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RULES AND REGULATIONS

Title 61--REVENUE

DEPARTMENT OF REVENUE

[61 PA. CODE CH. 873]

Lucky for Life Lotto

[34 Pa.B. 4599]

   The Secretary of Revenue (Secretary), under the authority in section 303 of the State Lottery Law (72 P. S. § 3761-303), adds Chapter 873 (relating to Lucky for Life Lotto) to read as set forth in Annex A.

   Because of time constraints associated with the establishment, operation and administration of Lottery games, the Department of Revenue (Department), under section 204 of the act of July 31, 1968 (P. L. 769, No. 240) (CDL) (45 P. S. § 1204) and the regulation thereunder, 1 Pa. Code § 7.4, finds that notice of proposed rulemaking is, under the circumstances, impracticable and, therefore, may be omitted.

   The Department's justification for utilizing the final-omitted rulemaking process is based upon the time constraints associated with the establishment, operation and administration of Lottery games. The efficient and successful operation of the Lottery requires that the Lottery implement the latest innovations and trends in the lottery industry. The inability to adapt marketing strategies quickly may lead to a reduction in Lottery revenues. The necessity of the Lottery to react quickly to market forces has been recognized in the past as an appropriate justification for utilizing the final-omitted rulemaking process as evidenced by the approval of these types of regulations in the past.

Purpose of the Final-Omitted Rulemaking

   The final-omitted rulemaking establishes and details the procedures that will be followed in operating and administering the Lucky for Life Lotto.

Explanation of Regulatory Requirements

   The Lucky for Life Lotto game offers the player two opportunities to win: an instant prize feature and correctly matching the numbers on a ticket in a single play to those drawn in the Lottery drawing in which the ticket is entered.

   The instant prize is determined by the Lottery's central computer system which will assign each play on a ticket a randomly selected number from 1 through 20. Nineteen of these numbers will have been predesignated by the Lottery's central computer as ''nonwinning'' numbers, the remaining number having been predetermined by the computer as the ''winning'' number. If the randomly selected number assigned to a play matches the predetermined ''winning'' number, that play will be an instant winning play entitling the player to an instant prize of $10.

   Correctly matching six numbers from 1 through 38, or a designated combination thereof, within a single play, and meeting other validation criteria, entitles the ticket holder to a set prize as set forth in § 873.9 (relating to determination of prize winners). The first prize category (jackpot) prize is $3,000 a month for life ($1.008 million lifetime minimum), second prize $2,000, third prize $40 and fourth prize $3.

Fiscal Impact

   The Department has determined that the final-omitted rulemaking will have no adverse fiscal impact on the Commonwealth and that the game described by the regulations could increase revenues available to older residents in this Commonwealth.

Paperwork

   The regulations will not generate substantial paperwork for the public or the Commonwealth.

Effectiveness/Sunset Date

   The final-omitted rulemaking will become effective upon publication in the Pennsylvania Bulletin. The final-omitted rulemaking is scheduled for review within 5 years of final publication. No sunset date has been assigned.

Contact Person

   The contact person for an explanation of the final-omitted rulemaking is Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061.

Regulatory Review

   Under section 5.1(a) of the Regulatory Review Act (71 P. S. § 745.5a(a)), on June 11, 2004, the Department submitted a copy of the final-omitted rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance. A copy of this material is available to the public upon request.

   Under section 5.1(j.2) of the Regulatory Review Act, on July 14, 2004, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 15, 2004, and approved the final-omitted rulemaking.

Findings

   The Department finds that the final-omitted rulemaking is necessary and appropriate for the administration and enforcement of the authorizing statute. Under section 204 of the CDL, the Department also finds that the proposed rulemaking procedures in sections 201 and 202 of the CDL (45 P. S. §§ 1201 and 1202) are unnecessary because of the time constraints associated with the establishment, operation and administration of Lottery games.

Order

   The Department, acting under the authorizing statute, orders that:

   (a)  The regulations of the Department, 61 Pa. Code, are amended by adding §§ 873.1--873.19 to read as set forth in Annex A.

