Can I offer contests that involve merchandise prizes in Washington? What are the requirements?

Yes, you can offer contests that involve merchandise prizes in Washington. However, the requirements vary depending on the type of contest you are offering.

If you are offering raffle prizes, you must follow the requirements outlined in WAC 230-11-065 and WAC 230-11-067. Organizations must own the prizes offered to winners before the date of the drawing. At the time and date of any raffle drawing, the organization must have on deposit an unencumbered amount of money that is equal to or greater than all cash prizes being offered in the raffle. Raffle prizes must be available at the time and place of the drawing. If cash, it must be United States currency or an equivalent amount of negotiable instruments. For licensees, raffle prizes must not exceed forty thousand dollars per prize or three hundred thousand dollars in total raffle prizes in a license year, except as authorized in WAC 230-11-067. For enhanced raffles, a purchase contract is not necessary for smaller noncash prizes, but the bona fide charitable or nonprofit organization must be able to demonstrate that such a prize is available and sufficient funds are held in reserve in the event that the winner chooses a noncash prize. If you want to offer raffle prizes that exceed forty thousand dollars per prize or three hundred thousand dollars in a license year, you must submit a raffle plan to the commission for approval.

If you are offering punch board and pull-tab prizes, you must follow the requirements outlined in WAC 230-14-095. You must clearly represent cash prizes on the prize flare. Merchandise prizes must be displayed in plain view and in the immediate vicinity of the punch board or pull-tab series. However, operators may wrap merchandise prizes for games that offer “surprise” prizes so players are unable to identify the prize until opened. If operators cannot display the prize merchandise on the premises, they must use an accurate description or photograph of the prize in plain view on, or immediately adjacent to, the flare. You must meet all the requirements of subsections (1) and (2) of this section for combination cash and merchandise prizes.

If you are offering a promotional contest of chance (PCOC) that is similar to bingo, commonly referred to as “no fee bingo,” you must follow the requirements outlined in WAAC 230-18-010. You must not charge participants a direct or indirect fee to participate in the PCOC. Indirect fees include, but are not limited to, cover charges. You must operate the PCOC for no more than a total of three hours per day, twice per week. Participants must receive a bingo card immediately before the start of each game. You must award only merchandise items, such as food, nonalcoholic beverages, hats, shirts, or other promotional items valued at less than twenty-five dollars each. You must not substitute cash prizes for merchandise prizes and must not award prizes worth more than one hundred dollars per week or five thousand dollars per year. You must record the names of winners and prize(s) won for each game. You must use recreational bingo cards that are not used in authorized bingo games.

For calculating markup for merchandise prizes, you must follow the requirements outlined in WAAC 230-14-085. To calculate sixty percent of total gross for merchandise prizes, operators take the amount actually paid for the prize and add to it no more than fifty percent of that cost as markup. Gift certificates from a licensee’s own establishment may be used as merchandise prizes for pull-tab games but must not be included in the sixty percent payout calculation. The total cost to the operator for the purchase of a prize must not exceed five thousand dollars.

References:

• WAC 230-11-065
• WAC 230-11-067
• WAC 230-14-095
• WAAC 230-18-010
• WAAC 230-14-085

Jurisdiction

Washington

• Gaming