WSR 04-19-030

EMERGENCY RULES

HORSE RACING COMMISSION


[ Filed September 9, 2004, 11:51 a.m. , effective September 9, 2004 ]


Other Findings Required by Other Provisions of Law as Precondition to Adoption or Effectiveness of Rule: RCW 67.16.270 Advance deposit wagering and 67.16.160 Rules implementing conflict of interest laws -- Wagers by commissioner.

Purpose: To adopt emergency rules to allow the commission to comply with RCW 67.16.270 and 67.16.160 which became effective on April 1, 2004.

Citation of Existing Rules Affected by this Order: Amending WAC 260-14-040 Wagering and 260-48-700 Interjurisdictional common pool wagering.

Statutory Authority for Adoption: RCW 67.16.020.

Under RCW 34.05.350 the agency for good cause finds that state or federal law or federal rule or a federal deadline for state receipt of federal funds requires immediate adoption of a rule.

Reasons for this Finding: ESSB 6481 took effect April 1, 2004: (1) Authorized advance deposit wagering in Washington; (2) allowed full card simulcast to satellite locations; (3) removed the day and hour limitation for simulcast wagering for the class 1 racing association and satellite locations; and (4) prohibited the commissioners from wagering on horse races under their jurisdiction.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 9, Amended 2, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

Date Adopted: August 13, 2004.

R. M. Leichner

Executive Secretary

OTS-7216.1


AMENDATORY SECTION(Amending Order 73.3, filed 6/28/73)

WAC 260-14-040   Wagering.   (1) No commission employee shall make any wager at a facility under the jurisdiction of the commission.

(2) No ((regulatory)) commission employee shall make any wager on the outcome of any horse race ((at a meeting at which he is employed)) under the jurisdiction of the commission. Commission employee means both regulator employee and employee as defined in WAC 260-14-010.

(3) No commissioner ((or employee)) shall make any wager ((except through authorized parimutuel betting)) on the outcome of any horse race at a meeting under the jurisdiction of the commission.

[Order 73.3, 260-14-040, filed 6/28/73.]

OTS-7217.1


AMENDATORY SECTION(Amending WSR 99-06-026, filed 2/23/99, effective 3/26/99)

WAC 260-48-700   ((Interjurisdictional)) Multi-jurisdictional common pool wagering.   (1) ((DEFINITIONS)) Definitions.

(a) The host association is the association conducting a licensed parimutuel meeting from which authorized contests or entire performances are simulcast.

(b) The guest association is the association that offers licensed parimutuel wagering on contests conducted by the host association.

(2)(a) Except as otherwise authorized by the commission, a request for simulcasting must be filed on a form provided by the commission not later than 7 business days before the first simulcast race covered by the request. The executive secretary may approve a request for simulcasting, subject to rescission of the approval by the commission at its next regular meeting.

(b) The application must include at a minimum:

(i) The simulcast agreement between the host and guest association;

(ii) The approval by the horsemen's association represented at the host and guest site;

(iii) The alternate jurisdiction approval;

(iv) When acting as the host site, approval also requires a list of all locations that will be receiving and/or wagering on the races under the guest site; and

(v) The executive secretary may require the association to submit additional information if the executive secretary determines the additional information is necessary to effectively evaluate the request.

(3) A class 1 racing association shall not be allowed to simulcast until the following are filed with the commission.

(a) A written agreement with the local horsemen's group.

(b) A description of how simulcast purse monies are to be maintained.

(c) A description of how breeder awards are to be maintained.

(d) A monthly statement showing amounts contributed to and balance in the purse fund and the breeders awards fund. This statement shall be filed with the commission no later than ten days after the end of each month.

(4) The approval of any particular simulcasting or wagering on particular simulcast races or programs is not binding on the commission for other requests for approval of simulcasting or wagering on simulcast races or programs.

(5) In determining whether to approve ((an interjurisdiction)) a multi-jurisdictional common pool which does not include the host track or which includes contests from more than one association, the commission shall consider and may approve use of a bet type which is not utilized at the host track, application of a takeout rate not in effect at the host track, or other factors which are presented to the commission.

