[atlas:bill]

AN ACT Relating to video pull-tabs; amending RCW 9.46.010, 9.46.0273, 9.46.0311, 9.46.0325, 9.46.070, and 9.46.110; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.14 RCW; adding new sections to chapter 9.46 RCW; and declaring an emergency.

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

Sec. 1. RCW 9.46.010 and 1996 c 101 s 2 are each amended to read as follows:

The public policy of the state of Washington on gambling is to keep the criminal element out of gambling and to promote the social welfare of the people by limiting the nature and scope of gambling activities and by strict regulation and control.

It is hereby declared to be the policy of the legislature, recognizing the close relationship between professional gambling and organized crime, to restrain all persons from seeking profit from professional gambling activities in this state; to restrain all persons from patronizing such professional gambling activities; to safeguard the public against the evils induced by common gamblers and common gambling houses engaged in professional gambling; and at the same time, both to preserve the freedom of the press and to avoid restricting participation by individuals in activities and social pastimes, which activities and social pastimes are more for amusement rather than for profit, do not maliciously affect the public, and do not breach the peace.

The legislature further declares that the raising of funds for the promotion of bona fide charitable or nonprofit organizations is in the public interest as is participation in such activities and social pastimes as are hereinafter in this chapter authorized.

The legislature further declares that the conducting of bingo, raffles, and amusement games and the operation of punch boards, pull-tabs, video pull-tabs, card games, and other social pastimes, when conducted pursuant to the provisions of this chapter and any rules ((~~and regulations~~)) adopted pursuant thereto, are hereby authorized, as are only such lotteries for which no valuable consideration has been paid or agreed to be paid as hereinafter in this chapter provided.

The legislature further declares that fishing derbies shall not constitute any form of gambling and shall not be considered as a lottery, a raffle, or an amusement game and shall not be subject to the provisions of this chapter or any rules ((~~and regulations~~)) adopted hereunder.

The legislature further declares that raffles authorized by the fish and wildlife commission involving hunting big game animals or wild turkeys shall not be subject to the provisions of this chapter or any rules ((~~and regulations~~)) adopted hereunder, with the exception of this section and RCW 9.46.400.

All factors incident to the activities authorized in this chapter shall be closely controlled, and the provisions of this chapter shall be liberally construed to achieve such end.

Sec. 2. RCW 9.46.0273 and 1987 c 4 s 19 are each amended to read as follows:

(1) "Punch boards" and "pull-tabs," as used in this chapter, shall be given their usual and ordinary meaning as of July 16, 1973, except that such definition may be revised by the commission pursuant to rules ((~~and regulations promulgated~~)) adopted pursuant to this chapter.

(2) "Video pull‑tabs" means a video display of a single pull‑tab ticket, the face of which is initially covered or otherwise hidden from view to conceal a number, symbol, or set of symbols, a few of which numbers or symbols out of every set of pull‑tabs have been designated in advance and at random as prize winners, when, for the opportunity to view the numbers or symbols thereon and possibly obtain a prize, a person pays some consideration to an operator.

Each video pull‑tab game consists of a finite number of video pull‑tabs, a certain number of which, if drawn, entitle a player to prize awards at various levels. Video pull‑tabs may only be accessed through a linked system of player terminals that only allow players to compete against other players. Player terminals do not allow for individual play against any terminal. The number of player terminals for use by each licensee must be as described in section 12 of this act. A video pull‑tab system includes video pull‑tab terminals that are played by use of computer hardware and software to manufacture, store, distribute, sell, and display video pull‑tabs to players. This section does not authorize any form of slot machine.

Sec. 3. RCW 9.46.0311 and 1987 c 4 s 26 are each amended to read as follows:

The legislature hereby authorizes bona fide charitable or nonprofit organizations to conduct bingo games, raffles, amusement games, ((~~and~~)) fund‑raising events, and to ((~~utilize~~)) use punch boards ((~~and~~)), pull-tabs, video pull-tabs, and video pull-tab systems, and to allow their premises and facilities to be used by only members, their guests, and members of a chapter or unit organized under the same state, regional, or national charter or constitution, to play social card games authorized by the commission, when licensed, conducted, or operated pursuant to the provisions of this chapter and rules ((~~and regulations~~)) adopted pursuant thereto.

