License Fee Evaluation

HISTORY

At previous Commission meetings we have reviewed current language in the statute that set out how we are to be funded. We have also shared with you the fee schedule from the beginning in 1973 to current and discovered that the only changes since the original fee schedule that started with 25 fees in 1973 to the 194 fees today was:

  • Added new activities through rule or statute
  • Added or increased the license fee classes
  • Increased fees

We’ve examined with you each of the 194 fees we have today, and the changes in fees and the license fees as a percentage of receipts for each activity.

We’ve discussed how

  • Other states fund similar gambling activities that we have in the state. Most states receive funding from license fees and/or taxes.
  • We regulate licensed and unlicensed activities.

In December 2014, we gave notice to all licensees that we were going to be analyzing our fee structure and asked them to participate in the meetings in 2015 and send us their feedback. We took a look at what stakeholders had to say. Most said, and we believe the Commissioners agreed, that our current fee structure is not reflective of what we would develop today if we were to start from scratch.

COMMISSION MEETING RECAPS

September 2016 Commission meeting - Stakeholder suggested a Work Group be formed to look at the fees more closely before any decisions are made given the significant impacts to some stakeholders who would pay more.

October 2016 Commission meeting – Feedback from stakeholders was shared, including written comments from stakeholders. Based on amount of feedback, Chair Sizemore announced:

Workgroup would be created to discuss alternatives. At that time, five meetings were planned in various parts of the state:

  • Monday, Oct. 24 – Tukwila
  • Wednesday, Nov. 16 – Spokane
  • Monday, Nov. 28 – Lacey, WSGC Headquarters
  • Monday, Dec. 5 – Tri-Cities (possibly at Columbia Center Rotary’s bingo location in Kennewick) CANCELLED
  • Thursday, Dec. 22 – Everett POSTPONED

Implementation date would be moved from July 1, 2017, to January 1, 2018.

LICENSE FEE RESTRUCTURE OPTIONS

May 2016 Commission Meeting - Staff presented two concepts for changing the current fee schedule based on the suggestions and feedback we had received to date from stakeholders.

Option A - Simplify Existing Fee Structure

  • Reduces 194 License fees to about 120
  • Manufacturers/Distributors/Gambling Service Suppliers (Vendors) would pay based on gross receipts, rather than on current limited classes
  • Same problems of our current fee structure, which is based on what the industry model was in 1973.

Option B – Creating a New Fee Structure

  • Changes 43-year-old system
  • Fees paid on actual gambling receipts, rather than estimated
  • Accomplishes goal of being easier for licensees and staff
    • No more refunds for overpayment of license fees
    • No more exceeding class fees
  • Accomplishes the goal of being adaptable to future gambling activities
  • Only 2 fee schedules: 1 for manufacturers/distributors (vendors); 1 for charity/nonprofit and commercial organizations

Staff recommended Option B and Commissioners directed staff to do stakeholder outreach with a report back at their October 2016 Commission meeting. Proposed implementation date for either Option was July 1, 2017.


Under Option B, most licensees would pay less in license fees.


Organization LicensesVendor Licenses
3004 license fees would decrease125 license fees would decrease
144 license fees would increase37 license fees would increase

WORKGROUP MEETING RECAPS

October 24, 2016, Workgroup Meeting in SeaTac - First Workgroup meeting was held. Chair Bud Sizemore chaired the meeting. Commissioner Patterson also attended most of the meeting. There were about 35 people in the audience and about 12 participants on the phone; although the call-in feature only worked during introductions, we plan to try the feature again at our next meeting.

Attendees were asked to choose a representative for each stakeholder group and attendees were asked to come up with a list of questions and data that would be helpful as we work towards a new fee structure.

November 16, 2016, Workgroup Meeting in Spokane - Second meeting was held at the Hampton Inn Spokane Airport. There were approximately 25 attendees and 6 participants on the phone.

Summary of Chair Sizemore’s Comments:

  • Hoping the second meeting would be more focused and not necessarily a repeat of the first meeting. Representatives had been selected for most of the groups now and they had the responsibility for coming up with solutions.
  • Current fee structure does not provide sustainable funding, fees are based on estimates (not actuals), and its roots are in fading forms of gambling.
  • Going forward, representatives should be working toward a consensus from their respective groups. Suggested that the next meeting be a meeting of the ten representatives and that perhaps it should be located in the commission’s main office in Lacey instead of Vancouver, where staff would have easier access to data as questions were asked.

November 28, 2016, Workgroup Meeting in Lacey - The third meeting was held on November 28 at the Commission’s main office in Lacey. There were eleven attendees representing the ten stakeholder groups. A phone-in feature was not offered for this meeting. Chair Sizemore reminded attendees that he and staff have been reviewing the Commission’s fee structure since 2014 when the Commission passed an across-the-board six percent fee increase. Each representative was given time to discuss their ideas, concerns, and ask questions.

Agreed that the December 5 meeting in the Tri-Cities would be cancelled so there would be more time between meetings for representatives to gather data, contact their group members, and not have to travel so frequently.

As the list of assignments grew and we gained more feedback, it was decided that the fifth meeting, scheduled for December 22 in Everett, would be postponed to allow staff more time to complete the data assignments, and representatives more time to coordinate with their groups. A follow-up meeting has not been scheduled yet.


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Page last updated 02/09/2017 08:13 AM
Washington State Gambling Commission

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