   (b)  The Secretary shall submit this order and Annex A to the Office of General Counsel and Office of Attorney General for approval as to form and legality as required by law.

   (c)  The Secretary shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (d)  This order shall take effect upon publication in the Pennsylvania Bulletin.

GREGORY C. FAJT,   
Secretary

   (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 34 Pa.B. 4082 (July 31, 2004).)

   Fiscal Note: 15-427. No fiscal impact; (8) recommends adoption.

Annex A

TITLE 61. REVENUE

PART V. STATE LOTTERIES

CHAPTER 873. LUCKY FOR LIFE LOTTO.

Sec.

873.1.Creation.
873.2.Purpose.
873.3.Definitions.
873.4.Ticket sales retailers.
873.5.Ticket price.
873.6.Lucky for Life Lotto bet slip and ticket characteristics and restrictions.
873.7.Determination of instant prize winners.
873.8.Time, place and manner of conducting drawing.
873.9.Determination of prize winners.
873.10.Ticket responsibility.
873.11.Ticket validation requirements.
873.12.Procedures for claiming and payment of prizes.
873.13.Prizes.
873.14.Unclaimed prize money.
873.15.Withholding.
873.16.Purchase and prize restrictions.
873.17.Restriction on voluntary assignment of first place prize (jackpot).
873.18.Governing law.
873.19.Probability of winning.

§ 873.1. Creation.

   Under the act and this part, there is created a numbers game, called Lucky for Life Lotto, which will commence at the discretion of the Secretary, and will continue until the Secretary publicly announces a suspension or termination date.

§ 873.2. Purpose.

   (a)  The Lucky for Life Lotto Game offers the player the opportunity to win two ways: instantly winning a prize; and correctly matching the numbers on his ticket in a single play to those drawn in the Lottery drawing in which the ticket is entered.

   (b)  The purpose of the Lucky for Life Lotto Game is to determine winners from ticket holders matching six numbers from 1 through 38, or a designated combination thereof, within a single play, with the six winning numbers to be randomly drawn. Correctly matching the six winning numbers drawn, or a designated combination thereof, and meeting other validation criteria, entitles the ticket holder to a set prize identified in § 873.9(a) (relating to determination of prize winners). Drawings will be conducted twice a week or as determined and publicly announced by the Secretary.

   (c)  In addition, every Lucky for Life Lotto ticket issued by the Lottery central computer system will be eligible to win an instant prize. The determination of the instant ticket winners, as described in § 873.7 (relating to determination of instant prize winners), will be made by the Lottery's central computer system based upon a statistical probability of 1 in 20. This probability will be adjusted to incorporate the number of plays on each ticket.

§ 873.3. Definitions.

   The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Apparent winning ticket--A ticket bearing winning numbers which has not been validated by the Lottery.

   Confidential security checks--Proprietary measures used by the Lottery to validate and verify a ticket's authenticity.

   Drawing--The process of selecting winning numbers that determines the number of winners for each prize category of the game.

   Game section--One of the five areas of the Lucky for Life Lotto bet slip that contains 38 squares each numbered 1 through 38. Each area is lettered either A, B, C, D or E and, when used to purchase a ticket, each corresponds to the numbers selected or quick picked, or both, and printed on the ticket for a single play.

   Lucky for Life Lotto bet slip--A card having a game section used by a player to play the game.

   On-line retailer or retailer--A person who is properly licensed by the Lottery to sell tickets.

   Pay status--The designation within the Lottery's gaming computer system, which indicates that a given drawing has been verified and validated.

   Play--A single line of six numbers from 1 to 38 which represents a single $2 wager, and consists of six player-selected or quick-picked numbers, or both.

   Quick pick--The random selection through a Lottery terminal of up to six different numbers from 1 through 38 that appear as a play in the Lucky for Life Lotto Game.

   Set prize--Any prize other than the first prize category (jackpot) prize that can be won in this game.

