WSR 99-08-094

PROPOSED RULES

GAMBLING COMMISSION


[ Filed April 6, 1999, 4:19 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 99-04-005 with a published date of February 17, 1999.

Title of Rule: Bingo rules.

Purpose: Changes were made to allow bingo operators to offer free games, such as the winners circle and pal games; reduce restrictions of gift certificates and promotional items; allow bingo operators to distribute coupons for free bingo card to customers as prizes, and allow bingo players to accrue points by playing bingo and redeem the points for prizes, such as a trip.

Statutory Authority for Adoption: RCW 9.46.070.

Summary: See Purpose above.

Reasons Supporting Proposal: Bingo licensees have requested changes as a way to stimulate bingo business. In response, these changes were made.

Name of Agency Personnel Responsible for Drafting: Susan Arland, Lacey, (360) 438-7654, ext. 374; Implementation: Ben Bishop, Lacey, (360) 438-7640; and Enforcement: Sherri Winslow, Lacey, (360) 438-7654, ext. 301.

Name of Proponent: Staff, governmental.

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

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

Proposal Changes the Following Existing Rules: See Purpose 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.

Section 201, chapter 403, Laws of 1995, 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: Heathman Lodge, 7801 N.E. Greenwood Drive, Vancouver, WA, (360) 254-6100, on May 14, 1999, at 1:30 p.m.

Assistance for Persons with Disabilities: Contact Susan Yeager by May 3, 1999, TDD (360) 438-7638, or (360) 438-7654, ext. 302.

Submit Written Comments to: Susan Arland, Mailstop 42400, Olympia, Washington 98504-2400, fax (360) 438-8652, by May 3, 1999.

Date of Intended Adoption: May 14, 1999.

April 6, 1999

Susan Arland

Rules Coordinator

OTS-2885.2


AMENDATORY SECTION(Amending WSR 98-04-024, filed 1/28/98, effective 7/1/98)

WAC 230-20-115
Gift certificates--Requirements.

Gift certificates may be sold or issued as prizes during bingo games and such shall not be deemed sales of bingo cards for purposes of this title if licensees comply with the following restrictions:

(1) If sold, gift certificates shall be paid for in full at the time they are issued;

(2) Gross receipts from the sale of certificates shall be deposited separately into the gambling account no later than five banking days after receipt.  The certificate numbers relating to the funds deposited shall be a part of the deposit record;

(3) For gift certificates awarded as prizes, the value of the certificate is recorded as a bingo prize on the daily bingo records for the sessions in which the certificate was issued.  The certificate will be supported by a bingo prize receipt;

(4) Gift certificates shall be purchased from a commercial printer or licensed distributor and shall be prenumbered, consecutively issued, and have a predetermined value with the following information imprinted:

(a) The name of the organization issuing the certificate;

(b) The date issued and an expiration date no later than three months from the date issued for awarded certificates; and one year for sold certificates;

(c) The dollar value of the certificate; and

(d) Any conditions or contingencies related to redemption of the certificate;

(5) Gift certificates may only be awarded as prizes ((on up to four occasions per year, and)) under the following conditions:

(a) No prize shall include more than ((forty)) fifty dollars U.S. currency in gift certificates; and

(b) Redemption of gift certificates shall not be limited to a specific gambling activity: Provided, That certificates may be specific for bingo;

(6) Certificates shall only be redeemed for bingo cards, food, drink, merchandise, punch boards or pull-tabs upon the licensed premises from which it was issued;

(7) Certificates redeemed shall be applied against bingo activity and daily bingo records shall be modified in the cash reconciliation section of the approved record format to document the number and dollar value of certificates redeemed;

(8) A reconciliation of gift certificate inventory to certificates issued shall be performed on a monthly basis and will include the following control features:

(a) Purchase invoices will be retained for gift certificates and they will include the organization name, date of purchase, and beginning and ending certificate numbers;

(b) Redeemed certificates will be maintained with the corresponding daily sales records;

(c) Sold certificates not redeemed the expiration date shall be properly accounted for as a donation; ((and))

(d) Certificates issued as prizes and not redeemed by the expiration date shall be accounted for by decreasing prizes paid expense by the value of the expired certificate and eliminating the corresponding liability.  This adjusting entry shall be clearly documented in the licensee's monthly records; and

(e) A certificate log will be maintained and will include the following:

(i) Certificate number;

(ii) Certificate value;

(iii) Date of issue;

(iv) Expiration date;

(v) Date of redemption; and

(vi) If awarded as a prize, the session and date the prize is awarded.