(6) No class 1 racing association shall enter a contractual agreement that is in violation of, or may be construed as waiving any provision of chapter 67.16 RCW, Title 260 WAC and any federal, state or local law.

(7) The mutuel manager or the mutuel manager's designee shall be present on association grounds at all times that the class 1 racing association is accepting wagers on simulcast races. He/she shall be responsible for communicating all errors or omissions regarding simulcast wagering to the ((board of stewards or the commissions on duty mutuel inspector)) executive secretary.

(8) There shall be a facsimile machine located in each mutuel area or tote room and a direct, private telephone line to be located in the tote room. Phone access to the tote room shall not require routing through the switchboard.

(9) Every class 1 racing association shall file with the commission an annual report of its simulcast operations including financial data as specified by the commission.

(10) Not less than 30 minutes prior to the commencement of transmission of the performance of parimutuel contests for each day or night, the guest association shall initiate a test program of its transmitter, encryption and decoding, and data communication to assure proper operation of the system.

(11) ((The audio or the video signals must be present at the start of a wagering event in order for wagering to begin and shall continue to be displayed to the public during the entire wagering card.

(12) In the event of the loss of both the audio and video signals the class 1 association mutuel manager shall ensure that wagering and racing information is provided through the public address system or totalisator information screens.

(13) If a guest association is unable to establish or to maintain the audio or video signal from the host association, the guest association may continue to accept wagers while attempting to establish the signal provided:

(a) An announcement is made to the public informing them of the technical difficulties;

(b) The totalisator system licensee transmits the odds on the affected race to the video department to be displayed to the patrons; and

(c) The totalisator system licensee locks all wagering on the affected race at zero minutes to post to ensure the integrity and transfer of the wagering pools.

(14) Wagering may not take place without the presence of both the audio and the video signals on a performance day following a performance day in which either the audio or the video was missing.

(15) If the host association loses the ability to transmit the audio or video signal, the host association:

(a) Shall notify all receiving locations of the technical difficulties being experienced;

(b) May continue to accept wagers from the receiving location on that days races; and

(c) May not accept wagers from the receiving locations for subsequent race days until the technical difficulties have been corrected.

(16) The content and format of the visual display of racing and wagering information at facilities in other jurisdictions where wagering is permitted in the interjurisdiction common pool need not be identical to the similar information permitted or required to be displayed under these rules.

(17))) Washington intratrack breakage and minus pools shall be prorated based on amounts wagered.

(((18))) (12) The commission may permit adjustment of the takeout from the parimutuel pool so that the takeout rate in this jurisdiction is identical to that at the host jurisdiction, or identical to that of other jurisdictions participating in a merged pool.

(((19))) (13) Any surcharges or withholdings in addition to the takeout shall only be applied in the jurisdiction otherwise imposing such surcharges or withholdings.

(((20))) (14) Where takeout rates in the merged pool are not identical, the net price calculation may be the method by which the differing takeout rates are applied.

(((21))) (15) Parimutuel pools may be combined for computing odds and calculating payouts but will be held separate for auditing and all other purposes.

[Statutory Authority: RCW 67.16.040. 99-06-026, 260-48-700, filed 2/23/99, effective 3/26/99.]

OTS-7205.3

Chapter 260-49 WAC

ADVANCE DEPOSIT WAGERING


NEW SECTION
WAC 260-49-010   Definitions.   For the purposes of this chapter, unless otherwise indicated by the context in which the term is used, the following terms shall have the meaning set forth herein:

(1) "Account" shall mean an account for advance deposit wagering with a complete record of credits, wagers and debits established by an account holder and managed by an authorized advance deposit wagering facility.

(2) "Account holder" shall mean a natural person, at least twenty-one years of age for whom an authorized advance deposit wagering facility has opened an account.

(3) "Advance deposit wagering" means a form of parimutuel wagering in which an individual deposits money in an account with an entity authorized by the commission to conduct advance deposit wagering and then the account funds are used to pay for parimutuel wagers made in person, by telephone, or through communication by other electronic means.

