NOTICES

Mega Millions® Terminal-Based Lottery Game

[40 Pa.B. 676]

[Saturday, January 30, 2010]Under the State Lottery Law (72 P. S. §§ 3761-101—3761-314) and 61 Pa. Code § 875.4 (relating to notice of terminal-based lottery game rules), the Secretary of Revenue hereby provides public notice of the rules for the following terminal-based lottery game:

1.

Name: The name of the terminal-based lottery game is Mega Millions®. The game will commence at the discretion of the Secretary and will continue until the Secretary publicly announces a suspension or termination date.2.

Definitions: The following words and terms, when used in this notice, have the following meanings, unless the context clearly indicates otherwise:Cross-Selling Agreement—The agreement between the Mega Millions® Lotteries and the MUSL allowing the MUSL Mega Millions® Product Group member lotteries to sell the Mega Millions® game.

Liability Cap—An amount equal to 300% of Mega Millions® sales for a particular drawing or 50% of Mega Millions® sales for a particular drawing plus $50,000,000, whichever is less.

MUSL—The Multi-State Lottery Association.

MUSL Finance and Audit Committee—The committee established by the Muti-State Lottery Association Agreement which, among other things, establishes the reserve accounts balances and may accelerate the payment of the jackpot category prize upon the death of a lottery winner.

MUSL Mega Millions® Product Group—The group of lotteries which have joined together to offer the Mega Millions® game under the terms of the Cross-Selling Agreement between the MUSL and the Mega Millions® Lotteries.

Mega Millions®—A terminal-based lottery game offered by the Mega Millions® Lotteries and the MUSL Mega Millions® Product Group.

Mega Millions® drawing officials—The personnel authorized by the Mega Millions® Lotteries to conduct and ensure the integrity of the Mega Millions® and the Megaplier® drawings.

Mega Millions® Lotteries—Lottery jurisdictions which are parties to the Mega Millions Lottery Agreement. This term does not include members of the MUSL Mega Millions® Product Group.

Mega Millions® winning numbers—Six numbers, the first five numbers from the field of numbers 1 through 56, and one number from the field of numbers 1 through 46, randomly selected at each Mega Millions® drawing, which shall be used to determine winning Mega Millions® plays.

Megaplier® promotion—A Mega Millions® game feature by which a player, for an additional wager of $1 per play, can increase the set prize amount or pari-mutual set prize amount, as applicable, by a factor of two, three or four times depending upon the multiplier number that is drawn prior to a Mega Millions® drawing. The Megaplier® does not apply to the jackpot category prize.

3.

Price: The price of a Mega Millions® play is $1. Additional plays may be purchased at the discretion of the player. The Megaplier® promotion may be exercised, at the discretion of the player, for an additional $1 per play.4.

Description of the Mega Millions® lottery game:(a) Mega Millions® is designed to give players the opportunity to win one prize in each play.

(b) For a $1 purchase, the player gets a ticket containing one play. Each play shall consist of six numbers, the first five numbers selected from the field of numbers 1 through 56 and one number selected from the field of numbers from 1 through 46. During each Mega Millions® drawing, six Mega Millions® winning numbers will be selected from two fields of numbers in the following manner: five winning numbers from the field of numbers 1 through 56, and one winning number from the field of numbers 1 through 46.

(c) Players can win a prize, identified in section 7(b) (relating to prizes available to be won and determination of prize winners), by matching, in the same play, five, four, three, two or one of the five numbers selected from the field of numbers 1 through 56 and matching one number from the field of numbers 1 through 46, all within a single play, with the winning numbers selected from the field of numbers 1 through 56 and the one number selected from the field of numbers 1 through 46, in the Mega Millions® drawing in which the ticket is entered. Or players can win a prize, identified in section 7(b) (relating to prizes available to be won and determination of prize winners), by matching, in the same play, five, four or three of the five numbers selected from the field of numbers 1 through 56 with the winning numbers selected from the field of numbers 1 through 56, in the Mega Millions® drawing in which the ticket is entered. Or players can win a prize, identified in section 7(b) (relating to prizes available to be won and determination of prize winners), by matching, in the same play, one number from the field of numbers 1 through 46, with the one number selected from the field of numbers 1 through 46 in the Mega Millions® drawing in which the ticket is entered.

