ARC 8353C

ARC 8353C

Proposing rulemaking related to general rules of computerized games
and providing an opportunity for public comment

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.

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.

ITEM 1.Adopt the following new701—Chapter 1106:

CHAPTER 1106

COMPUTERIZED GAMES—GENERAL RULES

701—1106.1(99G) Authorization of computerized lottery games. The lottery commission authorizes the sale of computerized games to be played in compliance with the criteria set forth in this chapter.

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

701—1106.2(99G) Computerized lottery definitions. As used in this chapter:

“Central computer” means a computer system designated to control, monitor, and communicate with lottery terminals and self-service kiosks and to record the transactions processed by that lottery equipment.

“Drawing” means the process used to randomly select winning numbers or entries.

“Easy pick” means the random selection by the terminal or self-service kiosk of a valid play for the game that was selected.

“Game” means any computerized game conducted by the lottery.

“Instant ticket vending machine” means a vending machine or self-service kiosk that dispenses printed paper lottery tickets, with or without a scratch-off area.

“Online vending machine” means a vending machine that prints and dispenses tickets or shares that have been determined to be winning or losing tickets or shares by a predetermined pool drawing machine prior to the dispensing of the tickets or shares.

“Play(s)” means the selection of an appropriate number of available variables that constitutes a valid entry in the game or the purchase of a ticket or share with a sequentially generated variable appearing on the face of the ticket or share that constitutes a valid entry in a pool exhaustion game.

“Play slip” means a card used by the player in marking a player’s plays.

“Pool exhaustion game” means a game where a predetermined pool of plays is established.

“Predetermined pool drawing machine” means a computer or other device external to a lottery terminal, instant ticket vending machine, self-service kiosk or online vending machine, that predetermines winning and losing tickets or shares, assigns them to preprogrammed and prepackaged sequential electronic pool files and subsequently utilizes the files in production and distribution of electronic game cards and paper game tickets or shares produced in manufactured packs or through lottery terminals or vending machines.

“Terminal” means a device that is authorized by the lottery division to function with a central computer system for the purpose of issuing, entering, receiving, and processing lottery transactions.

“Vending machine” means a lottery ticket or share dispensing machine either with a mechanical operating mechanism or with computer components that perform accounting functions and activate the ticket or share dispensing mechanism.

“Winning numbers” means the selection of an appropriate number of the variables, randomly selected at each drawing, that are used to determine winning plays contained on a game ticket or share.

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

701—1106.3(99G) Method of play. If mandated by the game specific rules, a player selects an appropriate number of the available game variables. A player may select each game variable by marking a play slip and submitting the play slip to a retailer, by asking a retailer to manually enter the game variables, or by purchasing an “easy pick” ticket from a retailer. Players may also purchase plays from player-activated terminals by use of a touch screen if player-activated terminals are available. A drawing is held in which an appropriate number of the game variables are drawn on a random basis.

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

701—1106.4(99G) Cancellation by a player. A ticket or share may be canceled by returning the ticket or share to the selling retailer provided that the ticket or share is returned to the retailer the same day it was purchased in time to permit canceling to be fully completed prior to the closing time for that drawing. In the event that a ticket or share is canceled, the player will be entitled to receive from the retailer a refund equal to the purchase price of the ticket or share.

Cancellations will not be allowed in certain games as outlined in the game specific rules.

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

701—1106.5(99G) Prizes and odds. The amount of prizes and the odds of winning are set forth in the game specific rules. Game specific rules may allow alternative prize structures.

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

701—1106.6(99G) Payment of annuity jackpot prizes. The lottery division may offer cash prizes, annuitized installment prizes, and prizes with cash or annuity payment options available to the winners. If the jackpot prize or share of the jackpot prize will be paid as an annuity, it will consist of the initial payment followed by such number of yearly installments as may be provided in the game specific rules for the game unless the cash value of the annuity prize attributable to a single play is less than $100,000. If the cash value of the annuity prize attributable to a single play is under $100,000, the lottery division may elect to pay the cash value of the prize in one lump-sum prize payment. This rule does not apply to multistate or other multijurisdictional lottery games. Provision for payment of prizes for multistate and other multijurisdictional games shall be outlined in the game specific rules for such games.