(4) "Authorized advance deposit wagering facility" means an entity licensed by the commission, pursuant to this chapter, to conduct advance deposit wagering including such entity's facility location, equipment and staff involved in the management, servicing and operation of advance deposit wagering.

(5) "Applicant" is a natural person, at least twenty-one years of age, who has submitted an application to establish an account with an advance deposit wagering facility.

(6) "Application" shall mean the form or forms and other required submissions received from an applicant for the purpose of opening an account.

(7) "Class 1 racing association" shall mean any person or entity holding a current and valid license under RCW 67.16.200 to engage in horse racing.

(8) "Commission" means the Washington horse racing commission.

(9) "Communications by other electronic means" includes communications by any electronic communication device or combination of devices including, but not limited to, the following: Personal computers, the internet, private networks, interactive televisions and wireless communication technologies or other technologies approved by the commission.

(10) "Confidential information" shall include the following:

(a) The amount of money credited to, debited from, withdrawn from, or present in any particular account holder's account;

(b) The amount of money wagered by a particular account holder on any race or series of races;

(c) The account number and secure personal identification code of a particular account holder;

(d) The identities of particular entries on which the account holder is wagering or has wagered; and

(e) Unless otherwise authorized by the account holder, the name, address, and other information in the possession of an authorized advance deposit wagering facility that would identify the account holder to anyone other than the commission, the authorized advance deposit wagering facility, the regulatory authority in the state that regulates the authorized advance deposit wagering facility or as otherwise required by state or federal law.

(11) "Credits" shall mean all deposits of money into an account.

(12) "Debits" shall mean all withdrawals of money from an account.

(13) "Deposit" shall mean a payment of money by cash, check, money order, credit card, debit card, or electronic funds transfer made by an account holder to the account holder's account.

(14) "Foreign jurisdiction" shall mean a jurisdiction of a foreign country or political subdivision thereof.

(15) "Natural person" shall mean any person, at least twenty-one years of age, but does not include any corporation, partnership, limited liability company, trust, or estate.

(16) "Principal residence address" shall mean that place where the natural person submitting an application for an account resides at least fifty percent of the time during the calendar year.

(17) "Proper identification" shall mean a form of identification sufficient to ensure that the person making a transaction is an account holder.

(18) "Qualified subscriber based service" and "closed-loop subscriber based system" shall mean any information service or system that uses:

(a) A device or combination of devices:

(i) Authorized by the commission and operated exclusively for placing, receiving, or otherwise making a parimutuel horse racing wager; and

(ii) By which a person must subscribe to in order to be able to place, receive or otherwise make a parimutuel horse racing wager;

(b) An effective system to verify an applicant's identification, residence and age; and

(c) Appropriate data security standards to prevent unauthorized access by any person who has not subscribed or who is less than twenty-one years of age.

(19) "Secure personal identification code" shall mean an alpha and/or numeric character code chosen by an account holder as a means by which the authorized advance deposit wagering facility may verify a wager or account transaction as authorized by the account holder.

(20) "Source market fee" shall mean the part of a wager made on any race by a person whose principal residence address is in Washington that is returned to the class 1 racing association.

(21) "Source market fee area" means the state of Washington.

(22) "Withdrawal" shall mean a payment of money from an account by an authorized advance deposit wagering facility to the account holder.

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NEW SECTION
WAC 260-49-020   Requirements to conduct authorized advance deposit wagering.   (1) The advance deposit wagering rules set forth in this chapter shall apply to the establishment and operation of accounts by an authorized advance deposit wagering facility for applicants whose principal residence address is in the state of Washington.

(2) Advance deposit wagering for applicants whose principal residence address is in the state of Washington may only be conducted by an authorized advance deposit wagering facility licensed by the commission pursuant to WAC 260-49-030 or 260-49-040.

(3) A class 1 racing association must obtain commission approval of its contract with an authorized advance deposit wagering facility.

(4) An authorized advance deposit wagering facility must be licensed by the commission prior to accepting accounts for individuals whose primary residence is in Washington.

