle: Provided, That noncash incentive awards may be provided to members for selling tickets if the following requirements are met:

(a) Individual awards do not exceed a fair market value of ten dollars;

(b) The awards are based on the number of chances sold; and

(c) The fair market value of the total amount awarded for an individual raffle does not exceed two percent of the gross gambling receipts of the raffle.


Prizes.


(12) 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) Liquor shall not be awarded as prizes: Provided, That unopened containers of liquor may be awarded as a prize in members-only raffles when the proper permit is obtained from the liquor control board (RCW 9.46.0315 and WAC 230-20-335);

(c) The amount of money spent on prizes 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.


Rules must be provided to participants.


(13) All participants in a raffle must be informed of all rules by which prizes may be won at the time the ticket is purchased. This information shall be provided by either imprinting such on the participant's portion of the ticket or otherwise providing such to each participant in writing.

The following information shall be provided to each participant:

(a) The cost of each chance;

(b) All prizes available, whether cash or merchandise;

(c) Date and time of drawing;

(d) Location of drawing;

(e) Whether an entrant is required to be present at a raffle drawing in order to be eligible to win a prize; and

(f) Name of organization conducting the raffle.


Posting the raffle license.


(14) The raffle license or a copy of the license must be posted in a location readily visible by all raffle participants during the entire time the drawing of winners is being conducted.


Joint raffles.


(15) Raffle licensees may join together to conduct a raffle when the provisions set forth in WAC 230-20-350 are met.


Members-only raffles.


(16) Organizations may conduct members-only raffles under simplified procedures set forth in WAC 230-20-335.)) Only licensed charitable and nonprofit organizations may operate raffles under the following conditions: Raffle tickets must be sold for twenty-five dollars or less. No person shall be required to purchase more than one raffle ticket. Every ticket for a particular raffle must be sold for the same price. However, tickets may be offered at a discount under the following conditions:


Bundling and selling tickets at a discount.


(1) Organizations may put tickets together in a bundle and sell them at a discount if the organization:

(a) Has a current raffle license;

(b) Sets the discount before selling any raffle tickets and does not change the discount plan during the raffle;

(c) Keeps records that meet all commission requirements;

(d) Makes single nondiscounted tickets available to all participants; and

(e) Uses only one discount plan for each raffle.

(2) Booklets of bundled discounted tickets must contain the number of tickets set forth in the discount plan. For example, a single ticket is sold for five dollars each and three tickets bundled together are sold for ten dollars.

(3) Bundled tickets cannot be removed from a booklet and sold individually. Each booklet of bundled tickets must have the following information printed on the cover:

(a) A description of the discount plan;

(b) The number of tickets in the booklet;

(c) The total cost of the booklet; and

(d) A consecutive number.


Ticket accounting.


(4) Organizations must establish accounting procedures and provide controls necessary to allow for an audit of gross gambling receipts from ticket sales. To provide an adequate audit trail, all raffle tickets must:

(a) Be consecutively numbered; or

(b) Be imprinted with letters or symbols which are not repeated within the population of all tickets sold for a particular raffle.


No free tickets.


(5) Organizations must not give raffle tickets away for free and no one can be given an opportunity to participate in a raffle drawing without purchasing a ticket.


Selling tickets.


(6) Organizations must not sell raffle tickets via the internet.

(7) Tickets must be sold by members of the organization or volunteers under the supervision of a member under the requirements set forth in WAC 230-20-070(1).


Incentives for selling tickets.


(8) Members or volunteers of the organization must not be paid for selling tickets, managing, or operating a raffle. Organizations may provide members or volunteers with noncash incentive awards for selling tickets if:

(a) The awards are based on the number of chances sold;

(b) The fair market value of the total amount awarded for an individual raffle does not exceed five percent of the gross gambling receipts of the raffle; and

(c) A record of the name, address, and telephone number is maintained for all persons receiving incentive awards.


Rules must be provided to participants.


(9) Organizations must inform all participants at the time a ticket is purchased of all rules by which prizes may be won in a raffle. This information must be provided by either imprinting such on the participant's portion of the ticket or otherwise providing such to each participant in writing. Organizations must give each participant the following information:

(a) The cost of each chance;

(b) All prizes available, whether cash or merchandise;

(c) Date and time of drawing;

(d) Location of drawing;

(e) Whether an entrant is required to be present at a raffle drawing in order to be eligible to win a prize; and

(f) Name of organization conducting the raffle.


Posting the raffle license.