   Ticket--A Lucky for Life Lotto ticket is a lottery ticket produced by a licensed retailer in an authorized manner, and contains, at the discretion of the player one, two, three, four or five plays, designated respectively as game A, B, C, D and E. The ticket also contains at a minimum, the drawing date, the amount bet, instant play data as described in § 873.7 (relating to determination of instant prize winners) and validation data.

   Trailing ticket--A ticket produced automatically by the lottery's central computer system when an original ticket with remaining plays is presented for payment. The ticket contains the same pertinent play data for the remaining plays as contained on the original ticket.

   Validation criteria--Criteria, including those set forth in § 873.11(a) (relating to ticket validation requirements), against which Lottery tickets are compared in the determination of whether the ticket has won a prize.

   Winning numbers--Six numbers, from 1 through 38, selected in a Lucky for Life Lotto drawing and which have been subsequently validated by the Lottery, which shall be used to determine the winning Lucky for Life Lotto plays on tickets.

§ 873.4. Ticket sales retailers.

   (a)  Lucky for Life Lotto Game ticket sales may only be made through licensed retailers the Director will appoint and contract with as provided in § 815.42 (relating to ticket sales agents).

   (b)  The Lottery may terminate sales by a retailer without prior notice to the retailer if the retailer becomes delinquent in payment of proceeds due the Lottery, or fails to handle Lottery funds in the prescribed manner, or if the retailer fails to follow the contract or an addendum thereof, this part or procedures established governing the sale of tickets or if the Lottery deems it to be in the best interest of the Commonwealth.

§ 873.5. Ticket price.

   Lucky for Life Lotto tickets may be purchased for $2 per play. A play, at the owner's option, may be up to six numbers selected by the player from 1 through 38, and the remainder selected randomly by the Lottery computer system, or all six numbers randomly selected through the Lottery terminal. Additional plays may, at the discretion of the player, be purchased for an additional $2 for each play purchased. There may be up to five plays on a ticket.

§ 873.6. Lucky for Life Lotto bet slip and ticket characteristics and restrictions.

   (a)  The player shall select, or request selection by computer, up to six numbered squares from 1 through 38. If less than six numbers are selected by the player the remaining number or numbers will be selected randomly by the Lottery computer system from that same range of numbers, in one or more of the game sections on a Lucky for Life Lotto bet slip. Lucky for Life Lotto bet slips shall be available at no cost to the player. The minimum entry is $2. For $2, play game A; for $4, play games A and B; for $6, play games A, B and C; for $8, play games A, B, C, and D; for $10, play games A, B, C, D and E. Game sections shall be selected in alphabetical order in accordance with the instructions printed on the Lucky for Life Lotto bet slip. A Lucky for Life Lotto bet slip has no pecuniary or prize value and does not constitute evidence of the purchase of a ticket or the numbers selected.

   (b)  To purchase a ticket, a player shall, in addition to the purchase price, submit the completed Lucky for Life Lotto bet slip, or request number selection, either by quick pick or manual terminal entry, or both, to an on-line retailer to have issued a ticket. The ticket shall contain, at a minimum, a six number selection, in each play section, (for each $2 wagered), the drawing date, amount bet, validation number data and instant play data. This ticket, or a subsequently produced trailing ticket, shall be the only valid proof of the bet placed, and the only valid receipt for claiming a prize. The ticket shall only be valid for the drawing date or dates printed on the ticket.

   (c)  If Lucky for Life Lotto bet slips are unavailable, number selections may be given to an on-line retailer in groups of up to six number selections for each $2 wagered. The retailer shall manually enter each group of up to six number selections into the computer terminal. The terminal will randomly generate the remainder of the numbers if the player selected less than the six required numbers.

   (d)  A Lucky for Life Lotto ticket may not be cancelled or voided once printed by the Lottery terminal, even if the ticket is printed in error.

   (e)  It is the sole responsibility of the ticket holder to verify the accuracy and condition of data printed on the ticket. The placing of plays is done at the player's own risk through the on-line retailer who is acting on behalf of the player in entering the play or plays.

   (f)  The Department reserves the right to stop play on a number or combination of numbers to protect the integrity of the prize structure of the game anytime during the course of the game.

