Iowa Code r. 491-11.12 - Progressive slot machines
(1)
Meter required. A progressive machine is a slot machine game
with an award amount that increases based on a function of credits bet on the
slot machine and that is awarded when a particular configuration of symbols or
events is displayed on the slot machine. Random events generating awards
independent of the base slot machine game and not dependent on any specific
slot machine game shall be considered bonus features. A progressive slot
machine or group of linked progressive slot machines must have a meter showing
the progressive jackpot payout.
(2)
Progressive controllers. The reset or base value and the rate
of increment of a progressive jackpot game must be filed with a commission
representative prior to implementation. A reset or base value must equal or
exceed the equivalent nonprogressive jackpot payout.
(3)
Limits. A facility may
impose a limit on the progressive jackpot payout of a slot machine if the limit
imposed is greater than the progressive jackpot payout at the time the limit is
imposed. The facility must prominently display a notice informing the public of
the limit. No progressive meter may be turned back to a lesser amount unless
one of the following circumstances occurs:
a.
The amount shown on the progressive meter is paid to a player as a
jackpot.
b. It is necessary to
adjust the progressive meter to prevent it from displaying an amount greater
than the limit imposed by the facility.
c. It is necessary to change the progressive
indicator because of game malfunction.
(4)
Transfer of jackpots. In
the event of malfunction, replacement, or other reason approved by the
commission, a progressive jackpot that is removed shall be transferred, less
the reset value, to other progressive slot machine jackpots of similar
progressive wager and probability at the same facility within 30 days from the
removal date. In the event a similar progressive jackpot at the same facility
is unavailable, other transfers shall be allowed. A commission representative
shall be notified in writing prior to a removal or transfer.
(5)
Records required.
Records must be maintained that record the amount shown on a progressive
jackpot meter. Supporting documents must be maintained to explain any reduction
in the payoff amount from a previous entry. The records and documents must be
retained for a period of three years unless permission to destroy them earlier
is given in writing by the administrator.
(6)
Transfer of progressive slot
machines. A progressive slot machine, upon permission of the
administrator, may be moved to a different facility if a bankruptcy, loss of
license, or other good cause warrants.
(7)
Linked machines. Each
machine on the link shall have the same probability of winning the progressive
jackpot, adjusted for the total amount wagered. The probability of winning the
progressive jackpot multiplied by the maximum amount wagered shall be within
the maximum allowable tolerance for all games on the link. For the purpose of
this calculation, the maximum allowable tolerance when linked with any other
game shall be the product of the probability of winning the progressive
jackpot, adjusted for amount wagered, multiplied by:
a. 1 percent (0.01) for games where the
probability of winning the progressive jackpot is less frequent than or equal
to 1 in 100,000; or
b. 5 percent
(0.05) for games where the probability of winning the progressive jackpot is
more frequent than 1 in 100,000.
(8)
Wide area progressive
systems. A wide area progressive system is a method of linking
progressive slot machines or electronic gaming machines by secured data
communication as part of a network that connects participating facilities. The
purpose of a wide area progressive system is to offer a common progressive
jackpot (system jackpot) at all participating locations within Iowa or in
multiple states. The operation of a wide area progressive system (multilink) is
permitted, subject to the following conditions:
a. The provider of a multilink (provider)
shall be an entity licensed as a manufacturer, a distributor, or an operator of
gambling games within the state of Iowa or be the qualified parent company of
an operator of gambling games within the state of Iowa. No entity shall be
licensed for the sole purpose of providing a multilink.
b. Prior to operation of a multilink, the
provider shall submit to the administrator for review and approval information
sufficient to determine the integrity and security of the multilink. The
information must include, but is not limited to, the following:
(1) Central system site location,
specifications, and operational procedures.
(2) Encryption and method of secured
communication over the multilink and between facilities.
(3) Method and process for obtaining meter
data from slot machines on the multilink.
(4) Disbursement options for jackpot payoffs,
including information for periodic payments. Periodic payment information,
including number of payments and time between payments must be displayed as
part of the slot machine pay table or prominently displayed on the face of the
slot machine.
(5) Jackpot
contribution rates, including information sufficient to determine contributions
to the jackpot are consistent across all entities participating in the
multilink. Any subsequent changes to the contribution rate of a multilink
jackpot must be submitted to the administrator for review and
approval.
(6) Jackpot verification
procedures.
(7) Jackpot
discontinuation procedures, including procedures for distribution of
contributions to another jackpot or return of pro rata shares to participating
facilities.
c. The
provider of the multilink shall, upon request, supply reports and information
to the administrator which detail the contributions and economic activity of
the system, subject to the following requirements:
(1) Aggregate and detail reports that show
both the economic activity of the entire multilink, as well as details of each
machine on the multilink.
