WSR 97-21-101

PROPOSED RULES

GAMBLING COMMISSION

[Filed October 20, 1997, 1:47 p.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-19-084 on September 16, 1997.

Title of Rule: Control of prizes--Restrictions--Bonus prizes--Displaying--Procedures for awarding, WAC 230-30-070; and Punchboard and pull tab series restriction--Prizes, size of game, and location of winners, WAC 230-30-080.

Purpose: These rules are changed to disallow fifty percent markup on cost of merchandise prizes.

Statutory Authority for Adoption: RCW 9.46.070 (3), (8), (11), and (14).

Summary: Statements allowing fifty percent markup on cost of product are deleted from WAC 230-30-070 and 230-30-080.

Reasons Supporting Proposal: Allowing a fifty percent markup creates a windfall profit for the operator.

Name of Agency Personnel Responsible for Drafting: Soojin Kim, Lacey, (360) 438-7654, ext. 310; Implementation: Ben Bishop, Lacey, (360) 438-7654, ext. 302; and Enforcement: Carrie Tellefson, Lacey, (360) 438-7654, ext. 373.

Name of Proponent: Dennis Zaborac, private.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal Changes the Following Existing Rules: See Summary and Reasons Supporting Proposal above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Proposal is exempt under RCW 19.85.025(2), therefore, a small business economic impact statement is not required.

RCW 34.05.328 does not apply to this rule adoption. This agency does not choose to make section 201, chapter 403, Laws of 1995, apply to this rule adoption.

Hearing Location: Skamania Lodge, Exit 44, Interstate 84, Stevenson, Washington 98648, (509) 427-7700, on January 9, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Susan Green by January 1, 1998, TDD (360) 438-7638, or (360) 438-7654, ext. 302.

Submit Written Comments to: Soojin Kim, Mailstop 42400, Olympia, Washington 98504-2400, FAX (360) 438-8652, by December 31, 1997.

Date of Intended Adoption: January 9, 1998.

Soojin Kim

Rules and Policy Coordinator

AMENDATORY SECTION (Amending WSR 97-14-012, filed 6/20/97, effective 7/21/97)

WAC 230-30-080 Punchboard and pull tab series restrictions--Prizes, size of game, and location of winners. No operator, distributor, or manufacturer, or representative thereof shall possess, display, put out for play, sell, or otherwise transfer to any person in this state, or for use in this state, any punchboard or pull tab series which:

(1) Does not offer prizes that are equal to or greater than sixty percent of the total gross receipts available from the punchboard or pull tab series. The following applies to the sixty percent calculation:

(a) For the purposes of determining the percentage of prizes offered on any punchboard, or in any pull tab series, total merchandise prizes shall be computed at the amount actually paid by the licensed operator ((plus fifty percent of that actual cost)); and

(b) Prize and percentage requirements for progressive pull tab series shall be calculated as set forth in WAC 230-30-025;

(2) Offers a single prize that exceeds:

(a) Five hundred dollars in cash: Provided, That progressive jackpot pull tab prizes, as authorized in WAC 230-30-025 shall be exempt from this requirement and shall be subject to the limits defined in those rules; or

(b) A merchandise prize, or combination cash-merchandise prize, for which the operator has expended more than five hundred dollars;

(3) Has multiple winners on an individual pull tab or punch that combined values exceed the single cash or merchandise prize limit in subsection (2) of this section;

(4) Offers prizes for purchasing the last ticket or last punch that exceeds:

(a) One hundred dollars cash; or

(b) Merchandise for which the licensee has expended more than one hundred dollars; or

(c) The highest prize offered, whichever is less;

(5) Contains more than ten thousand individual pull tabs: Provided, That progressive jackpot pull tab series, as authorized by WAC 230-30-025, may contain up to fifty thousand individual pull tabs;

(6) Utilizes a flare which does not meet the requirements of WAC 230-30-106;

(7) The winning punches or tabs have not been randomly distributed and mixed among all other punches or tabs in the board or series;

(8) The location, or approximate location, of any winning punches or tabs can be determined in advance of punching the punchboard or opening the tabs in any manner or by any device, by markings on the board, tabs, or container, or by use of a light;

(9) There exists a key to any winning numbers or symbols; or

(10) Does not conform in any other respect to the requirements of WAC rules as to the manufacture, assembly, or packaging of punchboards or pull tabs.