(10) The raffle license or a copy of the license must be posted in a readily visible location at the site of the drawing.


Ticket stub information.


(11) If organizations sell raffle tickets to the general public or for raffles that do not require the winner to be present at the drawing, the organization must include a stub or other detachable section bearing a duplicate number, letter, or symbol corresponding to the number, letter, or symbol on the ticket or object representing the player's chance. The portion kept by the organization must include the participant's name, complete address, telephone number, and/or other information necessary to notify the winner.


Ticket stubs to be placed in receptacle for drawing.


(12) Each person that sells a raffle ticket must give the organization all ticket stubs or other detachable section of all tickets sold. The organization must place each stub or other detachable section of each ticket sold into a receptacle from which the winning tickets will be drawn.


Prizes.


(13) Organizations must own the prizes before drawing the winning tickets. Raffle prizes must:

(a) Not be firearms, unless awarded as prizes under the provisions set forth in WAC 230-12-040;

(b) Not be liquor;

(c) Meet the requirements to the amount of money spent on prizes set forth in WAC 230-20-015; and

(d) Be controlled as set forth in WAC 230-20-300.


Drawing winning tickets.


(14) Organizations must design the ticket collection receptacle so that each ticket has an equal opportunity to be drawn unless the organization is using an authorized alternative drawing format.


Using alternative drawing formats.


(15) Organizations may use an alternative drawing format that randomly determines winners when the organization:

(a) Has a current raffle license;

(b) Maintains records sufficient to meet all requirements of WAC 230-08-070 regardless of license class;

(c) Meets the definition of a drawing as defined by WAC 230-02-500 with the alternate drawing format;

(d) Fully discloses to each player the random selection process used in the alternative format before selling tickets;

(e) Maintains a copy of the disclosure with the permanent raffle records;

(f) Ensures all participants have an equal chance of winning; and

(g) Uses raffle tickets that are prenumbered and sequential.

(16) Alternative formats involving an element of skill are prohibited.

(17) Internal controls and accounting procedures must:

(a) Provide the ability to audit gross gambling receipts from ticket sales;

(b) Have sufficient controls to prevent manipulation of the random selection process; and

(c) Document the random selection process.


Alternative drawing formats.


(18) Organizations can only conduct alternative drawings for raffles that meet the criteria outlined in subsections (15), (16) and (17) of this section. The following are examples of alternative drawing formats that meet this criteria.


Mock raffle races.


(a) Sequentially numbered and issued tickets/adoption papers are numbered to identify a specific corresponding numbered mock animal(s), ball(s), or other similar objects that can be raced using natural elements to move the objects (water, gravity, wind). Objects must be released simultaneously at a start line. The winner will be the numbered object to first cross the finish line. All objects must be identical in weight, size, and shape, to have an equal opportunity to win.


Poker runs.


(b) Sequentially numbered and issued tickets/poker tally sheets are sold to participants. Participants will travel a predetermined course with predetermined drawing stations (typically five drawing stations). At each drawing station, the participant will draw one playing card for each ticket purchased. Station attendants will verify the card drawn and will record the card value on the poker ticket tally sheet. After all participants have completed the course, the best recorded poker hand will be declared the winner.


Ball drops.


(c) Sequentially numbered and issued tickets are numbered to identify a specific corresponding numbered ball. All purchased numbered balls will be suspended in air and simultaneously released over a target zone. The ball, closest or first, to hit the predetermined target will be declared the winner. All balls must be equal in size, weight, and shape, to have an equal opportunity to win.


Animal plops.


(d) Sequentially numbered and issued tickets are numbered to identify a specific corresponding square on a numbered grid. The animal of choice will be released into the grid area until the animal has completed its plop. The numbered square containing the plop will determine the winner.


Multiple stage drawings.


(e) Tickets or objects are sequentially numbered and issued. Winners will be determined using multiple drawing phases to eliminate participants until the remaining ticket holder(s) are declared the winner. Second element chance plans are allowed as long as they meet the criteria set out in this rule.


Bucket raffles.


(f) Tickets are sequentially numbered and issued. Participants are allowed to place their tickets into any number of separate drawings for separate prizes. The multiple drawings are considered one single raffle unless the organization uses different numbered tickets for each drawing.


Calendar raffle.


(g) Calendars are sequentially numbered and issued. All sold calendar numbers are entered into the drawing receptacle. On predetermined dates, identified on the calendar, drawings will be conducted. All winning tickets must be replaced into the drawing receptacle for future drawings.


