Original Notice.

     Preproposal statement of inquiry was filed as WSR 10-09-059.

     Title of Rule and Other Identifying Information: WAC 230-03-020 Punch board and pull-tab service business permit and 230-03-210 Applying for a gambling service supplier license.

     Hearing Location(s): State Investment Board, 2100 Evergreen Park Drive S.W., Olympia, WA 98504, on September 9 or 10, 2010, at 9:00 a.m.

     Date of Intended Adoption: September 9 or 10, 2010.

     Submit Written Comments to: Susan Arland, P.O. Box 42400, Olympia, WA 98504-2400, e-mail SusanA@wsgc.wa.gov, fax (360) 486-3625, by September 1, 2010.

     Assistance for Persons with Disabilities: Contact Gail Grate, executive assistant, by September 1, 2010, TTY (360) 486-3637 or (360) 486-3453.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The petitioner requests the combined gross billings threshold for a punchboard/pull-tab (PB/PT) service business be increased from $25,000 to $30,000 a year. Currently, if their combined gross billings are more than $25,000 a year, they must have a gambling service supplier license. PB/PT service businesses enter into agreements with licensed PB/PT operators to count, weigh, and/or store punch board and pull-tab games that have been pulled from play. PB/PT service businesses operate under either a PB/PT service business permit or a gambling service supplier license. If the business has yearly combined gross billings of:

     $25,000 or less, they may operate under a permit. The initial permit fee is $236, with an annual renewal fee of $56. These businesses are typically a sole proprietorship or partnership.

     More than $25,000, they must operate under a gambling service supplier license. The fee for a service supplier license is $687 each year. The level of background scrutiny and investigation to source funds is greater than a permit investigation.

     In July 2006, the commission increased the combined gross billings threshold from $20,000 to $25,000 at the request of a PB/PT service permit holder.

     Reasons Supporting Proposal: The petitioner verbally stated to staff that his combined gross billings are approximately $20,000 a year. He is requesting the increase because he plans to increase his billing rate and needs a "cushion" to ensure he doesn't go over the combined gross billings threshold for a PB/PT service permit.

     Statutory Authority for Adoption: RCW 9.46.070.

     Statute Being Implemented: Not applicable.

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

     Name of Proponent: Casey's Dead Game Service, private.

     Name of Agency Personnel Responsible for Drafting: Susan Arland, Rules Coordinator, Lacey, (360) 486-3466; Implementation: Rick Day, Director, Lacey, (360) 486-3446; and Enforcement: Mark Harris, Assistant Director, Lacey, (360) 486-3579.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. A small business economic impact statement was not prepared because the proposed rule change does not impose more than minor costs, as defined in chapter 19.85 RCW, to licensees.

     A cost-benefit analysis is not required under RCW 34.05.328. The Washington state gambling commission is not an agency that is statutorily required to prepare a cost-benefit analysis under RCW 34.05.328.

July 13, 2010

Susan Arland

Rules Coordinator

OTS-3243.1

AMENDATORY SECTION(Amending Order 457, filed 3/22/06, effective 1/1/08)

WAC 230-03-020   Punch board and pull-tab service business permit.   (1) You must apply for a punch board and pull-tab service business permit if you:

     (a) Reconcile sales, prizes, and cash on hand for punch board and pull-tab series; or

     (b) Complete records we require; or

     (c) Store punch boards and pull-tab series removed from play.

     (2) The owners or employees of the punch boards and pull-tab service business must not be employees of the operator.

     (3) The owners or employees of the punch boards and pull-tab service business must not provide management advice to the operator.

     (4) The punch board and pull-tab service business must apply for a gambling service supplier license if combined gross billings exceed ((twenty-five)) thirty thousand dollars during the permit period.

[Statutory Authority: RCW 9.46.070. 06-07-157 (Order 457), § 230-03-020, filed 3/22/06, effective 1/1/08.]

OTS-3244.2

AMENDATORY SECTION(Amending Order 617, filed 10/22/07, effective 1/1/08)

WAC 230-03-210   Applying for a gambling service supplier license.   (1) You must apply for a gambling service supplier license if you perform any of the following gambling-related services for compensation:

     (a) Consulting or advisory services regarding gambling activities; or

     (b) Gambling management services; or

     (c) Financing for more than one licensee for purchases or leases of gambling equipment or financing for providing infrastructure or facilities, or equipment that supports gambling operations:

     (i) Once you have financed more than one licensee, you must be a licensed gambling service supplier until all loans with licensees or previous licensees are paid.

     (ii) Once you have been a licensed gambling service supplier, you must be licensed as a gambling service supplier again before financing purchases or leases for any licensee; or

     (d) Acting as a lending agent, or loan servicer, or placement agent; or

     (e) Providing the assembly of components for gambling equipment under a contract with a licensed manufacturer or entering into an ongoing financial arrangement for gambling related software with a licensed manufacturer; or

     (f) Installing, integrating, maintaining, or servicing digital surveillance systems that allow direct access to the operating system; or

     (g) Training individuals to conduct authorized gambling activities; or

     (h) Providing any other service or activity where influence may be exerted over any gambling activity licensed by the commission; or

     (i) Performing the testing and certification of tribal lottery systems in meeting requirements specified in the tribal-state compact; or

     (j) Providing nonmanagement-related recordkeeping or storage services for punch board and pull-tab operators, when the combined total gross billings from such services exceed thirty thousand dollars during any permit period or license year.

     (2) You do not need a gambling service supplier license if you are:

     (a) A bank, mutual savings bank, or credit union regulated by the department of financial institutions or any federally regulated commercial lending institution; or

     (b) A university or college regulated by the Washington state board of community and technical colleges and the higher education coordinating board that trains individuals to conduct authorized gambling activities; or

     (c) An attorney, accountant, or governmental affairs consultant whose primary business is providing professional services that are unrelated to the management or operation of gambling activities; or

     (d) A person who only provides nonmanagement-related recordkeeping or storage services for punch board and pull-tab operators, when the combined total gross billings from such services do not exceed ((twenty-five)) thirty thousand dollars during any ((calendar year)) permit period; or

     (e) A person who provides names, images, artwork or associated copyrights, or trademarks, or patent use, or other features that do not affect the results or outcome of the game, for use in gambling equipment; or

     (f) Regulated lending institutions.

[Statutory Authority: RCW 9.46.070. 07-21-116 (Order 617), § 230-03-210, filed 10/22/07, effective 1/1/08; 06-24-030 (Order 605), § 230-03-210, filed 11/29/06, effective 1/1/08; 06-07-157 (Order 457), § 230-03-210, filed 3/22/06, effective 1/1/08.]

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