Effective Date of Rule: January 1, 2008.

     Purpose: This new rule expands and codifies requirements to maintain control over logo gambling chips when a card room goes out of business or has damaged or worn chips to dispose of. The new rule will require the following: (1) Chip destruction log; (2) method of destruction; (3) designate the departments responsible for overseeing chip destruction. At least one licensed employee must be from the accounting department; and (4) procedures to be followed if the licensee's chip inventory becomes obsolete (i.e., card room changes its name, license is revoked, expired, or voluntarily surrendered).

     Statutory Authority for Adoption: RCW 9.46.070.

      Adopted under notice filed as WSR 07-11-077 on May 15, 2007, with a published date of June 26, 2007.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 1, Amended 0, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 1, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 1, Amended 0, Repealed 0.

     Date Adopted: August 13, 2007.

Susan Arland

Rules Coordinator

OTS-9714.2

NEW SECTION
WAC 230-40-817   Destruction and disposal of gambling chips.    Licensees must submit internal controls to us outlining the procedures for destroying or disposing of gambling logo chips.

     (1) Licensees' internal controls must set out the method for destroying logo chips that are damaged or worn. The internal controls must include, at least:

     (a) That chips must be destroyed or mutilated in such a way that they are unusable for play; and

     (b) The two departments, one of which must be the accounting department, that will be responsible for overseeing chip destruction; and

     (c) Only licensed employees may perform chip destruction.

     (2) Licensees must record all gambling chips they destroyed on a chip destruction log in the format we require.

     (3) If a card room closes, the licensee or former licensee must:

     (a) Sell or otherwise transfer gambling equipment to a licensed manufacturer or distributor; or

     (b) Destroy the chips according to the established internal controls and provide the chip destruction log to us.

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