BILL REQ. #:  H-0603.3 

Read first time 02/17/2003.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to the approval, licensing, and playing of electronic scratch ticket games and systems by bona fide charitable or nonprofit organizations; persons, associations, or organizations operating a business primarily engaged in the selling of food or drink for consumption on the premises; phase II house-banked card rooms operating at least five house-banked card tables; and class 1 horse racing facilities in operation for at least one year; amending RCW 9.46.010, 9.46.0311, 9.46.0325, and 9.46.070; adding a new section to chapter 9.46 RCW; adding a new chapter to Title 9 RCW; and declaring an emergency.

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

NEW SECTION.  Sec. 1   (1) This chapter dictates the approval, licensing, and playing of electronic scratch ticket games. The legislature declares that the following groups may use the types of electronic scratch ticket games, devices, and player terminals authorized under this chapter: (a) Bona fide charitable or nonprofit organizations conducting bingo games, raffles, amusement games, fund-raising events, punch boards, pull-tabs, and electronic scratch ticket games; (b) persons, associations, or organizations operating a business primarily engaged in the selling of food or drink for consumption on the premises to conduct social card games and punch boards, pull-tabs, and electronic scratch ticket games; (c) phase II house-banked card rooms operating at least five house-banked card tables; and (d) class 1 horse racing facilities in operation for at least one year under chapter 67.16 RCW.
     (2) The legislature further declares that electronic scratch tickets are a legal form of gambling in the state of Washington. This chapter is intended to grant specific authority to the commission to regulate, within its existing powers, electronic scratch ticket gambling by private enterprise as narrowly defined within this chapter. In addition, any game approved under RCW 9.46.360 is authorized to the same extent and in the same manner as electronic scratch tickets are regulated under this chapter. The legislature finds this chapter will assist in job creation and retention. The legislature further finds that this chapter is necessary for the immediate preservation of public health and safety and the support of state government and its existing public institutions as it is intended to generate revenue appropriated in the 2003-2005 biennium. The state faces a more than two billion dollar deficit from recession, slow economic recovery, and soaring health care costs. Programs dependent upon the additional revenue forecasted under this chapter provide for the health, education, and welfare of the citizens of the state of Washington.

Sec. 2   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, electronic scratch ticket games, 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.

NEW SECTION.  Sec. 3   A new section is added to chapter 9.46 RCW to read as follows:
     The definitions in this chapter apply throughout this chapter and chapter 9.-- RCW (sections 1, 4, 5, and 9 through 15 of this act).

