H-4637

AN ACT Relating to charitable gaming; amending RCW 9.46.070 and 9.46.120; and adding new sections to chapter 9.46 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. Bona fide charitable or bona fide nonprofit organizations may participate in charitable gaming events when the events are conducted by a gaming management company in accordance with the provisions of this chapter and the rules of the commission.

NEW SECTION. Sec. 2. "Charitable gaming event," as used in this chapter, means a gaming event conducted by a licensed gaming management company on behalf of a bona fide charitable or bona fide nonprofit organization that offers the games of blackjack, roulette, craps, sic-bo, and other traditional table games as may be authorized by the commission and when operated under the provisions of this chapter and the rules of the commission. The use of electronic or mechanical facsimiles of any table game or any gambling device as defined in this chapter is strictly prohibited.

NEW SECTION. Sec. 3. "Gaming employee" means a person employed in the operation or management of a charitable gaming event including, but not limited to: Gaming operation managers and assistant managers; accounting personnel; surveillance personnel; cashier supervisors; dealers or croupiers; box men; floormen; pit bosses; shift bosses; cage personnel; collection personnel; gaming consultants; management companies and their principals; and any other natural person whose employment duties require or authorize access to restricted areas of the gaming facility not otherwise opened to the public.

NEW SECTION. Sec. 4. "Gaming management company" or "company" means a business entity that has been selected and licensed by the commission to provide gaming event management, equipment, and personnel in relation to licensed charitable gaming events.

NEW SECTION. Sec. 5. "Gaming account" means an account established in accordance with commission rules by a licensee at a recognized financial institution for the exclusive purposes of depositing the proceeds from charitable gaming events to the account and making authorized disbursements from the account.

NEW SECTION. Sec. 6. "Gaming facility" means a licensed facility, premises, room or rooms that is owned, leased, or rented by a gaming management company.

NEW SECTION. Sec. 7. "Gaming services" means the providing of goods or services in connection with the operation of charitable gaming events in a gaming facility, including equipment, gaming supplies, maintenance, or security services for the gaming facility.

NEW SECTION. Sec. 8. "Gaming station" means one gaming table.

NEW SECTION. Sec. 9. "House rules" are rules enacted by the company that deal with the conduct of players and the management of the event, in accordance with the rules adopted by the commission.

NEW SECTION. Sec. 10. (1) Any bona fide charitable or nonprofit organization may apply to the commission for a license to hold a charitable gaming event.

(2) If approved, the commission shall assign a licensee under subsection (1) of this section a date or dates for a charitable gaming event. The assignment shall be made to a company and gaming facility in the district in which the organization resides. However, if there are no available dates in the district in which the organization resides, the commission may assign a different district.

NEW SECTION. Sec. 11. Training is mandatory for members filling the positions of volunteer supervisor and banker. The role of the volunteer in casino gaming is essential to ensure financial control at the event. Training provides volunteers with information regarding their rights as well as their roles and responsibilities at the charity gaming event. A licensee shall comply with all training requirements established by the commission.

NEW SECTION. Sec. 12. The commission may amend the terms and conditions of a charity gaming license at any time and may attach additional terms and conditions to the license.

NEW SECTION. Sec. 13. (1) A licensee may not transfer or assign its license.

(2) A licensee may not conduct or manage licensed gaming events on days, or for periods of time, or in locations not specified and approved in the license.

(3) If the licensee intends to cancel the license prior to the date of the casino event, a request must be submitted in writing by an authorized officer of the licensee to the commission for approval.

NEW SECTION. Sec. 14. The commission may suspend or revoke a license at any time if the licensee has breached the provisions of the license or if, in the opinion of the commission, suspension or revocation is necessary in the public interest. While a suspension is in effect, the commission may not consider other applications from the licensee to conduct or manage other licensed gaming events.

NEW SECTION. Sec. 15. (1) Charitable gaming events are limited to thirty-one gaming stations.

