Gambling Regulation

Overview

Gambling, like liquor sales and use, is an activity that is generally controlled by state law. Cities, towns, and counties are limited in their ability to regulate gambling. 

The Washington State Gambling Commission regulates and, with some exceptions, licenses the gambling activities authorized under chapter 9.46 RCW through the commission's extensive regulations in title 230 WAC. The commission does not require licenses for:

• certain limited gambling activities conducted by nonprofit or charitable organizations for fundraising purposes;
• dice or coin contests for music, food, or beverage payment at businesses where food is bought and consumed on the premises;
• sports pools when conducted within specified statutory limitations;
• certain bowling sweepstakes conducted by bowling establishments;
• members of a nonprofit or charitable organization engaging in social card games or dice games on the organization’s premises, provided statutory conditions are met;
• some “turkey shoots” conducted by nonprofit or charitable organizations;
• most fishing derbies;
• raffles authorized by the Fish and Wildlife Commission;
• conducting, operating, participating, selling, or purchasing tickets or shares in the state lottery, so long as such actions are in conformity with state law;
• certain golfing sweepstakes conducted by nonprofit or charitable organizations; and
• limited promotional contests of chance.

The gambling commission requires licenses for all other authorized types of gambling activities. All authorized gambling activities, whether subject to license requirements or not, are subject to the commission's detailed regulations in title 230 WAC.

Local Regulation of Gambling

Cities, towns, and counties are limited in their authority to regulate gambling. However, they are authorized to do either or both of the following:

• tax certain gambling activities; or
• prohibit any or all gambling activities for which licenses are required.

In addition, state law explicitly authorizes cities and towns to enact as local ordinances any or all sections of chapter 9.46 RCW, the violation of which constitutes a misdemeanor or gross misdemeanor.

Local Taxation of Gambling

State law authorizes cities and counties to tax gambling activities. RCW 9.46.110 sets the maximum rates at which cities, towns, and counties may tax gambling activities. The maximum rates vary depending on whether the gambling activity is conducted by commercial stimulant operators (i.e., for-profit businesses) or by charitable or nonprofit organizations.

The maximum allowable rates on gambling activities by commercial stimulant operators are as follows

• Bingo — up to 5% of net receipts
• Raffles — up to 5% of net receipts
• Amusement games — up to 2% of net receipts
• Punchboard, pull tabs — up to 5% of gross receipts or up to 10% of net receipts
• Social card rooms — up to 20% of gross receipts

The maximum allowable rates on gambling activities by charitable or nonprofit organizations are as follows

• Bingo — no tax on first $5,000 of net receipts, then up to 5% of net receipts.
• Raffles — no tax on first $10,000 of net receipts, then up to 5% of net receipts.
• Amusement games — no tax on first $5,000 of net receipts, then up to 2 % of net receipts.
• Punchboard, pull tabs — up to 10% of net receipts.
• Social card rooms — up to 20% of gross receipts.

Under RCW 9.46.113, revenues from local gambling taxes must be used primarily for the purposes of public safety. In addition, RCW 9.46.110(4) states that taxes imposed on gambling activities become a lien upon personal and real property used in the gambling activity.  

Local Prohibitions against Gambling

A number of cities, towns, and counties have prohibited some types of gambling activity. The statute that authorizes these local prohibitions, RCW 9.46.295, provides that cities, towns, and counties "may absolutely prohibit, but may not change the scope of license, any or all of the gambling activities for which the license was issued."

Examples of Local Ordinances Prohibiting Gambling 

The Washington State Gambling Commission maintains a list of cities and counties prohibiting gambling activities. Such prohibitions may apply to any or all gambling activities for which licenses are required. Below are specific examples of local ordinances that prohibit some types of gambling activities.

• Kirkland Municipal Code Sec. 7.48.017–.018 — Allows all gambling activities for which a license may be issued except the conduct of a social card game as a commercial stimulant, as well as most house-banked, social card game businesses
• Normandy Park Municipal Code Sec. 7.30.020 — Prohibits all gambling activities for which a license may be issued except for punch boards and pull tabs as a commercial stimulant, as well as gambling activities of charitable or nonprofit organizations
• Puyallup Municipal Code Sec. 5.68.015 — Allows all gambling activities for which a license may be issued except the conduct or operation of social card games as commercial stimulants
• Snohomish Municipal Code Sec. 5.53.010 — Allows all gambling activities for which a license may be issued except for house-banked card games.

Local prohibitions can apply to proposed and existing gambling activities. Specifically, Washington courts have affirmed the authority of cities and counties to ban existing gambling activities in the following decisions: 

• Edmonds Shopping Center v. Edmonds, 117 Wn. App. 344 (2003) — The state court of appeals held that a city may prohibit card rooms, including existing card rooms, but is preempted by state law from requiring or allowing a phase-out period of operation. The ban must apply equally to existing and future gambling activities.
• Paradise Village Bowl v. Pierce County, 124 Wn. App. 759 (2004) — The state court of appeals upheld the county's ban on for-profit social card games, rejecting a challenge by a business that included such card games and that alleged that the ban was a takings and violated substantive due process and equal protection.

Local Adoption of State Gambling Statutes and Penalties

RCW 9.46.192 authorizes every city or town to adopt as an ordinance any and all of the sections of chapter 9.46 RCW, the violation of which constitutes a misdemeanor or gross misdemeanor. Here are some examples of these types of ordinances.

• Bellingham Municipal Code Ch. 10.36
• Bremerton Municipal Code Ch. 9A. 28
• Burien Municipal Code Sec. 9.55.100
• Covington Municipal Code Ch. 9.85
• Lynnwood Municipal Code Ch. 10.30
• Yacolt Ordinance No. 303 (1988)

Legal References

State Statutes

• Ch. 9.46 RCW — Creates the state gambling commission
• Ch. 9.47 RCW — Addresses gambling at bucket shops and bunco steering
• Ch. 67.16 RCW — Creates the Horse Racing Commission
• Ch. 67.70 RCW — Creates the State Lottery Commission

Administrative Regulations

• Title 230 WAC — Outlines rules and regulations for the Gambling Commission

Recommended Resources

• Washington State Gambling Commission — Oversees gambling licensing, regulation, and enforcement statewide