Original Notice.

Preproposal statement of inquiry was filed as WSR 99-09-011 with a published date of May 3, 1999.

Title of Rule: Promotional contests of chance.

Purpose: To clarify that the specific business, product or service a promotional contest of chance is designed to promote cannot be a gambling activity (such as pull-tabs). New rules clarify what a person may be required to do to enter a promotional contest of chance and to set forth the requirements for a business to offer "no fee bingo" as a promotional contest of chance. An amendment was made to allow licensed distributors to sell disposable bingo cards to commercial businesses for promotional contests of chance.

Statutory Authority for Adoption: RCW 9.46.070.

Summary: See Purpose above.

Reasons Supporting Proposal: See Purpose above.

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 above.

Proposal Changes the Following Existing Rules: See Purpose 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: Shilo Inn, 707 Ocean Shores Boulevard, Ocean Shores, WA 98569, (360) 489-4600, on October 15, 1999, at 1:30 p.m.

Assistance for Persons with Disabilities: Contact Shirley Corbett by October 1, 1999, TDD (360) 438-7638, or (360) 438-7654 ext. 302.

Submit Written Comments to: Susan Arland, Mailstop 42400, Olympia, WA 98504-2400, fax (360) 438-8652, by October 1, 1999.

Date of Intended Adoption: October 15, 1999.

August 30, 1999

Susan Arland

Rules Coordinator

OTS-3267.2

AMENDATORY SECTION(Amending Order 182, filed 8/16/88)

WAC 230-46-020
Definitions.

(1) (("Lottery" means a scheme for the distribution of money or property by chance, among persons who have paid or agreed to pay a valuable consideration for the chance.

(2))) "Promotional contest of chance" means a scheme designed to promote a specific business, product(((s))) or service, other than gambling activities, and not the scheme itself, in which a person, association, or an organization may distribute money or property among individuals who have agreed to participate in a contest of chance equally with other participants((, providing no participant is required to do more than the allowable methods of entry authorized under the provisions of RCW 9.46.0355)).

(((3))) (2) "Promotional material" means all material which defines the rules of a particular promotional contest of chance, which may extend to a description or an explanation of a product(((s))), service(((s))), or combination(((s))) thereof being promoted.

(((4))) (3) "Perusing promotional material" means to read or examine contest rules and/or the specific product(((s))), service(((s))), or combination(((s))) thereof being promoted((: Provided, That the contest rules or its promotional material shall disclose any additional requirement(s) to attend a demonstration, tour a facility or specific areas, visit a specified location or similar activity, to include the approximate length of time in connection with a promotional scheme: Provided further, That any tour, demonstration, visit, or combination of requirement(s) will not extend beyond a total of two consecutive hours in duration)).

(4) For purposes of conducting a promotional contest of chance, as authorized by RCW 9.46.0355, a "coupon" or "entry blank" is defined to include "promotional game cards" as set forth in WAC 230-46-070 and disposable bingo cards sold under WAC 230-20-192 (6)(a)(iii).

[Statutory Authority: RCW 9.46.070 (11) and (14).  88-17-050 (Order 182), § 230-46-020, filed 8/16/88.  Statutory Authority: RCW 9.46.030(10) and 9.46.070 (14) and (20).  86-08-007 (Order 156), § 230-46-020, filed 3/20/86.  Statutory Authority: RCW 9.46.070 (3), (8) and (11).  85-09-040 (Order 149), § 230-46-020, filed 4/15/85.]

OTS-3264.3

NEW SECTION
WAC 230-46-035
Promotional contests of chance--Interpretations--Requirements for participation--Restrictions.

For purposes of conducting promotional contests of chance under the provisions of RCW 9.46.0355, the following interpretations, requirements, and restrictions apply:

(1) No person shall be required to do more than the allowable methods of entry set forth in RCW 9.46.0355 in order to participate in a promotional contest of chance.

(2) All participants shall be afforded an opportunity to compete equally in such contests of chance and game rules governing such contests shall not afford any participant an advantage over any other participant, except the promoter may set requirements regarding age and/or income.