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

701—1106.7(99G) Unclaimed prizes. Unclaimed jackpot prizes, shares of the jackpot prize, and other lottery prizes do not increase a prize simultaneously won by any other player in the game. Unclaimed jackpot shares are added to future jackpot prize pools at times determined by the lottery division. Other unclaimed prizes are added to future prize pools for any lottery game. This rule applies to such games offered in Iowa, except as may otherwise be provided in the game specific rules of a multistate lottery or other multijurisdictional lottery with which the Iowa lottery may be affiliated.

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

701—1106.8(99G) Price. The price of a play will be outlined in the game specific rules.

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

701—1106.9(99G) Changes for special promotions. The lottery division may alter the price of the tickets or shares, features, or prizes of the game or drawings to accommodate special promotions. Alterations made by the lottery division shall be contained in the game specific rules.

This rule is intended to implement Iowa Code sections 99G.7, 99G.9(2), and 99G.21.

701—1106.10(99G) Ticket or share ownership and prize entitlement.

1106.10(1) A ticket or share is owned by its physical possessor until a signature is placed on the back of a ticket in the area designated for signature. When a signature is placed on the back of the ticket or share in the designated space, the person whose signature appears in the designated space is the owner of the ticket or share and is entitled to any prize attributable to the ticket or share.

1106.10(2) Notwithstanding any name or names submitted on a claim form, the lottery division will make payment to the person whose signature appears on the back of the ticket or share in the designated space. If the signatures of more than one person appear in that space, the lottery division will make payment to the person identified on the winner’s claim form to receive payment, which designation is made by all persons whose signatures appear on the reverse side of the ticket or share. In the event that all persons whose signatures appear in the appropriate space cannot identify one person to whom payment should be made, the lottery division may withhold payment until the proper payee is determined.

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

701—1106.11(99G) Ticket validation requirements.

1106.11(1) All claims for prizes are subject to validation by the lottery division. A valid ticket or share eligible to receive a prize will satisfy all of the following requirements.

a.The ticket or share was issued by the lottery division directly or through a retailer, via a terminal, in an authorized manner.

b.The information on the ticket or share corresponds precisely with the lottery division’s computer record.

c.The ticket or share serial number appears in its entirety and corresponds, using a computer validation file, to the winning play or plays printed on the ticket or share.

d.A 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.

e.The ticket or share is not produced in error, counterfeit in whole or in part, altered, mutilated, unreadable, tampered with in any manner, incomplete, blank or partially blank, miscut, or defective.

f.The ticket or share is not stolen or canceled.

g.The ticket or share passes all additional validation requirements that may be stated in the game specific rules and other security criteria determined by the lottery division.

1106.11(2) In the event that a ticket or share fails to pass all of the validation criteria set forth in this rule, the game specific rules or as determined by the lottery division, the ticket or share is invalid and ineligible for any prize. The lottery division, in its sole discretion, may choose to pay a sum equal to the prize on an invalid ticket or share if the lottery division can determine the prize that would have been won by the ticket or share by use of a symbol, code number, color code, or other mechanism. The lottery division’s decisions as to whether a ticket or share is invalid and whether a sum equal to the prize on an invalid ticket or share will be paid are binding on all participants in the lottery. If the lottery division determines that a ticket or share is not eligible to receive a prize or a sum equivalent to the prize amount, the lottery division may replace the invalid ticket or share with a ticket or share of equivalent sale price from any current lottery game or refund the purchase price of the ticket or share. Replacement of the ticket or share, or refund of the purchase price, are the claimant’s sole and exclusive remedy. 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.

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

701—1106.12(99G) All prizes for games not associated with another state’s lottery must be claimed as directed within 90 calendar days of the drawing in which the prize was won unless otherwise specified in the game specific rules. All prizes for games associated with another state’s lottery are to be claimed as directed within the game specific rules. For purposes of determining the claim period, the drawing date is not counted. If a prize is claimed by mail, the lottery division must actually receive the ticket or share and claim form within the claim period. Any prize not properly claimed within the specified period is forfeited. The claim period for a game may be altered by the lottery division in the game specific rules.