Using a second element of chance.


(19) Organizations may use second elements of chance to:

(a) Determine the final prize winner (for example: Ten finalists are drawn and each finalist will choose a key. The finalist with the key that unlocks the safe wins);

(b) Determine which prize is awarded among a group of prizes (for example: The winner selects one of three keys and wins the vehicle the key starts);

(c) Increase the prize (for example: The winning ticket matches a predetermined sequence of numbers and wins an additional prize).

(20) All aspects of the alternate drawing format must be closely controlled by the licensee.


Joint raffles.


(21) Organizations holding a raffle license may join together with another raffle licensee to conduct a raffle when the provisions set forth in WAC 230-20-350 are followed.


Members-only raffles.


(22) Organizations may conduct members-only raffles under simplified procedures set forth in WAC 230-20-335.

[Statutory Authority: RCW 9.46.070. 01-23-054, 230-20-325, filed 11/20/01, effective 1/1/02. Statutory Authority: RCW 9.46.070 (3), (8), (11) and (14). 98-08-052, 230-20-325, filed 3/27/98, effective 7/1/98. Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075. 96-24-008 (Order 303), 230-20-325, filed 11/21/96, effective 12/22/96. Statutory Authority: RCW 9.46.0277 and 9.46.070. 96-07-077, 230-20-325, filed 3/19/96, effective 7/1/96. Statutory Authority: RCW 9.46.070. 95-07-093, 230-20-325, filed 3/17/95, effective 7/1/95. Statutory Authority: RCW 34.05.220(4), [34.05].230 and 9.46.070 (11) and (14). 90-05-032 (Order 205), 230-20-325, filed 2/14/90, effective 3/17/90. Statutory Authority: RCW 9.46.070 (11), (14) and 9.46.0218 [9.46.0281]. 89-05-024 (Order 186), 230-20-325, filed 2/13/89. Statutory Authority: RCW 9.46.070. 88-19-038 (Order 183), 230-20-325, filed 9/13/88. Statutory Authority: RCW 9.46.070 (8), (11) and (14). 88-07-059 (Order 175), 230-20-325, filed 3/15/88. Statutory Authority: RCW 9.46.070 (1), (2), (4), (5), (6), (9), (11), (14) and (17) and 9.46.020 (19) and (23). 85-17-015 (Order 153), 230-20-325, filed 8/12/85. Statutory Authority: RCW 9.46.070 (3), (8) and (11). 85-09-040 (Order 149), 230-20-325, filed 4/15/85. Statutory Authority: RCW 9.46.070 (8) and (11). 83-11-034 (Order 133), 230-20-325, filed 5/16/83.]

OTS-8098.3


AMENDATORY SECTION(Amending Order 443, filed 3/18/05, effective 7/1/05)

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 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.)) Only licensed charitable and nonprofit organizations may conduct a members-only raffle. For purposes of this section, "members-only raffle" means a raffle where chances are sold only to members of the organization and a limited number of guests. Winners must be determined from among those members and guests that have purchased chances.


Licensed versus unlicensed.


(1) Organizations 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 organizations plan to exceed the five thousand dollar gross revenue limit, they must obtain a raffle license.


Raffle to begin and end during membership meeting.


(2) All phases of the raffle must be completed during a meeting of the members or special event, and the meeting or event must be completed on the same day and at the same location without interruption.


Limit on number of guests.


(3) If organizations allow guests to participate, the total number of guests, as a percentage of the total attendance of the meeting, must not exceed twenty-five percent. The organization must maintain records to show compliance with this requirement.


Providing rules of play.


(4) Organizations must post a sign at each ticket sales point to provide participants with all rules of play or the required disclosures must be imprinted on the raffle ticket or chance.


Tickets in packages.


(5) Organizations may include chances to enter a raffle 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. However, initial applications for membership and any fees paid for such must not include chances to enter raffles or to participate in any gambling activities.


Modified pricing plans for tickets.


(6) Organizations may use modified ticket pricing plans at members-only raffles as long as gross revenue does not exceed five thousand five dollars. Chances to enter a raffle may be sold for different values not to exceed ten dollars for a single chance if:

(a) The plan for assigning the cost of the ticket is disclosed to the players before selling them a chance to participate. The information must include the total number of tickets in the population and the number of tickets at each price level;

(b) Participants are allowed to randomly select their ticket from the population of remaining tickets and pay the amount imprinted on the ticket they select;

(c) There is an adequate audit trail to determine gross gambling receipts;

(d) No more than two such drawings are held during a meeting or event.