5.

Mega Millions® bet slip and ticket characteristics:(a) Mega Millions® bet slips shall be available at no cost to the player. Plays shall be selected in accordance with the instructions printed on the Mega Millions® bet slip. A Mega Millions® bet slip has no pecuniary or prize value and does not constitute evidence of the purchase of a ticket or the numbers selected. The use of mechanical, electronic, computer generated or any other nonmanual method of marking bet slips is not permitted.

(b) To purchase a ticket, the player shall remit to an authorized retailer the purchase price, submit the completed Mega Millions® bet slip or request the number selection through Quick Pick or manual terminal entry to have a ticket issued. The ticket shall contain six numbers, the first five numbers selected from the field of numbers 1 through 56 and one number selected from the field of numbers 1 through 46 for each play, the drawing date or range of dates for which the ticket is entered, the total cost of the bet, validation data and the Megaplier® promotion indication if applicable. On tickets containing multiple plays, each play will be identified by a letter prefix: A for the first play printed on the ticket; B for the second play printed on the ticket; C for the third play printed on the ticket; D for the fourth play printed on the ticket; and E for the fifth play printed on the ticket. The 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 range of dates printed on the ticket.

(c) Through the use of a bet slip the player may select up to five numbers from the field of numbers 1 to 56 and one number from the field of numbers 1 to 46 for each play purchased and select the number of drawings in which the plays are entered. Additionally, a player may exercise the Quick Pick option by indication on the bet slip. A $1 wager entitles a player to play game A. A $2 wager entitles a player to play games A and B. A $3 wager entitles a player to play games A, B and C. A $4 wager entitles a player to play games A, B, C and D. A $5 wager entitles a player to play games A, B, C, D and E. Players are also given the option to select the Megaplier® promotion on the bet slip at the time of purchase for an additional $1 per play.

(d) If Mega Millions® bet slips are unavailable, the designation of the drawing date or dates for which the ticket is entered, number selections or request for the Quick Pick option may be given to an authorized retailer for each play. The player may designate the Megaplier® promotion for an additional $1 per play. The retailer shall manually enter the drawing date or dates for which the ticket is entered, number selections or Quick Pick selection and the Megaplier® promotion, if applicable, into the Lottery terminal.

(e) To purchase a ticket at a Lottery self-service terminal that dispenses terminal-based Lottery tickets, the player shall designate the drawing date or dates for which the ticket is entered, number selections and may exercise the Megaplier® promotion for an additional $1 per play. The player may use a bet slip or the Quick Pick option at a Lottery self-service terminal that dispenses terminal-based Lottery tickets.

(f) A player may purchase plays for one through twenty-six consecutive drawings, commencing with the next scheduled drawing.

6.

Time, place and manner of conducting drawings.(a) Time of drawing. A Mega Millions® drawing will be held as determined and publicly announced by the Secretary.

(b) Place of drawing. Mega Millions® and the Megaplier® drawings will be conducted in locations selected by the Mega Millions® Lotteries.

(c) Manner of conducting drawings. The Mega Millions® drawing officials will select, at random, the Mega Millions® winning numbers, with the aid of mechanical devices or any other selection methodology as authorized by the Mega Millions® Lotteries. Prior to the Mega Millions® drawing, the Megaplier® number will be drawn.

7.

Prizes available to be won and determination of prize winners:(a) An amount equal to 50.00% of Mega Millions® gross sales for a Mega Millions® game drawing is anticipated to be reserved for prizes and allocated for payment of prizes as enumerated in sections 7(b) and 7(d) (relating to prizes available to be won and determination of prize winners).

