WSR 16-04-053 PROPOSED RULES GAMBLING COMMISSION [Filed January 28, 2016, 9:52 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 15-22-054.
Title of Rule and Other Identifying Information: Amending WAC 230-13-005 Amusement games authorized (two options), 230-13-130 Display and exchange of amusement game prizes, 230-03-185 Applying for a manufacturer license, 230-03-190 Applying for a distributor license, 230-05-030 Fees for other businesses, 230-06-110 Buying, selling, or transferring gambling equipment, 230-13-010 Approval of new amusement games, 230-13-080 Operating coin or token activated amusement games, 230-13-135 Maximum wagers and prize limitations and 230-13-160 Basing rent on a percentage of gross receipts; and repealing WAC 230-13-140 Price to play amusement games must be paid in cash or check.
Hearing Location(s): Great Wolf Lodge, 20500 Old Highway 99 S.W., Grand Mound, WA 98531, (360) 273-7718, on March 10 or 11, 2016, at 9:30 a.m. or 1:00 p.m.
NOTE: Meeting dates and times are tentative. Visit our web site at www.wsgc.wa.gov and select public meeting about ten days before the meeting to confirm meeting date/location/start time.
Date of Intended Adoption: March 10 or 11, 2016.
Submit Written Comments to: Susan Newer, P.O. Box 42400, Olympia, WA 98504-2400, e-mail Susan.Newer@wsgc.wa.gov, fax (360) 486-3625, by March 1, 2016.
Assistance for Persons with Disabilities: Contact Michelle Rancour by March 1, 2016, TTY (360) 486-3637 or (360) 486-3453.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: In July 2015, the commissioners authorized group 12 amusement games to be played by persons twenty-one and over. With implementation of this new activity, staff has identified additional rule changes necessary to ensure effective regulation. For discussion purposes, these changes are grouped into three rule packages, which are listed below:
Rules Package #1: These changes are proposed by staff in conjunction with operators and stakeholders.
The proposed rule changes would require:
Rules Package #2: These changes were suggested by licensees and stakeholders during the comment period.
The proposed rule changes would limit the number of Group 12 amusement games to a maximum of:
Rules Package #3: This package has policy decisions separated into two Options A and B.
These rule changes include defining merchandise prizes, addressing the issuance of gift cards and gift certificates, awarding cash, replays of tokens or tickets awarded, and the participation in other gambling activities as a merchandise prize. This rules package also:
Many of the questions, comments, and concerns from the public, licensees, and stakeholders have come about because there is not a definition of merchandise prizes in gambling rules or statutes. To provide clarity and consistency, the following areas related to merchandise prizes should be addressed:
(1) Awarding gift certificates and gift cards as prizes;
(2) Allowing pull-tabs and the ability to pay for entry into bingo games to be considered merchandise prizes;
(3) Replaying tickets or tokens won; and
(4) Food or beverage at the licensed location to be considered merchandise prizes.
As a starting point for discussion, staff put together two rule package options for the commissioners' consideration. After additional discussion and input from the public, the commissioners may decide upon a different option, incorporating parts of Option A and Option B, for example.
Option A:
Option B:
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Washington state gambling commission, governmental.
Name of Agency Personnel Responsible for Drafting: Tina Griffin, Assistant Director, Lacey, (360) 486-3546; Implementation: David Trujillo, Director, Lacey, (360) 486-3512; and Enforcement: Josh Stueckle, Acting Assistant Director, Lacey, (509) 325-7909.
A small business economic impact statement has been prepared under chapter 19.85 RCW.
Small Business Economic Impact Statement
Involvement of Small Businesses: We filed the CR-101 on October 29, 2015, under WSR 15-22-054.
On November 9, 2015, we sent an e-mail to the Class B and above amusement game licensees that we had e-mail addresses for informing them that we had drafted rules for discussion on group 12 amusement games. The letter referred licensees to our web site, which the general public can access, to view the draft rules. The rules were posted on our web site in a special section for group 12 amusement game updates.
On November 12, 2015, the draft rules were discussed at study session, which was open to the general public. Those in attendance were asked to submit any comments or rule change language to commission staff by November 30, 2015.