(2) The wagering limitations for charitable gaming events are a maximum of twenty-five dollars per wager.

(3) The hours of operation for a gaming facility in which charitable gaming events are conducted may not exceed eighty hours per week. Daily operations are prohibited between the hours of 2:00 a.m. until 12:00 p.m.

(4) A bona fide nonprofit or bona fide charitable organization may not obtain more than four licenses per year to participate in charitable gaming events. Each license shall be valid for up to three consecutive days of operation, but the commission may increase or decrease the number of days of a licensee to meet the demands for license requests.

NEW SECTION. Sec. 16. Gaming facilities shall be limited to no more than two locations in each congressional district. The gaming facility location and the corresponding company shall be licensed by the commission. In granting such a license the commission shall follow the qualification requirements of this chapter and shall have broad authority to develop additional qualifications, guidelines, requirements, and criteria for selecting and approving gaming management companies and gaming facility licenses. This authority may include, at the discretion of the commission, the authority to utilize a competitive process subject to the rules of the commission for selection of gaming management companies.

NEW SECTION. Sec. 17. The following minimum operational requirements shall be observed at all charitable gaming events:

(1) A gaming revenue report from a charitable gaming event must be completed within twenty-four hours after the completion of the event and submitted to the commission within seven days of the conclusion of the charitable gaming event;

(2) All winnings shall be distributed to players at and during the operation of the charitable gaming event;

(3) The company shall keep a separate record, for each licensed gaming event, of the funds taken in and paid out at the event and other information as required by the commission;

(4) All records of the company shall be available for immediate review upon request by the commission. Failure to provide the records is grounds for summary suspension of all licenses held by the company;

(5) A gaming employee may not participate as a player in a gaming facility in which the gaming employee is employed;

(6) A person under the age of eighteen may not participate in the operation, management, or as a player in a charitable gaming event, and a person under the age of eighteen may not be permitted in a gaming facility;

(7) Alcoholic beverages are prohibited in a gaming facility;

(8) The gaming company, the gaming employees, or any other person associated with the conduct of a charitable gaming event may not offer or allow a player to participate on credit; and

(9) Such other rules as adopted by the commission.

NEW SECTION. Sec. 18. The revenues from a charitable gaming event shall be distributed as follows:

(1) A tax of ten percent of the net win is hereby imposed as a business and occupation tax and shall be remitted to the department of revenue in accordance with the provisions of chapter 82.04 RCW and the rules of the department and shall be deposited in the general fund, except that twenty percent of the taxes collected shall be distributed to the local enforcement agencies in the jurisdictions where the gaming facilities are located;

(2) Forty-five percent of the net win shall be distributed to the licensed organization, adjusted for cashier shortage or overage; and

(3) The balance, not to exceed forty-five percent of the net win, shall be retained by the gaming management company for expenses directly related to the conduct and management of the charitable gaming event, including salaries, wages, costs for equipment, room rental, and other fees.

NEW SECTION. Sec. 19. (1) The company shall indemnify and save harmless the charitable organization from and against any and all losses, claims, damages, actions, causes of action, costs, and expenses that the charitable organization may sustain, incur, suffer, or be put to by reason of an act or omission of the company or a servant, employee, officer, or director of the company.

(2) In the event of the death, incapacity, receivership, bankruptcy, or assignment for benefit of creditors of the company, the following applies:

(a) The commission chair may approve temporary transfer of the registration of the company to a court-appointed or court-confirmed guardian, executor, administrator, receiver, trustee, or assignee for the benefit of creditors, who may continue to operate the company's business. The transfer may be for a period not exceeding one hundred eighty days, but it may be extended for a further period of up to one hundred eighty days with the approval of the commission.

(b) In the event of closing of business, for any reason, the company shall immediately inform the commission. The commission may authorize closing for periods up to ninety days.

NEW SECTION. Sec. 20. The following procedures must be followed in reviewing an application for registration as a gaming management company:

(1) The information for registration must be submitted to the commission.