Sec. 4. RCW 9.46.0325 and 1987 c 4 s 29 are each amended to read as follows:

The legislature hereby authorizes any person, association, or organization operating an established business primarily engaged in the selling of food or drink for consumption on the premises to conduct social card games and to ((~~utilize~~)) use punch boards ((~~and~~)), pull-tabs, video pull-tabs, and video pull-tab systems as a commercial stimulant to such business when licensed and ((~~utilized~~)) used or operated pursuant to the provisions of this chapter and rules ((~~and regulations~~)) adopted pursuant thereto.

Sec. 5. RCW 9.46.070 and 1999 c 143 s 6 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, ((~~and~~)) social card games, and to ((~~utilize~~)) use punch boards ((~~and~~)), pull-tabs, video pull-tabs, and video pull-tab systems 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~~)) use punch boards ((~~and~~)), pull-tabs, video pull-tabs, and video pull-tab systems 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. 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. However, the commission's powers and duties granted by this subsection are discretionary and not mandatory;

(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 9.46.0282;

(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. However, the commissioner's powers and duties granted by this subsection are discretionary and not mandatory.

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.

Sec. 6. RCW 9.46.110 and 1999 c 221 s 1 are each amended to read as follows:

(1) The legislative authority of any county, city-county, city, or town, by local law and ordinance, and in accordance with the provisions of this chapter and rules adopted under this chapter, may provide for the taxing of any gambling activity authorized by this chapter within its jurisdiction, the tax receipts to go to the county, city-county, city, or town so taxing the activity. Any such tax imposed by a county alone shall not apply to any gambling activity within a city or town located in the county but the tax rate established by a county, if any, shall constitute the tax rate throughout the unincorporated areas of such county.

(2) The operation of punch boards ((~~and~~)), pull-tabs, video pull-tabs, and video pull-tab systems are subject to the following conditions:

(a) Chances may only be sold to adults;

(b) The price of a single chance may not exceed one dollar;

(c) No punch board ((or)), pull-tab ((~~license~~)), or video pull-tab system licensee may award as a prize upon a winning number or symbol being drawn the opportunity of taking a chance upon any other punch board ((or)), pull-tab, or video pull-tab;

(d) All prizes available to be won must be described on an information flare or video flare display. All merchandise prizes must be on display within the immediate area of the premises in which any such punch board ((or)), pull-tab, or video pull-tab terminal is located. Upon a winning number or symbol being ((~~drawn~~)) selected, a merchandise prize must be immediately removed from the display and awarded to the winner. All references to cash or merchandise prizes, with a value over twenty dollars, must be removed immediately from the information flare or video flare display when won, or such omission shall be deemed a fraud for the purposes of this chapter; and

(e) When any person wins money or merchandise from any punch board ((or)), pull-tab, or video pull-tab over an amount determined by the commission, every licensee shall keep a public record of the award for at least ((~~ninety~~)) sixty days containing such information as the commission shall deem necessary.

(3)(a) Taxation of bingo and raffles shall never be in an amount greater than five percent of the gross receipts from a bingo game or raffle less the amount awarded as cash or merchandise prizes.

(b) Taxation of amusement games shall only be in an amount sufficient to pay the actual costs of enforcement of the provisions of this chapter by the county, city or town law enforcement agency and in no event shall such taxation exceed two percent of the gross receipts from the amusement game less the amount awarded as prizes.

(c) No tax shall be imposed under the authority of this chapter on bingo or amusement games when such activities or any combination thereof are conducted by any bona fide charitable or nonprofit organization as defined in this chapter, which organization has no paid operating or management personnel and has gross receipts from bingo or amusement games, or a combination thereof, not exceeding five thousand dollars per year, less the amount awarded as cash or merchandise prizes.

(d) No tax shall be imposed on the first ten thousand dollars of gross receipts less the amount awarded as cash or merchandise prizes from raffles conducted by any bona fide charitable or nonprofit organization as defined in this chapter.