On December 24, 2015, we sent notice to all commercial and amusement game licensees of the updated rule proposals based [on] the feedback we received during the comment period. We also posted the draft rules on our web site.
The rules will be discussed at study session on the following dates: January 14, February 11, and March 10, 2016. The rules will also be discussed and public comment taken at the commission meetings held on January 14/15, February 11/12, and March 10/11, 2016.
This process provided small businesses opportunities in the development of the new rule.
1. Description of the Reporting, Recordkeeping and Other Compliance Requirements of the Proposed Rule: In July 2015, the commissioners authorized group 12 amusement games to be played by persons twenty-one and over. With implementation of this new activity, a number of issues have arisen that require additional rules surrounding group 12 amusement games.
This rules package would require:
It would also allow:
The proposed changes would not allow:
Manufacturers of group 12 amusement games approved prior to May 1, 2016, are not required to be licensed unless and until they make a change to their software or games approved prior to May 1, 2016, which would require approval prior to implementation. At that point, the manufacturer would be required to be licensed prior to the change in the game(s) being reviewed or approved.
Distributors of group 12 amusement games must be licensed prior to May 1, 2016. Prior to this, distributors of amusement games were not required to be licensed if they facilitated the sale between manufacturers and licensed owners.
Manufacturers and distributors of group 12 amusement games will have to comply with all the rules in Title 230 WAC, which includes recordkeeping and reporting requirements.
Currently, only amusement games that are placed in premises that rent the games are required to have an annual identification stamp. Licensees who own and operate amusement games in their own premises do not require annual stamps. Under the rule proposal, all group 12 amusement games would require annual identification stamps. This will require group 12 amusement game owners to begin purchasing identification stamps annually for these games that they own and operate in their own facilities. The group 12 amusement game identification stamp will cost more than other identification stamps.
Right now operators can introduce new amusement games that meet the standards without approval as long as they provide commission staff a description of the game, rules of play, and the group number of the game with an explanation of why that group was chosen at least sixty days before introducing the game.
As proposed, this process would remain the same for Group 1 through 11 amusement games. Group 12 amusement games would require an application and $2,000 deposit to be submitted with the equipment to begin the review process for approval. The game would be tested for compliance of rules and laws during a sixty day review process. Group 12 amusement games must allow for a means of identifying and validating approved software by a third-party application or device. The applicant is responsible for reimbursing the commission for the actual cost of the review.
2. Kinds of Professional Services That a Small Business is Likely to Need in Order to Comply: All businesses, as an ordinary course of doing business, maintain a check register, sales invoices, cash receipts register, etc. Manufacturers and distributors of group 12 amusement games will be required to maintain these same accounting records.
Group 12 amusement game manufacturers, distributors, owners or operators will need to purchase annually and record I.D. stamps purchased and affixed to these games. They will also need to submit two reports to us a year containing the quarterly gross receipts from the sale, lease or operation of the group 12 amusement games.
Given that each business owner has a different skill level and the volume of business will vary, a bookkeeper may be needed to maintain the accounting records and complete the activity report for the business.
3. The Actual Costs to Small Businesses of Compliance, Including Costs of Equipment, Supplies, Labor and Increased Administrative Costs: The cost for a group 12 amusement game manufacturer's license will depend on the amount of group 12 amusement game sales and lease proceeds the manufacturer anticipates having each year in Washington, the cost of the prelicensing investigation and equipment review costs.
A manufacturer application and annual license fee ranges from $1,398 for annual gross sales up to $250,000 to $4,498 for annual gross sales over $2.5 million. The application fee is meant to cover the cost of enforcement for one year so the applicant must also pay the actual cost of the prelicensing investigation, which will include an on-site visit to verify the ownership, and financial source of funds, and manufacturing process. The actual costs vary by applicant and depend upon the complexity of ownership and financing as well as the location of the business. For example, the average costs for a medium-sized company located in the midwest can range from $30,000 to $60,000 for the prelicensing investigation.
