How does tax apply to games and gambling?
Many restaurants offer entertainment in the form of games. The restaurant may own the games or receive commission for allowing the games to be placed in the restaurant.
Commissions: Income for allowing the placement of vending machines or games is subject to B&O tax under the Service and Other Activities classification. (See Vending Machines Section.)
Pool/Darts/Shuffleboard: These activities are retail sales. Gross receipts are subject to retail sales tax and the Retailing classification of the B&O tax.
Video games/Amusement devices: This includes slots, pinball, electronic darts, and other machines or devices that permit the patron to see, hear, or read something of interest. Gross receipts are subject to B&O tax under the Service and Other Activities classification.
Note: Sales or use tax applies to the purchase of the machines.
Internet Access: Gross receipts for allowing customers access to the Internet is subject to B&O tax under the Service and Other Activities classification.
References: WAC 458-20-187
Gambling - Contests of Chance
“
Contests of chance” means any contests, games, gaming schemes, or gaming devices, other than the state lottery as defined in
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” as defined in RCW 9.46.0201.)
“Gross income of the business” does not include the monetary value or actual cost of any prizes that are awarded, amounts paid to players for winning wagers, accrual of prizes for progressive jackpot contests, or repayment of amounts used to seed guaranteed progressive jackpot prizes.
Gross receipts from “contests of chance” are reported under Column one of the Service and Other Activities B&O tax classification. Except that if the gross receipts from contests of chance are (or expected to be) $50,000 or greater in any calendar year, report such amounts in Column one of the Gambling Contests of Chance ($50,000 a year or greater) B&O tax classification.
Reference: WAC 458-20-131