[Statutory Authority: RCW 9.46.070 (5), (6), (11), (14). 97-14-012, 230-30-080, filed 6/20/97, effective 7/21/97. Statutory Authority: RCW 9.46.070, 9.46.120, 9.46.0273, 9.46.310 and 34.05.313. 96-24-006 (Order 305), 230-30-080, filed 11/21/96, effective 1/1/97. Statutory Authority: RCW 9.46.070 (1)-(4), (7), (8), (11), (12), (14), (20) and 9.46.110 (3), (4). 95-23-109, 230-30-080, filed 11/22/95, effective 1/1/96. Statutory Authority: RCW 9.46.070. 93-12-082, 230-30-080, filed 5/28/93, effective 7/1/93. Statutory Authority: RCW 9.46.070(11). 91-10-004 (Order 222), 230-30-080, filed 4/18/91, effective 5/19/91. Statutory Authority: Chapter 9.46 RCW. 91-05-047 (Order 220), 230-30-080, filed 2/14/91, effective 3/17/91. Statutory Authority: RCW 9.46.030 (2) and (3) and 9.46.070 (11) and (14). 83-19-024 (Order 136), 230-30-080, filed 9/13/83. Statutory Authority: RCW 9.46.070(14). 81-19-073 (Order 112), 230-30-080, filed 9/15/81. Statutory Authority: RCW 9.46.070(10). 79-07-019 (Order 90), 230-30-080, filed 6/14/79; Order 55, 230-30-080, filed 6/25/76; Order 43, 230-30-080, filed 11/28/75; Order 15, 230-30-080, filed 4/17/74; Order 9, 230-30-080, filed 12/19/73, 1:26 p.m.; Order 5, 230-30-080, filed 12/19/73, 1:25 p.m.]

AMENDATORY SECTION (Amending WSR 97-14-012, filed 6/20/97, effective 7/21/97)

WAC 230-30-070 Control of prizes--Restrictions--Bonus Prizes--Displaying--Procedures for awarding. Punchboard and pull tab prizes shall be closely controlled to ensure players are not defrauded.

What may be awarded as a punchboard or pull tab prize?

(1) All prizes from the operation of punchboards and pull tabs shall be awarded in cash or in merchandise.

(a) No licensee shall offer to pay cash in lieu of merchandise prizes which may be won.

(b) For purposes of this rule, the retail value of a merchandise prize shall be the amount actually paid by the licensed operator ((plus 50 percent of that actual cost)).

(2) Additional chances on a punchboard or pull tab game may not be awarded as a prize. Provided, That prizes may involve the opportunity to advance and win a larger prize on the same punchboard or pull tab game as set forth in subsection (4) of this section.

What is a bonus prize?

(3) A bonus prize is a prize offered in a bonus pull tab game, defined in WAC 230-30-040(1). A step-up prize is a prize offered on a punchboard. The awarding of these prizes involves an immediate, additional opportunity to advance to a section of the game to determine the prize.

What additional requirements apply to the offering of bonus or step-up prizes?

(4) On games where players advance, the bonus or step-up prizes may not be less than the highest prize available, which might otherwise have been won by the punch or pull tab for which the opportunity was awarded. Each punchboard or pull tab game offering bonus or step-up prizes must clearly indicate on its flare the terms and conditions under which the bonus or step-up prize may be won, including the amount of the bonus or step-up prize.

How must prizes be displayed?

(5) The licensee shall display prizes so that a customer can easily determine which prizes are available from any particular punchboard or pull tab series or device operated or located upon the premises. In addition, the following requirements apply.

(a) Merchandise prizes shall be displayed as follows:

(i) In the immediate vicinity of the punchboard or pull tab series and in plain view;

(ii) If size or space constraints do not allow the prize to be displayed as provided in (a)(i) of this subsection, the merchandise prize may be displayed elsewhere on the premises provided that a specific reference to that actual prize is noted on the flare; or

(iii) If the merchandise prize cannot be displayed on the premises, an accurate description and/or photograph of the prize must be displayed in plain view on or immediately adjacent to the flare.

(b) Cash prizes shall be clearly represented on the prize flare;

(c) Combination cash and merchandise prizes must meet the requirements of both (a) and (b) of this subsection;

What is the procedure for removing prizes from flares and presenting prizes to winning players?

(6) The following procedures apply to the removal of prizes from the game flare and the presentation of prizes to winning players:

(a) Upon determination of a winner of a merchandise prize, the licensee shall immediately remove that prize from the flare and present the prize to the winner upon demand;

(b) Upon determination of a winner of any cash prize over twenty dollars, or of any merchandise prize with a retail value over twenty dollars, the licensee shall permanently and conspicuously delete all references to that prize from any flare, punchboard, or pull tab dispensing device upon which such reference may appear, and from any other list, sign, or notice which may be posted, in such a manner that all future customers will know the prize is no longer available. On step-up punchboards and bonus pull tab games, once all opportunities in a section of the flare have been won, all references to prizes no longer available to be won must be deleted on the flare. Operators may correct an inadvertently deleted prize by noting on the flare that such prize is still available. Such reference shall be permanently and conspicuously deleted when the prize is actually awarded. Failure to permanently and conspicuously delete a prize from the flare may result in the director initiating actions to revoke a license for violation of RCW 9.46.190 (defrauding a participant). The prize shall be paid or delivered to the winner only after all reference to such prize has been deleted from the flare.

What must I do if someone buys out a punchboard or pull tab game?