(5) The commission may suspend or revoke a license to operate an authorized advance deposit wagering facility, withdraw approval of a contract between a class 1 racing association and an advance deposit wagering facility and/or impose fines, if the authorized advance deposit wagering facility, its officers, directors, or employees violate chapter 67.16 RCW or Title 260 WAC.

(6) An authorized advance deposit wagering facility located within Washington shall not establish and/or operate advance deposit wagering accounts for people whose principal residence is outside of the state of Washington, including residents of foreign jurisdictions unless:

(a) Wagering on that same type of live racing is lawful in the jurisdiction which is the natural person's principal residence; and

(b) The authorized advance deposit wagering facility complies with the provisions of the Interstate Horseracing Act, 15 U.S.C. 3001 to 3007, and the laws of the applicant's jurisdiction.

(7) The authorized advance deposit wagering facility shall provide a bond or irrevocable letter of credit in an amount set by the commission for the purpose of ensuring that payments to the commission and to the Washington account holders are made. In the alternative, a facility may provide other means of assurance of such payment including, but not limited to, evidence of bond(s), irrevocable letter(s) of credit or other forms of financial guarantees posted and in good standing with regulatory authorities in other jurisdictions, which shall be subject to the approval of the commission. Any bond, or any other form of credit acceptable to the commission provided by the facility shall run to the Washington horse racing commission as obligee, and shall be for the benefit of the commission and any account holder who suffers a loss by reason of the facility's violation of chapter 67.16 RCW or these rules. The bond, or any other form of credit acceptable to the commission shall be conditioned on the obligor as licensee faithfully complying with chapter 67.16 RCW and these rules. The bond shall be continuous and may be canceled by the surety only upon the surety giving written notice to the executive secretary of its intent to cancel the bond. The notice of cancellation shall not be effective until thirty days after the notice is received by the executive secretary. In the event of cancellation of the bond, or any other form of credit acceptable to the commission the facility shall file a new bond, or any other form of credit acceptable to the commission by the effective date of the cancellation notice.

(8) Persons whose primary residence is within Washington shall not participate in advance deposit wagering unless such activity is conducted through an authorized advance deposit wagering facility.

(9) The content and frequency of reports from an authorized advance deposit wagering facility shall be at the discretion of the commission.

(10) No class 1 racing association shall enter into a written agreement under this section that is in violation of, or may be construed as waiving any provision of chapter 67.16 RCW, Title 260 WAC or any applicable federal, state or local law.

(11) Every class 1 racing association approved under this section shall file with the commission a monthly statement showing amounts contributed to and balances in the purse fund and the breeders awards fund. This statement shall be filed with the commission no later than ten days after the end of each month.

(12) In determining whether to approve an application under this section, the commission shall consider the following factors:

(a) The impacts on all entities conducting business as part of the Washington horse racing industry;

(b) Whether the commission deems the state compliance and monitoring efforts of the state where the authorized advance deposit wagering facility is located are sufficient for compliance with applicable laws and for the protection of the public and to ensure the integrity of all operations and financial transactions under the agreement between the class 1 racing association and the authorized advance deposit wagering facility; and

(c) Any other factor the commission identifies on the record as relevant to its approval.

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NEW SECTION
WAC 260-49-030   Authorized advance deposit wagering facility license for a class 1 racing association.   (1) A class 1 racing association licensed under chapter 67.16 RCW and chapter 260-13 WAC may apply for a license from the commission to operate an advance deposit wagering facility in accordance with chapter 67.16 RCW and these rules.

(2) An application to operate an authorized advance deposit wagering facility must be filed on a form provided by the commission.

(3) As part of the application, the class 1 racing association shall submit a detailed plan of how its proposed advance deposit wagering facility would operate. At a minimum, the operating plan shall address the following issues:

(a) The manner in which the proposed simulcasting and advance deposit wagering facility will operate;

(b) Programs for responsible wagering;

(c) A plan for verification of an applicant's identity, age and residence when establishing an account;

(d) Establish a dispute resolution process for account holders who file a claim against the authorized advance deposit wagering facility;

(e) The requirements for accounts established and operated for persons whose principal residence is outside of the state of Washington;

(f) The process for an account holder to make withdrawals from the account holder's account;

(g) The process for handling wagers when wagering pools cannot be merged with the wagering pools of the race track where the race is being run live; and

(h) Any additional information required by the commission.