To have a group 12 amusement game reviewed for approval under the proposed rules, manufacturers would submit an application and a $2,000 deposit. The actual costs of the review must be paid by the manufacturer, which would be offset by the initial deposit. Costs for the review can vary but could average between $3,000 to $5,000.
The cost for group 12 amusement game distributor application and license will vary depending upon their annual sales and leases in Washington. The application and annual license fees range from $1,398 for annual gross sales up to $250,000 to $4,498 for annual gross sales over $2.5 million.
Owners of group 12 amusement games will be required to purchase annual identification stamps, including owners who operate these games in their own facilities. The annual cost of a stamp is proposed to be $250. Currently, owners of amusement games placed in locations they don't own pay $29.68 for annual identification stamps. Under the proposed rules, group 12 amusement game owners would be required to place a $250 annual identification stamp on each game they leased or owned.
Charitable and nonprofit licensees operating group 12 amusement games would pay more for renting these games to manufacturers, distributors or Class B or above amusement game owners under the rule change. Currently, charitable and nonprofit licensees can rent amusement games at an amount not to exceed twenty-two percent of the gross gambling from the amusement games. Under the proposed rules, owners could rent group 12 amusement games to charitable and nonprofit licensees for a percentage of revenue the games generate if the method of distribution is specific. The additional cost to charitable and nonprofit licensees who rent group 12 amusement games is undeterminable. It will vary by charitable and nonprofit organization and game owner.
We cannot determine the actual costs to small businesses of complying with the additional operational compliance, reporting, and recordkeeping requirements as proposed by this rules package because there are too many variables based on the competency or experience of the staffing of the manufacturer, distributor, owner or operator.
Future manufacturers, distributors, owners, or operators of group 12 amusement games may already have knowledgeable staff, such as a bookkeeper, to comply with recordkeeping and accounting functions and with the group 12 amusement game approval process.
If future manufacturers, distributors, owners, or operators of group 12 amusement games do not have knowledgeable staff, then they would likely need to hire a bookkeeper to assist them with the recordkeeping and accounting functions. We cannot determine the actual costs to small businesses for hiring a bookkeeper to assist with the recordkeeping and accounting functions because there are too many variables that would play into determining the costs, such as experience level needed, size of the company, sales volume, and location of business.
4. Whether Compliance with the Rule, Based on Feedback Received from Licensees, Will Cause Businesses to Lose Sales or Revenue: Licensees and stakeholders have said that the group 12 amusement games will not be profitable for them to manufacturer [manufacture], distribute and operate if they cannot:
RCW 9.46.0201 states that an amusement game means a game played for entertainment in which only merchandise prizes are awarded. Merchandise is not defined in rule or law currently.
WAC 230-13-005 currently allows coin and token activated amusement games to dispense merchandise prizes, or coupons, tickets or tokens redeemable for merchandise prizes. The rule does not allow additional plays as prizes.
The commissioners approved the group 12 amusement games in July 2015. The rule became effective on August 10, 2015. The first group 12 amusement game wasn't approved until September 23, 2015. As of December 10, 2015, approximately sixty group 12 amusement games have been put into play in Washington. From July 31, 2015, to November 30, 2015, we have had an increase of 7.4 percent or forty eight new amusement game licensees.
We have four new group 12 amusement games in process for approval. We understand from licensees and stakeholders that a number of contracts for group 12 amusement games have been signed for amusement games once they are approved between manufacturers and distributors/owners to buy or lease games and between distributors/owners and operators for lease.
5. A Determination of Whether the Proposed Rule Will Have a Disproportionate Impact on Small Businesses: We do not currently license group 12 amusement game manufacturers or distributors, and there are approximately seven hundred eighty-five businesses (licensed group 1 through 12 amusement game premises and owners) currently affected by this rule change since this new category of amusement games were approved by the commission in July 2015. In addition, group 12 amusement games can only be placed where persons over the age of twenty-one can play, further limiting the number of impacted businesses. We do not know how many of the seven hundred eighty-five current licensed premises and amusement game owners will be able to have group 12 amusement games due to the age limit restriction. Thus, a disproportionate cost to small businesses cannot be found since there is insufficient information to make this determination, such as the number of employees of potential manufacturers or distributors, cost of labor, cost of sales, etc.
