Original Notice.

     Preproposal statement of inquiry was filed as WSR 02-09-100.

     Title of Rule: Card rooms that offer player-supported jackpots, amending WAC 230-40-610 Player-supported jackpots -- Restrictions -- Manner of conducting -- Approval.

     Purpose: We have received a petition for rule change from Sherry Gillard. Ms. Gillard is a licensed card room employee and poker player. At the May 10, 2002, commission meeting, the commission filed this petition for further discussion.

     Statutory Authority for Adoption: RCW 9.46.070.

     Summary: Currently, WAC 230-40-610(6) requires card room owners and on-duty card room employees that are playing in a poker game with a player-supported jackpot to show their hands at the end of play when the prize is not based upon a predetermined hand. This requirement prevents an owner or employee from folding their hand to avoid paying out a jackpot, which did occur. Ms. Gillard is requesting that card room owners and on-duty card room employees no longer have to show their hands in a poker game unless there is possibility of a "bad beat" situation. Ms. Gillard feels that requiring owners and on-duty employees to show their hands compromises their playing style and ability to effectively participate in a game.

     Reasons Supporting Proposal: See Purpose above.

     Name of Agency Personnel Responsible for Drafting: Susan Arland, Lacey, (360) 486-3466; Implementation: Rick Day, Lacey, (360) 486-3446; and Enforcement: Bob Berg, Lacey, (360) 486-3452.

     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.

     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: Shilo Inn, 707 Ocean Shores Boulevard N.W., Ocean Shores, WA 98569, (360) 289-4600, on August 9, 2002, at 9:30 a.m.

     Assistance for Persons with Disabilities: Contact Shirley Corbett by July 26, 2002, TDD (360) 486-3637, or (360) 486-3447.

     Submit Written Comments to: Susan Arland, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, (360) 486-3466, fax (360) 486-3625, by July 26, 2002.

     Date of Intended Adoption: August 9, 2002.

May 17, 2002

Susan Arland

Rules Coordinator

Funding a PSJ.

     (1) A licensee may provide house funds to establish a PSJ. The licensee shall issue a check from the general business account into the PSJ account to start the prize fund. Recouping of start-up funds shall be done by issuing a check from the PSJ account to the business general account. Electronic bank transfers shall satisfy this requirement. Start-up funds shall not exceed five thousand dollars per PSJ.

Using a rake to fund a PSJ.

     (2) A licensee may assess a portion of players' wagers for a jackpot prize. Such amount shall not exceed one dollar per hand or game for each PSJ. This assessment shall be separately collected using the rake method.

PSJ funds are player funds - exception from administrative fee.

     (3) The licensee acts only as the custodian of the PSJ funds, including any interest earned on this money, and maintains no legal right to the funds. All PSJ funds shall be awarded as prizes, based upon a format approved by commission staff. An administrative fee not to exceed ten percent of the amount collected for a PSJ may be imposed by the licensee. This administrative fee includes all expenses incurred by the licensee, including banking fees. No other expenses beyond the ten percent administrative fee shall be deducted from the PSJ account.

Prize fund custodian.

     (4) Each licensee shall designate at least one "prize fund custodian" who shall be responsible for safeguarding and disbursing funds to winners. A prize fund custodian may be an owner, partner, officer, or licensed individual designated by a card room owner, partner, or officer. The custodian shall have signature authority for prize fund bank accounts and ensure accountability of all funds collected for use in a PSJ. The licensee shall meet the deposit requirements of WAC 230-40-608.

Payout of prizes.

     (5) Prize amounts paid in cash shall not exceed five hundred dollars. Prize amounts not awarded in cash shall be paid within twenty-four hours, by check, the type which provides a duplicate copy, which shall not be cashed on the licensee's premises. A record of all prizes paid shall be maintained in the format prescribed by commission staff and shall include:

     (a) For prizes less than one hundred dollars, a system of accounting denoting each individual prize may be utilized.