(3) For purposes of interpreting RCW 9.46.0355 (1)(c), to "visit a business establishment to obtain or deposit a coupon or entry blank," may include requiring the participant to actively participate in the conduct of the game or contest of chance, such as selecting an item from among a group of randomly placed items, spinning a wheel with multiple stops of different values, marking or comparing characters or symbols on a game card to characters or symbols drawn at random at the premises: Provided, That in order to participate, the player shall not be required to:

(a) Make a purchase of any kind; or

(b) Be present at the location of the contest more than fifteen minutes in advance of the contest: Provided further, That if there is any waiting period prior to a contest, all of the waiting period time shall be included as a part of the thirty-minute contest time period.

(4) For purposes of interpreting RCW 9.46.0355 (1)(e), persons that are automatically entered into a contest of chance when they purchase goods or services shall not be deemed to have been required to make a purchase of goods and services and are considered as merely registering "without the purchase of goods or services" if the contest rules allow all other persons wishing to enter such contests to merely register without the purchase of goods or services or any other restrictions.

(5) Sponsors of promotional contests of chance may require a participant to "expend time, thought, attention, and energy in perusing promotional material" in order to participate in the contest (RCW 9.46.0355 (1)(f)). Such participation may require attendance at a demonstration, a visit or tour of a facility or specific location or similar activity if such is fully disclosed in the contest rules and the total time required to be expended does not exceed thirty minutes.

(6) Except as authorized in this chapter, gambling devices or supplies controlled by this Title shall not be used to conduct promotional contests of chance. The following devices or controlled supplies are authorized for use:

(a) "Promotional game cards" as set forth in WAC 230-46-070;

(b) Disposable bingo cards sold under WAC 230-20-192 (6)(a)(iii);

(c) Mechanical random number generators that are not professionally manufactured, such as spinning wheels and similar devices.

[]

OTS-3265.3

NEW SECTION
WAC 230-46-045
Promotional contests of chance similar to bingo--"No fee bingo."

Promotional contests of chance, which are similar to bingo and are commonly referred to as "no fee bingo," may be conducted in limited circumstances if all of the following conditions are met:

(1) Participants may not be charged a direct or indirect fee to participate in the game. Indirect fees include, but are not limited to, cover charges and other similar fees;

(2) Prizes may only involve merchandise items such as food, nonalcoholic beverages, hats, shirts, or other promotional items valued at less than twenty-five dollars each. No cash prizes may be substituted for merchandise prizes;

(3) Bingo cards used must be of the type set aside for recreational or noncommercial uses as described in WAC 230-20-192 (5)(a)(iii); and

(4) The contest may not be conducted for more than a total of thirty minutes each business day. Participants cannot be required to be present at the location of the contest more than fifteen minutes in advance of the contest: Provided, That if there is any waiting period prior to a contest, all of the waiting period time shall be included as a part of the thirty-minute contest time period.

[]

OTS-3268.1

AMENDATORY SECTION(Amending WSR 97-19-079, filed 9/16/97, effective 1/1/98)

WAC 230-20-192
Standards for disposable bingo cards--Definitions.

Disposable bingo cards sold for use in the state of Washington shall be manufactured and controlled using processes and procedures that ensure integrity of the activity and facilitates regulation by the commission.  Manufacturers of disposable bingo cards shall comply with the following requirements:

(1) Manufacturers shall establish quality control procedures necessary to ensure manufacturing processes, including collating of cards into packs or packets, meet the requirements of this section.  Quality control procedures shall be documented and provided to commission staff upon request;

(2) For purposes of this title, the following definitions apply:

(a) "Card" or "face" means a unique group and configuration of numbers or symbols imprinted on paper, cardboard, or other materials, and designed to be used to conduct bingo games;

(b) "Card number" means the number assigned by the manufacturer to identify a single card or face.  A "card number" may also be referred to as a "face" or "perm" number;

(c) "Collate" means the process of cutting and/or assembling master sheets or precut sheets of cards from one or more sets of cards into packets or books for marketing purposes.  "Collate" may also be referred to as "finish" or "finishing";

(d) "Collation" means a group of packets or books of cards assembled from more than one set of cards;

(e) "Consecutively numbered" means a numbering system normally beginning with the number one, increased by one for each individual unit added to the group, and ending with a number identical to the total number of units assigned to that group;

(f) "Cut" means the layout or orientation of cards or sheets of cards subdivided from a master sheet of cards or faces.  A "cut" will be either square, horizontal, or vertical;