(4) The commission may require changes in a proposed plan of operations as a condition of granting a license.

(5) The commission may conduct investigations or inspections or request additional information from the class 1 racing association, as it deems appropriate in determining whether to license the class 1 racing association to operate an authorized advance deposit wagering facility.

(6) A license authorizes only the class 1 racing association to establish and manage an advance deposit wagering facility. The class 1 racing association shall not subcontract operation of the authorized advance deposit wagering facility to another person or entity.

(7) No subsequent changes in the advance deposit wagering facility's plan of operations may occur unless ordered by the commission or until written approval is obtained from the commission.

(8) The commission, or its staff, will be given access to review and audit all records and financial information of a class 1 racing association related to the conduct of advance deposit wagering, including resident and nonresident accounts. This information shall be made available to the commission or its staff by the class 1 racing association at its location at reasonable hours. The commission may require the class 1 racing association to annually submit to the commission audited financial statements of the advance deposit wagering facility.

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NEW SECTION
WAC 260-49-040   Authorized advance deposit wagering facility license for nonclass 1 racing associations.   (1) Prior to accepting applications from Washington residents for advance deposit wagering accounts, the operator of an advance deposit wagering facility must have:

(a) An agreement with a class 1 racing association, which has been approved by the commission; and

(b) A license from the commission to conduct authorized advance deposit wagering.

(2) If the advance deposit wagering facility is located within the state of Washington, the operator of the advance deposit wagering facility shall not establish any advance deposit wagering accounts nor conduct advance deposit wagering until licensed by the commission.

(3) The operator of an advance deposit wagering facility applying for a license to conduct advance deposit wagering must provide the following information as part of the application:

(a) The applicant's legal name;

(b) If the applicant is a corporation, the date and place of incorporation, and the names, addresses, and dates of birth of its shareholders, directors and officers; if a shareholder is a corporation, the date of incorporation, the place of incorporation, and the names, addresses, and dates of birth of its shareholders, directors and officers must be provided. If the applicant is a corporation ultimately owned by a not-for-profit entity without any shareholders, or is a publicly traded corporation, the information required in this subsection shall be required from the directors of the membership organization, or the directors and officers of the publicly traded corporation, in lieu of the shareholders;

(c) If the applicant is a general or limited partnership, the names and addresses, and dates of birth of the partners; if a partner is a corporation, the date of incorporation, the place of incorporation and the names, addresses and dates of birth of its directors and officers must be provided;

(d) The commission reserves the right to request fingerprints as part of the license application process;

(e) Information from the applicant that demonstrates whether the applicant has the financial resources to operate the advance deposit wagering facility;

(f) A copy of the written agreement between the class 1 association and the advance deposit wagering facility and an assurance that the commission will be notified of any other agreements between the association and the facility pertaining to this section, whether written or oral;

(g) Written approval to conduct advance deposit wagering from the appropriate regulatory authority in the state where the advance deposit wagering facility is located;

(h) A description of how the state where the facility is located regulates and monitors the account wagering facility for compliance with applicable law and protection of the public; and

(i) Any other information required by the commission.

(4) The written agreement between the class 1 racing association and the advance deposit wagering facility must contain substantially the following terms:

(a) A description of the fee structure and fees to be paid to the class 1 racing association under the agreement;

(b) A provision requiring the facility to agree it shall not accept any wager that violates Washington law or rule.

(5) Approval of an agreement under this section shall be in effect for a period of twelve months from the date of approval, unless rescinded by the commission.

(6) The commission's approval of a specific agreement under this section is not binding on the commission as to any other agreement.