We also cannot determine the impact of licensure, the proposed group 12 amusement game approval process, identification stamp cost increases, additional recordkeeping and reporting requirements will have on manufacturers and distributors considering these amusement games were only approved in July 2015.
We do not know who will be paying for the annual identification stamps for the group 12 amusement games, specifically if it would be the manufacturers, distributors, owners or operators. Therefore, we cannot determine what, if any, impact this new fee will have on small businesses.
Group 12 amusement games are only allowed to be played by persons over twenty-one years of age. These games must be placed in areas only accessible to this age group. We cannot determine the cost to the owners or operators of group 12 amusement games that these rule changes will have on them because we don't know which small businesses desire to have group 12 amusement games or have the requisite areas in their facilities to accommodate these games.
These rule changes have the greatest impact on the manufacturers, distributors, owners and operators of group 12 amusement games. These games were approved by the commission in July 2015 with an effective date of August 2015. The first game was not approved until late September 2015. We have not collected any financial information from licensees to know the financial impact of this new activity. We do have financial information regarding the group 1 through 11 amusement games. In fiscal year 2014 (July 1, 2013, to June 30, 2014), we had twenty-eight charitable and nonprofit licensees that reported net win, gross receipts less prizes paid, of $115,191 from amusement games operated in Washington. We also had sixty-eight commercial licensees reporting net win $20,194,874 from amusement games operated in Washington.
6. Steps Taken by the Agency to Reduce the Costs of the Rule on Small Businesses or Reasonable Justification for Not Doing So. Agencies "must consider, without limitation, each of the following methods of reducing the impact of the proposed rule on small businesses:"
a. Reducing, modifying, or eliminating substantive regulatory requirements;
We have not proposed additional recordkeeping or reporting requirements for operators. Manufacturers and distributors of group 12 amusement games will be required to be licensed in order for the gambling commission to be able to regulate this new amusement game.
b. Simplifying, reducing, or eliminating recordkeeping and reporting requirements;
We have not proposed additional recordkeeping or reporting requirements for operators. Manufacturers and distributors of group 12 amusement games will be required to be licensed and this is necessary in order for the gambling commission to be able to regulate this new amusement game.
c. Reducing the frequency of inspections;
Unless we receive a complaint, we do not perform routine inspections on amusement games.
d. Delaying compliance timetables;
Reporting violations are given additional compliance time through the Paperwork Reduction Act.
e. Reducing or modifying fine schedules for noncompliance; or
For reporting requirements, first-time reporting violations are afforded seven days to come into compliance prior to being assessed civil or administrative penalties.
f. Any other mitigation techniques including those suggested by small businesses or small business advocates;
When we gave notice of the proposed rule changes in November 2015, we told licensees to submit their comments and suggested rule changes to us. We incorporated licensee suggested rule changes without requiring them to go through the petition process for changes that were not suggested by staff.
7. A Description of How the Gambling Commission Will Involve Small Businesses in the Development of the Rule: On November 9, 2015, we sent an e-mail to the Class B and above amusement game licensees that we had e-mail addresses for informing them that we had drafted rules for discussion on group 12 amusement games. The letter referred licensees to our web site, which the general public can access, to view the draft rules. The rules were posted on our web site in a special section for group 12 amusement game updates.
On November 12, 2015, the draft rules were discussed at study session, which was open to the general public. Those in attendance were asked to submit any comments or rule change language to commission staff by November 30, 2015.
On December 24, 2015, we sent notice to all commercial and amusement game licensees of the updated rule proposals based [on] the feedback we received during the comment period. We also posted the draft rules on our web site.
The rules will be discussed at study session on the following dates: January 14, February 11, and March 10, 2016. The rules will also be discussed and public comment taken at the commission meetings held on January 14/15, February 11/12, and March 10/11, 2016.
