Original Notice.

Preproposal statement of inquiry was filed as WSR 01-15-069.

Title of Rule: Raffles: WAC 230-20-325 Manner of conducting a raffle and 230-20-335 Members-only raffles -- Procedures -- Restrictions.

Purpose: The proposed amendment would eliminate the need for subsequent approval once a discount scheme or alternative drawing format has been approved. Licensees may offer the discount scheme or alternative drawing format again, as long as it is identical to what was previously approved and the organization has a current raffle license. This amendment will save staff time by eliminating repetitive approval of alternative drawing formats and discount schemes when they are identical in nature.

Statutory Authority for Adoption: RCW 9.46.070.

Summary: Under current rules, raffle licensees may request approval from commission staff to sell tickets at a discount when tickets are bundled together and licensees may also utilize alternative drawing formats (such as a duck race) to determine raffle winners. Raffle licensees must obtain staff approval each and every time a discount scheme or alternative drawing format is utilized.

Reasons Supporting Proposal: See Purpose above.

Name of Agency Personnel Responsible for Drafting: Susan Arland, Lacey, (360) 486-3466; Implementation: Ben Bishop, Lacey, (360) 486-3446; and Enforcement: Bob Berg, Lacey, (360) 486-3452.

Name of Proponent: Staff, governmental.

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

Explanation of Rule, its Purpose, and Anticipated Effects: See Purpose above.

Proposal Changes the Following Existing Rules: See Purpose and Summary above.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Proposal is exempt under RCW 19.85.025(2); therefore, a small business economic impact statement is not required.

RCW 34.05.328 does not apply to this rule adoption. This agency does not choose to make section 201, chapter 403, Laws of 1995, apply to this rule adoption.

Hearing Location: Sheraton Tacoma Hotel, 1320 Broadway Plaza, Tacoma, WA 98402, (253) 572-3200, on November 15, 2001, at 9:30 a.m.

Assistance for Persons with Disabilities: Contact Shirley Corbett by November 1, 2001, TDD (360) 486-3637, or (360) 486-3447.

Submit Written Comments to: Susan Arland, Rules Coordinator, P.O. Box 42400, Olympia, WA 98504-2400, (360) 486-3466, fax (360) 486-3625, by November 1, 2001.

Date of Intended Adoption: November 15, 2001.

September 13, 2001

Susan Arland

Rules Coordinator

OTS-5071.2

AMENDATORY SECTION(Amending WSR 98-08-052, filed 3/27/98, effective 7/1/98)

WAC 230-20-325   Manner of conducting a raffle.  

((What are the general requirements for conducting a raffle?

(1) All raffles, except as otherwise provided in WAC 230-20-335, shall be conducted by selling individual chances for not more than twenty-five dollars and awarding prizes by selecting winners by a random drawing from among all chances sold. The following operating procedures apply:

(2) All raffle chances shall be consecutively numbered tickets or other objects imprinted with letters or symbols that are not repeated within the population of all chances sold for a specific raffle;

(3) No person shall be required to obtain more than one chance to enter a raffle;

What additional requirements apply to raffles offered to the general public and raffles that do not require the winner to be present at the drawing?

(4) Raffle chances sold to the general public or for raffles that do not require the winner to be present at the drawing shall consist of a ticket that includes a stub or other detachable section bearing a duplicate number, letter, or symbol corresponding to the number, letter, or symbol on the ticket or object representing the player's chance. The portion retained by the raffle operator shall include the participant's name, complete address, telephone number, and/or other information necessary to notify the winner;

What information must be provided to raffle participants and when must such information be provided?

(5) All participants in a raffle must be informed of all rules by which such prizes may be won at the time of sale of a chance. This information shall be provided by either imprinting such on the participant's portion of the ticket or otherwise providing such to each participant in writing. The following information shall be provided to each participant:

(a) The cost of each chance;

(b) All prizes available, whether cash or merchandise;

(c) Date and time of drawing;

(d) Location of drawing;

(e) Whether an entrant is required to be present at a raffle drawing in order to be eligible to win a prize; and

(f) Name of organization conducting raffle;

What are the restrictions on raffle entry fees and ticket prices?

(6) No person shall be required to pay, directly or indirectly, more than twenty-five dollars in order to enter any raffle: Provided, That the sale of more than a single ticket to a single participant or the sale of a booklet of tickets under approval of the director, as authorized by subsection (7) of this section, shall not be deemed a violation of this section;

(7) Each raffle ticket must be sold for the same price as every other raffle ticket being used for that particular raffle: Provided, That the director may authorize a licensee to sell tickets at a discount if:

(a) A petition for approval for discount sales is received at the Lacey headquarters office at least thirty days prior to beginning the raffle for which such approval is requested. Each petition for approval to sell discounted raffle tickets shall include at least the following:

(i) A full description of the discount scheme;

(ii) The accounting controls and records to be used; and

(iii) A facsimile of the tickets and booklet cover planned for the raffle.

(b) Any licensee requesting approval for this activity shall reimburse the commission for all costs in reviewing and approval of such under the guidelines set forth in WAC 230-08-017;

(c) The organization has a Class E or higher raffle license: Provided, That organizations that are licensed to conduct raffles at Class C or Class D may participate in this activity if all requirements of WAC 230-08-070 are followed;

(d) Participants must be allowed to purchase a single ticket;

(e) A single discount scheme is allowed for each raffle. The amount of the discount must be set prior to beginning sales for the raffle and shall not be changed during any raffle. The following restrictions apply to such discounted tickets:

(i) Discounted tickets must be bundled into booklets that contain the number of tickets set forth in the scheme (i.e., ten tickets if tickets are sold for two dollars a piece or ten for fifteen dollars, three tickets if tickets are sold for five dollars a piece or three for ten dollars, five tickets if tickets are sold for five dollars a piece or five for twenty dollars, etc.);

(ii) Tickets bundled into booklets shall not be removed from the booklet and sold individually; and

(iii) The booklet cover of each ticket booklet shall be imprinted with a description of the sales scheme that includes the number of tickets included and the total cost of the booklet and a control number that meets the requirements of subsection (2) of this section; and

(f) Accounting procedures must be established that provide controls necessary to allow commission staff the ability to audit gross gambling receipts from such tickets;

What are the limits on what may be offered as a prize or reward for either selling or purchasing tickets?

(8) No free tickets, or any opportunity to participate in the drawing of any raffle, shall be awarded or given to a person as a prize or reward for selling raffle tickets or for purchasing a certain number of raffle tickets: Provided, That noncash incentive awards may be provided to members selling tickets if:

(a) Individual awards do not exceed a fair market value of ten dollars;

(b) The awards are based on the number of chances sold; and

(c) The fair market value of the total amount awarded for an individual raffle does not exceed two percent of the gross gambling receipts of the raffle;

What are the procedures for handling sold tickets?

(9) Each ticket seller shall return to the licensee the stubs or other detachable section of all tickets sold. The licensee shall then place each stub or other detachable section of each ticket sold into a receptacle from which the winning tickets are to be drawn;

What are the procedures for conducting a raffle drawing?

(10) The raffle license issued by the commission or a copy of the license shall be posted in plain view at the location at all times during the occasion when a drawing is being conducted.

(11) The ticket collection receptacle shall be designed so that each ticket has an equal opportunity to be drawn: Provided, that an alternative drawing format to determine the winner may be utilized if such format is approved by the director before tickets are sold and the following requirements are complied with:

(a) The organization must have a current raffle license;

(b) The alternate format must meet the definition of a drawing as defined by WAC 230-02-500;

(c) The random selection process used in the alternative format shall be fully disclosed to each player prior to selling a ticket;

(d) Any alternate format utilized to determine the winners must be closely controlled by the licensee; and

(e) The written request to utilize an alternative drawing format shall contain, at a minimum, the following information:

(i) The time, date and location of the drawing;

(ii) The type of random selection process to be used and complete details of its operation;

(iii) The name and telephone number of the raffles manager; and

(iv) The signature of the organization's chief executive officer.)) Only charitable and nonprofit organizations may conduct a raffle. All raffles, except as authorized in WAC 230-02-335 (members-only raffles), shall be conducted utilizing the following operating procedures:

Price per ticket - maximum $25.

(1) Each raffle ticket may not be sold for more than twenty-five dollars. Every raffle ticket for a particular raffle must be sold for the same price: Provided, That tickets may be bundled together and sold at a discount, as authorized by subsection (2) of this section.

Discount schemes for tickets.

(2) The director may authorize a raffle licensee to sell tickets at a discount when the following requirements are met:

License required.

(a) The organization must have a current Class E or higher raffle license: Provided, That Class C or Class D raffle licensees may offer discounted tickets if all recordkeeping requirements of WAC 230-08-070 are followed.

Request for approval.

(b) A request for approval of discounted sales must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. The request for approval shall include, at a minimum, the following information:

(i) A full description of the discount scheme;

(ii) The account controls and records that will be used; and

(iii) A copy of a raffle ticket and the booklet cover to be used in the raffle.

Subsequent discount schemes.

(c) After a licensee has received approval for a discount scheme, the licensee may utilize the identical discount scheme in subsequent raffles, unless approval is rescinded or commission rules change.

Cost of approval.

(d) The licensee shall reimburse the commission for costs incurred to review discount schemes: Provided, That the licensee will not be charged for the first two hours of service (WAC 230-12-315).

Amount of discount.

(e) Only one discount scheme is allowed for each raffle. The amount of the discount must be set prior to selling any raffle tickets and must not be changed during the raffle.

Bundling tickets.

(f) Raffle tickets bundled to be sold at a discount must meet the following requirements:

(i) Discounted tickets must be bundled into booklets that contain the number of tickets set forth in the approved scheme. For example, if single tickets are sold for five dollars each, the discount scheme may allow three tickets to be bundled together and sold for ten dollars;

(ii) Tickets bundled into booklets shall not be removed from the booklet and sold individually; and

(iii) The cover of each ticket booklet shall be imprinted with the following:

(A) A description of the sales scheme;

(B) The number of tickets in the booklet;

(C) The total cost of the booklet; and

(D) A control number that meets the requirements of subsection (3) of this section.

Accounting.

(g) Accounting procedures must be established and provide controls necessary to allow commission staff the ability to audit gross gambling receipts from ticket sales.

Numbering of tickets.

(3) To provide an adequate audit trail, all raffle tickets shall be:

(a) Consecutively numbered; or

(b) Imprinted with letters or symbols which are not repeated within the population of all tickets sold for a particular raffle.

Purchasing tickets.

(4) No person shall be required to purchase more than one raffle ticket.

No free tickets or chances to win.

(5) Free tickets, or an opportunity to participate in a raffle drawing without purchasing a ticket, are not allowed for any reason, including, but not limited to, the following:

(a) Awarded or given away as a prize;

(b) For purchasing a certain number of raffle tickets; or

(c) As a reward for selling raffle tickets.

Ticket stub information.

(6) Raffle tickets sold to the general public or for raffles that do not require the winner to be present at the drawing shall include a stub or other detachable section bearing a duplicate number, letter, or symbol corresponding to the number, letter, or symbol on the ticket or object representing the player's chance. The portion retained by the raffle operator shall include the participant's name, complete address, telephone number, and/or other information necessary to notify the winner.

Ticket stubs to be placed in receptacle for drawing.

(7) Each person that sells a raffle ticket shall give the raffle licensee all ticket stubs or other detachable section of all tickets sold. The licensee shall place each stub or other detachable section of each ticket sold into a receptacle from which the winning tickets will be drawn.

Drawing the winning tickets.

(8) The ticket collection receptacle shall be designed so that each ticket has an equal opportunity to be drawn: Provided, That an alternative drawing format to determine the winners may be utilized, as authorized by subsection (9) of this section.

Alternative drawing format.

(9) The director may authorize a raffle licensee to determine the winners utilizing an alternative drawing format when the following requirements are met:

License required.

(a) The organization must have a current raffle license.

Request for approval.

(b) A request for approval for an alternative drawing format must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. The request shall include, at a minimum, the following information:

(i) The type of random selection process to be used and complete details of its operation;

(ii) The name and telephone number of the raffle manager; and

(iii) The signature of the organization's chief executive officer.

Subsequent alternative drawing formats.

(c) After a licensee has received approval to utilize an alternative drawing format, the licensee may utilize the identical drawing format in subsequent raffles, unless approval is rescinded or commission rules change.

Cost of approval.

(d) The licensee shall reimburse the commission for costs incurred to review alternative drawing formats: Provided, That the licensee will not be charged for the first two hours of service (WAC 230-12-315).

Additional requirements.

(e) The alternate drawing format must meet the definition of a drawing as defined by WAC 230-02-500;

(f) The random selection process used in the alternative format shall be fully disclosed to each player prior to selling a ticket; and

(g) The alternate drawing format must be closely controlled by the licensee.

Selling tickets.

Members only to sell - exception.

(10) Tickets must be sold by members of the organization or volunteers under the supervision of a member under the requirements set forth in WAC 230-20-070(1).

Compensation or incentives for sales.

(11) Members shall not be paid for selling tickets, managing or operating a raffle: Provided, That noncash incentive awards may be provided to members for selling tickets if the following requirements are met:

(a) Individual awards do not exceed a fair market value of ten dollars;

(b) The awards are based on the number of chances sold; and

(c) The fair market value of the total amount awarded for an individual raffle does not exceed two percent of the gross gambling receipts of the raffle.

Prizes.

(12) Prizes must be owned by the organization conducting the raffle prior to drawing the winning tickets. Raffle prizes must meet the following requirements:

(a) Firearms shall not be awarded as prizes: Provided, That a raffle licensee may award firearms as prizes under the provisions set forth in WAC 230-12-040;

(b) Liquor shall not be awarded as prizes: Provided, That unopened containers of liquor may be awarded as a prize in members-only raffles when the proper permit is obtained from the liquor control board (RCW 9.46.0315 and WAC 230-20-335);

(c) The amount of money spent on prizes must meet the requirements set forth in WAC 230-20-015; and

(d) Prizes shall be controlled as set forth in WAC 230-20-300.

Rules must be provided to participants.

(13) All participants in a raffle must be informed of all rules by which prizes may be won at the time the ticket is purchased. This information shall be provided by either imprinting such on the participant's portion of the ticket or otherwise providing such to each participant in writing.

The following information shall be provided to each participant:

(a) The cost of each chance;

(b) All prizes available, whether cash or merchandise;

(c) Date and time of drawing;

(d) Location of drawing;

(e) Whether an entrant is required to be present at a raffle drawing in order to be eligible to win a prize; and

(f) Name of organization conducting the raffle.

Posting the raffle license.

(14) The raffle license or a copy of the license must be posted in a location readily visible by all raffle participants during the entire time the drawing of winners is being conducted.

Joint raffles.

(15) Raffle licensees may join together to conduct a raffle when the provisions set forth in WAC 230-20-350 are met.

Members-only raffles.

(16) Organizations may conduct members-only raffles under simplified procedures set forth in WAC 230-20-335.

[Statutory Authority: RCW 9.46.070 (3), (8), (11) and (14). 98-08-052, 230-20-325, filed 3/27/98, effective 7/1/98. Statutory Authority: RCW 9.46.070, 9.46.0209, 9.46.0237, 9.46.0205 and 9.46.075. 96-24-008 (Order 303), 230-20-325, filed 11/21/96, effective 12/22/96. Statutory Authority: RCW 9.46.0277 and 9.46.070. 96-07-077, 230-20-325, filed 3/19/96, effective 7/1/96. Statutory Authority: RCW 9.46.070. 95-07-093, 230-20-325, filed 3/17/95, effective 7/1/95. Statutory Authority: RCW 34.05.220(4), [34.05].230 and 9.46.070 (11) and (14). 90-05-032 (Order 205), 230-20-325, filed 2/14/90, effective 3/17/90. Statutory Authority: RCW 9.46.070 (11), (14) and 9.46.0218 [9.46.0281]. 89-05-024 (Order 186), 230-20-325, filed 2/13/89. Statutory Authority: RCW 9.46.070. 88-19-038 (Order 183), 230-20-325, filed 9/13/88. Statutory Authority: RCW 9.46.070 (8), (11) and (14). 88-07-059 (Order 175), 230-20-325, filed 3/15/88. Statutory Authority: RCW 9.46.070 (1), (2), (4), (5), (6), (9), (11), (14) and (17) and 9.46.020 (19) and (23). 85-17-015 (Order 153), 230-20-325, filed 8/12/85. Statutory Authority: RCW 9.46.070 (3), (8) and (11). 85-09-040 (Order 149), 230-20-325, filed 4/15/85. Statutory Authority: RCW 9.46.070 (8) and (11). 83-11-034 (Order 133), 230-20-325, filed 5/16/83.]

