WSR 06-10-026

PROPOSED RULES

GAMBLING COMMISSION


[ Filed April 26, 2006, 1:46 p.m. ]

Continuance of WSR 05-17-205.

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

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

Hearing Location(s): Hilton Hotel, 301 West 6th Street, Vancouver, WA 98660, (360) 993-4500, on July 14, 2006, at 9:30 a.m.

Date of Intended Adoption: July 14, 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 July 1, 2006.

Assistance for Persons with Disabilities: Contact Shirley Corbett by July 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 Harmon Consulting Inc., was filed at the October 2005, meeting. The petitioner 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.

At their April 2006 meeting, the commission held the petition over for final action at their July 14, 2006, commission meeting. As such, this continuance is being filed to accommodate this timeline.

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 opposes the petition for the following reasons: (1) This new rule would require the commission to approve accounting systems, but does not set forth standards for the system. (2) The commission does not currently approve accounting systems. If we begin approving accounting systems, additional regulatory oversight would be required. (3) The term "cash" is used in sixty-one commission rules and there is no ambiguity on what this term means in these rules, as such there is no need to define the term "cash." (4) The petition does not contain a dollar limit on gift cards, which could facilitate money laundering. (5) Players are more likely to spend additional money gambling at a licensee's business when a gift card is issued, compared to if cash was given as a prize. (6) The term "other cashless systems" is referred to in the petitioner's rule. This term contemplates something other than gift cards, but it is not defined or otherwise explained by the petitioner. (7) It would apply to all gambling activities, not just pull-tabs, and would allow winnings to be credited to "guest cards." (8) It is unclear how the gift cards, if approved, would relate to pull-tab dispensing devices or other similar devices.

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.

April 20, 2006

Susan Arland

Rules Coordinator

OTS-8805.1


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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Washington State Code Reviser's Office