(e) Taxation of punch boards and pull-tabs ((~~for bona fide charitable or nonprofit organizations is~~)) by a county, city, or town must be based on ((~~gross~~)) the net gambling receipts from the operation of the games ((~~less the amount awarded as cash or merchandise prizes~~)), and shall not exceed a rate of ten percent. ((At the option of the county, city-county, city, or town, the taxation of punch boards and pull-tabs for commercial stimulant operators may be based on gross receipts from the operation of the games, and may not exceed a rate of five percent, or may be based on gross receipts from the operation of the games less the amount awarded as cash or merchandise prizes, and may not exceed a rate of ten percent.))

(f) Taxation of social card games may not exceed twenty percent of the gross revenue from such games.

(4) Taxes imposed under this chapter become a lien upon personal and real property of the licensee used in the gambling activity in the same manner as provided for under RCW 84.60.010. The lien shall attach on the date the tax becomes due and shall relate back and have priority against real and personal property to the same extent as ad valorem taxes.

NEW SECTION. Sec. 7. A new section is added to chapter 82.04 RCW to read as follows:

Upon every person engaging within the state in the business of selling video pull-tabs; as to such persons, the amount of tax with respect to such business shall be equal to the gross proceeds of sales of video pull-tabs, multiplied by five percent.

NEW SECTION. Sec. 8. A new section is added to chapter 82.14 RCW to read as follows:

The legislative authority of any county, city‑county, city, or town, by local law or ordinance, and in accordance with this chapter and rules adopted under it, may provide for the collection of taxes generated from video pull‑tab sales. The tax may be set at up to five percent of the net gambling receipts from the sales of video pull‑tabs.

NEW SECTION. Sec. 9. A new section is added to chapter 9.46 RCW to read as follows:

The problem gaming prevention account is created in the custody of the state treasurer. All receipts from the tax collected under section 7 of this act must be deposited into the account. Expenditures in this account may be used only for problem gaming prevention, youth education, public awareness, training, help-line services, and treatment under the division of alcohol and substance abuse in the department of social and health services.

NEW SECTION. Sec. 10. A new section is added to chapter 9.46 RCW to read as follows:

The department of revenue must adopt rules to carry out sections 7 and 8 of this act.

NEW SECTION. Sec. 11. A new section is added to chapter 9.46 RCW to read as follows:

Placement of video pull‑tab terminals and video pull-tab systems is allowed only in areas and on premises classified by the Washington state liquor control board as minor‑prohibited areas and facilities and premises licensed by the commission.

NEW SECTION. Sec. 12. A new section is added to chapter 9.46 RCW to read as follows:

The maximum number of video pull‑tab terminals per licensed premises is twenty‑five. A minimum of five video pull‑tab terminals is required.

NEW SECTION. Sec. 13. A new section is added to chapter 9.46 RCW to read as follows:

License fees for video pull‑tab system licensees must be established by the commission on a sliding scale basis. The fee schedule established by the commission must be based on the total number of video pull‑tab terminals per licensed location and the amount net gambling receipts for each licensed premise.

NEW SECTION. Sec. 14. A new section is added to chapter 9.46 RCW to read as follows:

"Net gambling receipts" means all gross gambling receipts from any gambling activity, less the monetary value or, in the case of merchandise, the actual cost, of any prizes that were awarded.

NEW SECTION. Sec. 15. A new section is added to chapter 9.46 RCW to read as follows:

Unless play is conducted on premises which otherwise require surveillance for operation, no surveillance is required by video pull-tab system licensees.

NEW SECTION. Sec. 16. A new section is added to chapter 9.46 RCW to read as follows:

Video pull‑tab systems must be approved by the commission subject to the following conditions:

(1) The system must:

(a) Produce accurate facsimiles of one or more standard series of pull‑tabs;

(b) Randomly select a pull‑tab before each round of play;

(d) Contain security protocols that prevent unauthorized access;

(e) Provide a means of testing of computer software;

(f) Meet any additional technical standards required by the commission; and

(g) Be tested by a licensed game testing laboratory for compliance with these requirements.

(2) The costs of initial laboratory testing and any additional testing required by the commission will be paid for by the manufacturer.

NEW SECTION. Sec. 17. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.