ARC 8351C - Iowa Administrative Rules

Notice of Intended Action

Scratch ticket and instaplay ticket general rules, ch 1104

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ARC 8351C

REVENUE DEPARTMENT[701]

Notice of Intended Action

Proposing rulemaking related to scratch ticket and instaplay ticket general rules
and providing an opportunity for public comment

The Revenue Department hereby proposes to adopt new Chapter 1104, “Scratch Ticket and InstaPlay Ticket General Rules,” Iowa Administrative Code.

Legal Authority for Rulemaking

This rulemaking is proposed under the authority provided in Iowa Code sections 99G.3, 99G.9, 99G.21 and 99G.31.

State or Federal Law Implemented

This rulemaking implements, in whole or in part, Iowa Code sections 99G.3, 99G.9, 99G.21 and 99G.31.

Purpose and Summary

This proposed chapter provides generally applicable rules that govern all scratch ticket and InstaPlay ticket games offered by the Iowa Lottery. Because this chapter falls under the Iowa Lottery Authority’s portion of the Iowa Administrative Code, this chapter is outdated upon implementation of the government realignment in 2023 Iowa Acts, Senate File 514. In a separate rulemaking, 531—Chapter 18 is proposed to be rescinded. This rulemaking proposes to readopt the chapter under the Department as Chapter 1104. Additionally, this rulemaking is intended to make the changes required by Executive Order 10 to remove portions of the rules that the Department determined are unnecessary, outdated, or duplicative of statutory language.

Regulatory Analysis

A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on September 18, 2024. A public hearing was held on the following date(s):

●October 8, 2024

No public comments on the Regulatory Analysis were received at the hearing or in writing. No changes have been made to the text after the Regulatory Analysis publication. The Administrative Rules Coordinator provided preclearance for publication of this Notice of Intended Action onOctober 9, 2024.

Fiscal Impact

This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Department for a waiver of the discretionary provisions, if any, pursuant to rule 701—7.28(17A).

Public Comment

Any interested person may submit written or oral comments concerning this proposed rulemaking, which must be received by the Department no later than 4:30 p.m. on December 3, 2024. Comments should be directed to:

Madelyn Cutler
Department of Revenue
Hoover State Building
P.O. Box 10457
Des Moines, Iowa 50306-3457
Phone: 515.724.2924
Email: madelyn.cutler@iowa.gov

Public Hearing

Public hearings at which persons may present their views orally or in writing will be held as follows:

December 4, 2024 10 to 11 a.m.	Room 430 Hoover State Office Building Des Moines, Iowa
December 4, 2024 1:30 to 2:30 p.m.	Room 430 Hoover State Office Building Des Moines, Iowa

Persons who wish to make oral comments at a public hearing may be asked to state their names for the record and to confine their remarks to the subject of this proposed rulemaking.

Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Department and advise of specific needs.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

The following rulemaking action is proposed:

ITEM 1.Adopt the following new701—Chapter 1104:

CHAPTER 1104

SCRATCH TICKET AND INSTAPLAY TICKET GENERAL RULES

701—1104.1(99G) Authorization of instant ticket games. The lottery commission authorizes the sale of scratch tickets and instaplay tickets that meet the criteria set forth in this chapter.

This rule is intended to implement Iowa Code section 99G.9(2).

701—1104.2(99G) Definitions.

“Instaplay ticket” means a ticket printed on lottery terminal paper with play symbols that are not concealed by a removable covering.

“Play symbols” means the numbers or symbols appearing under the removable covering on a scratch ticket or on the face of an instaplay ticket.

“Scratch ticket,” as used in this chapter, means the same as “instant ticket” as defined in Iowa Code section 99G.3(8).

“Validation number” means the characters or numbers found on a ticket or ticket stub used by the department to determine whether a ticket or ticket stub is authentic.

This rule is intended to implement Iowa Code sections 99G.3 and 99G.9(2).

701—1104.3(99G) Method of play. Winners of a prize may be determined by such activities as locating, matching, or adding the play symbols on the tickets or by any other play action approved by the lottery division. The exact method of determining a winning ticket will be determined by the lottery division and shall be set forth in the game specific rules.

This rule is intended to implement Iowa Code sections 99G.9(2) and 99G.21.

701—1104.4(99G) Prizes.

1104.4(1) The number and amount of prizes in any specific scratch ticket or instaplay ticket game will be determined by the lottery division and set forth in the game specific rules applicable to that game.

1104.4(2) At the lottery division’s discretion, a scratch ticket game or an instaplay ticket game may include a special prize event. The number of prizes and the amount of each prize in the prize event will be determined by the lottery division. The dates and times, as well as the procedures for conducting any prize events, will be determined by the lottery division in thegame specific rules. Finalists for prize events will be selected in the manner stated in the game specific rules.

This rule is intended to implement Iowa Code sections 99G.9(2), 99G.21, and 99G.31.

701—1104.5(99G) Annuity prizes. If a prize offered in a scratch ticket game or an instaplay ticket game is an annuity, the prize will consist of an initial prize payment followed by yearly installments as described in the game specific rules. If the current cash value of an annuity prize attributable to a single ticket or entry is less than $100,000, the lottery division may elect to pay the current cash value of the prize in one lump-sum payment.

This rule is intended to implement Iowa Code sections 99G.9(2), 99G.21, and 99G.31.

