Original Notice.

     Preproposal statement of inquiry was filed as WSR 05-17-205 [05-17-204].

     Title of Rule and Other Identifying Information: New section WAC 230-02-101 Cash defined.

     Hearing Location(s): DoubleTree Guest Suites, 16500 Southcenter Parkway, Seattle, WA 98188, (509) 248-8220, on January 13, 2006, at 9:30 a.m.

     Date of Intended Adoption: January 13, 2006.

     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 January 1, 2006.

     Assistance for Persons with Disabilities: Contact Shirley Corbett by January 1, 2006, TTY (360) 486-3637 or (360) 486-3447.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: A petition for rule change submitted by Monty Harmon, Harmon Consulting Inc., was filed at the October 14, 2005, meeting. Mr. Harmon is requesting that cash be defined in our rules. This new definition of cash would expand the methods players could use to participate in gambling activities and/or receive their winnings.

     The petitioner has indicated to staff that the intent of the change is to allow patrons to use "guest cards" to purchase pull-tabs and allow pull-tab winnings to be added to "guest cards." However, if this proposal is approved it would apply to all gambling activities. The petitioner states in his petition the change would modernize the industry and take advantage of current security benefits of prepaid cashless systems.

     Cash is not specifically defined in our rules; however, cash equivalent is defined in WAC 230-40-552 as follows: "as treasury check, personal check, traveler's check, wire transfer of funds, money order, certified check, cashier's check, a check drawn on the licensee's account payable to the patron or to the licensee, or a voucher recording cash drawn against a credit card or debit card." This rule became effective May 2000 and provided for additional methods of payment to participate in card games, other than cash or personal check. Although the cash equivalent definition only applies to card games, it has been informally used by staff to clarify the definition of cash as it relates to other gambling activities. The petitioner's intent is for the "guest card" to be purchased and used by patrons at a licensed business. The "guest card" could be used to purchase food, beverages, pull-tabs, and/or participate in other gambling activities. A patron may add additional funds to the "guest card." Most importantly, licensees may add a player's winnings to the "guest card" rather than paying with cash or a check. The "guest card" would be redeemable for cash at anytime. There would be an accounting system associated with this activity to ensure the accuracy of customer "guest card" balance. At a patron's request, the system would also provide a "guest card" fund balance.

     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.

     Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: Staff recommends the petition be denied for the following reasons: Standards must be developed for an accounting system; rules must be reviewed to determine other necessary changes and the impact on other gambling activities; and staff will need to monitor the systems to ensure balances are accurate.

     Name of Proponent: Monty Harmon, Harmon Consulting, Inc., private.

     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. A small business economic impact statement has not been prepared pursuant to RCW 19.85.025, and/or the proposed rule does not impose more than minor, if any, costs to businesses and no disproportionate impact to small businesses has been identified.

     A cost-benefit analysis is not required under RCW 34.05.328. The Washington State Gambling Commission is not an agency that is statutorily required to prepare a cost-benefit analysis under RCW 34.05.328.

October 25, 2005

Susan Arland

Rules Coordinator

OTS-8460.1

NEW SECTION
WAC 230-02-101   Cash defined.   "Cash" is any currency, check, or debit card transaction valued in terms of the U.S. dollar. For purposes of these rules, Canadian currency shall be converted in accordance with the published exchange rates for financial reporting purposes but may be recorded in terms of Canadian or U.S. dollars as long as the records clearly identify the currency used.

     In addition, licensees with accounting systems approved by the gambling commission may use transactions on "guest cards" and other "cashless" systems as cash transactions for purposes of conducting their business and gambling operations. The systems cannot be used for credit transactions and would operate in the same manner as a debit card. Customer purchases would reduce their account balance and their winnings could be added to their balance. Licensees using a "guest card" or "cashless" system must maintain the system so that customer balances could never go below a zero balance even for nongambling purchases or transactions.

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