torrarale1977.netlify.com

• Is Online Gambling Illegal In Washington State Right Now
• Is Online Gambling Illegal In Washington State Parks

Online gambling as such is prohibited in Washington, if we are to judge according to the website of the Washington State Gambling Commission. Additionally, online gambling operators that decide to operate an illegal gambling site in this state could be charged with a Class C felony. Washington Gambling Age: 18 for all gambling, although some casinos that serve alcohol require patrons to be 21; Smoking ban: Washington bans smoking in all gaming establishments. State law does not apply to reservation casinos. Washington Online gambling: Horse racing is the only form of legal online gambling. All others are expressly illegal.

How does tax apply to games and gambling?

Many businesses and organizations offer entertainment in the form of games. The business or organization may own the games or receive commission for allowing the games to be placed on their property.

Commissions: Income for allowing the placement of vending machines or games is subject to B&O tax under the Service and Other Activities classification.

Air hockey/pool/foosball/darts/shuffleboard: These activities are retail sales. Gross receipts are subject to retail sales tax and the Retailing classification of the B&O tax. Gamer operators may factor out retail sales tax from the amount received by the payment-operated (including coin-operated) games to determine gross receipts. (See our online information on Recreational Services for more information on other activities.)

Is Online Gambling Illegal In Washington State Right Now

Note: Effective January 1, 2016, amounts paid to play all forms of dart games (i.e., steel tip darts, soft tip darts, and electronic dart games) are subject to retail sales tax and the Retailing B&O tax. Prior to this date steel and soft tip darts were subject to retail sales tax and the Retailing B&O tax. Electronic dart games were subject to B&O tax under the Service and Other Activities classification and retail sales tax did not apply.

Video games/Amusement devices: These items include slots, pinball, and other machines or devices that permit the patron to play a game. Gross receipts are subject to B&O tax under the Service and Other Activities classification.

Sales or use tax applies to the purchase of the machines.

Internet access: Gross receipts for allowing customers internet access is subject to B&O tax under the Service and Other Activities classification.

References:WAC 458-20-187

Definitions

“Contests of chance” means any contests, games, gaming schemes, or gaming devices, other than the state lottery (RCW 67.70.010) in which the outcome depends upon an element of chance. The skill of the contestants may also be a factor in the outcome. “Contests of chance” include:

• social card games
• dice games
• bingo
• raffles
• punchboard games
• pull-tabs

(“Contests of chance” does not include race meets for which a license must be obtained from the Washington Horse Racing Commission or “amusement games,” RCW 9.46.0201.)

B&O tax classifications

There are two B&O tax classifications that apply to income received from operating contests of chance:

• Gambling Contests of Chance (less than $50,000 a year) – rate 1.5 percent
• Gambling Contests of Chance ($50,000 a year or greater) – rate 1.63 percent

The lower rate classification shares the line with the Service and Other Activities classification on the excise tax return. The higher rate classification has its own line on the return.

How is income calculated to determine a B&O Tax classification?

You can calculate the gross amount of gaming income by taking the total revenue from gaming activities and deducting the amount of payouts to the customers.

Payouts include:

• Monetary value or actual cost of any awarded prizes
• Amounts paid to players for winning wagers
• Accrual of prizes for progressive jackpot contests
• Repayment of amounts used to seed guaranteed progressive jackpot prizes
• Fair-market value of the merchandise (in the case of donated merchandise)

Payouts do not include:

• Labor costs associated with operating a game
• Amounts paid for equipment and supplies to operate game
• Amounts paid for the purchase of the actual game (e.g., punchboards, pull tabs, etc)
• Other business expenses
• Lottery payouts

The business will report under the new Gaming Contests of Chance ($50,000 a year or more) B&O tax classification if – after this calculation – the income is or will be $50,000 or more per calendar year. The business reports under the Gambling Contests of Chance (less than $50,000 a year) classification if income is less than $50,000.

Income from “amusement games” should not be combined with income from contests of chance for purposes of determining if the “less than fifty thousand dollar” threshold is met.

Annual filers: The appropriate B&O tax classification may be determined when you file your annual excise tax return.

Quarterly and monthly filers: You will need to estimate whether you will meet the $50,000 annual threshold when you complete excise tax returns that are due before the end of the year. If your estimate is determined to be inaccurate before you reach the end of the year, you need to:

• complete the final return(s) of the year using the appropriate classification and
• file amended returns for the past returns to correctly report under the appropriate classification.

