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AGO 1986 No. 10 - July 09, 1986
AGO Opinion Header Image
Ken Eikenberry | 1981-1992 | Attorney General of Washington

TAXATION ‑- GAMBLING ‑- ENFORCEMENT ‑- USE OF PROCEEDS FROM TAX ON GAMBLING ACTIVITIES

Revenue from the tax on gambling activities authorized by RCW 9.46.110 must be used chiefly, or for the most part, to enforce gambling laws.  However, revenues from the tax on amusement games must be used solely for the enforcement of gambling laws. 

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                                                                     July 9, 1986

Honorable Gary P. Burleson
Prosecuting Attorney
County of Mason
411 North Fifth Street
Shelton, Washington 98584 

Cite as:  AGO 1986 No. 10                                                                                                                

 Dear Sir:

             By letter previously acknowledged, you requested our opinion on a question which we paraphrase as follows:

             Must all of the proceeds from the tax on gambling activities authorized by RCW 9.46.110 be used for the enforcement of gambling laws under chapter 9.46 RCW?

             We answer your question in the negative, with one exception, for the reasons stated in the following analysis.

                                                                      ANALYSIS

            RCW 9.46.110 authorizes any county, city-county, city, or town to impose a tax on certain gambling activities.  RCW 9.46.110 provides in part1/ as follows:

             The legislative authority of any county, city-county, city, or town, by local law and ordinance, and in  [[Orig. Op. Page 2]] accordance with the provisions of this chapter and rules and regulations promulgated hereunder, may provide for the taxing of any gambling activity authorized in RCW 9.46.030 as now or hereafter amended within its jurisdiction, the tax receipts to go to the county, city-county, city, or town so taxing the same . . . .

             Revenue from the gambling tax authorized under RCW 9.46.110 must be spent in accordance with RCW 9.46.113, which reads as follows:

             Any county, city or town which collects a tax on gambling activities authorized pursuant to RCW 9.46.110 shall use the revenue from such tax primarily for the purpose of enforcement of the provisions of this chapter by the county, city or town law enforcement agency.

             In 1976 we interpeted [interpreted] the language of RCW 9.46.110 in AGLO 1976 No. 21, a copy of which is provided for your convenience.  Therein we stated:

             By choosing [the] word [primarily], however, the legislature, nevertheless, retained a requirement that any revenues derived by a municipality from its taxation of authorized gambling activities be used first, chiefly, and for the most part, to fund law enforcement activities specifically related to the state gambling laws.

                         Because the legislature took this course, a county, city or town willnot be in violation of RCW 9.46.113, supra, if some small portion of the total revenues derived from the taxation of gambling activities within its boundaries is used for other law enforcement activities or, conceivably, even for nonlaw enforcement operations.  But such a municipality will, nevertheless, have to adopt and follow whatever budgetary procedures are required in order to assure that most of the revenues in question are used for the specific purpose of enforcing the state gambling laws . . . .

             AGLO 1976 No. 21 concluded there was no requirement that all of the revenue from the gambling tax be used for gambling enforcement.  In responding to your inquiry we have reexamined AGLO 1976 No. 21, and the subsequent 1977 amendment to RCW 9.46.110 (§ 1, chapter 198, Laws of 1977, 1st Ex. Sess.) referring to the taxation of amusement games.

              [[Orig. Op. Page 3]]

            The term "primarily" is not defined in the statute, so we must undertake to clarify the meaning to be accorded it.  Absent a statutory definition, words in a statute must be accorded their usual and ordinary meaning.  Pacific First Federal Savings & Loan Association v. State, 92 Wn.2d 402, 409, 598 P.2d 387 (1979).  In determining the usual and ordinary meaning of a word, it is appropriate to consult the dictionary.  See Purse Seine Vessel Owners Association v. Moos, 88 Wn.2d 799, 808, 567 P.2d 205 (1977).  The following are dictionary definitions of "primarily":

             "Primarily. . .  First of all . . . in the first place . . . Webster's Third New International Dictionary 1800 (1971).

             "Primarily. . .  'Essentially; mostly; chiefly; principally; . . . in the first instance; at first; originally: . . .'"  Random House Dictionary of the English Language 1142 (1967).