(7) Payment of prizes. The licensee must pay or award to the customer or player playing the punchboard or pull tab series all such prizes that are required to be, but have not been, deleted from the flare when the punchboard or pull tab series is completely played out.

What is the procedure for redemption of winning pull tabs or punches?

(([(8)])) (8) Record of winners. When any person wins a cash prize of over twenty dollars or wins a merchandise prize with a retail value of more than twenty dollars from the play of any punchboard or pull tab series, the licensee or licensee's representative shall make a record of the win. The record of the win shall be made in the following manner:

(a) The winners shall be required to print their name and date of birth, in ink, upon the side of the winning punch or tab opposite the winning symbol(s);

(b) The licensee or their representative shall then verify the winner's identity and record the date and initial the winning punch or tab; and

(c) If the pull tab or punch is constructed or printed in such a manner as to preclude recording the information required in (a) and (b) of this subsection in a legible manner, the licensee may record the required information on a sheet of paper not less than three inches by five inches and staple the winning tab or punch thereto.

(([(9)])) (9) Defacing winning punches or tabs. The licensee shall, within twenty-four hours after a winning pull tab or punch of twenty dollars or more has been presented for payment, mark or perforate the winning symbols in such a manner that the pull tab or punch cannot be presented again for payment.

What special operating conditions apply to spindle, banded, or jar type pull tab games which award merchandise prizes only?

(10) Spindle, banded, or "jar" type pull tabs played in a manner which awards merchandise prizes only. Pull tab series which award only merchandise prizes valued at no more than twenty dollars, are hereby permitted to employ schemes whereby certain predesignated pull tabs are free or the player is otherwise reimbursed the actual cost of said pull tabs. Flares for spindle-type pull tabs operated in this manner shall designate the total number of pull tabs in the series and the total number of pull tabs designated as free or reimbursable. Free or reimbursable pull tabs in these types of pull tab series shall not constitute a prize or prizes nor shall moneys collected and later reimbursed constitute revenue for the purposes of determining gross gambling receipts.

[Statutory Authority: RCW 9.46.070 (5), (6), (11), (14). 97-14-012, 230-30-070, filed 6/20/97, effective 7/21/97. Statutory Authority: RCW 9.46.070, 9.46.120, 9.46.0273, 9.46.310 and 34.05.313. 96-24-006 (Order 305), 230-30-070, filed 11/21/96, effective 1/1/97. Statutory Authority: RCW 9.46.070 (1)-(4), (7), (8), (11), (12), (14), (20) and 9.46.110 (3), (4). 95-23-109 and 95-24-048, 230-30-070, filed 11/22/95 and 11/30/95, effective 1/1/96. Statutory Authority: RCW 9.46.070. 94-23-094, 230-30-070, filed 11/17/94, effective 1/1/95. Statutory Authority: Chapter 9.46 RCW. 91-21-053 (Order 228), 230-30-070, filed 10/15/91, effective 11/15/91. Statutory Authority: RCW 9.46.070. 90-24-005 (Order 218), 230-30-070, filed 11/26/90, effective 12/27/90. Statutory Authority: RCW 9.46.070 (11) and (14). 90-11-058, 230-30-070, filed 5/15/90, effective 6/15/90. Statutory Authority: RCW 34.05.220(4), [34.05].230 and 9.46.070 (11) and (14). 90-05-032 (Order 205), 230-30-070, filed 2/14/90, effective 3/17/90. Statutory Authority: RCW 9.46.070 (11) and (14). 89-17-056 (Order 196), 230-30-070, filed 8/15/89, effective 9/15/89. Statutory Authority: RCW 9.46[.070] (8), (14). 87-17-052 (Order 171), 230-30-070, filed 8/18/87. Statutory Authority: Chapter 9.46 RCW. 87-03-023 (Order 164), 230-30-070, filed 1/13/87. Statutory Authority: RCW [9.46.]070 (1), (2) and (11) and [9.46.]110. 85-21-046 (Order 154), 230-30-070, filed 10/14/85. Statutory Authority: RCW 9.46.070 (8), (11) and (14). 85-03-024 (Order 142), 230-30-070, filed 1/9/85. Statutory Authority: RCW 9.46.070 (8) and (11). 82-01-065 and 82-03-033 (Order 115 and 116), 230-30-070, filed 12/18/81 and 1/18/82; 81-21-033 (Order 114), 230-30-070, filed 10/15/81. Statutory Authority: RCW 9.46.070(10). 79-09-029 (Order 91), 230-30-070, filed 8/14/79; Order 43, 230-30-070, filed 11/28/75; Order 29, 230-30-070, filed 1/23/75; Order 27, 230-30-070, filed 11/15/74; Order 23, 230-30-070, filed 9/23/74; Order 14, 230-30-070, filed 3/27/74; Order 12, 230-30-070, filed 2/14/74; Order 5, 230-30-070, filed 12/19/73.]

NOTES: