[Filed March 19, 2019, 2:37 p.m.]

Preproposal statement of inquiry was filed as WSR 19-03-095.

Title of Rule and Other Identifying Information: WAC 230-16-005 Transporting, displaying, and selling gambling equipment at trade shows and conventions and 230-06-050 Review of electronic or mechanical gambling equipment.

Hearing Location(s): On May 9, 2019, at 9:00 a.m., at the Heathman Lodge, 7801 N.E. Greenwood Drive, Vancouver, WA 98662. Hearing will take place at the May commission meeting. The meeting dates and times are tentative. Visit our web site at www.wsgc.wa.gov about seven days before the meeting, select "May Commission Meeting" to confirm the hearing date, location, and start time.

Date of Intended Adoption: May 9, 2019.

Submit Written Comments to: Ashlie Laydon, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, email rules.coordinator@wsgc.wa.gov, fax 360-486-3624, by May 1, 2019.

Assistance for Persons with Disabilities: Contact Julie Anderson, phone 360-486-3453, TTY 360-486-3637, email Julie.anderson@wsgc.wa.gov, by May 1, 2019.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: Changes made to WAC 230-16-005 clarify what types of gambling devices can be brought into the state, for what purpose, and in what manner they can be displayed at trade shows. Specific changes include defining the terms "trade show," "gambling equipment," and "demonstration mode"; clarifying what equipment can be displayed at trade shows and the manner in which it is displayed, providing parameters for how long unapproved equipment can remain in the state, establishing a method of notifying the Washington state gambling commission, and allowing for onsite inspection of equipment by the gambling commission at a trade show.

Changes made to WAC 230-06-050 are necessary to be consistent with WAC 230-16-005.

Reasons Supporting Proposal: These changes clarify what equipment can be displayed at trade shows and the manner in which the equipment can be displayed.

Statutory Authority for Adoption: RCW 9.46.070.

Statute Being Implemented: RCW 9.46.070.

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: Brian Considine, Managing Staff Attorney, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3469; Implementation: David Trujillo, Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3512; and Enforcement: Tina Griffin, Assistant Director, 4565 7th Avenue S.E., Lacey, WA 98503, 360-486-3546.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. The proposed rule change does not have any costs associated with it.

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. Most, if not all, manufacturers impacted by this rule do not qualify as a small business under RCW 19.85.020(3). Additionally, this rule change codifies current practice and should not impose more-than-minor costs, RCW 19.85.020(2), and may possibly allow licensed manufacturers better ability to market and sell gambling products and equipment.

AMENDATORY SECTION(Amending WSR 14-09-037, filed 4/11/14, effective 7/1/14)

WAC 230-06-050Review of electronic or mechanical gambling equipment.

(1) When you submit gambling equipment, supplies, services, or games for our review to verify compliance with chapter 9.46 RCW and Title 230 WAC, you must pay the application deposit before we perform the review. You must also reimburse us for any additional costs of the review. All costs must be paid in full prior to the completion of the review.

(2) The gambling equipment submitted for review must be identical or substantially similar to what will be marketed, distributed, and deployed in Washington. If the equipment is not sufficient for testing and review, we may require additional equipment or information.

(3) If your application is incomplete or we request additional information, you must provide us with the required items within thirty days of notification or we may administratively close your application.

(4) You can begin ((selling or leasing the))accepting orders for gambling equipment when you are licensed ((and the gambling equipment has been approved by the director or director's designee)).

(5) Only gambling equipment approved by the director or director's designee is allowed in Washington except as provided under WAC 230-16-005.

(6) We may include security or surveillance requirements as part of gambling equipment approval.

(((6)))(7) Gambling equipment must operate as approved by the director or director's designee.

(((7)))(8) We may keep equipment 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.

(((8)))(9) 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 07-19-069, filed 9/17/07, effective 1/1/08)

WAC 230-16-005Transporting, displaying, and selling gambling equipment at trade shows ((and conventions)).

((Licensed manufacturers and distributors selling gambling equipment authorized by state or federal law may transport, display, and accept orders for the sale or lease of their products at trade shows and conventions as long as:

(1) They notify us in writing of the nature, date, and location ten days before the trade show or convention; and

(2) Their target audience of the trade show or convention are operators of authorized gambling activities in Washington; and

(3) They deliver all gambling equipment purchased or leased at the trade show or convention to the operator's authorized location.))(1) "Trade show" when used in this section means an exhibition where licensed manufacturers and distributors promote their products and services to operators of authorized gambling activities in Washington; the exhibition is not open to the public; and it is of limited duration.

(2) "Gambling equipment" as used in this section has the same meaning as in WAC 230-03-200.

(3) "Demonstration mode" when used in this section means when gambling equipment cannot be used for actual wagering and the equipment's coin or bill acceptor is removed or physically restricted from use.

(4) Licensed manufacturers and distributors may transport, display, and accept orders for the sale or lease of their products at trade shows only under the following conditions:

(a) All products must be manufactured by a licensed manufacturer for: Activities authorized by state laws or tribal-state compacts, or is Class II gaming equipment as authorized by federal law for use on tribal lands; and

(b) All gambling equipment physically displayed must be in demonstration mode and either:

(i) Approved for sale or lease in the state; or

(ii) Not approved by us but is only used for authorized activities under state laws or tribal-state compacts, or is Class II gaming equipment as authorized by federal law for use on tribal lands, and is transported into the state no more than ten days before a trade show begins and is removed from the state within ten days following the last day of a trade show.

(c) Gambling equipment must have a sign posted in close proximity to the device that contains the phrase, "No one under 18 years of age is allowed to operate this machine."

(5) Licensed manufacturers and distributors must provide notification that they will be transporting, displaying, or accepting orders for gambling equipment on a form prescribed by the gambling commission at least ten days before a specified trade show.

(6) Gambling equipment at a trade show is subject to on-site inspection by the gambling commission.