Mich. Admin. Code R. 432.1841 - Wide area progressive system authorization

Rule 841.

(1) This rule authorizes the use of a wide area progressive system.

(2) Unless otherwise permitted by the board in writing, each machine on the link shall have the same probability of hitting the combination that will award the progressive jackpot. In addition, each machine on a link shall be located on the licensed premises of 1 casino or a machine may be linked among more than 1 casino if the system, hereinafter referred to as multilink for describing such system, is in compliance with all of the following:

(a) The wide area progressive system shall have the ability to monitor entry into the front door of each networked EGD as well as the logic area of each networked EGD and report it to the central system immediately.

(b) All communication packets between each location and the central system shall be encrypted.

(c) A progressive EGD must either contain or be linked to a progressive display showing the wide area progressive jackpot to all players who are playing a progressive EGD and who may potentially win the wide area progressive jackpot.

(d) All progressive meter reading data shall be obtained in real-time in an automated fashion. When requested to do so, the system shall return meter readings on the first device attached to the system within 5 minutes of the meter acquisition request. This limitation shall not apply to the length of time it takes the computer system to calculate and print reports, but rather only to the time it takes to gather data used for the process. Manual reading of meter values may not be substituted for these requirements.

(e) A casino licensee utilizing a wide area progressive system shall suspend play on the system if a communication failure in the system cannot be corrected within 24 consecutive hours. If a communication failure occurs in a wide area progressive system, then the operator of the system shall take a reading during the time the system is down to make sure that the jackpot amount is the same at all locations connected to the system when restoring the system.

(f) A licensee authorized to provide a wide area progressive system shall keep a log of all events for a period of not less than 60 days.

(g) Wide area progressive jackpot verification procedures shall include the following provisions:

(i) When a wide area progressive jackpot is won, the licensee authorized to provide the wide area system shall inspect the machine and the board must be notified prior to inspection. The inspection shall include examining the EPROM or equivalent electronic storage mediums, the error events received by the central system, and any other data that could reasonably be used to ascertain the validity of the jackpot.

(ii) The central system shall produce reports that will clearly demonstrate the method of arriving at the payoff amount. The reports shall include wagers beginning at the polling cycle immediately following the previous jackpot and will include all wagers up to and including the polling cycle, which includes the jackpot signal. Wagers before the jackpot message is received will be used in calculating the progressive amount before the current jackpot. Wagers subsequent to the jackpot message being received will be used in calculating the progressive amount of the next jackpot.

(iii) A jackpot of more than $100,000.00 may be paid in installments over a period of not more than 25 years if each machine clearly displays the fact that the jackpot will be paid in installments. In addition, the number of installments and time between installments shall be clearly displayed on the face of the machine in plain language that is approved by the board.

(iv) Two jackpots that occur in the same polling cycle are deemed to have occurred simultaneously and, therefore, each winner shall receive the full amount shown on the meter, unless another method of resolution has been approved in advance by the board.

(h) Submission to the board of any wide area progressive system shall occur in the following 2 phases:

(i) The initial phase, wherein the underlying gaming devices and communication hardware are tested and approved or rejected by the board.

(ii) The on-site testing phase, wherein a field inspection is conducted at the central computer site as well as multiple field sites to ensure compliance with the act and these rules. Operation of the system will be authorized only after the board is satisfied that the system meets both the initial approval and on-site testing requirements, as well as any other requirements that the board may impose to assure the integrity, security, and legal operation of the wide area progressive system.

(i) The central computer site shall be equipped with a noninterruptible power supply, and the central computer shall be capable of on-line data redundancy if hard disk peripherals fail during operation.

(j) A licensee authorized to provide a wide area progressive system shall supply reports in a format approved by the board that support and verify the economic activity on the system.

(k) Any licensee authorized to provide a wide area progressive system must supply, as requested, reports and information to the board indicating the amount of, and basis for, the current jackpot amount (the amount currently in play).

The reports shall include an aggregate report and a detail report. The aggregate report shall show only the balancing of the system with regard to system-wide totals. The detail report shall be in a form that identifies each machine on a polling station and indicates for each machine, summarized by location, the coin-in and coin-out totals as the terms are commonly understood in the industry.