Discount based on number of tickets purchased.


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

(a) The amount of the discount is set before any raffle tickets are sold;

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

(c) There is only one discount plan for each raffle;

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

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

(f) The cost of a single ticket is imprinted on each ticket (for example, one dollar each);

(g) The discounted tickets are identified by a unique ticket audit numbering system; and

(h) An audit system is established that includes controls and procedures to determine gross gambling receipts from the sale of tickets utilizing a modified pricing plan.


Other pricing plan.


(8) 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.


Alternative drawing formats.


(9) Organizations may use alternative drawing formats set forth in WAC 230-20-325 for members-only raffles. Organizations may substitute prenumbered raffle tickets with similar objects that can be used to randomly determine winners if the organization:

(a) Has a current raffle license; and

(b) Establishes internal controls and accounting procedures that will:

(i) Provide permanent records with enough information to verify gross gambling receipts;

(ii) Prevent the manipulation of the random selection process; and

(iii) Document, in detail, the random selection process used.


Members-only alternative drawing formats.


(10) Organizations can only conduct alternative drawings for raffles that meet the criteria outlined in subsection (9) of this section. In addition to the alternative drawing formats listed in WAC 230-20-325, the following are also examples of alternative drawing formats that can be used for members-only raffles.


Mock raffle races (horse race raffles).


(a) Sequentially numbered and issued tickets/race forms are sold to participants to wager on a specific mock animal in a field of mock animal racers (typically five to ten racers). The mock animals will race in individual lanes divided into equal spaces or squares (for example, bingo boards are sometimes used as race lanes). Animals will move forward based on the numbers rolled on dice or balls drawn from a set of bingo balls. The first mock animal to cross the finish line will be declared the winner. All winning ticket holders will split the prize pool or a drawing of winning tickets will determine a single winner.


Video race raffles.


(b) Sequentially numbered and issued tickets/race forms are sold to participants to wager on the outcome of an unknown video taped race, typically horse races. The previously taped races must be obtained from an outside source and no participants must have knowledge of the specific race or the specific racers before conducting the video race drawing. Participants will be allowed to wager on the specific racers, identified by numbers, or a specific race lane. All participants holding a winning race number ticket or winning lane number ticket will be declared the winner. A drawing of the winning tickets may be held to determine a single winner.


Paddle wheel raffles.


(c) Numbered paddles or numbered tickets are sold to participants that correspond with numbered spaces on a spinning wheel. A balanced wheel divided into numbered segments is spun, at least one full revolution. The specific number the wheel stops on will determine the winning ticket holder.


Pick your own ticket.


(d) A predetermined number of objects or tickets are sold to participants. Each object or ticket may only be issued one time. If using a modified pricing plan, the selection of tickets must be based totally on chance and no participant can determine the price of a ticket before making their selection. All modified pricing plans must follow the requirements set out in subsections (6), (7) and (8) of this section.


Incentives for selling tickets.


(11) Organizations may provide members with noncash incentive awards for selling tickets if:

(a) The awards are based on the number of chances sold;

(b) The fair market value of the total amount awarded for an individual raffle does not exceed five percent of the gross gambling receipts of the raffle; and

(c) A record of the name, address, and telephone number is maintained for all persons receiving incentive awards.


Prizes.


(12) Organizations must own the prizes before drawing the winning tickets. Raffle prizes must:

(a) Not be firearms, unless awarded as prizes under the provisions set forth in WAC 230-12-040;

(b) Not be liquor, unless unopened containers of liquor are awarded as a prize in members-only raffles when the proper permit is obtained from the liquor control board (RCW 9.46.0315 and WAC 230-20-335);

(c) Meet the dollar amount limits set forth in WAC 230-20-015; and

(d) Be controlled as set forth in WAC 230-20-300.


Records.


(13) For members-only raffle records, WAC 230-08-070 is modified as follows:

(a) The name, address, and telephone number must be recorded for all winners of a prize valued at greater than fifty dollars, see WAC 230-08-070 (2)(e);

(b) A detailed record of disbursements and returned tickets is not required, see WAC 230-08-070 (2)(f); and

(c) All records must be maintained for a minimum of one year following the date of each individual raffle drawing, see WAC 230-08-070(4).

[Statutory Authority: RCW 9.46.070 and 9.46.0277. 05-07-107 (Order 443), 230-20-335, filed 3/18/05, effective 7/1/05. 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