[atlas:bill]

AN ACT Relating to consistency in gaming provisions; amending RCW 9.46.010, 9.46.0273, 9.46.0325, 9.46.070, and 9.46.110; adding a new section 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 finds that state control and regulation of gambling since 1973 has been successful in regulating recreational gambling, preventing encroachment by criminal influences, and encouraging predictable and orderly participation by related businesses and nonprofit entities in gambling. The legislature intends to maintain the course regarding gambling policies through continued strict and comprehensive oversight, continued regulatory diligence, providing freedom of choice to those who choose to gamble, providing uniformity and consistency in gambling opportunities, and providing reasonable protection of the public and those engaged in the investment in, promotion of, and operation of lawful gambling.

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, electronic pull-tabs, card games, contests of chance, 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) "Electronic pull-tabs," as used in this chapter, are similar to and consistent with the electronic scratch ticket game operated as part of the tribal lottery system and authorized and adopted by the state of Washington. Each electronic pull-tab game consists of a predetermined number of electronic pull-tabs, a certain number of which, if drawn, entitle a player to prize awards at various levels. Electronic 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 such terminal. Player terminals used in connection with approved electronic pull-tab games do not constitute gambling devices pursuant to RCW 9.46.0241. An electronic pull-tab game includes electronic pull-tabs that are played by use of computer hardware and software to manufacture, store, distribute, sell, and display electronic pull-tabs to players.

Sec. 3. RCW 9.46.0325 and 1987 c 4 s 29 are each amended to read as follows:

(1) 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 and promote raffles, amusement games, social card games, and contests of chance, and to ((~~utilize~~)) use punch boards ((~~and~~)), pull-tabs ((~~as a commercial stimulant to such business~~)), and electronic pull-tabs by for-profit operators when licensed and ((~~utilized~~)) used or operated pursuant to the provisions of this chapter and rules ((~~and regulations~~)) adopted pursuant thereto. Contests of chance that are similar to and consistent with those authorized and adopted by the state of Washington may be conducted and promoted in addition to those card games operated under this chapter.

(2) The number of electronic pull-tab player terminals for use by each eligible licensee operating social card games with no fewer than five house-banked, phase two card tables shall be no more than two hundred terminals per license at no more than two hundred licensed premises.

(3) Eligible licensees conducting and promoting activities under this section may contract unused electronic pull-tab player terminals to other eligible licensees for use at their premises, however no more than five hundred terminals may be operated at a single licensed premises.

(4) Eligible licensees conducting and promoting activities under this section may contract with licensees under RCW 9.46.0311 and fraternal organizations to operate activities authorized under RCW 9.46.0311.

Sec. 4. 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 other contests of chance, and to ((~~utilize~~)) use punch boards ((~~and~~)), pull-tabs, and electronic pull-tabs that are similar to and consistent with the electronic scratch ticket game operated as part of the tribal lottery system and authorized and adopted by the state of Washington, 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, and electronic pull-tabs that are similar to and consistent with the electronic scratch ticket game operated as part of the tribal lottery system and authorized and adopted by the state of Washington, and to conduct social card games ((~~as a commercial stimulant~~)) and other contests of chance that are similar to and consistent with those authorized and adopted by the state of Washington, for profit 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 and adopted by this chapter and similar to and consistent with the games authorized and operated in the state of Washington, 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 and be similar to and consistent with the games authorized and operated in the state of Washington;

(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. 5. 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 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 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;

((~~(d)~~)) (c) All prizes available to be won must be described on an information flare or electronic display. All merchandise prizes must be on display within the immediate area of the premises in which any such punch board or pull-tab 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 electronic display when won, or such omission shall be deemed a fraud for the purposes of this chapter; and

((~~(e)~~)) (d) When any person wins money or merchandise from any punch board or 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~~)) net win 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, social card games, and pull-tabs ((~~for bona fide charitable or nonprofit organizations is~~)) by a county, city, or town shall be based on ((~~gross receipts~~)) net win 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~~)) As used in this subsection (3), "net win" means the amount of revenue retained by the licensee from such games after prizes and the cost of the games, for games that are a paper punch board or pull-tab series, have been paid out but before any expenses have been paid.

(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. 6. A new section is added to chapter 9.46 RCW to read as follows:

(1) The department of revenue shall adopt rules for the collection of taxes generated from electronic pull-tab sales and from contests of chance. The tax shall be set at ten percent of the net win from the sales of electronic pull-tabs and from contests of chance. All proceeds from taxes collected under this section shall be deposited in an account in the custody of the state treasurer. This custodial account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures. Five percent of the proceeds from taxes collected under this section shall be allocated for problem gaming prevention, youth education, public awareness, training, helpline services, and to the division of alcohol and substance abuse in the department of social and health services, for treatment.

(2) The legislative authority of any county, city-county, city, or town, by local law and ordinance, and in accordance with this chapter and rules adopted under it, may provide for the collection of taxes generated from electronic pull-tab sales for terminals operated in the county, city-county, or town and from contests of chance. The tax shall be set at up to five percent of the net win from the sales of electronic pull-tabs and from contests of chance. The amount of tax authorized under this subsection shall be credited against the amount of tax levied by the state under subsection (1) of this section.

(3) As used in this section, "net win" means the amount of revenue retained by the licensee after prizes have been paid out but before any expenses have been paid.

NEW SECTION. Sec. 7. 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.