8. A List of Industries That Will Be Required to Comply with the Rule: 7132.
9. An Estimate of the Number of Jobs That Will Be Created or Lost as the Result of Compliance with the Proposed Rule: We cannot determine the impact of jobs gained or loss [lost] as a result of compliance with the proposed rule because:
A copy of the statement may be obtained by contacting Susan Newer, P.O. Box 42400, Olympia, WA 98503, phone (360) 486-3466, fax (360) 486-3625, e-mail Susan.Newer@wsgc.wa.gov.
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.
January 28, 2016
Susan Newer
Rules Coordinator
AMENDATORY SECTION (Amending WSR 09-11-085, filed 5/18/09, effective 7/1/09)
WAC 230-03-185 Applying for a manufacturer license.
(1) You must apply for a manufacturer license if you:
(a) Make or assemble a completed piece or pieces of gambling equipment for use in authorized gambling activities; or
(b) Convert, modify, combine, add to, or remove parts or components of any gambling equipment for use in authorized gambling activities; or
(c) Manufacture group 12 amusement games approved or modified after May 1, 2016.
(2) You must demonstrate your ability to comply with all manufacturing, quality control, and operations restrictions imposed on authorized gambling equipment that you want to manufacture or market for use in Washington state.
(3) The licensing process may include an on-site review of your manufacturing equipment and process for each separate type of authorized gambling equipment to ensure compliance capability.
AMENDATORY SECTION (Amending WSR 06-07-157, filed 3/22/06, effective 1/1/08)
WAC 230-03-190 Applying for a distributor license.
You must apply for a distributor license if you:
(1) Buy or otherwise obtain a finished piece of gambling equipment for use in authorized gambling activities or a group 12 amusement game from another person and sell or provide that gambling equipment to a third person for resale, display, or use; or
(2) Are a manufacturer who sells or provides gambling equipment you do not make to any other person for resale, display, or use; or
(3) Service and repair authorized gambling equipment. However, distributors must not add, modify, or alter the gambling equipment; or
(4) Modify gambling equipment using materials provided by manufacturers to upgrade equipment to current technology.
AMENDATORY SECTION (Amending WSR 14-19-123, filed 9/17/14, effective 11/1/14)
WAC 230-05-030 Fees for other businesses.
All other business license applicants must pay the following fees to us when applying for gambling licenses, miscellaneous changes, or inspection services:
1. Commercial amusement games
2. Distributor
3. Fund-raising event equipment distributor
4. Gambling service supplier
5. Linked bingo prize provider
6. Call centers for enhanced raffles
7. Manufacturer
8. Permits
9. Changes
10. Other fees
11. Identification stamps
12. Two-part payment plan participation
AMENDATORY SECTION (Amending WSR 08-11-044, filed 5/14/08, effective 7/1/08)
WAC 230-06-110 Buying, selling, or transferring gambling equipment.
(1) All licensees and persons authorized to possess gambling equipment must closely control the gambling equipment in their possession.
(2) Before selling gambling equipment, licensees must ensure that the buyer possesses a valid gambling license or can legally possess the equipment without a license.
(3) Before purchasing gambling equipment, licensees must ensure that the seller possesses a valid gambling license.
(4) Applicants for Class F or house-banked card room licenses may purchase and possess gambling equipment during the prelicensing process, but only after receiving written approval from us.
(5) Charitable and nonprofit organizations conducting unlicensed bingo games, as allowed by RCW 9.46.0321, may possess bingo equipment without a license.
(6) Group 12 amusement games can only be sold or leased by a licensed manufacturer or distributor to a licensee.
(7) Licensees may transfer gambling equipment as a part of a sale of a business as long as a condition of the sale is that the buyer receives a gambling license before the sale is complete. Licensees must make a complete record of all gambling equipment transferred in this manner, including I.D. stamps. Licensees must report these transfers, including a copy of the inventory record, to us.
AMENDATORY SECTION (Amending WSR 15-15-063, filed 7/10/15, effective 8/10/15)
WAC 230-13-005 Amusement games authorized.
(1) We authorize the approved groups of amusement games set forth in this chapter. Operators must only operate amusement games that meet the standards of at least one of the authorized groups.