(2) The commission shall evaluate the merits of the application and inform the applicant, in writing, of its decision.

NEW SECTION. Sec. 21. The following minimum information must be provided by an applicant to determine its eligibility for licensing as a gaming management company:

(1) All jurisdictions where the gaming management company is incorporated, evidence that the company is in good standing;

(2) Evidence of expertise in casino or gaming operations, or both, in a regulated jurisdiction and evidence that quality services shall be provided to the licensed organization;

(3) Identification of and verification that the directors, officers, shareholders, or other persons having a financial interest in the company have not been convicted in a country, province, or state within the last five years of a criminal offense related to narcotics, to acts of dishonesty including but not limited to offenses involving fraud, currency, gaming, and betting, or to acts against the right of property such as theft, robbery, or forgery;

(4) Verification that no directors, officers, shareholders, or other persons having a financial interest in the company have had a claim made successfully or have a claim pending in a civil proceeding before a court, territory, state, or country that was, or is, based in whole or in part on fraud, deceit, misrepresentation, or similar conduct;

(5) Evidence of financial eligibility.

NEW SECTION. Sec. 22. (1) The company shall indemnify and save harmless the charitable organization from and against any and all losses, claims, damages, actions, causes of action, costs, and expenses that the charitable organization may sustain, incur, suffer, or be put to by reason of an act or omission of the company or a servant, employee, officer, or director of the company.

(2) In the event of the death, incapacity, receivership, bankruptcy, or assignment for benefit of creditors of the company, the following criteria apply:

(a) The commission chair may approve temporary transfer of the registration of the company to a court-appointed or court-confirmed guardian, executor, administrator, receiver, trustee, or assignee for the benefit of creditors who may continue to operate the company's business. The transfer may be for a period not exceeding one hundred eighty days, but it may be extended for a further period of up to one hundred eighty days with the approval of the commission.

(b) In the event of closing of business, for any reason, the company shall immediately inform the commission. The commission may authorize closing for periods up to ninety days.

NEW SECTION. Sec. 23. A company shall submit to the commission on a yearly basis an independent audited financial statement covering the company's activities for the previous business year to be submitted no later than three months after the end of the business year. The commission shall establish the content and format of the statement.

Sec. 24. RCW 9.46.070 and 1987 c 4 s 38 are each amended to read as follows:

The commission shall have the following powers and duties:

(1) To authorize and issue licenses for a period not to exceed one year to bona fide charitable or nonprofit organizations approved by the commission meeting the requirements of this chapter and any rules and regulations adopted pursuant thereto permitting said organizations to conduct bingo games, raffles, amusement games, charitable gaming events, and social card games, to utilize punch boards and pull-tabs in accordance with the provisions of this chapter and any rules and regulations adopted pursuant thereto and to revoke or suspend said licenses for violation of any provisions of this chapter or any rules and regulations adopted pursuant thereto: PROVIDED, That the commission shall not deny a license to an otherwise qualified applicant in an effort to limit the number of licenses to be issued: PROVIDED FURTHER, That the commission or director shall not issue, deny, suspend or revoke any license because of considerations of race, sex, creed, color, or national origin: AND PROVIDED FURTHER, That the commission may authorize the director to temporarily issue or suspend licenses subject to final action by the commission;

(2) To authorize and issue licenses for a period not to exceed one year to any person, association, or organization operating a business primarily engaged in the selling of items of food or drink for consumption on the premises, approved by the commission meeting the requirements of this chapter and any rules and regulations adopted pursuant thereto permitting said person, association, or organization to utilize punch boards and pull-tabs and to conduct social card games as a commercial stimulant in accordance with the provisions of this chapter and any rules and regulations adopted pursuant thereto and to revoke or suspend said licenses for violation of any provisions of this chapter and any rules and regulations adopted pursuant thereto: PROVIDED, That the commission shall not deny a license to an otherwise qualified applicant in an effort to limit the number of licenses to be issued: PROVIDED FURTHER, That the commission may authorize the director to temporarily issue or suspend licenses subject to final action by the commission;