             Based on the usual and ordinary meaning of "primarily," RCW 9.46.113 requires that revenue from the gambling tax be used chiefly and for the most part to enforce the state's gambling laws.  The term "primarily" does not require that all revenue be devoted to this purpose.

             This interpretation is consistent by the intent and purpose of chapter 9.46 RCW.  In interpreting a statute, one must give effect to the intent and purpose of the legislation as expressed in the act as a whole.  Condit v. Lewis Refrigeration Co., 101 Wn.2d 106, 110, 676 P.2d 466 (1984).

             When read as a whole, chapter 9.46 RCW demonstrates the legislature's recognition of the dangers of gambling and its intent to enforce the state's gambling laws.

             The legislative declaration in RCW 9.46.010 provides in part:

             It is hereby declared to be the policy of the legislature, recognizing the close relationship between professional gambling and organized crime, to restrain all persons from seeking profit from professional gambling activities in this state; to restrain all persons from patronizing such professional gambling activities; to safeguard the public against the evils induced by common gamblers and common gambling houses engaged in professional gambling; and at the same time,  [[Orig. Op. Page 4]] both to preserve the freedom of the press and to avoid restricting participation by individuals in activities and social pastimes, which activities and social pastimes are more for amusement than for profit, do not maliciously affect the public, and do not breach the peace.

             The legislature's recognition of the potential dangers of gambling and the need for enforcement were recognized by the Court of Appeals, Division II, inState v. Gedarro, 19 Wn.App. 826, 579 P.2d 949 (1978).  Gedarro concerned a challenge to the constitutionality of certain operative sections of chapter 9.46 RCW.  In this context the court discussed the policy behind chapter 9.46 RCW, stating:

             Underlying the gambling act, and consonant with the legislative recognition that professional gambling is interrelated with organized crime, are policies which attempt to restrain personal profits realized through professional gambling activities and to discourage participation in such activities.  RCW 9.46.030 is consistent with the State's interest to suppress moral decay and criminal propensities that accompany professional gambling because (1) it permits the public to engage only in pastimes that tend more toward amusement than profit, and (2) it promotes the public interest in supporting charitable activities, thus differentiating between gambling for profit and professional fund raising by a bona fide charitable organization.  The statutory regulations afford the State an opportunity to scrutinize the activities of the charitable organizations and licensed individuals to ensure their eligibility pursuant to the statutory scheme . . . .

 Gedarro, 19 Wn.App. at 830.

             Consistent with the legislative concern for enforcement, chapter 9.46 RCW provides criminal penalties for violation of the act.  For example, RCW 9.46.160 provides in part:

             Any person who conducts any activity for which a license is required by this chapter, or by rule of the commission, without the required license issued by the commission shall be guilty of a felony and upon conviction shall be punished by imprisonment for not more  [[Orig. Op. Page 5]] than five years or by a fine of not more than one hundred thousand dollars, or both.

 RCW 9.46.180 provides:

             Any person who knowingly causes, aids, abets, or conspires with another to cause any person to violate any provision of this chapter shall be guilty of a felony and upon conviction shall be punished by imprisonment for not more than five years or a fine of not more than one hundred thousand dollars, or both.

             Law enforcement agencies of local government play an important part in the legislative scheme for enforcing chapter 9.46 RCW.  RCW 9.46.210 provides in part as follows:

             (1) It shall be the duty of all peace officers, law enforcement officers, and law enforcement agencies within this state to investigate, enforce, and prosecute all violations of this chapter.

             (2) In addition to the authority granted by subsection (1) of this section law enforcement agencies of cities and counties shall investigate and report to the commission all violations of the provisions of this chapter and of the rules of the commission found by them and shall assist the commission in any of its investigations and proceedings respecting any such violations.  Such law enforcement agencies shall not be deemed agents of the commission.

            The legislative emphasis on enforcement in chapter 9.46 RCW and the significant role of local government law enforcement agencies persuade us that RCW 9.46.113's reference to "primarily for the purpose of enforcement" is a requirement that revenue from the gambling tax be used chiefly and for the most part to enforce gambling laws.  However, we find no requirement in chapter 9.46 RCW that all of the revenue from the tax on gambling activities authorized under RCW 9.46.110 be used for the enforcement of gambling laws.  Thus, we reaffirm our prior conclusion in AGLO 1976 No. 21 and, with a single exception which we will note, answer your question in the negative.

