WSR 03-08-001



[ Filed March 19, 2003, 3:44 p.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-07-062.

Title of Rule: Financial reporting by licensees, amending WAC 230-12-305 Licensee required to submit updated documents or information.

Purpose: This amendment will enable staff to be fully informed of all of a licensee's financing activities, therefore, staff will be able to complete a more thorough financial investigation on persons involved in the financing of a gambling operation.

Statutory Authority for Adoption: RCW 9.46.070.

Summary: Currently, loans of $2,000 or more must be reported to the commission if they are not obtained from a federally recognized financial institution. This allows staff to source the funds to ensure the moneys are clean and persons with ties to criminal activities do not infiltrate gambling operations in Washington state. Staff has requested language be added to require contributions of cash and assets to also be reported to the commission. This proposed language enables staff to be fully informed on all of the licensee's financing activities and facilitates a more complete financial investigation on all parties involved in the financing of a gambling operation.

Reasons Supporting Proposal: See Purpose above and Explanation of Rule below.

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: Currently, a licensee can receive approval from staff for a line of credit (for example, from a financier licensed as a service supplier) from which they can take draws from over a period of time. At times, these draws can occur years after the original funds were investigated and sourced. During this time, the "original" moneys that were sourced are gone and other moneys are held in the account, which may be drawn on by the licensee. By requiring draws to be reported, staff can track the moneys and if necessary, source new funds that have replaced the funds which were originally sourced.

$2,000 is a very low threshold and does not appear to be a material amount to even our smallest licensees. Therefore, it is proposed that the loan/contribution amount be increased from $2,000 to $10,000.

Proposal Changes the Following Existing Rules: See Purpose, Summary, and Explanation of Rule 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, an SBEIS 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: Red Lion Hotel, 1225 North Wenatchee Avenue, Wenatchee, WA 98801, (509) 663-0711, on May 9, 2003, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Shirley Corbett by May 1, 2003, 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 May 1, 2003.

Date of Intended Adoption: May 9, 2003.

March 19, 2003

Susan Arland

Rules Coordinator


AMENDATORY SECTION(Amending Order 250, filed 3/16/94, effective 4/16/94)

WAC 230-12-305   Licensee required to submit updated documents or information.   In addition to any other requirements set forth in these rules, ((the)) persons licensed by the commission shall ((be required to)) submit any ((changes in the following)) new or updated documents or information ((on file with the commission)) including, but not limited to, the following:

(1) Articles of incorporation or by laws, or any other documents which set out the organizational structure and purposes;

(2) Internal Revenue Service tax exemption status (charitable/nonprofit organizations only);

(3) All ((leases, rental, consignment, franchise, or other)) contracts and agreements ((relating)), whether oral or written which relate to gambling activities or ((altering the commercial stimulant business, whether oral or written)) alter the organizational structure of the licensee or its business activities in Washington state; and

(4) All cash or asset contributions, draws from lines of credit, and loans, from other than recognized financial institutions, which individually or collectively exceed a total of (($2,000.00)) ten thousand dollars during any calendar year: Provided, That cash or asset contributions do not include donations to licensed charitable or nonprofit organizations.

(5) The new or updated documents and/or information shall be submitted to the commission by notation on the next quarterly activity report filed, and by attaching all details concerning each transaction: Provided, That licensees not required to submit quarterly activity reports shall submit the required information no later than ((60)) sixty days following the transaction(s) date.

[Statutory Authority: RCW 9.46.070. 94-07-084 (Order 250), 230-12-305, filed 3/16/94, effective 4/16/94. Statutory Authority: RCW 9.46.070 (7)(14). 91-07-021, 230-12-305, filed 3/13/91, effective 4/13/91. Statutory Authority: Chapter 9.46 RCW. 87-09-043 (Order 167), 230-12-305, filed 4/14/87.]

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