(3) To authorize and issue licenses for a period not to exceed one year to any person, association, or organization approved by the commission meeting the requirements of this chapter and meeting the requirements of any rules and regulations adopted by the commission pursuant to this chapter as now or hereafter amended, permitting said person, association, or organization to conduct or operate amusement games in such manner and at such locations as the commission may determine;

(4) To authorize, require, and issue, for a period not to exceed one year, such licenses as the commission may by rule provide, to any person, association, or organization to engage in the selling, distributing, or otherwise supplying or in the manufacturing of devices for use within this state for those activities authorized by this chapter;

(5) To establish a schedule of annual license fees for carrying on specific gambling activities upon the premises, and for such other activities as may be licensed by the commission, which fees shall provide to the commission not less than an amount of money adequate to cover all costs incurred by the commission relative to licensing under this chapter and the enforcement by the commission of the provisions of this chapter and rules and regulations adopted pursuant thereto: PROVIDED, That all licensing fees shall be submitted with an application therefor and such portion of said fee as the commission may determine, based upon its cost of processing and investigation, shall be retained by the commission upon the withdrawal or denial of any such license application as its reasonable expense for processing the application and investigation into the granting thereof: PROVIDED FURTHER, That if in a particular case the basic license fee established by the commission for a particular class of license is less than the commission's actual expenses to investigate that particular application, the commission may at any time charge to that applicant such additional fees as are necessary to pay the commission for those costs. The commission may decline to proceed with its investigation and no license shall be issued until the commission has been fully paid therefor by the applicant: AND PROVIDED FURTHER, That the commission may establish fees for the furnishing by it to licensees of identification stamps to be affixed to such devices and equipment as required by the commission and for such other special services or programs required or offered by the commission, the amount of each of these fees to be not less than is adequate to offset the cost to the commission of the stamps and of administering their dispersal to licensees or the cost of administering such other special services, requirements or programs;

(6) To prescribe the manner and method of payment of taxes, fees and penalties to be paid to or collected by the commission;

(7) To require that applications for all licenses contain such information as may be required by the commission: PROVIDED, That all persons (a) having a managerial or ownership interest in any gambling activity, or the building in which any gambling activity occurs, or the equipment to be used for any gambling activity, or (b) participating as an employee in the operation of any gambling activity, shall be listed on the application for the license and the applicant shall certify on the application, under oath, that the persons named on the application are all of the persons known to have an interest in any gambling activity, building, or equipment by the person making such application: PROVIDED FURTHER, That the commission may require fingerprinting and background checks on any persons seeking licenses under this chapter or of any person holding an interest in any gambling activity, building, or equipment to be used therefor, or of any person participating as an employee in the operation of any gambling activity;

(8) To require that any license holder maintain records as directed by the commission and submit such reports as the commission may deem necessary;

(9) To require that all income from bingo games, raffles, and amusement games be recorded and reported as established by rule or regulation of the commission to the extent deemed necessary by considering the scope and character of the gambling activity in such a manner that will disclose gross income from any gambling activity, amounts received from each player, the nature and value of prizes, and the fact of distributions of such prizes to the winners thereof;

(10) To regulate and establish maximum limitations on income derived from bingo: PROVIDED, That in establishing limitations pursuant to this subsection the commission shall take into account (i) the nature, character, and scope of the activities of the licensee; (ii) the source of all other income of the licensee; and (iii) the percentage or extent to which income derived from bingo is used for charitable, as distinguished from nonprofit, purposes;

(11) To regulate and establish the type and scope of and manner of conducting the gambling activities authorized by this chapter, including but not limited to, the extent of wager, money, or other thing of value which may be wagered or contributed or won by a player in any such activities;

