Original Notice.

     Preproposal statement of inquiry was filed as WSR 06-07-050.

     Title of Rule and Other Identifying Information: Amendatory section WAC 230-40-610 Player-supported jackpots -- Restrictions -- Manner of conducting -- Approval.

     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: The proposed rule change would prohibit on-duty card room employees from contributing to player-supported jackpots (PSJ), which they are not eligible to win. Currently, owners, custodians, and on-duty card room employees may participate in card games that offer a PSJ but may not share in the PSJ winnings. This prohibition has been in existence since PSJ's were authorized. Any PSJ winnings an owner or on-duty card room employee may be entitled to under game rules must be divided equally among the other players at the table. Off-duty card room employees may participate in card games that offer a PSJ and may share in the PSJ winnings. Card rooms often require card room employees to play in poker games while on-duty in order to keep games going when there are not enough players.

     The petitioner states that employees, at times, are required by licensees to play while on-duty and to contribute (up to two dollars per hand) to PSJ prizes that are ineligible to win. The petitioner feels that if on-duty card room employees are not eligible to win the PSJ prize, they should not be forced to contribute to the PSJ prize fund.

     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: The petitioner requests that the PSJ rake be returned to on-duty employees or that they be eligible to win a PSJ. On the surface the petitioner's request may seem fair and simple. However, it is more complicated than it first appears: (1) The on-duty card room employee does not contribute the entire amount of the PSJ rake. The amount raked from the pot for the PSJ prize, up to $2 per pot, is a small part of the total pot and the on-duty card room employee's portion is a small fraction of the PSJ funds collected. (2) The petitioner has not identified a way to track and account for an on-duty card room employee's share of the PSJ rake and staff is not aware of an efficient and cost effective way to do this. (3) WAC 230-40-610(6) was written to protect the integrity of card games and allow players to win PSJs. (4) This may be more of an employer/employee decision, rather than a regulatory issue.

     Name of Proponent: Cory Thompson, licensed card room employee, 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 25, 2006

Susan Arland

Rules Coordinator

OTS-8804.1

AMENDATORY SECTION(Amending Order 452, filed 11/21/05, effective 1/1/06)

WAC 230-40-610   Player-supported jackpots -- Restrictions -- Manner of conducting -- Approval.   A player-supported jackpot (PSJ) is a separate contest of chance directly related to the play and/or outcome of authorized nonhouse-banked card games but which is not the card game itself. Card rooms with a Class F or house-banked license may establish a prize fund for the purpose of operating a PSJ for nonhouse-banked card games. Any PSJ must be approved in writing by the director or the director's designee prior to play. A PSJ must meet the following requirements:

Funding a PSJ.

     (1) A licensee may provide house funds to establish a PSJ. The licensee shall issue a check from the general business account into the PSJ account to start the prize fund. Recouping of start up funds shall be done by issuing a check from the PSJ account to the business general account. Electronic bank transfers shall satisfy this requirement. Start up funds shall not exceed five thousand dollars per PSJ.

Using a rake to fund a PSJ.

     (2) A licensee may assess a portion of players' wagers for a jackpot prize. Such amount shall not exceed two dollars per hand or game for each PSJ. This assessment shall be separately collected using the rake method.

PSJ funds are player funds - exception from administrative fee.

     (3) The licensee acts only as the custodian of the PSJ funds, including any interest earned on this money, and maintains no legal right to the funds. All PSJ funds shall be awarded as prizes, based upon a format approved by commission staff. An administrative fee not to exceed ten percent of the amount collected for a PSJ may be imposed by the licensee. This administrative fee includes all expenses incurred by the licensee, including banking fees. No other expenses beyond the ten percent administrative fee shall be deducted from the PSJ account.

Prize fund custodian.

     (4) Each licensee shall designate at least one "prize fund custodian" who shall be responsible for safeguarding and disbursing funds to winners. A prize fund custodian may be an owner, partner, officer, or licensed individual designated by a card room owner, partner, or officer. The custodian shall have signature authority for prize fund bank accounts and ensure accountability of all funds collected for use in a PSJ. The licensee shall meet the deposit requirements of WAC 230-40-608.

Payout of prizes.

     (5) Prize amounts paid in cash shall not exceed two thousand five hundred dollars. Prize amounts not awarded in cash shall be paid within twenty-four hours, by check, the type which provides a duplicate copy. A record of all prizes paid shall be maintained in the format prescribed by commission staff and shall include:

     (a) For prizes less than one hundred dollars, a system of accounting denoting each individual prize may be utilized.