(g) "Disposable bingo card" means a nonreusable paper bingo card manufactured by a licensed manufacturer;

(h) "Duplicate cards" means two or more cards that are imprinted with the same numbers or symbols, regardless of the configuration or location of such numbers or symbols on the card;

(i) "On" means the number of cards or faces imprinted on a sheet or "cut." The term is normally preceded by the number of cards;

(j) "Pack" or "packet" means a group of cards or sheets of cards collated into a book when each page or sheet in the book is intended for use to play a separate bingo game, including "on-the-way" games, within a session;

(k) "Product line" means a specific type of card, identifiable by features or characteristics that are unique when compared to other types of cards marketed by the manufacturer.  A "product line" includes all series and all cards within each series as identified by the manufacturer;

(l) "Serial number" means a number assigned to a set of cards by a manufacturer for identification and tracking purposes when the same number is not used to identify another set of cards from the same product line, color, border pattern, and series in less than 999,999 occurrences or twelve months, whichever occurs first: Provided, That if the product line is used as a determining factor for assignment of a serial number, the difference between various product lines must be readily identifiable by observation;

(m) "Series" of cards means a specific group of cards or faces that have been assigned consecutive card or face numbers by a manufacturer.  Series are typically identified by the first and last card number in the group of cards, such as "1 to 9000 series";

(n) "Set" of cards means a specific group of cards from the same product line, which are the same color, border pattern, and imprinted with the same serial number.  A "set" of cards may include more than one series of cards or faces;

(o) "Sheet number" means the number assigned by the manufacturer to identify an arrangement of more than one card that results from dividing master sheets of cards to facilitate marketing;

(p) "Skip" means the standard spread or difference between card or sheet numbers at different page levels in packs or packets;

(q) "Subset" means a portion of a set of cards or collation of packets that has been divided by a licensed distributor to facilitate marketing; and

(r) "Up" means the number of pages or sheets collated into each packet or book of cards.  The term is normally preceded by the number of pages or sheets.

(3) Each card or face in a particular type or product line must be imprinted with a unique set of numbers or symbols and configuration of numbers or symbols.  Duplicate cards within a specific product line are prohibited.  Manufacturers of disposable bingo cards are responsible for ensuring that there are no duplicate cards in a set or collation of cards sold to distributors or operators: Provided, That duplicate cards can be collated into packets if they are located at different page levels in the packets and intended only for use during separate games, including "on-the-way" games, within a session.  If a manufacturer discovers a duplicate card error or is notified of such by the commission staff or a licensee, it shall immediately comply with the following steps:

(a) Stop marketing the product line containing duplicate cards in Washington;

(b) Recall all sets of cards and/or collations of packets or books containing duplicate cards at the same page level;

(c) Take steps to correct manufacturing or collating processes necessary to ensure duplicate cards are not sold to operators, and inform the commission in writing regarding steps taken;

(d) Reimburse all operators who submit a claim for prizes paid as a result of selling sets or collations containing duplicate cards when such claim has been validated by commission staff; and

(e) Reimburse the commission for all cost incurred investigating duplicate card complaints that result in findings that the error was caused by manufacturers.

(4) Packets of cards must be collated so that each page of the packet:

(a) Is from a different set of cards;

(b) Has skips that are consistent throughout the entire collation and contains cards that are different when compared to other cards or faces in the pack or packet; and

(c) Has a different color or border pattern.

(5) Each set must include an audit system that allows identification of that specific set and each specific card within that set, allows tracking of the transfer of cards from the point of manufacture to operators, and facilitates sale by the operator to the player: Provided, That audit systems that accomplish regulatory requirements using alternative controls may be approved by the commission staff.  The audit system shall meet the following requirements:

(a) Each set of cards manufactured as a specific product line, using the same color and border pattern, will be assigned a unique serial number by the manufacturer.  The serial number must be imprinted on each card or face;

(b) Each card or face must be identified by a card number imprinted on the face of the card: Provided, That cards used in "player selection" games, authorized by WAC 230-20-241 and "keno bingo" games, authorized by WAC 230-20-247, are exempted from this requirement; and

(c) Each sheet of cards within a set must be consecutively numbered: Provided, That sheets of cards do not have to be numbered if alternative audit controls are available and disclosed to the operator.