(2) Upon
invoicing a facility, details regarding each machine at the facility and each
machine's contribution to the multilink for the period of the invoice shall be
supplied, as well as any other details required by the administrator.
d. Concurrent jackpots which occur
before the multilink jackpot meters show reset and updated jackpot amounts will
be deemed to have occurred simultaneously. Each winner shall receive the full
amount shown on the system jackpot meter.
e. The provider must suspend play on the
multilink if a communication failure of the system cannot be corrected within
24 consecutive hours.
f. A meter
that shows the amount of the system jackpot must be conspicuously displayed at
or near the machines to which the jackpot applies. Jackpot meters may show
amounts that differ from the actual system jackpot, due to delays in
communication between sites and the central system, but meters shall not
display an incorrect amount for an awarded jackpot.
g. In calculating adjusted gross receipts, a
facility may deduct its pro rata share of the present value of any system
jackpots awarded. Such deduction shall be listed on the detailed accounting
records supplied by the provider. A facility's pro rata share is based on the
amount of coin-in from that facility's machines on the multilink, compared to
the total amount of coin-in on the whole system for the time period between
awarded jackpots.
h. In the event a
facility ceases operations and a progressive jackpot is awarded subsequent to
the last day of the final month of operation, the facility may not file an
amended wagering tax submission or make a claim for a wagering tax refund based
on its contributions to that particular progressive prize pool.
i. The payment of any system jackpot offered
on a multilink shall be administered by the provider, and the provider shall
have sole liability for payment of any system jackpot the provider
administers.
j. The provider shall
comply with the following:
(1) A reserve shall
be established and maintained by the provider in an amount of not less than the
sum of the following amounts:
1. The present
value of the amount currently reflected on the jackpot meters of the
multilink.
2. The present value of
one additional reset (start amount) of the multilink.
(2) For system jackpots disbursed in periodic
payments, a provider shall fund the periodic payments within 90 days of the
notice of the jackpot award with:
1. Purchase
of a qualified investment. A copy of such qualified investment shall be
provided to the administrator within 30 days of purchase. Any qualified
investment shall have a surrender value at maturity, excluding any interest
paid before the maturity date, equal to or greater than the value of the
corresponding periodic jackpot payment and shall have a maturity date prior to
the date the periodic jackpot payment is required to be made; or
2. A surety bond or an irrevocable letter of
credit with an independent financial institution which provides periodic
payments to a winner should the establishment default for any reason. The
written agreement establishing a surety bond or irrevocable letter of credit
shall be submitted to the administrator within 30 days of purchase;
or
3. An irrevocable trust with an
independent financial institution in accordance with a written trust agreement
approved by the administrator which provides periodic payments from an
unallocated pool of assets to a group of winners and which shall expressly
prohibit the winner from encumbering, assigning or otherwise transferring in
any way the winner's right to receive the deferred portion of the winnings
except to the winner's estate. The assets of the trust shall consist of federal
government securities including but not limited to treasury bills, treasury
bonds, savings bonds or other federally guaranteed securities in an amount
sufficient to meet the periodic payments as required; or
4. Another irrevocable method of providing
the periodic payments to a winning player consistent with the purpose of this
subparagraph, and which is approved by the administrator prior to
implementation.
(3) The
provider shall not be permitted to sell, trade, or otherwise dispose of any
periodic payment funding unless approval to do so is first obtained from the
administrator.
(4) Upon becoming
aware of an event of noncompliance with the terms of the reserve requirement
mandated by subparagraph 11.12(8)"j"(1) above, or in the event
of nonpayment of a periodic payment directly by the provider, the provider must
immediately notify the administrator. An event of noncompliance includes a
nonpayment of a jackpot periodic payment or a circumstance which may cause the
provider to be unable to fulfill, or which may otherwise impair the provider's
ability to satisfy, the provider's jackpot payment obligations.
(5) On a quarterly basis, the provider must
deliver to the administrator a calculation of system reserves required under
subparagraph 11.12(8)"j"(1) above. The calculation shall come
with a certification of financial compliance signed by a duly authorized
financial officer of the provider, on a form prescribed by the administrator,
validating the calculation.
(6) On
an annual basis, the provider must deliver to the administrator updated
information sufficient to determine compliance with the funding requirements of
all outstanding periodic payments. This shall include an updated listing of all
winners showing outstanding periodic payment amounts and any updates to funding
documents and agreements. The updated information shall come with a
certification of compliance signed by a duly authorized financial officer of
the provider.
(7) The reserve
required under subparagraph 11.12(8)"j"(1) must be examined by
an independent certified public accountant according to procedures approved by
the administrator. Two copies of the report must be submitted to the
administrator within 90 days after the conclusion of the provider's fiscal
year.
(8) The administrator may
require additional information or audits at any time to ensure compliance with
this paragraph.
k. For
system jackpots disbursed in periodic payments, subsequent to the date of the
win, a winner may be offered the option to receive, in lieu of periodic
payments, a discounted single cash payment in the form of a "qualified prize
option," as that term is defined in Section
451(h) of the Internal
Revenue Code. The provider shall calculate the single cash payment based on the
discount rate. Until the new discount rate becomes effective, the discount rate
selected by the provider shall be used to calculate the single cash payment for
all qualified prizes that occur subsequent to the date of the selected discount
rate.
l. Multilinks to be offered
in conjunction with jurisdictions in other states within the United States are
permitted. Multistate multilinks are subject to the requirements of this
subrule; in addition, any multistate plans or controls are subject to
administrator review and approval.
Notes
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