(7) As part of the application for licensure as an operator of an advance deposit wagering facility, the applicant shall submit a detailed plan of operations in a format and containing such information as required by the commission. At a minimum, the operating plan shall address the following issues:

(a) The manner in which the proposed simulcasting and wagering system will operate and the regular hours of operation;

(b) The process for handling wagers when wagering pools cannot be merged with the wagering pools of the race track where the race is being run live;

(c) Programs for responsible wagering;

(d) A dispute resolution process for account holders who file a claim against the authorized advance deposit wagering facility;

(e) The process for an account holder to make withdrawals from the account holder's account;

(f) Washington operators of advance deposit wagering facilities must include the requirements for accounts established and operated for persons whose principal residence is outside of the state of Washington; and

(g) Any other issues as required by the commission.

(8) The commission may require changes to an advance deposit wagering facility's proposed plan of operations as a condition of granting a license. No subsequent material changes in the plan of operations may occur unless ordered by the commission or until written approval is obtained from the commission.

(9) The operator of an advance deposit wagering facility applying for a license shall provide to the commission the number of Washington accounts on file with its business as of 1:00 p.m. PST April 1, 2004, and the total wagering activity since that time until the date of the application for license in Washington. Any operator of an advance deposit wagering facility authorized by the commission to conduct advance deposit wagering shall pay the source market fee on all advance deposit wagers for all accounts since 1:00 p.m. PST April 1, 2004, that have Washington as the principal resident address.

(10) The commission may conduct investigations or inspections or request additional information from the applicant for a license under this section as it deems appropriate in determining whether to approve the license application.

(11) The operator of an advance deposit wagering facility accepting a license from the commission recognizes and accepts the jurisdiction of the state of Washington as provided in RCW 4.28.185. The commission, or its staff, will be given access to review and audit all records and financial information of the operator of an advance deposit wagering facility, including all Washington account information. If the operator of the advance deposit wagering facility is located in Washington, the commission, or its staff, shall have access to all accounts (resident and nonresident) maintained in Washington. This information shall be made available to the commission or its staff by the operator of the advance deposit wagering facility at the operator's location upon notice from the commission or commission staff at all reasonable times. The commission may require the operator annually submit to the commission audited financial statements of the advance deposit wagering facility.

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NEW SECTION
WAC 260-49-050   Establishing an account.   (1) An established account is necessary to place advance deposit wagers. An account may only be established at an authorized advance deposit wagering facility.

(a) To establish an account, an application form must be signed or otherwise authorized in a manner acceptable to the commission and include:

(i) The applicant's full legal name;

(ii) Principal residence address;

(iii) Telephone number;

(iv) Proper identification or certification demonstrating that the applicant is at least twenty-one years of age; and

(v) Any additional information required by the commission.

(b) Each application submitted shall be verified with respect to name, principal residence address, and date of birth by either an independent service provider or another means which meets or exceeds the reliability, security, accuracy, privacy and timeliness provided by an independent service provider. If there is a discrepancy between the application submitted and the information provided by the verification described above or if no information on the applicant is available from such verification process, another individual reference service may be accessed or another technology meeting the requirements described above may be used to verify the information provided. If the applicant's information cannot be verified, the authorized advance deposit wagering facility shall not establish an account.

(2) Each account shall have a unique identifying account number. The identifying account number may be changed at any time by the operator of the advance deposit wagering facility provided the operator informs the account holder in writing prior to the change.

(3) The applicant shall supply a secure personal identification code when the account holder is placing an advance deposit wager. The account holder has the right to change this code at any time.

(4) The holder of the account shall receive at the time the account is approved:

(a) Unique account identification number;

(b) Copy of the advance deposit wagering rules and such other information and material that is pertinent to the operation of the account;

(c) Notice that the account holder must be at least twenty-one years of age, and that individuals under the age of twenty-one may not have access to the account;

(d) Such other information as the authorized advance deposit wagering facility or the commission may deem appropriate.

(5) Accounts shall only be accepted in the name of a natural person.

(6) The account is nontransferable between natural persons.

(7) The authorized advance deposit wagering facility may close or refuse to open an account for what it deems good and sufficient reason, and shall order an account closed if it is determined that information that was used to open an account was false, or that the account has been used in violation of these rules.