[Statutory Authority: RCW 9.46.070 (1), (11), (14).  98-04-024, 230-20-115, filed 1/28/98, effective 7/1/98.  Statutory Authority: RCW 9.46.070 (1), (8), (11), (14), (16) and (20).  97-09-072, 230-20-115, filed 4/22/97, effective 7/1/97.  Statutory Authority: RCW 9.46.070 (1), (8) - (11), (14), (16), (20).  96-07-078, 230-20-115, filed 3/19/96, effective 7/1/96.]

OTS-2954.2


AMENDATORY SECTION(Amending Order 364, filed 9/23/98, effective 1/1/99)

WAC 230-20-125
Discounts and promotional gifts--Authorized--Limits.

To increase profits from bingo games and enhance the entertainment aspect of such, licensees may conduct limited promotional activities.  The following restrictions and procedures apply to promotional activities conducted as a part of bingo games:

(1) Licensees may promote bingo games by providing players discounts or gifts of nominal value on up to ((eight)) twelve occasions annually under the following conditions:

(a) Licensees may offer players discounts or reductions in the price to play bingo for purposes of evaluating the effectiveness of advertising of bingo games if:

(i) Discounts are only awarded to players that present a coupon that was issued by the licensee for a specific date and session;

(ii) Coupons shall not be available on the licensed premises: Provided, That this section does not prevent the sale of newspapers in which such coupons are printed on the licensed premises;

(iii) Coupons are printed in newspapers or similar media that are normally sold or delivered to an individual's residence;

(iv) The discount does not exceed fifty percent of the minimum cost to play or ((three)) five dollars, whichever is less;

(v) Any conditions or restrictions of the discount are disclosed in all advertisements offering the discount; and

(vi) Records required by subsection (2) of this section are maintained.

(b) Licensees may award promotional gifts to players if:

(i) Only merchandise gifts with a cost to the licensee of no more than ((three)) five dollars per gift are awarded;

(ii) The gifts are treated as prizes; and

(iii) A record is completed for each session setting out the criterion for selecting the recipients, the number of gifts, and total cost of the gifts.

(2) Licensees shall use the combination receipting method set forth in WAC 230-20-108 to record discounts awarded by this section.  All discounts shall be recorded on the cash register receipt during the sales transaction;

(3) Records must be maintained as a part of the daily bingo records that provide full details of each discount or gift awarded.  All discounts must be reconciled to sales and cash on the "Bingo daily record-Cash control" record.  Such records must include at least the following details:

(a) Time and date of the activity;

(b) Full description of the activity, including any conditions or restrictions;

(c) A copy of all advertisements for such promotions; and

(d) All coupons or "frequent player" cards redeemed which shall include the name, address, and birth date of customers redeeming such.

(4) Licensees may provide special recognition gifts to players during the calendar week of their birthday.  These gifts are excluded from the ((eight)) twelve occasion limitation if the following requirements are met:

(a) Such gifts shall not exceed a value of ((three)) five dollars;

(b) The recipient's name and date of birth are recorded; and

(c) These gifts are treated as prizes and applicable records are maintained.

(5) Licensees may promote bingo games by offering incentives to players which are based on the customer participating in games for a specific number of sessions, playing during a session when promotional gifts are awarded to players, as authorized by subsection (1)(b) of this section, or for spending a specific dollar amount to play bingo over a period of time if:

(a) These "frequent player" incentives are redeemed only for promotional marketing gifts; or merchandise with a cost of twenty dollars or less;

(b) These incentives are accumulated in the form of "credits" or "points" that equate to a specified number of dollars spent by the player;

(c) The redemption value of points or credits awarded under this section does not exceed:

(i) ((One-half of one)) Two percent of the total dollar amount spent by a player and recorded through the cash register method of recording bingo sales; or

(ii) ((Three)) Five dollars for each occasion that points or credits are awarded as promotional gifts under authority of subsection (1)(b) of this section;

(d) Such credits or points shall have no cash or partial redemption value;

(e) Players shall be informed of any expiration date of points or credits earned;

(f) The licensee shall develop a control system to account for points or credits issued, redeemed, or expired.  Credits or points shall be controlled by issuing points at the time of cash register receipting method sale and recorded either with a computer-based tracking system or approved manual system.  The following conditions apply to accumulation records:

(i) If cards are used, cards shall meet all of the requirements set forth for tickets used for receipting for bingo income in WAC 230-20-104 and the recording of credits on such cards shall be accomplished by means under control of the licensee, such as stamps, punches, employee initials, etc.; and

(ii) Computer-based records used to record points shall be approved by the commission staff.