Businesses that use e-file may amend multiple periods using My DOR.

How do I amend multiple periods online?

1. Log into My DOR and access the tax account
2. Click the More Options tab.
3. Click on Send a Message.
4. Select the tax account and click Next.
5. Select the Filing Period or the This message doesn't concern a specific period option and click Next.
6. Select the topic Amended Tax Returns.
7. Enter a subject, such as 'Multiple Periods, Gambling B&O tax'.
8. In the Message, provide an explanation for the changes such as 'Over/under $50,000 threshold for gambling B&O tax'.
9. Complete one of the following spreadsheets and save it to your computer:
   • Quarterly filer:
   • Monthly filer:
10. Click Add in the Attachments section to attach the saved spreadsheet
11. Select and save to attach the file
12. Click Submit

Games of chance operators need to report the total receipts from gaming income under the gross amount on the excise tax return. Record the amount of payouts on the deduction detail. To find the taxable amount, use this equation:

Column 1 (gross amount) – Column 2 (deduction amount) = Column 3 (the taxable amount).

Examples

The following examples identify a number of facts and then state a conclusion. These examples should be used as a general guide. The tax results of other situations must be determined after a review of all facts and circumstances.

Example 1 - Sam’s Place has total gaming income of $70,000 per calendar year and $25,000 in payouts for the same period. Sam’s would report all of its gaming income under the Service and Other B&O classification because its “gross income” for threshold purposes is $45,000 ($70,000 minus $25,000).

Example 2 - J&M Grill has total gaming income of $120,000 in 2006 and $40,000 in payouts during the same period. J&M will be taxable on all of its income from contests of chance under the Gambling Contests of Chance ($50,000 a year or greater) B&O tax classification because its “gross income” for threshold purposes is greater than $50,000 ($120,000 minus $40,000 = $80,000).

Example 3 - Doug’s Cafe is a new business that opened in March. The business estimated that the “gross income” for threshold purposes would be less than $50,000 per year. At the end of July of the same year the total gaming income was $75,000 for March through July and total payouts for the same period of time was $22,000. Doug’s must report the taxable income for July under the Gambling Contest of Chance ($50,000 a year or greater) B&O tax classification because its “gross income” for threshold purposes $53,000 ($75,000 minus $22,000). Additionally, Doug’s must also reclassify, by filing amended excise tax returns for March, April, May and June, all gaming income reported for this period under the Gambling Contests of Chance (less than $50,000 a year classification to Gambling Contests of Chance ($50,000 a year or greater) B&O tax classification. (Businesses that e-file: see the “How do I amend multiple periods online?” section above).

Lottery commissions

Lottery or scratch ticket purchases by a consumer are not subject to retail sales tax. The organization reports commissions received from such sales on the excise tax return under the Service & Other Activities B&O tax classification. Lottery payouts do not qualify for the payouts deduction.

Nonprofit Organizations – Fundraising

Gross income received by nonprofit organizations from operating contests of chance may qualify for the fundraising B&O tax exemption. If such activities are not held frequently, the resulting income would generally qualify for the B&O tax exemption. However, if such activities are held on an ongoing basis at a regular place of business, the resulting income would not qualify for the fundraising exemption and would be subject to tax.

For more information on the fundraising exemptions:

WAC 458-20-169 – Nonprofit Organizations

Reference: WAC 458-20-131

Important WA Notes

• WA residents are accepted at offshore sites legally (Federal)
• It’s a felony to gamble online in Washington State
• However, the law has never been enforced
• Land-based gambling is legal throughout the state
• Live poker in Washington is extremely popular

“Reviewed by Chuck Humphrey – 50 year Gaming Law Practitioner”

The state of Washington has some of the toughest laws in the United States pertaining to online gambling and poker websites, but that could easily change in the near future. State laws explicitly prohibit the act of making a bet over the internet, with stiff penalties, for anyone caught contravening the laws. Players can be charged for anything from gross misdemeanors to even Class C Felonies for playing online poker in Washington (neither of which have ever happened or been pursued). There are plans being worked on to establish a regulatory authority to introduce online poker to Washington in the near future. Poker players in Washington play online at licensed offshore websites legally as a player at the Federal level.

Future of Online Poker in Washington: Estimated date of legalization: 2020-2021

The following graph tracks our expected legislation of online poker in Washington on a state law level. It is currently already legal on a Federal level. This graph monitors the current rise or fall of expected legalization.