(2) Commercial businesses or nonprofit or charitable organizations may apply for licenses for amusement games.
(3) Charitable or nonprofit organizations also may conduct group 1 through 11 amusement games without a license when authorized to do so under RCW 9.46.0321 and 9.46.0331.
(4) Operators must operate amusement games as either:
(a) An attended amusement game.
(i) An "attended amusement game" means an amusement game that requires the presence or assistance of a person (attendant) in the regular operation of the game; and
(ii) These games must award a merchandise prize to players if players achieve the objective with one cost of play; and
(iii) An attendant accepts cash, check, tickets or scrip to play the amusement game. The tickets and scrip are not redeemable for cash and must show the name of the operator or sponsor; or
(b) A coin or token activated amusement game.
(i) A "coin or token activated amusement game" means an amusement game that uses a mechanical, electronic, or electro-mechanical machine to allow the player to activate the game by inserting coins ((or)), cash, tokens, or tokens on an electronic token card; and
(ii) These games may dispense merchandise prizes, or coupons, tickets, ((or)) tokens, or token onto an electronic token card redeemable for merchandise prizes; and
(iii) Tokens or tokens on an electronic token card awarded on a group 12 amusement game can be used to continue play or be reinserted into a group 12 amusement game for additional plays.
(5) Amusement games must ((not award additional plays as)) only award merchandise prizes.
(a) Merchandise prizes mean:
(i) Noncash prizes including toys, novelties, retail items such as electronic goods, clothing, accessories, as well as food, beverages and other items sold by the operator as a normal part of their business in compliance with all other state laws and regulations; and
(ii) Operator gift cards up to fifty dollars in value per person per day; and
(iii) Retailer gift cards up to two hundred dollars (examples include retail stores, gas cards, restaurants, movie theaters, etc.); and
(iv) Participation in a gambling activity operated by the licensee, such as pull-tabs and bingo.
(b) Electronic token card means a card issued by the operator that stores the cash available to play the amusement game separate from the coupons, tickets, or tokens awarded from the play of the amusement game.
AMENDATORY SECTION (Amending WSR 15-15-063, filed 7/10/15, effective 8/10/15)
WAC 230-13-005 Amusement games authorized.
(1) We authorize the approved groups of amusement games set forth in this chapter. Operators must only operate amusement games that meet the standards of at least one of the authorized groups.
(2) Commercial businesses or nonprofit or charitable organizations may apply for licenses for amusement games.
(3) Charitable or nonprofit organizations also may conduct group 1 through 11 amusement games without a license when authorized to do so under RCW 9.46.0321 and 9.46.0331.
(4) Operators must operate amusement games as either:
(a) An attended amusement game.
(i) An "attended amusement game" means an amusement game that requires the presence or assistance of a person (attendant) in the regular operation of the game; and
(ii) These games must award a merchandise prize to players if players achieve the objective with one cost of play; and
(iii) An attendant accepts cash, check, tickets or scrip to play the amusement game. The tickets and scrip are not redeemable for cash and must show the name of the operator or sponsor; or
(b) A coin or token activated amusement game.
(i) A "coin or token activated amusement game" means an amusement game that uses a mechanical, electronic, or electro-mechanical machine to allow the player to activate the game by inserting coins ((or)), cash, tokens, or tokens on an electronic token card; and
(ii) These games may dispense merchandise prizes, or coupons, tickets, ((or)) tokens, or tokens onto an electronic token card redeemable for merchandise prizes.
(5) Amusement games must not:
(a) Award additional plays as prizes; or
(b) Allow coupons, tickets, tokens or tokens on electronic token cards that are awarded to be replayed; or
(c) Result in any cash payment being awarded.
(6) Amusement games must only award merchandise prizes. Merchandise prizes means noncash prizes including toys, novelties, retail items such as electronic goods, clothing, accessories, as well as food, beverages and other items sold by the operator as a normal part of their business in compliance with all other state laws and regulations. Other items sold by the operator must not include pull-tabs and other gambling activities. Gift certificates or gift cards do not constitute merchandise.