§ 873.7. Determination of instant prize winners.

   (a)  For each Lucky for Life Lotto play, the Lottery's central computer system will assign that play a randomly selected number from 1 through 20. Nineteen of the numbers from 1 through 20 will have been predesignated by the Lottery's central computer as ''nonwinning'' numbers, the remaining number having been predetermined by the computer as the ''winning'' number. If the randomly selected number assigned to a play matches the predetermined ''winning'' number, that play will be an instant winning play.

   (b)  If on a ticket no play is an instant winner the ticket produced by the Lottery terminal will indicate ''NO INSTANT WIN TRY AGAIN.''

   (c)  A ticket upon which one or more plays qualifies as an instant winner will indicate ''INSTANT WINNER $'' followed by the total amount of the instant prize won on that ticket.

§ 873.8. Time, place and manner of conducting drawing.

   (a)  Time of drawing. A Lucky for Life Lotto drawing will be held twice a week or as determined and publicly announced by the Secretary.

   (b)  Place of drawing. A Lucky for Life Lotto drawing will be conducted in the Harrisburg area unless the Secretary directs that a drawing or part of the drawing procedure be conducted at some other location.

   (c)  Manner of conducting drawings. The Lottery will select at random, six numbers from a field of numbers from 1 through 38, with the aid of mechanical devices or any other selection methodology as authorized by the Secretary. The validity of a drawing will be solely determined by the Lottery.

§ 873.9. Determination of prize winners.

   (a)  The prizes to be awarded to an owner of an apparent winning ticket are as follows:
 

      Tickets containing the following       numbers in one single game play Prize Category Prize Amount Percent (%) of Sales Anticipated to Be Paid in Prizes/Category
   All six winning numbers 1st $3,000/month/life 10.27%
   Five winning numbers 2nd $2,000 6.95%
   Four winning numbers 3rd $40 5.39%
   Three winning numbers 4th $3 5.39%
   Instant winner Instant winner $10 25.0%

 

   (b)  Holders of tickets entitling them to a first prize category (jackpot) prize shall be entitled to a prize of $3,000 a month for life ($1,008,000 lifetime minimum), which shall be paid by an initial cash payment of $36,000, plus equal annual payments of $36,000, over the lifetime of the winner. In the event that the winner dies before having received the $1,008,000 minimum, payments will continue under provisions of § 811.16 (relating to prizes payable after death of prize winner) until the $1,008,000 minimum has been paid. For purposes of claiming the $3,000 a month for life prize, ''lifetime'' for legal entities shall be defined as 28 years, beginning the date the prize is claimed.

   (c)  If the winner of a Pennsylvania Lottery Lucky for Life Lotto first place prize is younger than 18 years of age, the winner will not begin to receive the prize until the winner has attained 18 years of age.

   (d)  There can only be one claimant per ticket for a first prize category (jackpot) prize.

   (e)  Lucky for Life Lotto prizes will be paid as follows:

   (1)  Individual ticket prize payments will be made as a single payment with the exception of the first prize (jackpot) category.

   (2)  If more than five winning first prize (jackpot) plays are determined in the same drawing, each, upon meeting the requirements of §§ 873.11 and 873.12 (relating to ticket validation requirements; and procedures for claiming and payment of prizes), is entitled to a share of annual payments totaling $180,000. Each share is limited to annual payments for the lifetime of the winner equal to $180,000 divided by the actual number of jackpot prize winners. In these cases, the minimum lifetime amount is determined to be 28 annual payments each in the amount as determined above. For the purpose of calculating the share of the first-place prize pool, prizes will be rounded down to the nearest 50¢. This conditional pari-mutuel top prize payout may be changed at the discretion of the Secretary and the change will be announced by public notice in the Pennsylvania Bulletin. The change will only apply prospectively to Lucky for Life Lotto drawings as of the date specified in the public notice.

   (f)  A winning Lucky for Life Lotto play is entitled only to the highest prize won by those numbers, plus the instant prize, if applicable.