[Statutory Authority: RCW 9.46.070.  98-19-131 (Order 364), 230-20-125, filed 9/23/98, effective 1/1/99.  Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075.  96-24-008 (Order 303), 230-20-125, filed 11/21/96, effective 12/22/96.]

OTS-2959.1


NEW SECTION
WAC 230-02-145
Promotional marketing gifts.

Promotional marketing gifts are merchandise items that either promote the game of bingo or a specific bingo licensee. Promotional marketing gifts include, but are not limited to, items used in connection with playing bingo or items with a licensee's name or logo permanently imprinted thereon.

[]

OTS-2955.1


AMENDATORY SECTION(Amending WSR 96-07-078, filed 3/19/96, effective 7/1/96)

WAC 230-20-230
Free games for winners--Restrictions.

((On only four occasions per year, a licensee may award free cards, or any opportunity to play in a bingo game, to a person as a prize for, or conditioned upon, winning a bingo game or games.  Provided, those)) Bingo games conducted under the authority of a Class A, B or C license or games conducted without a license under RCW 9.46.0321 may award free games without restrictions on the number of occasions.  ((The restrictions set forth in WAC 230-20-115 will apply when awarding gift certificates that may include free games for winners.)) Class D and above licensees may only award free bingo games as a prize when the restrictions and requirements set forth in WAC 230-20-115 are met.

[Statutory Authority: RCW 9.46.070 (1), (8) - (11), (14), (16), (20).  96-07-078, 230-20-230, filed 3/19/96, effective 7/1/96.  Statutory Authority: RCW 9.46.070.  94-07-084 (Order 250), 230-20-230, filed 3/16/94, effective 4/16/94; Order 53, 230-20-230, filed 5/25/76; Order 12, 230-20-230, filed 2/14/74; Order 5, 230-20-230, filed 12/19/73, 1:25 p.m.]

OTS-2953.1


AMENDATORY SECTION(Amending WSR 97-14-013, filed 6/20/97, effective 7/21/97)

WAC 230-20-242
Activities conducted as a part of bingo games--Authorization--Restrictions.


((What activities are authorized for consideration as part of a bingo game?


(1) The following activities are authorized:

(a) Drawings.

(b) Creativity and originality contests. A competition to determine the best costume, flower arrangement, cake decorating, ugliest tie, or other activities requiring skill or original thought.

(c) "Good neighbor" schemes. Prizes are awarded based upon the seating location of a player(s) in regards to the winner of a bingo game.

(d) Second element of chance schemes. An additional chance is offered to win an increased minimum bingo game after the winner(s) of the game has been determined by calling numbers and symbols.

(e) Birthday bonus schemes. Prizes are awarded to a player who wins a bingo game during the same calendar week in which the player's birthday occurs.


What general restrictions apply to the awarding of prizes for these activities?


(2)
)) Bingo licensees may award prizes to winners of activities authorized by this section when such activities are conducted as a part of bingo games.  Such activities shall be deemed to be bingo games if all players paying to participate are allowed to compete equally and all prizes awarded are treated as bingo game prizes for purposes of compliance with WAC 230-20-059.


((What additional restrictions apply to drawings?))


(((3))) (1) Drawings.  Each licensee shall be allowed to award prizes that are determined by a random drawing of tickets or by other random selection methods involving the numbering system on such tickets if the requirements of WAC 230-20-105 are followed: Provided, That upon approval by commission staff, a licensee may use bingo cards in place of tickets if the requirements of WAC 230-20-107 are followed, and:

(a) All rules regarding these drawings, including requirements to qualify for participation, time and date of the drawing, and whether a player must be present to win, are clearly posted and distinctly explained to the players;

(b) Tickets or other facsimiles used to enter such drawings are awarded only to players purchasing cards to play in bingo games;

(c) Tickets, from which the winners of any such drawing are selected, shall not be accumulated for a period that is longer than thirty days.  Drawings may be conducted using tickets that accumulate during any bingo occasion, week, or any other period that does not exceed thirty consecutive days;

(d) Players may only be awarded or otherwise receive tickets to participate in drawings at bingo games by meeting the following criteria:

(i) Pay an amount not to exceed one dollar per ticket.  If a licensee elects to charge for entry into drawings, such drawings shall not be combined with other means of entry allowed by this subsection, and the gross gambling receipts, prizes, and expenses shall be recorded and reported as bingo activities: Provided, that if players are required to purchase tickets to enter the drawing, they shall not be required to be present to win if the drawing is not held at the same session as tickets are purchased;

(ii) Be a winner of a bingo game during the session;

(iii) Be a "good neighbor" winner, as defined by subsection (((5))) (3) of this section; or

(iv) Meet other specific and predetermined criterion that has been approved by the director;

(e) The criterion for granting tickets, and the number of tickets awarded during each session, shall be recorded in the daily bingo record for each session.  All winning tickets and other records shall be maintained as a part of the daily bingo records.