(7) Electronic token card means a card issued by the operator that stores the cash available to play the amusement game separate from the coupons, tickets, or tokens awarded or dispensed as prizes from the play of the amusement game. Coupons, tickets, or tokens awarded as prizes cannot be used to play amusement games and must only be redeemed for merchandise prizes.
AMENDATORY SECTION (Amending WSR 07-15-064, filed 7/16/07, effective 1/1/08)
WAC 230-13-010 Approval of new amusement games.
(1) Operators may introduce new games that meet the standards of an authorized group 1 through 11 amusement game without approval of the director as long as they provide the director or his or her designee with a description of the game, the rules of play, and the group number of the game with an explanation of why that group was chosen at least sixty days before introducing the game.
(((2))) The game cannot be introduced during this sixty day period unless approved sooner by us. The sixty day period stops when we request additional information.
(2) The following procedures apply to all group 12 amusement games:
(a) An application and deposit must be submitted requesting approval of new group 12 amusement games and the applicant will provide all requested information;
(b) All amusement game equipment, programs, and games must be submitted for our review to verify compliance with chapter 9.46 RCW and Title 230 WAC.
(i) The equipment, programs, and/or games submitted must be fully functional/operational and capable of being tested once our review begins.
(ii) If the equipment is not fully functional/operational and ready for testing and review, we may require additional equipment or information before we start our review process.
(c) Amusement game equipment, programs, and games submitted for review must be identical to what will be marketed, distributed, and deployed in Washington;
(d) Group 12 amusement games must allow for a means of identifying and validating approved software that will demonstrate the authenticity of any software or game by a third-party program or device;
(e) We will have sixty days to finish our review once your application is complete;
(f) We will notify you if we require additional information or if your equipment, program, or game malfunctions or is otherwise inoperable.
(i) You will have fourteen days to provide any additional information or correct any equipment, program, or game malfunction and the sixty day review period stops when this occurs. The review period will restart when we receive the requested additional information or when the problem is corrected. You will be responsible for any additional cost needed to review the additional information provided or review of any equipment, program, or game malfunction;
(ii) Review of your application may be terminated if you do not respond within fourteen days. You will be required to reapply under this rule if your application is terminated.
(g) You can only begin selling, leasing, distributing, or operating these amusement games once all entities or individuals are licensed under chapter 230-03 WAC and the amusement game equipment, program, and/or game(s) are approved by the director or director's designee;
(h) All licensed amusement games must operate as approved by the director or director's designee; and
(i) We may keep equipment, software, and/or games submitted for review to allow for continued testing and training as long as the equipment remains in play in Washington. We are not liable for any damage to equipment while in our possession.
(3) If the director or director's designee notifies the operator that the proposed game does not meet the standards or otherwise violates the gambling laws or rules, the operator:
(a) May not introduce the game; ((and))
(b) If already introduced, must remove it from play until the operator brings it into compliance with the authorized group; and
(c) If you do not agree with the director or director's designee's decision, you may file a petition for declaratory order with the commission according to RCW 34.05.240 and chapter 230-17 WAC.
AMENDATORY SECTION (Amending WSR 09-15-067, filed 7/13/09, effective 8/13/09)
WAC 230-13-080 Operating coin or token activated amusement games.
(1) Coin or token activated amusement games must have nonresetting coin-in meters, certified as accurate to within plus or minus one coin or token in one thousand plays, which stop play of the machine if the meter is removed or disconnected when operating at:
(a) Amusement parks; or
(b) Regional shopping malls; or
(c) Movie theaters; or
(d) Bowling alleys; or
(e) Miniature golf course facilities; or
(f) Skating facilities; or
(g) Family sports complexes.
(i) A "family sports complex" is a facility, at a permanent location, to which people go to play sports. A family sports complex must offer multiple sports activities, such as indoor soccer, outdoor soccer, lacrosse, baseball, Frisbee, and lawn bowling and the gross receipts must be primarily from these sports activities.