(b) Determinations of the Mega Millions® prize winners for tickets correctly matching, in the same play, the winning numbers selected by the Mega Millions® drawing officials are:

(1) Holders of tickets upon which the player's five numbers selected from the field of numbers 1 through 56 and the player's one number selected from the field of numbers 1 through 46 matches the Mega Millions® winning numbers, in a single play, for the drawing in which the ticket is entered, shall be the winner of the jackpot category prize. Prize money allocated to the jackpot category prize will be divided into as many shares as there are winning jackpot category prize plays as provided in this section.

(i) Prior to each drawing, the Mega Millions® Lotteries shall determine the annuity jackpot category prize amount to be advertised. The official advertised annuity jackpot category prize amount, as determined by the Mega Millions® Lotteries, shall be the basis for determining the amount to be awarded for each Mega Millions® play matching all the Mega Millions® winning numbers.

(ii) If the sales support a jackpot that is at least $12 million lower than the advertised annuity jackpot category prize amount, the resulting annuity jackpot category prize amount to be paid will be the highest fully funded million dollars plus $12 million or the advertised annuity jackpot category prize, whichever is lower. In no event, however, shall the annuity jackpot category prize paid be less than the advertised annuity jackpot category prize of the immediately prior drawing in which there were no winning jackpot category prize plays.

(iii) The minimum Mega Millions® annuity jackpot category prize shall not be less than $12 million divided by the number of plays entitled to a jackpot category prize.

(iv) If, in a Mega Millions® drawing, there are no winning Mega Millions® jackpot category prize plays, prize money allocated to that prize category will be carried forward and added to the amount allocated for the jackpot category prize in the next consecutive Mega Millions® drawing.

(v) If the annuity jackpot category prize divided by the number of Mega Millions® plays matching all the Mega Millions® winning numbers, is equal to or greater than $1,000,000, the jackpot category prize will be paid as an annuity as described in section 7(b)(1)(vi) unless the winner elects to receive the jackpot category prize in a single cash payment provided the election is made by the player within 60 days of the date the Lottery determines that a player is entitled to the jackpot category prize.

(vi) Annuity jackpot category prizes shall be paid in 26 consecutive annual installments. The initial payment shall be paid upon completion of internal validation procedures. The subsequent 25 payments shall be paid annually.

(vii) The amount of the jackpot category prize, if paid as a lump-sum cash payment, may be either the amount determined by multiplying the annuity jackpot category prize amount by a discount value set by the Mega Millions® Lotteries prior to each drawing, divided by the number of jackpot category prize winners, or the proceeds of the sale of bonds purchased to fund a particular winner's share of the annuity jackpot category prize amount. A winner has 60 days from the date the Lottery determines that a player is entitled to a jackpot category prize to elect in writing to irrevocably receive payment as a lump-sum cash payment.

(viii) In the event multiple Mega Millions® plays match all the Mega Millions® winning numbers in the same drawing, and the annuity Mega Millions® jackpot category prize divided by the number of winning jackpot category prize game plays is less than $1,000,000, each Mega Millions® jackpot category prize winner shall be paid a lump-sum cash payment in an amount equal to the annuity jackpot category prize amount multiplied by a discount value set by the Mega Millions® Lotteries prior to each drawing, divided equally by the number of jackpot category prize winners.

(ix) If individual shares of the cash held to fund an annuity are less than $250,000, the MUSL Mega Millions® Product Group, in its sole discretion, may elect to pay the winners their share of the cash allocated for the payment of the jackpot category prize. Prize payments may be rounded to the nearest one thousand dollars.

(x) In the event of the death of a lottery winner during the annuity payment period, the MUSL Finance & Audit Committee, in its sole discretion excepting a discretionary review by the MUSL Mega Millions® Product Group, may accelerate the payment of all of the remaining lottery proceeds to the estate of the lottery winner. The estate of the lottery winner shall petition the lottery of the jurisdiction in which the deceased lottery winner purchased the winning ticket to request acceleration. If such a determination is made, then securities and/or cash held to fund the deceased lottery winner's annuity prize may be distributed to their estate. The identification of the securities to fund the annuity prize shall be at the sole discretion of the MUSL Finance and Audit Committee or the MUSL Mega Millions® Product Group.