(8) Any disputes between an account holder and an authorized advance deposit wagering facility shall follow the dispute resolution procedures contained in the authorized advance deposit wagering facility's plan of operations as approved by the commission. If the authorized advance deposit wagering facility fails to resolve the dispute, the commission may take appropriate action including claims against the bond or other form of financial security.

(9) The authorized advance deposit wagering facility shall state in all advertising in the state of Washington that residents under the age of twenty-one are not permitted to open, own or have access to an advance deposit wagering account.

(10) If the authorized advance deposit wagering facility is located in Washington, no account shall be established for any natural person under the age of twenty-one.

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NEW SECTION
WAC 260-49-060   Operation of an account.   (1) The authorized advance deposit wagering facility may refuse deposits to an account for what it deems good and sufficient reason.

(2) The authorized advance deposit wagering facility may suspend any account or close any account at any time provided that when an account is closed, they shall, within seven calendar days, return to the account holder all moneys then on deposit by sending a check to the last known principal residence address.

(3) Credits to an account after the initial establishment of the account may be made as follows:

(a) Deposits to an account by an account holder may be made in the following forms:

(i) Cash, which may be deposited at financial or retail outlets designated by the authorized advance deposit wagering facility;

(ii) Check, money order or negotiable order of withdrawal given or sent to an authorized advance deposit wagering facility;

(iii) Charges made to an account holder's credit card or debit card upon the direct and personal instruction of the account holder, if the use of the card has been approved by the authorized advance deposit wagering facility;

(iv) Transfer by means of an electronic funds transfer from a monetary account controlled by an account holder to his/her account, said account holder to be liable for any charges imposed by the transmitting or receiving entity with such charges to be deducted from the account; or

(v) Funds so deposited will be made available for wagering use in accordance with financial institution funds availability schedules.

(b) Credit for winnings from wagers placed with funds in an account and credit for account wagers on entries that are scratched shall be posted to the account by the authorized advance deposit wagering facility.

(4) Debits to an account shall be made as follows:

(a) Upon receipt by the authorized advance deposit wagering facility of an advance deposit wager, the authorized advance deposit wagering facility shall debit the account in the amount of the wager;

(b) For fees for service or other transaction-related charges by the authorized advance deposit wagering facility;

(c) The authorized advance deposit wagering facility may close accounts in which there has been no activity for at least six months, returning funds remaining therein to the account holder at his/her last known principal residence address; or

(d) In the event an account holder is deceased, funds accrued in the account shall be released to the decedent's legal representative upon receipt of a copy of a valid death certificate, tax releases or waivers, probate court authorizations or other documents required by applicable laws.

(5) Account holders may communicate instructions concerning advance deposit wagers to the advance deposit wagering facility in person, by mail, telephone, or other electronic means.

(6) The authorized advance deposit wagering facility shall not accept wagers from an account holder in an amount in excess of the account balance.

(7) Moneys deposited with the authorized advance deposit wagering facility for the purpose of advance deposit wagering shall not bear any interest to the account holder.

(8) Notwithstanding any other rules, the authorized advance deposit wagering facility may at any time declare the advance deposit wagering closed for receiving wagers on any parimutuel pool, race, group of races, or closed for all wagering. Any time advance deposit wagering is closed other than coincident with the start of a race, a written report must be filed with the commission within forty-eight hours. Any time the authorized advance deposit wagering facility is closed during its normal hours of operation a written report must be filed with the commission within forty-eight hours.

(9) The authorized advance deposit wagering facility has the right at any time and for what it deems good and sufficient reason to refuse to accept all or part of any wager.

(10) Accounts are for the personal use of the account holder. The account holder is responsible for maintaining the secrecy of the account number and his/her personal identification code.

(11) Payment on winning parimutuel wagers and credits for advance deposit wagers on entries which are scratched shall be posted to the credit of the account holder as soon as practicable after the race is declared official.

(12) The authorized advance deposit wagering facility shall provide written or electronic statements of an individual's account activity at any time upon the request of the account holder.