OTS-5069.2

AMENDATORY SECTION(Amending WSR 98-08-052, filed 3/27/98, effective 7/1/98)

WAC 230-20-335   Members-only raffles -- Procedures -- Restrictions.   Organizations may conduct members-only raffles utilizing simplified procedures. For purposes of this section, "members-only raffle" means a raffle conducted by selling chances only to members of the organization and a limited number of guests, and determining the winners from among those members and guests that have purchased chances. The following procedures and restrictions supplement or modify WAC 230-08-070 and 230-20-325 and apply only to members-only raffles:

Licensed versus unlicensed.

(1) An organization may conduct an unlimited number of unlicensed members-only raffles if the combined gross revenue from the raffles does not exceed five thousand dollars during a calendar year. If the organization plans to exceed the five thousand dollar gross receipts limit, it must obtain a raffle license.

Raffle to begin and end during membership meeting.

(2) In order to conduct raffles utilizing these simplified procedures, all phases of the raffle must be completed during a meeting of the members, and the meeting must be completed on the same day and at the same location without interruption;

Limit on number of guests.

(((2))) (3) If guests are allowed to participate, the total number of guests, as a percentage of the total attendance of the meeting, shall not exceed twenty-five percent. Records shall be maintained that will allow commission staff to determine compliance with this requirement;

Rules of play.

(((3))) (4) All disclosures required to be imprinted on a raffle ticket or chance may be provided to participants by posting a sign at each ticket sales point;

Tickets.

(((4))) (5) Chances to enter a raffle may be included as a part of a package that includes dues, entertainment, or other fund-raising activities if the value of each component of the package is disclosed to the purchaser and the value of each individual raffle chance does not exceed twenty-five dollars: Provided, That initial applications for membership and any fees paid for such shall not include chances to enter raffles or to participate in any gambling activities;

Modified pricing schemes for tickets.

(((5))) (6) The director may authorize an organization to deviate from the "same price" requirements of WAC 230-20-325(((5). Approval for such schemes must be in writing and received prior to beginning ticket sale utilizing such sales. Approval of such schemes remain valid until the scheme is modified by the licensee or the approval is revoked by the director. The following pricing schemes may be approved)) when the following requirements are met:

Request for approval.

(a) A request for approval of a modified pricing scheme must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested.

Subsequent pricing schemes.

(b) After an organization has received approval for a modified pricing scheme, the organization may utilize the identical approved pricing scheme in subsequent raffles, unless approval is rescinded or commission rules change. The following modified pricing schemes may be approved by the director:

Different prices for tickets - one cent to ten dollars.

(((a))) (c) Chances to enter a raffle may be sold for different values, ranging from one cent to a maximum of ten dollars, if the following conditions are met:

(i) The scheme for assigning the cost of the ticket must be disclosed to the player before selling them a chance to participate. This disclosure shall include the total number of tickets in the population and the number of tickets at each price level;

(ii) Participants must be allowed to randomly select their ticket from the population of remaining tickets. Participants pay the amount imprinted upon the ticket they select;

(iii) The scheme provides an adequate audit trail that will allow commission staff and taxing authorities to determine gross gambling receipts;

(iv) The total gross gambling receipts available from raffles utilizing such schemes are limited to five thousand five dollars for each drawing;

(v) No more than two such drawings are conducted during a meeting of the members.