NEW SECTION.  Sec. 4   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Cashless transaction system" means the method by which a player obtains, transfers, and redeems game play credits. The cashless transaction system permits a player to play the electronic scratch system without inserting cash, including coins, tokens or paper currency, into, and to win prizes without receiving cash from, the player terminal. A cashless transaction system includes the following components:
     (a) The electronic accounting system that contains one or more of the following: Plastic, cardboard, magnetic, or smart cards; paper; personal identification numbers; game play credits obtained from the exchange of cash or cash equivalents; game play credits displayed on the player terminal that were earned as prizes from prior play and not redeemed; and other means for effectuating play and awarding prizes without inserting or dispensing cash into or from the terminal if all game play credits, other than credits earned from prior play and remaining displayed on a player terminal, must have been paid for by cash or cash equivalent;
     (b) A means of accounting for player deposits of cash or cash equivalents and exchanges for and redemption of game play credits that is independent of the player terminal, through a player's account, a voucher system, or a smart card or similar device for recording individual player data; and
     (c) A means by which players can redeem unused game play credits for cash or cash equivalents, first by depositing credits into a player account, a voucher system, or a smart card system or similar device for recording individual player data, and then providing a means to exchange such credits for cash or cash equivalents. All exchanges for cash must be through a cashier or other separate redemption system.
     (2) "Central accounting and auditing computer system" means a computer system owned and operated by the commission that provides a secure means to monitor, receive, store, and access data, and record critical functions and activities of the player terminals.
     (3) "Central computer" means a computer that conducts random drawings for electronic scratch ticket games and stores and dispenses electronic scratch tickets from scratch ticket subsets that have been loaded into it from a manufacturing computer and are maintained in a secure manner.
     (4) "Commission" means the Washington state gambling commission.
     (5) "Electronic scratch ticket" means a predetermined winning or losing outcome in electronic form. Each scratch ticket represents a chance from among the finite set of chances that comprise an electronic scratch ticket game set.
     (6) "Electronic scratch ticket game" means:
     (a) A scratch ticket lottery game, together with its respective operating system or systems, that is played in an electronic environment. A game has a specific set of rules including: The theme and types of symbols used; the total number of tickets in the game; the ratio or mix of winning and losing tickets; the prize structure, including number and dollar value of each prize; and price of a single ticket. The game is played by use of computer hardware and software to manufacture, store, distribute, sell, and display scratch tickets to players;
     (b) An electronic scratch ticket game includes: The licensed systems that are connected to an electronic central accounting and auditing computer system within the commission's control; a cashless transaction system; player terminals with video displays that allow players to purchase chances and obtain game result information; a manufacturing computer that securely creates the finite set of chances used in the scratch ticket portion of the system; and a central computer containing an electronic accounting system. The electronic scratch ticket game contains preexisting scratch tickets that are dispensed in an electronic format to players through the player terminals on an on-demand basis.
     (7) "Electronic scratch ticket game set" means a finite set of electronic scratch tickets that is based on a template, which number cannot be limited by commission rule, that has been designed in accordance with a specific set of rules, including the basic requirements of game sets and subsets, governing the structure of an electronic scratch ticket game. Based on that template, an electronic scratch ticket game set is created in a manufacturing computer in a secure and verifiable electronic form before the play of an electronic scratch ticket game. Each electronic scratch ticket game set is uniquely identifiable, by serial number or otherwise, so that it can be distinguished from other game sets manufactured from the same template.
     (8) "Electronic scratch ticket game subset" means a defined group of electronic scratch tickets that has been randomly selected from an electronic scratch ticket game set and transmitted to a central computer in a fixed order for play. Each electronic scratch ticket game subset is uniquely identifiable from all other subsets selected from the same game set.
     (9) "Game play credits" means the method of representing value obtained from the exchange of cash or cash equivalents, or earned as a prize, that is used to effectuate play. Game play credits may be redeemed for cash or a cash equivalent.
     (10) "Manufacturing computer" means a computer that creates electronic scratch ticket game sets, randomly allocates tickets into electronic scratch ticket game subsets, and delivers them to a central computer.
     (11) "Net win" means gross wagers received by a licensee from the operation of an electronic scratch ticket game system less the amount paid to players for winning wagers, the actual cost of merchandise prizes awarded, accrual of prizes for progressive jackpot contests, and repayment of amounts used to seed guaranteed progressive jackpot prizes.
     (12) "Player terminals" means electronic computer terminals housed in cabinets with input devices and/or video screens and with which players play the electronic scratch ticket games. Player terminals are not capable of playing gambling games as stand-alone devices.