(12) To regulate the collection of and the accounting for the fee which may be imposed by an organization, corporation or person licensed to conduct a social card game on a person desiring to become a player in a social card game in accordance with RCW 9.46.0281(4);

(13) To cooperate with and secure the cooperation of county, city, and other local or state agencies in investigating any matter within the scope of its duties and responsibilities;

(14) In accordance with RCW 9.46.080, to adopt such rules and regulations as are deemed necessary to carry out the purposes and provisions of this chapter. All rules and regulations shall be adopted pursuant to the administrative procedure act, chapter 34.05 RCW;

(15) To set forth for the perusal of counties, city-counties, cities and towns, model ordinances by which any legislative authority thereof may enter into the taxing of any gambling activity authorized by this chapter;

(16) To establish and regulate a maximum limit on salaries or wages which may be paid to persons employed in connection with activities conducted by bona fide charitable or nonprofit organizations and authorized by this chapter, where payment of such persons is allowed, and to regulate and establish maximum limits for other expenses in connection with such authorized activities, including but not limited to rent or lease payments.

In establishing these maximum limits the commission shall take into account the amount of income received, or expected to be received, from the class of activities to which the limits will apply and the amount of money the games could generate for authorized charitable or nonprofit purposes absent such expenses. The commission may also take into account, in its discretion, other factors, including but not limited to, the local prevailing wage scale and whether charitable purposes are benefited by the activities;

(17) To authorize, require, and issue for a period not to exceed one year such licenses or permits, for which the commission may by rule provide, to any person to work for any operator of any gambling activity authorized by this chapter in connection with that activity, or any manufacturer, supplier, or distributor of devices for those activities in connection with such business. The commission shall not require that persons working solely as volunteers in an authorized activity conducted by a bona fide charitable or bona fide nonprofit organization, who receive no compensation of any kind for any purpose from that organization, and who have no managerial or supervisory responsibility in connection with that activity, be licensed to do such work. The commission may require that licensees employing such unlicensed volunteers submit to the commission periodically a list of the names, addresses, and dates of birth of the volunteers. If any volunteer is not approved by the commission, the commission may require that the licensee not allow that person to work in connection with the licensed activity;

(18) To publish and make available at the office of the commission or elsewhere to anyone requesting it a list of the commission licensees, including the name, address, type of license, and license number of each licensee;

(19) To establish guidelines for determining what constitutes active membership in bona fide nonprofit or charitable organizations for the purposes of this chapter; ((~~and~~))

(20) To perform all other matters and things necessary to carry out the purposes and provisions of this chapter; and

(21) To authorize and issue all licenses necessary to regulate charitable gaming events, including but not limited to, gaming management companies, gaming facilities, and gaming employee licenses.

Sec. 25. RCW 9.46.120 and 1987 c 4 s 40 are each amended to read as follows:

(1) Except in the case of an agricultural fair as authorized under chapters 15.76 and 36.37 RCW, no person other than a member of a bona fide charitable or nonprofit organization (and their employees) or any other person, association or organization (and their employees) approved by the commission, shall take any part in the management or operation of any gambling activity authorized under this chapter, and no person who takes any part in the management or operation of any such gambling activity shall take any part in the management or operation of any gambling activity conducted by any other organization or any other branch of the same organization, unless approved by the commission, and no part of the proceeds thereof shall inure to the benefit of any person other than the organization conducting such gambling activities or if such gambling activities be for the charitable benefit of any specific persons designated in the application for a license, then only for such specific persons as so designated. However, this subsection is not applicable to the operation of charitable gaming events.

(2) No bona fide charitable or nonprofit organization or any other person, association or organization shall conduct any gambling activity authorized under this chapter in any leased premises if rental for such premises is unreasonable or to be paid, wholly or partly, on the basis of a percentage of the receipts or profits derived from such gambling activity.

NEW SECTION. Sec. 26. Sections 1 through 23 of this act are each added to chapter 9.46 RCW.