   (g)  The number of prize categories, the allocation of prize money among the prize categories, the instant prize amount and frequency of instant prize award, and the annuity amount or terms may be changed at the discretion of the Secretary and the change will be announced by public notice in the Pennsylvania Bulletin. The changes will only apply prospectively to Lucky for Life Lotto drawings as of the date specified in the public notice.

   (h)  Retailer incentive and marketing promotion programs, including the use of free tickets, may be implemented at the discretion of the Secretary. Funds for the programs, if needed, will be drawn from the Lottery fund.

§ 873.10. Ticket responsibility.

   (a)  A ticket is a bearer document deemed to be owned by the person holding the ticket, except that if a name is contained on the back of the ticket, the person so named will, for all purposes, be considered the owner of the ticket.

   (b)  The Commonwealth will not be responsible for lost or stolen tickets.

   (c)  The purchaser of the ticket has the sole responsibility for checking the accuracy and condition of the data printed on the ticket.

   (d)  The Commonwealth will not be responsible for tickets redeemed in error by a player at an on-line retailer.

§ 873.11. Ticket validation requirements.

   (a)  Valid tickets. To be a valid ticket, the following conditions shall be met:

   (1)  The ticket validation number shall be present in its entirety and shall correspond to the computer record generated at the time the ticket is produced.

   (2)  The ticket shall be intact.

   (3)  The ticket may not be mutilated, altered, reconstituted or tampered with.

   (4)  The ticket may not be counterfeit or an exact duplicate of a winning ticket.

   (5)  The ticket shall have been issued by the Lottery through a licensed retailer.

   (6)  The ticket may not have been stolen.

   (7)  The ticket shall be validated in accordance with § 873.12 (relating to procedures for claiming and payment of prizes).

   (8)  The player-selected or computer-selected numbers, or both, on the ticket shall be in individual groups of six numbers each associated with a single letter, A, B, C, D or E. The six numbers and the associated letter shall constitute a single play.

   (9)  The ticket data shall have been recorded on the Lottery's central computer system prior to the drawing and the ticket data shall match this computer record in every way.

   (10)  The player-selected and computer-selected numbers, the validation number data and the drawing date of an apparent winning ticket shall appear on the official file of winning tickets; and a ticket with that exact data may not have been previously paid.

   (11)  The ticket may not be misregistered, defectively printed or printed or produced in error to an extent that it cannot be processed by the Lottery.

   (12)  The ticket shall pass other confidential security checks of the Lottery.

   (13)  By submitting a ticket for validation, the player agrees to abide by this chapter as determined by the Secretary.

   (14)  There may not be another breach of this part in relation to the ticket which, in the opinion of the Secretary, justifies disqualification.

   (b)  Invalid or defective tickets/disputes. A ticket not passing the validation checks in subsection (a) will be considered invalid and will not be paid.

   (1)  In cases of doubt, the determination of the Secretary is final and binding. The Secretary may replace an invalid ticket with a ticket of equivalent sale price from a current Lottery game.

   (2)  If a defective ticket is purchased or if the Secretary determines to adjust an error, the sole and exclusive remedy will be the replacement of the defective or erroneous ticket with a ticket of equivalent sale price from a current Lottery game.

   (3)  If a ticket is not paid by the Lottery and a dispute occurs as to whether the ticket is a winning ticket, the Lottery may replace the ticket as provided in paragraph (2). This is the sole and exclusive remedy of the holder of the ticket.

§ 873.12. Procedures for claiming and payment of prizes.

   (a)  A prize shall be claimed only through a licensed on-line retailer, and except for the instant prize, may be claimed as soon as that drawing is placed in pay status by the Lottery.

   (1)  The holder of a ticket designated as an instant prize winner may claim the instant prize before or after the drawing for which the ticket was valid.

   (2)  The holder of a ticket designated as an instant prize winner, who has claimed the instant prize prior to the drawing for which the ticket is valid shall be issued a trailing ticket which shall contain the same relevant play information as contained in the redeemed ticket except for the instant prize data.

