[Filed May 29, 2019, 11:52 a.m.]

Preproposal statement of inquiry was filed as WSR 18-22-126 and 19-06-054.

Title of Rule and Other Identifying Information: WAC 230-03-210 Applying for a gambling service supplier license and 230-03-190 Applying for a distributor license.

Hearing Location(s): On July 11, 2019, at 9:00 a.m., at the Hotel Murano, 1320 Broadway Plaza, Tacoma, WA 98402. Hearing will take place at the July commission meeting. The meeting date and time is tentative. Visit our web site at www.wsgc.wa.gov about seven days prior to the meeting, select "July Commission Meeting" to confirm the hearing date, location, and start time.

Date of Intended Adoption: July 11, 2019.

Submit Written Comments to: Ashlie Laydon, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, email rules.coordinator@wsgc.wa.gov, fax 360-486-3624, by July 1, 2019.

Assistance for Persons with Disabilities: Contact Julie Anderson, phone 360-486-3453, TTY 360-486-3637, email Julie.anderson@wsgc.wa.gov, by July 1, 2019.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Changes are being made to WAC 230-03-190 Applying for a distributor license and 230-03-210 Applying for a gambling service supplier license, so that licensed distributors can provide training and licensing assistance to punchboard and/or pull-tab operators without having to also obtain a service supplier license, which under current rules, is prohibited.

Reasons Supporting Proposal: Under current rules, a service supplier license is required to provide training and licensing assistance, however a licensed distributor cannot also hold a service supplier license. These changes will allow for licensed distributors to provide training and licensing assistance to potential and existing punchboard and/or pull-tab operators and still be compliant with commission rules.

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: Wendy Winsor, W.O.W. Distributing, Mukilteo, Washington, private.

Name of Agency Personnel Responsible for Drafting: Brian Considine, Managing Staff Attorney, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3469; Implementation: David Trujillo, Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3512; and Enforcement: Tina Griffin, Assistant Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3546.

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.A cost-benefit analysis must be completed for significant legislative rules. Per RCW 34.05.328 (5)(c), amendments to WAC 230-03-190 and 230-03-210 do not meet the definition of a "significant legislative rule" and therefore do not require a cost-benefit analysis.

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 proposed changes may affect businesses that employ less than fifty people, but do not impose any new costs, increase existing costs, or decrease existing revenue for small businesses. The proposed changes allow, but do not require, businesses to provide additional services for compensation without having to accrue additional licensing fees.

AMENDATORY SECTION(Amending WSR 18-05-026, filed 2/9/18, effective 5/1/18)

WAC 230-03-190Applying for a distributor license.

You must apply for a distributor license if you:

(1) Buy or otherwise obtain a finished piece of gambling equipment for use in authorized gambling activities from another person and sell or provide that gambling equipment to a third person for resale, display, or use; or

(2) Are a manufacturer who sells or provides gambling equipment you do not make to any other person for resale, display, or use; or

(3) Service and repair authorized gambling equipment. However, distributors must not add, modify, or alter the gambling equipment; or

(4) Modify gambling equipment using materials provided by manufacturers to upgrade equipment to current technology((.)); or

(5) Buy or lease a group 12 amusement game from another licensee and sell or lease the group 12 amusement game to an amusement game licensee; or

(6) Provide training to licensed and potential punch board/pull-tab operators for compensation; or

(7) Provide assistance to gambling license applicants or licensees seeking gambling license renewal for compensation.

AMENDATORY SECTION(Amending WSR 10-19-052, filed 9/14/10, effective 1/1/11)

WAC 230-03-210Applying for a gambling service supplier license.

(1) You must apply for a gambling service supplier license if you perform any of the following gambling-related services for compensation:

(a) Consulting or advisory services regarding gambling activities; or

(b) Gambling management services; or

(c) Financing for more than one licensee for purchases or leases of gambling equipment or financing for providing infrastructure or facilities, or equipment that supports gambling operations:

(i) Once you have financed more than one licensee, you must be a licensed gambling service supplier until all loans with licensees or previous licensees are paid.

(ii) Once you have been a licensed gambling service supplier, you must be licensed as a gambling service supplier again before financing purchases or leases for any licensee; or

(d) Acting as a lending agent, or loan servicer, or placement agent; or

(e) Providing the assembly of components for gambling equipment under a contract with a licensed manufacturer or entering into an ongoing financial arrangement for gambling related software with a licensed manufacturer; or

(f) Installing, integrating, maintaining, or servicing digital surveillance systems that allow direct access to the operating system; or

(g) Training individuals to conduct authorized gambling activities; or

(h) Providing any other service or activity where influence may be exerted over any gambling activity licensed by the commission; or

(i) Performing the testing and certification of tribal lottery systems in meeting requirements specified in the tribal-state compact; or

(j) Providing nonmanagement-related recordkeeping or storage services for punch board and pull-tab operators, when the combined total gross billings from such services exceed thirty thousand dollars during any permit period or license year.

(2) You do not need a gambling service supplier license if you are:

(a) A bank, mutual savings bank, or credit union regulated by the department of financial institutions or any federally regulated commercial lending institution; or

(b) A university or college regulated by the Washington state board of community and technical colleges and the higher education coordinating board that trains individuals to conduct authorized gambling activities; or

(c) An attorney, accountant, or governmental affairs consultant whose primary business is providing professional services that are unrelated to the management or operation of gambling activities; or

(d) A person who only provides nonmanagement-related recordkeeping or storage services for punch board and pull-tab operators, when the combined total gross billings from such services do not exceed thirty thousand dollars during any permit period; or

(e) A person who provides names, images, artwork or associated copyrights, or trademarks, or patent use, or other features that do not affect the results or outcome of the game, for use in gambling equipment; or

(f) Regulated lending institutions; or

(g) A licensed distributor who provides any of the following services for compensation:

(i) Training to licensed and potential punch board/pull-tab operators; or

(ii) Providing assistance to gambling license applicants or licensees seeking gambling license renewal for compensation.