NEW SECTION.  Sec. 5   (1)(a) All electronic scratch ticket systems, games, and player terminals approved for operation by the commission as a tribal lottery system under tribal-state class III gaming compacts in the state may be put into use under this chapter by: (i) Bona fide charitable or nonprofit organizations conducting bingo games, raffles, amusement games, fund-raising events, and using punch boards, pull-tabs, and electronic scratch ticket games; (ii) persons, associations, or organizations 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 use punch boards, pull-tabs, and electronic scratch ticket games; (iii) phase II house-banked card rooms operating at least five house-banked card tables; and (iv) class 1 horse racing facilities in operation for at least one year under chapter 67.16 RCW. All computers and player terminals and the combination and components thereof in each system shall conform to this chapter and the rules adopted under this chapter.
     (b) Electronic scratch systems, games, and player terminals not approved for operation by the commission under tribal-state class III gaming compacts in the state may be put to use after approval is obtained from the commission under the requirements of this chapter and rules adopted under this chapter.
     (2) The electronic scratch ticket game consists of a finite number of electronic scratch tickets, a certain number of which, if drawn, entitle a player to prize awards at various levels. The scratch tickets are designed from a template in conformity with this chapter and are created in game sets on a manufacturing computer from which scratch tickets are randomly selected and placed into scratch ticket subsets. Each game set has a predetermined number of winners and values and is designed so as to assure players of an at least seventy-five percent payback of the amounts paid in the aggregate for all tickets in the set. As a game set's tickets are placed into subsets, the pool of tickets available from that game set for placement into subsets diminishes, until each ticket in the game set has been placed into a subset.
     (3)(a) Electronic scratch ticket game subsets are transmitted to the central computer, where they are stored until dispensed electronically on demand to player terminals. Scratch tickets are electronically dispensed from the central computer in the order within each subset in which the tickets were received. Players compete against each other to draw winning tickets. As subsets are used, they are replaced by additional subsets that have been created and delivered to the central computer in the same manner, until the game set has been depleted, ending that particular game. Different games based on different game sets may be offered simultaneously through the central computer.
     (b) Each game set shall meet the following minimum requirements:
     (i) Each game set shall be made up of a finite number, that cannot be limited by rule, of electronic scratch tickets;
     (ii) All scratch tickets in a particular game set shall be of the same purchase price, not to exceed five dollars, but a single ticket may offer more than one opportunity to win a prize on the same wager;
     (iii) The payout percentage for the entire game set shall be no less than seventy-five percent of the total purchase price of all tickets in the set combined;
     (iv) Each game set shall be assigned a unique serial number; and
     (v) Each ticket shall have a specific outcome and prize level associated with it.
     (4) A central accounting and auditing computer system shall monitor the electronic scratch ticket games and their related systems. This central accounting and auditing computer system shall:
     (a) Be controlled, owned, and operated by the commission;
     (b) Be connected to electronic scratch ticket systems operated by licensees to communicate a licensee's electronic scratch ticket game system information; and
     (c) Be for the purpose of assuring the integrity, security, honesty, and fairness in the operation and administration of electronic scratch ticket games.
     (5) The commission shall adopt rules defining the remaining electronic scratch ticket system operating requirements including rules regarding internal controls, software auditing, player terminals, the standards for random number generators, accounting, security, reporting, storage requirements, testing, and auditing of system operations that shall be consistent with the provisions of Appendix X as adopted under the most current tribal-state class III gaming compact in Washington state.

Sec. 6   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, and electronic scratch ticket games under chapter 9.-- RCW (sections 1, 4, 5, and 9 through 15 of this act), 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. 7   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, and electronic scratch ticket games under chapter 9.-- RCW (sections 1, 4, 5, and 9 through 15 of this act) as a commercial stimulant to such business when licensed and utilized or operated pursuant to the provisions of this chapter and rules ((and regulations)) adopted pursuant thereto.

Sec. 8   RCW 9.46.070 and 2002 c 119 s 1 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, to ((utilize)) use punch boards ((and)), pull-tabs, and electronic scratch ticket games under chapter 9.-- RCW (sections 1, 4, 5, and 9 through 15 of this act) 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)), and electronic scratch ticket games under chapter 9.-- RCW (sections 1, 4, 5, and 9 through 15 of this act), 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 shall require fingerprinting and national criminal history background checks on any persons seeking licenses, certifications, or permits 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. All national criminal history background checks shall be conducted using fingerprints submitted to the United States department of justice- federal bureau of investigation. The commission must establish rules to delineate which persons named on the application are subject to national criminal history background checks. In identifying these persons, the commission must take into consideration the nature, character, size, and scope of the gambling activities requested by the persons making such applications;
     (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.

NEW SECTION.  Sec. 9   (1) A state tax is imposed on the net win from the sale of all electronic scratch ticket games and is set at twenty percent. All proceeds from taxes collected under this section shall be deposited in an account in the custody of the state treasurer. Five percent of the proceeds from taxes collected under this section will be allocated for problem gaming prevention, youth education, public awareness, training, help-line services, and to the division of alcohol and substance abuse in the department of social and health services for treatment.
     (2) A local tax is imposed on the net win from the sale of all electronic scratch ticket games and is set at five percent. 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 electronic scratch ticket games' sales or may enter into an agreement with the state for such collection.
     (3) The department of revenue shall adopt rules to implement this section.