             [[Orig. Op. Page 6]]

            The one exception to this conclusion relates to the tax revenue from amusement games.  "Amusement games" are a distinct type of gambling activity specifically defined in RCW 9.46.020(1).  RCW 9.46.030 permits amusement games under certain circumstances and amusement games are subject to tax under RCW 9.46.110.

             RCW 9.46.110 specifically limits the revenue to be raised from the tax on amusement games in the following manner:

             Taxation of amusement games shall only be in an amount sufficient to pay the actual costs of enforcement of the provisions of this chapter by the county, city or town law enforcement agency and in no event shall such taxation exceed two percent of the gross revenue therefrom less the amount paid for as prizes . . . .  (Emphasis supplied)

             This statutory provision mandates that the tax on amusement games cannot be greater than the cost of gambling enforcement.  That tax also cannot be greater than two percent of the gross revenue less the amount paid for prizes.  When this specific provision is read in conjunction with RCW 9.46.113, we have to conclude that all of the revenue from the tax on amusement games must be spent on gambling enforcement.  Since all the revenue from the tax on amusement games is spent on gambling enforcement there is none left to spend for other purposes.

             This is the exception to our general conclusion that all revenue from the tax authorized under RCW 9.46.110 need not be used for gambling enforcement is limited to the tax on amusement games.  This is because the limitation that taxes "shall only be in an amount sufficient to pay the actual costs of enforcement" applies only to amusement games.  Taxes on other gambling activities authorized by RCW 9.46.110 have no such limit.  For example, RCW 9.46.110 states:

             [T]axation of bingo and raffles shall never be in an amount greater than ten percent of the gross revenue received therefrom less the amount paid for or as prizes. . . .  Taxation of punch boards and pull-tabs shall not exceed five percent of gross receipts, nor shall taxation of social card games exceed twenty percent of the gross revenue from such games.

              [[Orig. Op. Page 7]]

            Also, the legislative history of RCW 9.46.110 confirms that the limitation to the actual costs of enforcement applies only to "amusement games."  When RCW 9.46.110 was enacted in 1973, the law provided in part:

             [T]axation of bingo, raffles and amusement games shall never be in an amount greater than ten percent of the gross revenue received therefrom.

 Laws of 1973, 1st Ex. Sess., ch. 218, § 11.

             In 1977, RCW 9.46.110 was amended in part as follows:

             [T]axation of bingo ((,))and raffles ((and amusement games)) shall never be in an amount greater than ten percent of the gross revenue received therefrom less the amount paid for or as prizes.  Taxation of amusement games shall only be in an amount sufficient to pay the actual costs of enforcement of the provisions of this chapter by the county, city or town law enforcement agency and in no event shall such taxation exceed two percent of the gross revenue therefrom less the amount paid for as prizes. . . .

 Laws of 1977, 1st Ex. Sess., ch. 198, § 1.

             Under the 1977 amendment amusement games were no longer subject to the same limitations as bingo and raffles.  Instead, amusement games were subject to two new limitations.  First, the requirement that the tax not exceed the actual costs of enforcement and second, that in no event was the tax to exceed two percent of the gross revenue therefrom less the amount paid for as prizes.  Clearly, neither of these limitations apply to the taxation of any gambling activity except amusement games.

             Thus, except for amusement games, the taxes imposed under RCW 9.46.110 can be in an amount greater than the costs of enforcement since such terms are not exclusively earmarked for enforcement.  However, we caution that our conclusion that all of the revenue from the tax authorized under RCW 9.46.110 need not be used for gambling enforcement (except for the tax on amusement games) does not mean that this revenue is generally available for other governmental purposes.  RCW 9.46.113 requires that the revenue be  [[Orig. Op. Page 8]] used primarily for enforcement of gambling laws.  Consistent with our 1976 AGLO, we interpret this to mean that the revenue must be used chiefly, or for the most part, for enforcement of gambling laws.

             We trust that the foregoing will be of assistance to you.

 Very truly yours,
KENNETH O. EIKENBERRY
Attorney General

WILLIAM B. COLLINS
Assistant Attorney General

                                                         ***   FOOTNOTES   ***

 1/RCW 9.46.110 is set forth in its entirety in Appendix A.

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