     (b) For prizes one hundred dollars and above, the following information shall be recorded on a prize record:

     (i) Full printed name;

     (ii) Date of birth;

     (iii) Street address;

     (iv) Type of identification reviewed;

     (v) Amount of the prize awarded;

     (vi) Description of the winning hand;

     (vii) Time and date awarded; and

     (viii) The supervisor's and dealer's initials.

     (c) Upon awarding a prize of five hundred dollars or more, the dealer shall fan the winning hand in view of the surveillance camera. The hand shall be collected and sealed with the prize record. The winning hand and remaining deck shall be maintained on the premises as part of daily card room records for a period of seven days, unless released by a commission agent.

Owners and employees competing for a PSJ.

     (6) Owners, custodians and on-duty card room employees may participate in card games that offer a PSJ, but may not share in the winnings of any prize awarded. If playing in a game with a PSJ in which the prize is not based upon a predetermined hand, owners and card room employees must turn their cards face up at the end of each game so that the cards may be observed by other players at the table and surveillance if there is a qualifying hand at the end of a game (such as a "bad beat" hand). Any prize winnings an owner or on-duty employee may be entitled to under game rules, must be divided equally among the other players at the table: Provided, That off-duty employees may participate in card games that offer a PSJ and share in the prize winnings.

House dealer required.

     (7) All card games offering a PSJ must utilize a house dealer.

Security requirements.

     (8) Each gaming table offering a PSJ shall be required to install a closed circuit television system as outlined in WAC 230-40-625: Provided, That licensees operating any house-banked card games shall follow the security requirements set forth in WAC 230-40-825 for all tables in the card room, including those offering a PSJ.

Removing a PSJ from play.

     (9) The following procedures shall be followed for all discontinued player-supported jackpots:

Discontinued.

     (a) In the event a licensee elects to discontinue a PSJ, the balance, less any nonrecouped seed money, shall be distributed to players within sixty days of discontinuance by offering an approved promotion or card tournament of the same game under which the PSJ was originally accrued.

Closure of business.

     (b) In the event a licensee ceases to operate a card room, or fails to maintain a valid card room license, all funds associated with the PSJ shall be distributed to the Washington state council on problem gambling.

Posting rules.

     (c) The licensee shall conspicuously post a sign stating how PSJ money will be distributed in the event the PSJ is discontinued or the business closes. The sign must be posted at the inception of the PSJ.

House rules.

     (10) House rules, to include administrative fees shall be posted in a location readily visible by all players and disclose the conditions under which prizes may be won, the prize amount, cost to participate, and any other conditions which may affect the outcome of the game.

Dispute resolution.

     (11) If a dispute arises involving the outcome of a PSJ, the licensee shall preserve the video recording, the winning hand and remaining deck, and all records for the game where the dispute occurred and shall notify commission staff within twenty-four hours. The licensee shall document all information pertaining to the dispute including:

     (a) The names, addresses, and phone numbers of all players, card room staff, and any witnesses involved;

     (b) Amount of the advertised PSJ; and

     (c) A full description of the circumstances surrounding the dispute.

     (12) All disputes involving a PSJ will be investigated by commission staff, with a report submitted to the director. A written decision will be issued by the director, or the director's designee, and such decision shall be final.

     (13) During the course of dispute resolution, the commission may become the temporary custodian of any and all prize funds. The PSJ will be suspended until the dispute is resolved.

[Statutory Authority: RCW 9.46.070. 01-13-091 (Order 403), § 230-40-610, filed 6/19/01, effective 7/20/01; 00-09-052 (Order 383), § 230-40-610, filed 4/14/00, effective 5/15/00.]

[Statutory Authority: RCW 9.46.070. 01-13-091 (Order 403), § 230-40-610, filed 6/19/01, effective 7/20/01; 00-09-052 (Order 383), § 230-40-610, filed 4/14/00, effective 5/15/00.]

     Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.

     Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

© Washington State Code Reviser's Office