(6) Each set of cards or collation of packets of cards shall be sold intact as a single unit: Provided, That for ease of marketing to Class E and below operators and to operators of authorized unlicensed activities, distributors may divide sets or collations as authorized below:

(a) Cartons or packages assembled by manufacturers can not be opened prior to sale to an operator, except that distributors may open cartons or packages as authorized below:

(i) At an operator's request to change the "on," "up," and "cut." When such modification is made, the distributor shall be responsible for resealing the carton and noting all changes on the packing label;

(ii) To provide cards to Class A or B bingo games and for unlicensed activities authorized by RCW 9.46.0321 or 9.46.0355; ((and))

(iii) To provide cards to individuals for ((noncommercial)) recreational activities; and

(iv) To provide cards to businesses for use in promotional contests of chance as authorized by RCW 9.46.0355.

(b) Subsets must contain at least one carton or package: Provided, That cartons or packages may be broken and cards sold in smaller quantities under conditions described in subsection (6)(a)(i) and (ii) of this section; and

(c) Subsets of cards used for "hidden face" bingo games must contain at least one thousand cards or sheets of cards.

(7) In addition to the requirements of subsections (1) through (6) of this section, cards sold to operators for use in the operation of "hidden face" bingo games, authorized by WAC 230-20-243, must meet the following requirements:

(a) Each card or sheet of cards must be printed, folded, and sealed in a manner that prohibits determination of numbers or symbols, configurations of such on the card, or the card number prior to opening by the player;

(b) Each card or sheet of cards must have a separate numbering system that is randomly distributed when compared to the card number imprinted in the "free" space.  Manufacturers must utilize procedures that mix cards or sheets of cards in a manner that ensures no consistent relationship exists between the "card numbers" and separate numbering system within a set or subset and that there are no patterns or consistent relationships of the location of a specific card number between subsets from different sets;

(c) The serial number and the additional card or sheet number, required by (b) of this subsection, must be imprinted on the outside of the cards or sheets of cards and visible for recording without opening the card or sheet of cards; and

(d) Each set of cards must contain at least six thousand unique faces or patterns of numbers or symbols.

(8) In addition to the requirements of subsections (1) through (6) of this section, cards sold to operators for use in "player selection" bingo games, authorized by WAC 230-20-241, must be printed on two-part, self-duplicating paper that provides an original and duplicate copy;

(9) A packing record must be completed for each set of cards or collation of packets and either enclosed inside or in an envelope attached to the carton or package.  If the marketing unit contains more than one carton or package, the packing record must be located on carton or package number one.  The packing record must include at least the following:

(a) Name of manufacturer;

(b) Description of product, including the "series," "on," "cut," and "up";

(c) Records entry labels that match the identification and inspection services stamp attached to the packing label on the outside of the carton or package;

(d) Serial number or, if packets, serial number of the top page;

(e) Color and border pattern or, if packets, colors and border patterns of all sets and the sequence they are collated in the packet; and

(f) A record of any missing cards, sheets of cards, or packets.

(10) Each separate packing or marketing unit containing a set of cards or collation of packets of cards must be identified in a manner that allows determination of the contents without opening the package.  If the marketing unit contains more than one case or carton, each unit shall be labeled and numbered.  Minimum information to be disclosed on each carton or package:

(a) The identification and inspection services stamp number;

(b) Serial number or, if packets, serial number of the top page;

(c) Color and border pattern or, if packets, color and border pattern of the top page; and

(d) Number of the carton and the total number of cartons included in the marketing unit.

(11) Sets of cards, collations of packets, or any other marketing units established by a manufacturer shall be complete and contain the correct number of cards or packets and the specific cards or packets noted on the packing slip: Provided, That up to one percent of the cards in the set may be missing if all missing cards, sheets, or packets are documented on the packing record enclosed in carton or package number one of the marketing unit; and

(12) To provide the commission and operators the ability to verify the authenticity of winning cards, each manufacturer shall prepare and make available a master verification system for each type or product line of cards it manufactures.  This master verification system shall provide a facsimile of each card within a set of cards by the card number.  The master verification system shall display the exact numbers or symbols and the location or configuration of numbers or symbols on the card.

[Statutory Authority: RCW 9.46.070.  97-19-079, § 230-20-192, filed 9/16/97, effective 1/1/98; 94-01-033, § 230-20-192, filed 12/6/93, effective 1/6/94.]

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