(13) No employee or agent of the authorized advance deposit wagering facility shall divulge any confidential information related to the placing of any wager or any confidential information related to the operation of the authorized advance deposit wagering facility, except to the account holder as required by these rules, the commission, and as otherwise required by state or federal law, or Title 260 WAC.

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NEW SECTION
WAC 260-49-070   Distribution of source market fee.   (1) A source market fee shall be paid monthly for the source market fee area on all accounts that have Washington as the principal residence address.

(2) The authorized advance deposit wagering facility shall, at least monthly, distribute ninety percent of the source market fee directly to the class 1 racing association and the remaining ten percent directly to the commission. The class 1 racing association shall distribute two and one-half percent of the total source market fee to the breeders' award fund. The commission shall distribute two and one-half percent of the total source market fee to the Washington bred owners' bonus and one-half of one percent of the total source market fee to the class C purse fund.

(3) The commission shall annually review the distribution of the source market fee. Any changes to the distribution shall be adopted by rule. The class 1 racing association and the recognized horsemen's organization shall negotiate a separate agreement for contributions to the purse account from the source market fee and submit the agreement for review and approval by the commission.

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NEW SECTION
WAC 260-49-080   Reserved.   (For future use - multiclass 1 racing association source market fee distribution.)

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NEW SECTION
WAC 260-49-090   Licensing fees to operate advance deposit wagering.   (1) Application fees.

(a) A nonrefundable application fee of five thousand dollars must be submitted with all license applications to conduct authorized advance deposit wagering.

(b) The applicant will be billed and shall be responsible for any costs involved in the background checks, investigation, and review of the application in excess of five thousand dollars.

(2) An annual license fee of one thousand dollars shall be payable to the commission on issuance of the original license. Thereafter, the annual renewal license fee shall be one thousand dollars due on or before January 1 of each year. The licensee will be billed and shall be responsible for any costs in excess of one thousand dollars associated with the review and investigation of the annual renewal application.

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NEW SECTION
WAC 260-49-100   Enforcement and penalties.   (1) Any enforcement of this chapter shall be referred to the commission, who shall have sole authority for its enforcement. The commission shall have authority to ensure compliance with these rules, conduct hearings on violations, and determine penalties for violations.

(2) The commission may suspend or revoke a license to operate an advance deposit wagering facility, withdraw approval of a contract between a class 1 racing association and an advance deposit wagering facility and/or impose fines, if the licensee:

(a) Violates any of the requirements of chapter 67.16 RCW or these rules;

(b) Fails to provide a bond or letter of credit or evidence thereof in another jurisdiction to the satisfaction of the commission;

(c) Fails to make payments in a timely manner as required by these rules;

(d) Fails to comply with any conditions on the license imposed by the commission;

(e) Has demonstrated willful disregard for complying with ordinances, statutes, administrative rules, or court orders, whether at the local, state, or federal level. This includes, but is not limited to, failure to make required payments to other state regulatory agencies;

(f) Poses a threat to the effective regulation of wagering or creates or increases the likelihood of unfair or illegal practices, methods, and activities in the conduct of wagering activities, as demonstrated through the person's prior activities, criminal record, reputation, habits, or associations;

(g) Fails to provide at the office of the commission any information required under the commission's rules within the time required therefor by applicable rule, or if no maximum time has been established respecting the particular kind of information by other rule, then within thirty days after receiving a written request therefor from the commission or its staff;

(h) Commits, or has committed, any other act that the commission determines constitutes a sufficient reason in the public interest for denying, suspending, or revoking licenses or approval of agreements.

(3) The commission shall afford a licensee the opportunity for an adjudicative proceeding prior to suspending or revoking a license or imposing fines, and shall provide a class 1 racing association and/or an authorized advance deposit wagering facility a hearing on refusal of approval or withdrawal of approval of the agreement between the association and the facility.

(4) The commission shall have authority to ensure compliance with these regulations, including, but not limited to, injunctive relief and the imposition of fines, suspensions and revocation of license and repayment of outstanding source market fees.

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