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

701—1106.13(99G) Manner of claiming prizes.

1106.13(1) To receive payment for a prize or prizes on any single game ticket or share that total $600 or less, the winner may take the signed ticket or share directly to any lottery retailer authorized to sell and validate the game, or to any lottery division office, or mail the signed ticket or share, along with a completed claim form, to the Iowa Lottery Division’s main office as defined in rule 701—2.3(17A).

If there is any alteration, mutilation, tear, or other ambiguity on the ticket or share, the retailer is not authorized to make direct payment of a prize and a claim form, and the ticket or share is to be submitted to the lottery division.

1106.13(2) To receive payment for a prize or prizes on any single game ticket or share that total more than $600, the winner may submit the signed ticket or share and a completed claim form directly to any lottery division office. The winner may also mail the signed ticket or share and claim form to the Iowa Lottery Division’s main office as defined in rule 701—2.3(17A).

1106.13(3) Claim forms are available at all computerized lottery division retailers and lottery offices. The lottery division or, at the lottery division’s direction, a lottery retailer may require the person claiming a prize of any amount to fill out a claim form.

1106.13(4) If a prize is claimed by mail, the ticket or share and the claim form must actually be received by the lottery division within the claim period.

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

701—1106.14(99G) Presentation of ticket. No prize payments will be made unless the player submits a valid, uncanceled ticket or share. A play slip has no pecuniary or prize value and is not evidence of ticket purchase or of numbers selected.

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

701—1106.15(99G) One prize per play. The holder of a winning ticket or share may win only one prize per play in connection with the winning numbers drawn and is entitled only to the prize won by those numbers in the highest matching prize category.

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

701—1106.16(99G) Corrections. The lottery division reserves the right to correct and adjust, up or down, the amount of any prize or prizes, whether all or part of the prize or prizes has been paid, if it is determined that one or more players are entitled to a portion of a prize and were not included in the prize calculations or were included in the prize calculations by mistake.

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

701—1106.17(99G) Risk of error. The placing of plays is done at the player’s own risk. It is solely the player’s responsibility to verify the accuracy of plays and all other data printed on the ticket. In the event of any error, the player’s only remedy is cancellation of the ticket or share according to the procedure specified in this chapter. The lottery division and lottery retailers have no other responsibility for tickets or shares printed in error.

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

701—1106.18(99G) Multidraw plays and advance plays. Multidraw plays and advance plays may be available.

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

701—1106.19(99G) Drawings. Drawings will be held as specified in the game specific rules.

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

701—1106.20(99G) Cancellation or delay. The lottery division reserves the right to cancel or delay drawings or sales of tickets or shares in the event of technical difficulties, and on days of special importance or on days the drawings would be impractical or inappropriate.

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

701—1106.21(99G) Pool exhaustion game—method of play.

1106.21(1) Players may purchase tickets or shares for a specific game. Each ticket or share sold for a pool exhaustion game will be generated separately. Tickets or shares will be sold against the pool until the pool of plays is exhausted or until the game ends in accordance with the game specific rules.

1106.21(2) Each ticket or share will bear a sequentially generated variable on the face of the ticket or share.

1106.21(3) Drawings for the prizes for a specific game will randomly select a winner or winners from the tickets or shares actually sold. The drawing method is described in the game specific rules.

1106.21(4) Prizes are awarded as specified in the game specific rules.

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

701—1106.22(99G) Prize insurance fund.

1106.22(1) The lottery may provide that up to 10 percent of the funds designated for the jackpot prize level in the prize structure of the game specific rules for a game or that any prize funding not awarded by the conclusion of the relevant claim period for a fixed-prize game will be transferred to a prize insurance fund.

1106.22(2) The prize insurance fund may be used for any of the following purposes:

a.To pay prizes for any online game prize obligation if the amount available to fund an online game prize is insufficient;

b.To support a special promotion to retire an online game (e.g., a television show or a second-chance drawing);

c.To transfer amounts to a successor game to pay prize obligations for a different online game.

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