701—1104.6(99G) Disclosure of odds. The overall probability of purchasing a winning ticket will be displayed on thelottery division’s website and in game literature made available by the lottery division.

This rule is intended to implement Iowa Code sections 99G.9(2) and 99G.21.

701—1104.7(99G) Claiming prizes.

1104.7(1) Claim period. Scratch ticket prizes must be claimed within 90 days of the announced end of the scratch ticket game. Instaplay ticket prizes must be claimed within 90 days of the date of sale of the instaplay ticket.

1104.7(2) Prizes claimed at retailer. The game specific rules shall specify prizes that shall be claimed from the retailer. To claim a prize from a retailer, the winner shall sign the back of the winning ticket and fill out a claim form if required by the game specific rules. If a retailer can verify the claim, the retailer shall pay the prize. If a retailer cannot verify the claim, the player may claim the prize from another retailer or may submit the ticket and a completed claim form to the lottery division. If the claim is validated by the lottery division, a draft shall be forwarded to the player in payment of the amount due. If the claim is not validated by the lottery division, the claim shall be denied and the player shall be promptly notified.

1104.7(3) Prizes claimed at a lottery division office. The game specific rules may specify prizes that may be claimed only from the lottery division. To claim a prize from the lottery division, the player may personally present the completed claim form obtained from a licensed retailer or any lottery office and the ticket to any lottery office or may mail the ticket and claim form to the Iowa lottery division’s main office as defined in rule 701—2.3(17A). If the claim is validated by the lottery, the prize or a check, warrant, or draft will be forwarded to the player in payment of the amount due less any applicable state or federal income tax withholding and less any applicable setoff withheld under Iowa Code section 99G.41. If the claim is not validated by the lottery, the claim is denied and the player will be promptly notified.

1104.7(4) Variation by game specific rules. The game specific rules may vary the terms of this rule in respect to the manner in which prizes are claimed or the claim period applicable to any scratch ticket game or instaplay ticket game or special event.

This rule is intended to implement Iowa Code sections 99G.9(2), 99G.21, and 99G.31.

701—1104.8(99G) Ticket validation requirements.

1104.8(1) To be a valid scratch ticket, a ticket must meet all of the following validation requirements. A ticket must:

a.Have been issued in an authorized manner as determined by the lottery division.

b.Not be altered, unreadable, reconstructed, or tampered with in any manner.

c.Not be counterfeit in whole or in part.

d.Not be stolen or appear on any list of omitted tickets on file with the lottery division.

e.Be complete and not blank or partially blank, miscut, misregistered, defective, or printed or produced in error.

f.Have play symbols and captions as described in the game specific rules. All symbols, numbers, and codes must be present in their entirety, legible, right side up, and not reversed in any manner.

g.Have the appropriate bar code, pack-ticket number, retailer verification code, and security code.

h.Have a validation number that appears on the lottery division’s official list of validation numbers of winning tickets. A ticket with that validation number shall not have been previously paid.

i.Pass all additional validation requirements stated in the game specific rules and any confidential validation requirements established by the lottery.

1104.8(2) To be a valid instaplay ticket, a ticket must meet all of the following validation requirements. A ticket must:

a.Have been issued in an authorized manner as determined by the lottery division.

b.Not be altered, unreadable, reconstructed, or tampered with in any manner.

c.Not be counterfeit in whole or in part.

d.Not be stolen, canceled, or appear on any list of omitted or test tickets on file with the lottery division.

e.Be complete and not blank or partially blank, miscut, misregistered, defective, or printed or produced in error.

f.Have play symbols and captions as described in the game specific rules. All symbols, numbers, and codes must be present in their entirety, legible, right side up, and not reversed in any manner.

g.The information on the ticket or share must correspond precisely with the lottery division’s computer record.

h.The ticket or share serial number must appear in its entirety and correspond, using a computer validation file, to the winning game play or plays printed on the ticket or share.

i.A ticket or share shall be void unless the ticket or share is printed on a paper stock roll that was validly issued to and used, at the time of the play, by the retailer from which the ticket or share was purchased.

j.Pass all additional validation requirements stated in the game specific rules and any confidential validation requirements established by the lottery division.

1104.8(3) Any ticket not passing all applicable validation requirements is invalid and is ineligible for any prize. The lottery division determination that a ticket is invalid is binding on all participants in the lottery. The lottery division may choose to pay an amount equal to the prize that would have been won on an invalid ticket if the lottery division is able to determine the prize that would have been won by use of a symbol, number, color code, or other mechanism. The lottery division’s decision as to whether to pay a player the sum equal to the prize on an invalid ticket is binding on all participants in the lottery. A player who wishes to challenge a determination by the lottery division under this subrule may request a contested case proceeding as described in 701—Chapter 6.

If an invalid ticket is purchased by a player, the only responsibility or liability of the lottery division will be to replace the invalid ticket with an unplayed ticket from the same game or any other game or issue a refund of the sale price.

This rule is intended to implement Iowa Code sections 99G.9(2), 99G.21, and 99G.31.

701—1104.9(99G) Official end of game. The lottery division will announce the official end of each scratch ticket game and each instaplay ticket game. Retailers may continue to sell tickets for each game up to the cutoff date specified by the lottery.

This rule is intended to implement Iowa Code sections 99G.9(2) and 99G.21.