Discount based on number of tickets purchased.

(((b))) (d) Chances may be sold for a discounted price that is based on the number of tickets a player purchases if:

(i) Participants are allowed to purchase a single ticket;

(ii) ((A single)) Only one discount scheme is allowed for each raffle. The amount of the discount must be set prior to beginning sales for the raffle ((and shall not be changed during the raffle));

(iii) The cost of a single ticket, without a discount, does not exceed two dollars;

(iv) The total cost of a discount package does not exceed twenty-five dollars;

(v) The cost of a single ticket shall be imprinted on each ticket (i.e., one dollar a piece or twelve for ten dollars; or two dollars a piece or fifteen for twenty dollars); and

(vi) The licensee shall establish an audit system that includes controls and procedures that will allow commission agents and taxing authorities the ability to determine gross gambling receipts from the sale of tickets utilizing discounts. Such system shall be submitted to the director or the director's designee as a part of the approval request;

Other pricing schemes.

(((6) The following sales schemes may be used for members-only raffles:

(a))) (e) Multiple tickets to enter one or more drawings may be sold as a package as long as the total price of the package does not exceed twenty-five dollars; and

(((b))) (f) Alternative ((sales methods)) pricing schemes may be used if specifically authorized by the ((commission)) director. ((This authority)) Approval will be issued on an individual basis and will require a detailed written request;

Alternative drawing formats.

(7) ((Alternative drawing formats approved for members-only raffles shall be valid until revoked by the commission staff, if all the information required by this subsection is reported to the commission at least ten days before any drawing using such schemes. Notification for members-only raffles may be signed by the designated raffle manager;)) The director may authorize an organization to determine the winners utilizing an alternative drawing format when the following requirements are met:

Request for approval.

(a) A request for approval of an alternative drawing format for a members-only raffle must be received at the Lacey headquarters office at least thirty days prior to beginning the first raffle for which such approval is requested. Requests for approval of alternative drawing formats shall be signed by the organization's raffle manager.

Subsequent alternative drawing formats.

(b) After an organization has received approval for an alternative drawing format, the organization may utilize the identical alternative drawing format in subsequent raffles, unless approval is rescinded or commission rules change.

Incentives for selling tickets.

(8) The limitations on noncash incentive awards for an individual raffle, set forth in WAC 230-20-325 (((8)(a) and (c))) (11), are modified to allow awards that do not exceed five percent of the combined gross gambling receipts for all raffles conducted during a membership meeting if a record of the name, address, and telephone number is maintained for all persons receiving awards valued in excess of fifty dollars;

Prizes.

(9) Prizes must be owned by the organization conducting the raffle prior to drawing the winning tickets. Raffle prizes must meet the following requirements:

(a) Firearms cannot be awarded as prizes: Provided, That a raffle licensee may award firearms as prizes under the provisions set forth in WAC 230-12-040;

(b) Unopened containers of liquor may be awarded as a prize when the proper permit is obtained from the liquor control board;

(c) Prize limits must meet the requirements set forth in WAC 230-20-015; and

(d) Prizes shall be controlled as set forth in WAC 230-20-300.

Records.

(((9))) (10) Raffle records, as required by WAC 230-08-070, are modified as follows:

(a) The threshold value for maintaining a record of the name, address, and telephone number of each winner of a prize is increased to include only prizes valued in excess of fifty dollars;

(b) Ticket disbursement records are not required; and

(c) Minimum record retention period is reduced to a period that is not less than one year following the date of each individual raffle drawing.

[Statutory Authority: RCW 9.46.070 (3), (8), (11) and (14). 98-08-052, 230-20-335, filed 3/27/98, effective 7/1/98. Statutory Authority: RCW 9.46.0277 and 9.46.070. 96-07-077, 230-20-335, filed 3/19/96, effective 7/1/96. Statutory Authority: RCW 9.46.070. 95-07-093, 230-20-335, filed 3/17/95, effective 7/1/95.]

Washington State Code Reviser's Office