(2) Holders of tickets upon which the player's five numbers selected from the field of numbers 1 through 56 match the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56, in a single play, for the drawing in which the ticket is entered, shall be the winner of a second category prize.

(3) Holders of tickets upon which four of the player's five numbers selected from the field of numbers 1 through 56 match four of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56 and the player's one number selected from the field of numbers 1 through 46 matches the one number selected by the Mega Millions® drawing officials from the field of numbers 1 through 46, in a single play, for the drawing in which the ticket is entered, shall be the winner of a third category prize.

(4) Holders of tickets upon which four of the player's five numbers selected from the field of numbers 1 through 56 match four of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56, in a single play, for the drawing in which the ticket is entered, shall be the winner of a fourth category prize.

(5) Holders of tickets upon which three of the player's five numbers selected from the field of numbers 1 through 56 match three of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56 and the player's one number selected from the field of numbers 1 through 46 matches the one number selected by the Mega Millions® drawing officials from the field of numbers 1 through 46, in a single play, for the drawing in which the ticket is entered, shall be the winner of a fifth category prize.

(6) Holders of tickets upon which two of the player's five numbers selected from the field of numbers 1 through 56 match two of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56 and the player's one number selected from the field of numbers 1 through 46 matches the one number selected by the Mega Millions® drawing officials from the field of numbers 1 through 46, in a single play, for the drawing in which the ticket is entered, shall be the winner of a sixth category prize.

(7) Holders of tickets upon which three of the player's five numbers selected from the field of numbers 1 through 56 match three of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56, in a single play, for the drawing in which the ticket is entered, shall be the winner of a seventh category prize.

(8) Holders of tickets upon which one of the player's five numbers selected from the field of numbers 1 through 56 matches one of the five winning numbers selected by the Mega Millions® drawing officials from the field of numbers 1 through 56 and the player's one number selected from the field of numbers 1 through 46 matches the one number selected by the Mega Millions® drawing officials from the field of numbers 1 through 46, in a single play, for the drawing in which the ticket is entered, shall be the winner of an eighth category prize.

(9) Holders of tickets upon which the player's one number selected from the field of numbers 1 through 46 matches the one number selected by the Mega Millions® drawing officials from the field of numbers 1 through 46, in a single play, for the drawing in which the ticket is entered, shall be the winner of a ninth category prize.

(c) An amount up to one percent of a MUSL Mega Millions® Product Group member's sales shall be placed in trust in one or more prize reserve accounts held by the MUSL Mega Millions® Product Group at any time that the MUSL Mega Millions® Product Group member's share of the prize reserve account or accounts is below the amounts designated by the MUSL Mega Millions® Product Group. The MUSL Mega Millions® Product Group, with approval of the MUSL Finance and Audit Committee, may establish a maximum balance for the prize reserve account or accounts. The MUSL Mega Millions® Product Group may determine to expend all or a portion of the funds in the accounts for the payment of prizes in the game subject to the approval of the MUSL Finance and Audit Committee. The shares of a member of the MUSL Mega Millions® Product Group may be adjusted with refunds to the member from the prize reserve account or accounts as may be needed to maintain the approved maximum balance and shares of the MUSL Mega Millions® Product Group member. Any amount remaining in a prize reserve account at the end of this game shall be carried forward to a replacement prize reserve account or expended in a manner as directed by the MUSL Mega Millions® Product Group in accordance with jurisdiction law.

(d) Should total prize liability for all lotteries selling the Mega Millions® game, exclusive of jackpot category prize rollover from previous drawings, exceed the Liability Cap, the second through fifth category prizes shall be paid on a pari-mutuel basis, provided, however, that in no event shall the pari-mutuel prize be greater than the fixed prize. The amount to be used for the allocation of such pari-mutuel prizes shall be the Liability Cap less the amount paid for the jackpot category prize and the sixth through ninth category prizes. The California Lottery is excluded from this calculation for the second through ninth category prizes.