((What additional restrictions apply to creativity and originality contests?


(4)
)) (2) Creativity and originality contests.  A bingo licensee may conduct contests in which players may demonstrate their creativity and originality skills on up to eight occasions annually.  The following rules must be observed in conducting these contests:

(a) The total value of prizes shall not exceed five hundred dollars during any occasion;

(b) Only players who have paid to participate in bingo games during the current session may participate in the contest; and

(c) A record shall be completed for each contest setting out the criterion for selecting the winners, the number of participants in the contest, and all details required by WAC 230-08-080 and 230-20-102.  Such records shall be maintained as a part of the daily bingo records.


((What additional restrictions apply to "good neighbor" schemes?


(5)
)) (3) "Good neighbor" prize schemes.  A licensee may award prizes based upon the seating location of a player or players in regards to a winner of a bingo game or other approved criteria.  The following requirements must be observed prior to awarding "good neighbor" prizes:

(a) All rules regarding these prizes, including the amount to be awarded to each "good neighbor" or group of "good neighbors" and all requirements to qualify for a prize, must be clearly posted and distinctly explained to the players; and

(b) A record shall be completed setting out the criterion for awarding such prizes, the number of such prizes awarded during each session, and all details required by WAC 230-08-080 and 230-20-102.  Such record shall be maintained as a part of the daily bingo records.


((What additional restrictions apply to second element of chance schemes?


(6)
)) (4) Second element of chance schemes.  Licensees may use these schemes to increase the minimum prize for a bingo game after the winner(s) of the game has been determined by calling numbers and symbols if:

(a) The schemes do not involve the use of gambling devices specifically prohibited by public policy or commission rules;

(b) A player's minimum odds of winning the highest prize is equal to or greater than one winner out of one hundred twenty-five chances or the probability of winning the highest prize is .008 or greater;

(c) The scheme does not require the player to risk any portion of a prize already won;

(d) Every possible outcome of the scheme provides the player with an additional prize;

(e) All rules regarding play of the game are clearly posted and distinctly explained to the players.  At least the following information shall be disclosed:

(i) The players minimum odds of winning the highest prize;

(ii) How a winner is determined;

(iii) Any contingencies or special requirements that may affect the outcome;

(iv) The cash value of the highest prize available; and

(v) Any financial burden that must be borne by the winner, such as taxes or registration fees.

(f) All requirements of WAC 230-20-010 are met before cards are purchased; and

(g) The scheme and supporting records contain control factors necessary for commission audit.


((What additional restrictions apply to birthday bonus prizes?


(7)
)) (5) Birthday bonus prizes.  Licensees may offer birthday bonus prizes to players who win a bingo game subject to the following restrictions:

(a) The maximum bonus prize is fifty dollars;

(b) The player's birthday must be within the calendar week that the winning combination occurred and the bonus is paid;

(c) A licensee may award only one birthday bonus to any player during any calendar year;

(d) In addition to all requirements of WAC 230-20-102, the prize receipt for such prizes must include:

(i) The address of the winner;

(ii) The player's date of birth; and

(iii) The type of identification provided by the player to verify the winner's date of birth.

[Statutory Authority: RCW 9.46.070 (1), (2).  97-14-013, 230-20-242, filed 6/20/97, effective 7/21/97.  Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075.  96-24-008 (Order 303), 230-20-242, filed 11/21/96, effective 12/22/96.  Statutory Authority: RCW 9.46.070 (1), (8) - (11), (14), (20).  96-13-067 (Order 293), 230-20-242, filed 6/18/96, effective 7/19/96.  Statutory Authority: Chapter 9.46 RCW.  94-24-055 (Order 263), 230-20-242, filed 12/5/94, effective 1/5/95.  Statutory Authority: RCW 9.46.070.  93-13-062 (Order 240), 230-20-242, filed 6/17/93, effective 7/18/93.]

Washington State Code Reviser's Office