(ii) A family sports complex does not include a facility owned or operated by a school or school district; or
(h) Amusement centers; or
(i) Restaurants; or
(j) Grocery or department stores. A "department or grocery store" means a business that offers the retail sale of a full line of clothing, accessories, and household goods, or a full line of dry grocery, canned goods, or nonfood items plus some perishable items, or a combination of these. A department or grocery store must have more than ten thousand square feet of retail and support space, not including the parking areas.
(2) All coin or token activated amusement games must have a coin acceptor capable of taking money for one play and may have an additional acceptor to include paper money.
(3) Operators using amusement games that do not return change must have a change-making bill acceptor or the ability to get change in the immediate vicinity of such games. All amusement games using paper money acceptors must either:
(a) Return change; or
(b) Clearly disclose to players before play that change is not returned and disclose to them where at the location they may get change.
(4) The maximum number of group 12 amusement games a licensee may have in their licensed premises is limited to:
(a) Twenty games for charitable and nonprofit licensees; and
(b) Ten games for commercial licensees.
AMENDATORY SECTION (Amending WSR 07-15-064, filed 7/16/07, effective 1/1/08)
WAC 230-13-130 Display and exchange of amusement game prizes.
(1) Amusement game operators must prominently display a sample of each type of prize available.
(2) Operators must only award prizes that are posted. However, after a player has won two or more prizes, operators may offer that player the opportunity to exchange those prizes for one or more other prizes, but only if that prize was on display during the play of the game.
(3) Operators must not allow winners to forfeit previously won prize(s) in exchange for another play.
(4) Operators may give winners tickets, coupons, tokens, or tokens stored on an electronic token card, which winners may combine with other tickets, coupons, tokens, or tokens on multiple electronic token cards won and redeem for a merchandise prize.
AMENDATORY SECTION (Amending WSR 11-04-004, filed 1/20/11, effective 2/20/11)
WAC 230-13-135 Maximum wagers and prize limitations ((at certain amusement game locations)).
(1) The maximum wager is three dollars and fifty cents and the maximum cost for a prize is five hundred dollars if school-aged minors are allowed to play amusement games at the following locations:
(((1))) (a) Regional shopping centers; and
(((2))) (b) Movie theaters; and
(((3))) (c) Bowling alleys; and
(((4))) (d) Miniature golf course facilities; and
(((5))) (e) Skating facilities; and
(((6))) (f) Family sports complexes.
(((a))) (i) A "family sports complex" is a facility, at a permanent location, to which people go to play sports. A family sports complex must offer multiple sports activities, such as indoor soccer, outdoor soccer, lacrosse, baseball, Frisbee, and lawn bowling and the gross receipts must be primarily from these sports activities.
(((b))) (ii) A family sports complex does not include a facility owned or operated by a school or school district; and
(((7))) (g) Amusement centers; and
(((8))) (h) Grocery or department stores. A "department or grocery store" means a business that offers the retail sale of a full line of clothing, accessories, and household goods, or a full line of dry grocery, canned goods, or nonfood items plus some perishable items, or a combination of these. A department or grocery store must have more than ten thousand square feet of retail and support space, not including the parking areas; and
(((9))) (i) Any business whose primary activity is to provide food service for on premises consumption.
(2) For group 12 amusement games, the maximum wager is five dollars and the maximum cost for a prize is one thousand dollars.
AMENDATORY SECTION (Amending WSR 07-15-064, filed 7/16/07, effective 1/1/08)
WAC 230-13-160 Basing rent on a percentage of gross receipts.
Class B or above amusement game operators:
(1) May base the rent or consideration paid to a Class A commercial amusement game location or charitable or nonprofit amusement game location for group 12 amusement games on a percentage of revenue the activity generates if the method of distribution is specific.
(2) May not base the rent or consideration paid to a charitable or nonprofit organization on a percentage of revenue the activity generates unless the amount returned to the organization is equal to or exceeds twenty-two percent of the gross gambling receipts.
(3) Operators must pay the organization at least once a month.
(((3))) (4) If located at regional shopping centers, may use a percentage of receipts to pay rental leases. They are also exempt from the profits restrictions of RCW 9.46.120(2).
REPEALER
The following section of the Washington Administrative Code is repealed:
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