(1) In the event the Liability Cap is met, the amount to fund the jackpot category prize together with the amounts to fund the sixth through the ninth category prizes shall be first paid from the Liability Cap amount. The balance of the Liability Cap, after deducting the jackpot category prize and payment for the sixth through the ninth category prizes, shall be applied to the second through the fifth category prizes on a pari-mutuel basis in accordance with the following formula: The second category prize shall be an amount equal to 64.53% of the balance of the Liability Cap divided by the number of winners of a second category prize; the third category prize shall be an amount equal to 14.63% of the balance of the Liability Cap divided by the number of winners of a third category prize; and the fourth and fifth category prize shall be an amount equal to 20.84% of the balance of the Liability Cap divided by the number of winners of a fourth and fifth category prize.

(2) In the event the formula in section 7(d)(1) produces a prize amount for any category prize above that category prize's normal fixed amount, then that prize shall be paid at its normal fixed amount rather than the pari-mutuel determined prize amount. In this event, the amount exceeding the normal fixed amount shall then be redistributed among the other pari-mutuel prizes according to the procedure established by the Mega Millions® Lotteries.

(e) All Mega Millions® prize payments, other than the jackpot category prize, will be made as a lump-sum cash payment.

(f) A winning Mega Millions® play is entitled only to the highest prize won by those numbers for the drawing in which the play was entered.

(g) For purpose of prize calculation with respect to a Mega Millions® second through fifth category pari-mutuel prize, the calculation may be rounded down so that prizes may be paid in multiples of one dollar.

(h) With respect to any Mega Millions® annuity jackpot category prize, the prize amount may be rounded to the next highest affordable multiple of one million dollars, prior to any division by the number of winning plays, based upon market rates at the time of the annuity purchase.

(i) The pool of funds used to pay prizes may be increased as necessary from funds authorized for the payment of prizes to meet the payment obligations in this section.

(j) The number of prize categories and the allocation of prize money among the prize categories may be changed at the discretion of the Mega Millions® Lotteries and change will be announced by public notice. Any such changes will apply prospectively to Mega Millions® drawings as of the date specified in the public notice.

(k) The Lottery shall not be responsible for Mega Millions® winning numbers reported in error.

8.

Probability of winning. The following tables set forth all possible ways that a prize can be won in a single play, the corresponding prize, the probability of winning each prize and the percent of sales anticipated to be paid in prizes in each prize category:

A Play Matching The Mega Millions® Winning Numbers Category Prize

Prize

Probability Of

Winning Per Play:

Percent (%) Of Sales Anticipated To Be Paid In Prizes Five numbers from the field of numbers 1 through 56 and one number from the field of numbers 1 through 46 Jackpot Jackpot 1:175,711,536 31.8% (Actual) Five numbers from the field of numbers 1 through 56 Second $250,000 1:3,904,700.80 6.4% Four numbers from the field of numbers 1 through 56 and one number from the field of numbers 1 through 46 Third $10,000 1:689,064.85 1.45% Four numbers from the field of numbers 1 through 56 Fourth $150 1:15,312.55 0.98% Three numbers from the field of numbers 1 through 56 and one number from the field of numbers 1 through 46 Fifth $150 1:13,781.30 1.09% Two numbers from the field of numbers 1 through 56 and one number from the field of numbers 1 through 46 Sixth $10 1:843.75 1.19% Three numbers from the field of numbers 1 through 56 Seventh $7 1:306.25 2.29% One number from the field of numbers 1 through 56 and one number from the field of numbers 1 through 46 Eighth $3 1:140.63 2.13% One number from the field of numbers 1 through 46 Ninth $2 1:74.80 2.67%

9.

Unclaimed prizes. All unclaimed jackpot category prize moneys will be returned to the lotteries selling Mega Millions® in the same ratio that each lottery contributed to the jackpot category prize.10.