NEW SECTION.  Sec. 10   (1) Play of all electronic scratch ticket games is restricted to players who are twenty-one years of age or older.
     (2) Placement of player terminals for electronic scratch ticket games shall only be allowed on premises and in areas of premises meeting the liquor control board's requirements for barrier and signage as contained in WAC 314-02-050(1) as it exists on the effective date of this act and: (a) Where the entire facility is not restricted to persons of age twenty-one; (b) in areas of the premises designated as off-limits and restricted to persons under the age of twenty-one; or (c) in premises designated as off-limits to persons under the age of twenty-one in their entirety.
     (3) Duties of employees who are eighteen, nineteen, and twenty shall comply with the provisions of chapter 66.44 RCW and the rules adopted by the liquor control board under that chapter.

NEW SECTION.  Sec. 11   (1) The maximum number of electronic scratch ticket game player terminals shall be determined as of January 1, 2003, for the initial allocation and January 1st of every year thereafter for future allocations as set forth in section 12 of this act and is set at the number authorized at any given time based upon the cumulative number of electronic scratch ticket game player terminals authorized under all current tribal-state class III gaming compacts in the state. Of this maximum number, the following distribution is established:
     (a) Fifteen percent of the player terminals to the top forty gross receipt bingo operations conducting bingo games, raffles, amusement games, fund-raising events, or using punch boards or pull-tabs and licensed as of January 1, 2003, with an established maximum number of player terminals per location as set forth in section 12 of this act;
     (b) Thirty-six percent of the player terminals to phase II house-banked card rooms operating at least five house-banked card tables and class 1 horse racing facilities in operation for at least one year with an established maximum number of player terminals per location as set forth in section 12 of this act; and
     (c) Forty-nine percent of the player terminals to: (i) Persons, associations, or organizations primarily engaged in the selling of food or drink for consumption on the premises conducting social card games and using punch boards, pull-tabs, and electronic scratch ticket games; and (ii) bona fide charitable or nonprofit organizations conducting bingo games, raffles, amusement games, fund-raising events, or using punch boards or pull-tabs with an established maximum number of player terminals per location as set forth in section 12 of this act.
     (2) Electronic scratch ticket licensed locations under this chapter shall not be licensed for player terminals under more than one of the three categories described in section 12 of this act.

NEW SECTION.  Sec. 12   (1)(a) The maximum number of player terminals per licensed location shall be as follows:
     (i) To the top forty gross receipt bingo operations, one hundred twenty-five player terminals per location;
     (ii) To phase II house-banked card rooms operating at least five house-banked card tables and class 1 horse racing facilities in operation for at least one year, one hundred twenty-five player terminals per location;
     (iii) To persons, associations, or organizations primarily engaged in the selling of food or drink for consumption on the premises and bona fide charitable or nonprofit organizations conducting bingo games, raffles, amusement games, and fund-raising events other than those in (a)(i) of this subsection as follows:

NEW SECTION.  Sec. 13   Video and/or electronic surveillance is not required by electronic scratch ticket game licensees unless electronic scratch ticket player terminals are located on premises where the commission requires surveillance as a condition of holding any other license issued previously by the commission. This applies to all electronic scratch ticket game licensees and licensed premises unless the commission makes specific written findings and conclusions warranting a deviation.

NEW SECTION.  Sec. 14   (1) In order to be eligible for an electronic scratch ticket license, the commission shall, at a minimum, require the applicant to demonstrate that the applicant, applying for a license under this chapter, has held another gaming license issued under prior statutory authority and issued by the commission for a period of six months before the effective date of an electronic scratch ticket game system license.
     (2) Electronic scratch ticket licensees may lease and/or revenue-share with persons or entities, including route operators, distributors, and manufacturers licensed by the commission to engage in such activity. Contracts between a route operator and a licensee shall be in writing, signed by the parties, and submitted to the commission before the installation of player terminals.

NEW SECTION.  Sec. 15   Individual licensees may electronically interconnect the player terminals on separate licensed locations. However, there shall be no capacity for remote access or control of any player terminal from a remote device without written commission approval. All communications to and from the player terminals that constitute a wide area network system shall be encrypted for security purposes and coverage and shall comply with the encryption scheme of the electronic accounting system.

NEW SECTION.  Sec. 16   Sections 1, 4, 5, and 9 through 15 of this act constitute a new chapter in Title 9 RCW.

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.