Recent Activity
The future of online poker in Washington looks fairly promising and the state could feel the need to introduce regulation in order to compete with other states over the next several years.

Washington is one of the only states to explicitly prohibit all types of online gambling, poker included, having passed an amendment to its criminal code[A] in 2006 to include any type of placing or receiving bets over the internet. As such, the amendment to Section 9.46.240 expressly states under ‘Gambling information, transmitting or receiving’: Whoever knowingly transmits or receives gambling information by telephone, telegraph, radio, semaphore, the internet, a telecommunications transmission system, or similar means, or knowingly installs or maintains equipment for the transmission or receipt of gambling information shall be guilty of a class C felony subject to the penalty set forth in RCW 9A.20.021.

Over the years, efforts have been made to question the constitutionality of the law, with the most famous case even reaching the Washington Supreme Court when lawyer and poker player Lee Russo, backed by the one-million-member grassroots group, the Poker Players Alliance, brought their case to the upper courts. In 2010, the Supreme Court upheld state law that makes it a Class C Felony to play poker and gamble online, although the court did not essentially endorse the law, but rather endorsed the right of the legislature to pass the law. At the time of the ruling, the then Chairman of the Poker Players Alliance, former US Senator Alfonse d’Amato said: “That underscores what we’ve heard time and time again – that this law is ridiculous.”

Ridiculous or not, the Supreme Court decision led top names in the industry accepting USA players at the time, such as Poker Stars and Full Tilt Poker, to block players from Washington[B] from playing at their sites.

Over the years, several attempts have been made to introduce new laws that would at least ease the fate of online poker websites in Washington; all of them have been unsuccessful.

• House Bill 1824[C] was read in February 2013, calling for the reduction of penalties for those who play poker, “for recreational purposes only” and no longer making it a Classy C felony to play online (bringing it down to a class 3 civil infraction with a maximum $50 penalty). However, after a 50 minute hearing, the bill failed to advance. At the time, the PPA vowed to push the bill again.
• A pair of pro-online poker voter initiatives were given final language approval initiatives from the state and were put out as petitions to try and gather support.

I-582[D] called for the Washington authorities to license and regulate intrastate internet poker, requiring operators to have a physical presence in the state.

I-583[E] called for the removal of penalties of players participating in online poker games, stating that if the I-582 was passed the measure would be moot.

In January 2015, HB 1114 was introduced, a bill to legalize poker online in Washington, by state Representative Sherry Appleton. The following month the state announced the bill would not be getting a hearing this session due to a lack of support. The same bill was introduced again on January 15, 2016 by state Representatives Sherry Appleton and Vincent Buys. Unfortunately, the bill did not advance once again. However, the future does look bright for passing poker over the internet as well as potentially casino games.

History of Gambling in Washington

Land Based Poker in Washington

Laws governing poker in the state of Washington are covered by Section 9.46.0237[H] which defines gambling as, “staking or risking something of value upon the outcome of a contest of chance or a future contingent event not under the person’s control or influence, upon an agreement or understanding that the person or someone else will receive something of value in the event of a certain outcome.”

Poker falls under the definition of “contest of chance” (Section 9.46.0225[I]) which, “means any contest, game, gaming scheme, or gaming device in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”

Having said that, real money poker opportunities are available in Washington in a number of casinos and card clubs as long as players stick to the conditions set out under WAC 230-15-135[J] which spells out very specific wagering limits for non house banked card games. For example, there are not allowed to be more than five betting rounds in one game and there may not be more than four wagers in any betting round.

In addition, the maximum amount of a single wager is not allowed to exceed $40, although Class F and house banked card game licensees are allowed to offer a single wager that should not exceed $100 on Texas Hold ’em games.

When it comes to the ante, no more than the maximum wager is allowed for the first betting round of any game (except Panguingue). In Pan, the maximum value of a chip is not allowed to exceed $10 and doubling of conditions is not allowed.

Washington law is rather vague about poker games played at home, although it is generally felt that they are legal as long as they adhere to conditions spelled out by general gambling laws.

Gambling Laws in Washington

As noted, the relevant laws that govern gambling in Washington are state code 9.46.010 et seq; 67.16.010[K] where the definitions of gambling and games of chance are clearly spelled out. Washington considers any game a game of chance if the concept of chance plays a role in the outcome of the game, even if substantial skill is also involved (read: poker).

