WSR 18-08-085

PROPOSED RULES

GAMBLING COMMISSION

[Filed April 4, 2018, 9:17 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 17-12-085.

Title of Rule and Other Identifying Information: Amending WAC 230-15-115 Standards for cards and new WAC 230-06-053 Approval to provide preshuffled cards and 230-16-158 Preshuffled cards.

Hearing Location(s): On May 10, 2018, at 10:00 a.m., at the Washington State Gambling Commission, Nisqually Conference Room, 4565 7th Avenue S.E., Lacey, WA 98503. Hearing will take place at a special commission meeting. The meeting dates and times are tentative. Visit our web site at www.wsgc.wa.gov about seven days before the meeting, select "May Commission meeting" to confirm the hearing date, location, and start time.

Date of Intended Adoption: May 10, 2018.

Submit Written Comments to: Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, email rules.coordinator@wsgc.wa.gov, fax 360-486-3624, by May 1, 2018.

Assistance for Persons with Disabilities: Contact Julie Anderson, phone 360-486-3453, TTY 360-486-3637, email julie.anderson@wsgc.wa.gov, by May 1, 2018.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: A rule change was requested through a rule petition and staff requested additional rule changes to ensure the integrity of the preshuffled card manufacturing process. Staff reviewed preshuffled card regulations from sixteen United States or Canadian jurisdictions and worked with stakeholders since May 2017. Based on discussions with industry, the following changes will be made: (1) Approval of preshuffled cards to be used only in mini-baccarat; (2) new approval process for preshuffled card manufacturers only; and (3) new process for the manufacturing of preshuffled cards, including approval of shuffling device used to preshuffle cards; inspection and verification methods; and quality control standards.

Reasons Supporting Proposal: Industry supports this rule change to allow for preshuffled cards to be used in the card game mini-baccarat. Additionally, staff and stakeholders have agreed upon the proposed rule language and it will provide state card rooms with an option to use preshuffled cards for mini-baccarat and includes safeguards that will ensure the integrity of the preshuffled card manufacturing process.

Statutory Authority for Adoption: RCW 9.46.070.

Statute Being Implemented: RCW 9.46.070.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Washington state gambling commission, governmental.

Name of Agency Personnel Responsible for Drafting and Enforcement: Tina Griffin, Assistant Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3546; and Implementation: David Trujillo, Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3512.

A school district fiscal impact statement is not required under RCW 28A.305.135.

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.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(4).

Explanation of exemptions: The preshuffled card integrity rules will not affect small businesses.

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. The rule was requested by the industry and it does not impose any additional costs on businesses in the industry because the rule does not impose any additional regulatory requirements on card rooms. Instead, the rule change allowing preshuffled cards was requested to allow card rooms the ability to reduce costs and/or increase possible revenue in their card rooms by using preshuffled cards.

April 4, 2018

Brian J. Considine

Legal and Legislative Manager

NEW SECTION

WAC 230-06-053 Approval to provide preshuffled cards.

(1) Licensed manufacturers must obtain approval by the director or director's designee prior to selling preshuffled cards in Washington.

(2) Manufacturers must ensure quality control of the preshuffled cards to protect players or licensees. To obtain approval, manufacturers must submit in writing to us the following for our review:

(a) An overview of the product;

(b) Site security provided at the facility;

(d) Procedures utilized to ensure randomness;

(e) Procedures to detect irregularities;

(f) A deposit to cover the cost of our review, which may include an on-site review to verify the above; and

(g) Identify the automated shuffling device used to preshuffle cards.

(3) Manufacturers must comply with all rules regarding preshuffled cards.

(4) If you do not agree with the director or director's designee's decision, you may file a petition for declaratory order with the commission according to RCW 34.05.240 and chapter 230-17 WAC.

AMENDATORY SECTION (Amending WSR 18-05-029, filed 2/9/18, effective 7/1/18)

WAC 230-15-115 Standards for cards.

(1) Card game licensees must:

(a) Supply cards of conventional size and design to maximize the integrity of the card games; and

(b) Safeguard all cards; and

(2) For Class F, house-banked, and nonhouse-banked card game licensees that play poker or other games approved by the director or the director's designee and collect a fee to play, the cards must:

(a) Be made by a licensed manufacturer; and

(b) Be purchased from a licensed manufacturer or distributor.

(3) Cards with the house name or logo must be used for house-banked card games.

(4) Preshuffled cards, as approved by the director or the director's designee, can be used for mini-baccarat and approved proprietary variations of mini-baccarat in accordance with approved internal controls.

NEW SECTION

WAC 230-16-158 Preshuffled cards.

Manufacturers of preshuffled cards must:

(1) Obtain approval from the director or director's designee for the automated shuffling device used to preshuffle cards; and

(2) Implement a process for producing, shuffling, and packaging preshuffled cards which will, at a minimum, include:

(a) Visual inspection of the back of each card to assure that it is not flawed, scratched or marked in any way that might compromise the integrity or fairness of the game;

(b) Verification that each package of cards contains the correct number of suits and is constituted in accordance with the specific rules of the game the cards are intended for use;

(c) Inserting the cards in a package with a tamper-proof package seal(s) that bears the conspicuous indication if the package has been opened. The exterior of the package will indicate:

(i) The total number of decks contained within the package; and

(ii) The game(s) the cards are intended for use; and

(iii) The color of the preshuffled cards.

(d) Generation of a receipt to be inserted in the sealed package or a label on the sealed package, which shall include the following information:

(i) The total number of cards and decks contained within the package. If using an exterior label, this information will suffice for (c)(i) of this subsection;

(ii) The date and time the preshuffled cards were shuffled, packaged, and verified;

(iii) Identification of the manufacturer's employee who shuffled, packaged, and verified the cards; and

(iv) The manufacturer, model and serial number of the production line or device used to shuffle the cards.