     (b) For prizes one hundred dollars and above, the following information shall be recorded on a prize record:

     (i) Full printed name;

     (ii) Date of birth;

     (iii) Street address;

     (iv) Type of identification reviewed;

     (v) Amount of the prize awarded;

     (vi) Description of the winning hand;

     (vii) Time and date awarded; and

     (viii) The supervisor's and dealer's initials.

     (c) When awarding a prize of five hundred dollars or more, the dealer must, in view of the surveillance camera, display the value and suit of each card in the winning hand, and the remaining cards in the deck must be counted and put in numerical order by suit to confirm a complete deck. The hand shall be collected and sealed with the prize record. The winning hand and remaining deck shall be maintained on the premises as part of daily card room records for a period of seven days, unless released by a commission agent.

Owners and employees competing for a PSJ.

     (6) Owners, custodians and on-duty card room employees may participate in card games that offer a PSJ, but may not contribute to or share in the winnings of any prize awarded. Any prize winnings an owner or on-duty employee may be entitled to under game rules, must be divided equally among the other players at the table: Provided, That off-duty employees may participate in card games that offer a PSJ and share in the prize winnings.

Owners and employees showing cards.

     (7) Owners and on-duty card room employees must turn their cards face up at the end of each game so they may be observed by other players at the table and surveillance if:

     (a) Playing in a game with a PSJ;

     (b) The prize is not based upon a predetermined hand; and

     (c) There is a qualifying hand at the end of a game (such as a "bad beat" hand).

House dealer required.

     (8) All card games offering a PSJ must utilize a house dealer.

Security requirements.

     (9) Each gaming table offering a PSJ shall be required to install a closed circuit television system as outlined in WAC 230-40-625: Provided, That licensees operating any house-banked card games shall follow the security requirements set forth in WAC 230-40-825 for all tables in the card room, including those offering a PSJ.

Removing a PSJ from play.

     (10) The following procedures shall be followed for all discontinued player-supported jackpots:

Discontinued.

     (a) In the event a licensee elects to discontinue a PSJ, the balance, less any nonrecouped seed money, shall be distributed to players within sixty days of discontinuance by offering an approved promotion or card tournament of the same game under which the PSJ was originally accrued.

Closure of business.

     (b) In the event a licensee ceases to operate a card room, or fails to maintain a valid card room license, all funds associated with the PSJ shall be distributed to the Washington state council on problem gambling.

Posting rules.

     (c) The licensee shall conspicuously post a sign stating how PSJ money will be distributed in the event the PSJ is discontinued or the business closes. The sign must be posted at the inception of the PSJ.

House rules.

     (11) House rules, to include administrative fees shall be posted in a location readily visible by all players and disclose the conditions under which prizes may be won, the prize amount, cost to participate, and any other conditions which may affect the outcome of the game.

Dispute resolution.

     (12) If a dispute arises involving the outcome of a PSJ, the licensee shall preserve the video recording, the winning hand and remaining deck, and all records for the game where the dispute occurred and shall notify commission staff within twenty-four hours. The licensee shall document all information pertaining to the dispute including:

     (a) The names, addresses, and phone numbers of all players, card room staff, and any witnesses involved;

     (b) Amount of the advertised PSJ; and

     (c) A full description of the circumstances surrounding the dispute.

     (13) All disputes involving a PSJ will be investigated by commission staff, with a report submitted to the director. A written decision will be issued by the director, or the director's designee, and such decision shall be final.

     (14) During the course of dispute resolution, the commission may become the temporary custodian of any and all prize funds. The PSJ will be suspended until the dispute is resolved.

[Statutory Authority: RCW 9.46.070 and 9.46.0282. 05-23-129 (Order 452), § 230-40-610, filed 11/21/05, effective 1/1/06. Statutory Authority: RCW 9.46.070. 04-24-038 (Order 439), § 230-40-610, filed 11/24/04, effective 1/1/05; 02-17-033 (Order 414), § 230-40-610, filed 8/13/02, effective 1/1/03; 01-13-091 (Order 403), § 230-40-610, filed 6/19/01, effective 7/20/01; 00-09-052 (Order 383), § 230-40-610, filed 4/14/00, effective 5/15/00.]

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