Besides defining what gambling means, the official state codes also spell out what types of gambling are allowed or banned. Licensed horse racing and pari-mutuel wagering is allowed, while betting greyhound races is specifically prohibited. Tribal gaming is allowed as long as the casinos adhere to the Indian Gaming Regulatory Act and maintain the correct gambling devices.

Specifically banned by law are bucket shops, bunco steering, bookmaking and professional gambling. On the other hand, bingo, raffles and amusement games that are sponsored by charitable organizations are allowed, as are sports pools, fishing derbies, golfing and bowling sweepstakes, social card games, turkey shoots and promotional contests.

Laws state that a gambler needs to be 18 years of age or older in order to take part in legal gambling.

Is Online Gambling Illegal In Washington State Parks

Casinos in the state of Washington are run by Native American tribes, and there are several dozen in operation. These include the 7 Cedars Casino run by the Jamestown S’Klallam, the Clearwater Casino Resort run by the Suqamish and Emerald’s Down racetrack run by the Puyallup. The state essentially has 32 Indian casinos owned by 23 tribes, with each tribe federally recognized to sign a compact with the state. This means that the tribe shares gambling revenues with the state’s government and abides to the restrictions on the types and numbers of casino games allowed to be offered.

Indian Gaming Class III authorized games (ie. games played against the house) are defined as blackjack, baccarat, Big 6, Chuck a Luck, craps, keno, off track betting, Pai gow poker, poker (class III), red dog, roulette, sic bo and tribal lotteries.

Indian Gaming Class II authorized games (games played against other players) are defined as bingo, flashcash bingo machines, Mega Mania bingo machines, pull tabs, progressive pull tabs, poker (class II), rocket bingo machines, tab force pull tab readers and wildfire pull tab machines.

Washington state gambling laws dictate that players have to be 18 years of age or older to play in casinos.

Wagering on horse racing is overseen by the Washington Horse Racing Commission[L]. Advance deposit wagering is allowed (under state RCW 67.16.260[M]). The five racing tracks in Washington State are Dayton, Emerald Downs in Auburn, Sun Downs in Kennewick, Waitsburg and Walla Walla Fair Grounds. There are also over 10 licensed off track betting locations.

With the passing of the 1973 Gambling Act, 100 square sports pool boards were authorized by authorities, and this remains the only type of sports betting allowed today by the state. Fantasy sports, office sports pools and bracket pools are not allowed. Needless to say that online sports betting is not legal in Washington, with online gambling residents having no legal way to claim their winnings. Bookmaking is also not legal in Washington as it is defined as professional gambling (which is also outlawed). Statutes range from first degree (class B felony) to third degree (gross misdemeanor).

Washington’s Lottery[N] was created in 1982 to provide revenues for the State General Fund which supports human services programs, schools and government programs. The state agency employs around 150 people and is overseen by a five person Lottery Commission. Tickets can only be purchased at locations throughout the state such as grocery stores, gas stations and bars, and, for now, the purchase of lottery tickets over the internet is not permitted.

Washington State seems to be lenient in its outlook when it comes to charity games. A number of games such as charity poker games and Vegas nights require a license from the relevant authorities, although many such as raffles do not require licenses. The Washington State Gambling Commission provides more details about which games require a license and which do not here: https://www.wsgc.wa.gov/forms/detail/np-add-activity-packet.aspx[O]

Another area where Washington regulators seem to have let go of the iron grip (in relation to other types of gambling such as online gambling) is the area of social gambling where the player in this instance is defined under RCW 9.46.0265 as, “a natural person who engages, on equal terms with the other participants, and solely as a contestant or bettor, in any form of gambling in which no person may receive or become entitled to receive any profit there from other than personal gambling winnings, and without otherwise rendering any material assistance to the establishment, conduct or operation of a particular gambling activity. A natural person who gambles at a social game of chance on equal terms with the other participants shall not be considered as rendering material assistance to the establishment, conduct or operation of the social game merely by performing, without fee or remuneration, acts directed toward the arrangement or facilitation of the game, such as inviting persons to play, permitting the use of premises for the game, or supplying cards or other equipment to be used in the games.”

In a nutshell, this means that if nobody rakes in a profit and nobody pays a fee, social games of chance (including poker) are not illegal under Washington law.

Author:Joseph Falchetti (twitter)
(C) Copyright PokerWebsites.com, 2018

References and Citations