In addition, upon the invoicing of any licensee participating in a wide area progressive system, a licensee shall be given a printout identifying all of the following:

(i) Each machine linked to the system.

(ii) The wagers by each machine to the jackpot for the period for which an invoice is remitted.

(iii) Other information required by the board to document the validity of the licensee's contributions to the jackpot amount.

(l) A licensee authorized to provide a wide area progressive system shall obtain written approval from the board identifying all of the following:

(i) The methods of funding the progressive prize pool.

(ii) The calculating and receipt of payments from participating licensees.

(iii) Provisions for equipment and services associated with the wide area progressive system.

(m) In calculating gross receipts, a licensee shall deduct its contributions to any progressive jackpots awarded during the month. The deducted amount shall be listed on the detailed accounting records provided to the licensee by the person authorized to provide the wide area progressive system. A licensee's contribution is based on the wagered amounts from that licensee's machines on the wide area progressive system, compared to the total amount of coins in on the whole system for the time period or periods between the jackpot or jackpots awarded.

(n) The right to receive the jackpot payments may not be encumbered, assigned, or otherwise transferred by a winner, estate, or heir of a deceased winner, except to the estate or heir of the person upon his or her death. An attempt to make a prohibited transfer may result in the person forfeiting the right to receive future payments.

(o) Except where prohibited by law, if a licensee ceases operations and a progressive jackpot is awarded subsequent to the last day of the final month of operation, then the licensee may file an amended tax return or make claim for a gaming tax refund based on its contributions to the particular progressive pool.

(p) The central monitoring system for the wide area progressive shall be located within this state unless otherwise approved in writing by the board. The office containing the central monitoring system shall be equipped with a surveillance system that has been approved by the board. The licensee authorized to provide a wide area progressive system shall be required to limit access to the monitoring system room and keep and maintain an entry and exit log for the office in a manner approved by the board. The board must, at all times, have the right to immediate access to the office containing the central monitoring system and the system itself.

(q) The licensee authorized to provide the wide area progressive system must not allow any agent or employee to work on any component of the system until the person has demonstrated that the employee or agent is qualified and experienced in the construction, software, hardware, and all internal and external components of the system and has attained at least a level 2 occupational license from the board.

(r) The licensee authorized to provide a wide area progressive system shall supply a copy of all leases and contractual agreements relating to the wide area progressive system if requested by the board.

(s) The wide area progressive system prize fund (the amount of money contributed by the participating licensees) shall be audited, in accordance with generally accepted auditing standards, on the fiscal year of the licensee authorized to provide the system, by an independent accountant licensed by the Michigan state board of accountancy and approved by the board. The report shall be submitted to the board upon completion of the audit or 90 days after the conclusion of the licensees fiscal year, whichever occurs first. The licensee providing the wide area progressive system shall pay for the cost of the audit.

(t) The licensee who is authorized to provide a wide area progressive system must maintain, in a restricted account, a reserve consisting of cash, United States government treasury securities, approved debt instruments, or combination of not less than the sum of both of the following:

(i) The aggregate remaining balances owed on all jackpots previously won by patrons through the wide area progressive system.

(ii) An amount sufficient to fully fund the present value of all amounts currently reflected on the progressive meters of the wide area progressive systems.

(3) A licensee of a wide area progressive system must not reduce, eliminate, or transfer the amount on a wide area progressive EGD jackpot meter or a wide area progressive EGD jackpot unless 1 of the following circumstances exist:

(a) A player wins the wide area progressive jackpot.

(b) The licensee adjusts the wide area progressive EGD jackpot meter to correct a malfunction or to prevent the display of an amount greater than a limit imposed in these rules and the licensee documents the adjustment and the reasons for it and notifies the board in writing.

(c) The casino licensee's gaming operations at the establishment cease for any reason other than a temporary closure where the same licensee resumes gaming operations at the same establishment within 30 days.

(d) The licensee distributes the amount to another wide area progressive EGD jackpot in accordance with the licensees board approved internal controls.

(e) The board, for good cause, approves in writing prior to a transfer, a reduction, elimination, distribution, or procedure not otherwise addressed in this rule or the licensees internal controls.

Notes

Mich. Admin. Code R. 432.1841

1998-2000 AACS; 2019 MR 9, Eff. 5/17/2019