   (b)  An on-line retailer is authorized and required to make payment of a prize of $2,500 or less, if the ticket is presented within a designated time period as announced by the Secretary, on an individual winning ticket, if the retailer has sufficient funds available for payment.

   (c)  The holder of an apparent winning ticket representing a prize of $2,500 or less will be paid by participating on-line retailers as provided in subsection (b), if the ticket validation requirements in § 873.11 (relating to ticket validation requirements) have been met, a proper validation pay ticket has been issued by the retailer's computer terminal, and other retailer procedures have been met.

   (d)  The holder of an apparent winning ticket representing a prize in excess of $2,500, with the exception of the first place prize (jackpot), shall present the winning ticket to an on-line retailer or authorized claim center under Chapter 811 (relating to prizes).

   (e)  The holder of an apparent winning ticket representing a first place prize (jackpot) shall present, in person, the apparent winning ticket to Lottery Headquarters under Chapter 811.

   (f)  The payment of a prize to a person who dies before receiving any or all of a particular prize or to a person under 18 years of age will be paid under §§ 811.16 and 811.27 (relating to prizes payable after death of prize winner; and payment of prizes to persons under 18 years of age).

   (g)  The Commonwealth will be discharged of liability after payment of prizes as provided in § 811.26 (relating to discharge of State liability upon payment).

§ 873.13. Prizes.

   (a)  If the total of the set prizes awarded in a Lucky for Life Lotto drawing exceeds the sales for that drawing by 100% or more, then those set nonjackpot prize tiers, in which the stated prizes won exceed the percentage of sales anticipated to be paid in prizes/category, will become pari-mutuel (rounded down to the nearest 50¢) to the extent necessary to limit the total set prizes awarded to 200% of sales. Moneys shall be drawn from the Lottery Fund, to the extent necessary, to fund the payment of prizes under this subsection.

   (b)  If the Lucky for Life Lotto is terminated for any cause, prize moneys remaining undistributed will be paid out of the State Lottery Fund and used for purposes otherwise provided for by law.

§ 873.14. Unclaimed prize money.

   Prize money on a winning Lucky for Life Lotto play may be retained by the Secretary for payment to the person entitled to it. If within 1 year of the drawing date on the ticket, no claim is made on a winning play, as determined by the Secretary, the right to claim prize money terminates, and the prize money will be paid into the State Lottery Fund and used for purposes otherwise provided for by statute.

§ 873.15. Withholding.

   Federal withholding taxes will be withheld by the Lottery for prize payments in amounts required in accordance with applicable provisions of law.

§ 873.16. Purchase and prize restrictions.

   A ticket may not be purchased by, and a prize will not be paid to, an officer or employee of the Lottery, Lottery professional services contractors or subcontractors, who are involved in the operation of the on-line Lottery games system or its associated drawing; or to a spouse, child, brother, sister or parent residing in the same household of the officer, contractor, or subcontractor.

§ 873.17. Restriction on voluntary assignment of first place prize (jackpot).

   A prize payable over, and whose term is determined by the lifetime of the winner, can be voluntarily assigned only to the extent of remaining unpaid minimum guaranteed prize amount.

§ 873.18. Governing law.

   (a)  In purchasing a ticket, the purchaser agrees to comply with and abide by applicable laws, this part, instructions, conditions and final decisions of the Secretary, and procedures established by the Director for the conduct of the Lucky for Life Lotto.

   (b)  Decisions made by the Director or the Secretary including the declaration of prizes and the payment thereof in interpretation of this part are final and binding on players and persons making a claim in respect thereof.

§ 873.19. Probability of winning.
 

      Tickets containing the following       numbers in one single game play Prize Category Odds of winning Prize Amount
   All six winning numbers 1st 1:2,760,681 $3,000/month/life
   Five winning numbers 2nd 1:14,378.5 $2,000
   Four winning numbers 3rd 1:371.1 $40
   Three winning numbers 4th 1:27.8 $3
   Instant winner Instant winner 1:20 $10

 
[Pa.B. Doc. No. 04-1546. Filed for public inspection August 20, 2004, 9:00 a.m.]



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