Megaplier® promotion.(a) The Megaplier® promotion shall be available in association with the Mega Millions® game and will continue until the Secretary publicly announces a suspension or termination thereof. The Megaplier® promotion will be conducted in accordance with the Mega Million® rules except that players may purchase the Megaplier® promotion for the chance to multiply set prizes won as a result of a Mega Millions® drawing by a number ranging from 2 to 4. The Secretary on occasion may announce, as a special promotion, multipliers greater than four. The Mega Millions® jackpot category prize will not be eligible for multiplication under the Megaplier® promotion.

(b) At the time of purchasing a Mega Millions® ticket from a Lottery retailer, a player may choose the Megaplier® promotion for an additional $1 per play for each play on a Mega Millions® ticket. If a player chooses the Megaplier® promotion feature for any play on a ticket, every play on that ticket must participate in the promotion.

(c) Prior to the time of each Mega Millions® drawing, the Mega Millions drawing officials shall conduct a Megaplier® drawing which shall result in the selection of the Megaplier® number from among the following series of numbers: 2, 2, 3, 3, 3, 3, 3, 3, 3, 4, 4, 4, 4, 4, 4, 4, 4, 4, 4, 4, and 4.

(d) Mega Millions® tickets that contain the Megaplier® promotion and one or more plays eligible for Mega Millions® set prizes, but not the jackpot category prize, identified in section 7 (relating to prizes available to be won and determination of prize winners), shall be entitled to a total set prize calculated by multiplying each Mega Millions® set prize by the Megaplier® number selected for the drawing in which the ticket was entered.

(e) Fifty percent of the Megaplier® sales shall be allocated for the payment of Megaplier® prizes. Any amount not used to pay multiplied prizes may be carried forward to subsequent draws or may be collected and placed in prize reserve accounts until the prize reserve accounts reach the amounts designated by the MUSL Mega Millions® Product Group.

(f) The odds of various Megaplier® numbers being selected in a Megaplier® drawing are:

Megaplier® Odds Two 1:10.5 Three 1:3 Four 1:1.75 (g) When the Mega Millions® second through fifth category prizes become pari-mutuel, the prize won will be calculated by multiplying the pari-mutuel prize value by the Megaplier® number.

(h) If the total of the Mega Millions® set prizes, as determined in section 7(b) and the multiplied Megaplier® set prizes, as determined in this section, awarded in a drawing exceeds the percentage of the sales allocated to the Mega Millions® set prizes and the multiplied Megaplier® set prizes, then the amount needed to fund the Mega Millions® set prizes and the Megaplier® multiplied set prizes awarded shall be drawn from the following sources, in the following order: (i) the amount allocated to the set prizes and carried forward from previous draws, if any; (ii) an amount from the reserve accounts not to exceed the lesser of 300% of draw sales or 50% of draw sales plus $50 million. If, after these sources are depleted, there are not sufficient funds to pay the set prizes awarded, including multiplied prizes, then the prize levels two through five shall become a pari-mutuel prize, as set out in section 7(d). The funds dedicated to the payment of Mega Millions® set prizes and the multiplied Megaplier® set prizes shall be combined in the rare instance when the set prizes are paid on a pari-mutuel basis, so that the Megaplier® will remain in effect for all prize levels.

11. A Mega Millions® game ticket may not be purchased, and a prize will not be paid to a lottery board member, commissioner, officer or employee of a lottery jurisdiction selling Mega Millions®, or a spouse, child, brother, sister or parent residing as a member of the same household in the principle place of residence of any such person. A Mega Millions® game ticket may not be purchased, and a prize will not be paid to individuals prohibited by the MUSL Mega Millions Product Group or individuals identified in 61 Pa. Code § 871.17(b) (relating to purchase and prize restrictions).

12. Claims arising from Mega Millions® sales occurring in the Commonwealth shall be resolved exclusively with the Pennsylvania Lottery according to the laws of Pennsylvania.

13. The Lottery may conduct a separate retailer incentive program for retailers who sell Mega Millions® lottery tickets.

The conduct of the program will be governed by 61 Pa. Code § 811.41 (relating to promotional prizes).

C. DANIEL HASSELL,

Acting Secretary

[Pa.B. Doc. No. 10-199. Filed for public inspection January 29, 2010, 9:00 a.m.]

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