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PA Bulletin, Doc. No. 13-1818

NOTICES

Powerball

[43 Pa.B. 5776]
[Saturday, September 28, 2013]

 In accordance with 61 Pa. Code § 871.21 (relating to future changes to Powerball), the Secretary of Revenue (Secretary) announces the following changes to the Powerball regulations. This amendment adds definitions for Licensee Lottery and MUSL Finance and Audit Committee. Additionally, this amendment further provides for the instances where the set prizes, including the power play set prizes, may become parimutuel prizes. Finally, this amendment provides clarification and further descriptions of the prize pool accounts and the prize reserve accounts.

 These changes will affect ticket sales beginning October 1, 2013. The changes to the regulation will be codified as paragraph (6) in 61 Pa. Code § 871.22 (relating to changes to Powerball):

 (6) Changes effective for Powerball tickets sold on or after October 1, 2013:

 (i) Section 871.3 (relating to definitions).

 Licensee Lottery—A State lottery or lottery of a political subdivision or entity which is not a Party Lottery but has agreed to comply with all applicable MUSL and MUSL Powerball Product Group requirements and has been authorized by the MUSL and by the MUSL Powerball Product Group to sell the Powerball game.

 MUSL Finance and Audit Committee—The committee established by the Muti-State Lottery Association which, among other things, establishes the reserve accounts balances.

 Editor's note: This is a partial listing of the definitions applicable to Powerball. See § 871.3 (relating to definitions) for additional definitions.

 (ii) Section 871.8(c) (relating to expected prize payout percentages). The number of plays determined by the MUSL to be winners of the second through ninth prize categories will be paid as set cash prizes, except as provided in paragraphs (1) through (4).

 (1) Except as otherwise provided in section 871.8(c)(4), if the total of the set prizes awarded in a Powerball drawing exceeds the set prize pool which is 18.0244% of gross sales, the amount needed to fund the set prizes, including Power play prizes, shall be drawn from the following sources in the following order:

 (i) The amount allocated to the set prize tiers and carried forward from previous draws, if any.

 (ii) An amount from the MUSL set prize reserve account, if available, not to exceed $40,000,000 per Powerball drawing.

 (2) Except as otherwise provided in section 871.8(c)(4), if the sources set forth in paragraph (1) are depleted and there still are not sufficient funds to pay the set prizes, including Power play prizes, for a particular Powerball drawing, the highest set prize shall become a parimutuel prize. If the amount of the highest set prize, when paid as a parimutuel prize, is less than or equal to the next highest set prize and there are still not sufficient funds to pay the remaining set prizes, the next highest set prize shall become a parimutuel prize. If necessary, and under the same test conditions set forth in the preceding sentence, each succeeding set prize level shall be converted to a parimutuel prize, in order, until all set prizes become parimutuel.

 (3) Except for winning prizes sold by the California Lottery, if all, or any portion of the set prize pool is not awarded in the current Powerball drawing, that portion of the set prize pool shall be carried forward to subsequent Powerball drawings.

 (4) By agreement with the Licensee Lotteries, the Licensee Lotteries shall independently calculate their set parimutuel prize amounts. The Party Lotteries and the Licensee Lotteries shall then agree to set the parimutuel prize amounts for all lotteries selling the game at the lesser of the independently-calculated prize amounts.

 (iii) Section 871.14(b) (relating to pari-mutuel prize pool). An amount equal to up to 5% of a party lottery's sales shall be deducted from a party lottery's grand prize pool and placed in trust in one or more prize pool accounts and prize reserve accounts until the prize pool accounts and party lottery's share of the prize reserve accounts reaches the amounts designated by the MUSL Powerball Product Group. The MUSL Powerball Product Group has established the following prize reserve accounts for the Powerball game: the Prize Reserve Account, which is used to guarantee the payment of valid, but unanticipated, Grand Prize claims that may result from a system error or other reason; and the Set Prize Reserve Account, which is used to fund deficiencies in low-tier prize payments, subject to the limitations of these rules. The MUSL Powerball Product Group has established the following prize pool accounts for the Powerball game; the Grand Prize pool, which is used to fund the immediate Grand Prize, the Set-Aside Account, which is used to guarantee payment of the minimum or starting Grand Prize; the Power play pool account, which is described in § 871.20 (relating to power play promotion) of these rules; and the Low-Tier Prize Pool Account, which holds the temporary balances that may result from having fewer than expected winners in the low-tier prize categories. The source of the Low-Tier Prize Pool is the Party Lottery's weekly prize contributions less actual set prize liability. Once the prize pool accounts and the party lottery's share of the prize reserve accounts exceeds the designated amounts, the excess shall become part of the grand prize pool. The MUSL Powerball Product Group, with the approval of the Finance and Audit Committee, may establish a maximum balance for the prize pool accounts and prize reserve accounts. The MUSL Powerball Product Group may determine to expend all or a portion of the funds in the prize pool accounts, except the Grand Prize pool account, and the prize reserve accounts for the purpose of indemnifying the Party Lotteries and Licensee Lotteries in the payment of prizes to be made by the participating lotteries, subject to the approval of the MUSL Board and for the payment of prizes or special prizes in the game, subject to the approval of the MUSL Finance and Audit Committee. The prize reserve shares of a party lottery may be adjusted with refunds to the party lottery from the prize reserve accounts as may be needed to maintain the approved maximum balance and shares of the party lotteries. Any amount remaining in the prize pool accounts or prize reserve accounts 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 members of the MUSL Powerball Product Group in accordance with State law.

 (iv) Section 871.20(e) (relating to power play promotion). The Power play prize pool for power play set prizes shall consist of up to 49.96% of power play sales. The Power play prize pool shall be carried forward to subsequent power play drawings if all or a portion of the percentage is not required to pay the power play prizes for the current power play drawing and held in the Power Play Pool Account.

 (v) Section 871.20(f) (relating to power play promotion). An additional 0.04% of power play sales may be collected and placed in the power play pool account, for the purpose of paying Power Play prizes. Any amount remaining in the power play pool account at the end of the power play promotion shall be returned to all lotteries participating in the account after the end of all claim periods of all selling lotteries, carried forward to a replacement game, or expended in a manner as directed by the MUSL Powerball Product Group in accordance with State law.

 (vi) Section 871.20(g) (relating to power play promotion). Except as otherwise provided in section 871.20(m), if, with respect to a single Powerball drawing, the total of the Powerball set prizes without the power play option and the Powerball set prizes increased by the power play option exceeds the percentage of the prize pools allocated to the set prizes, the amount needed to fund those combined set prizes shall be drawn from the following sources in the following order:

 (1) The amount allocated to the set prizes and carried forward from previous Powerball drawings, if any.

 (2) The amount allocated to the Powerball Set-Prize Reserve Account, if available in the account, not to exceed forty million dollars ($40,000,000.00) per drawing.

 (vii) Section 871.20(h) (relating to power play promotion). Except as otherwise provided in section 871.20(m), if the sources set forth in subsection (g) are depleted and there still are not sufficient funds to pay the set prizes, including the power play prizes, for a particular Powerball drawing, the highest set prize, including the prize increased by the power play option, shall become a parimutuel prize. If the amount of the highest set prize, when paid as a parimutuel prize, is less than or equal to the next highest set prize and there are still not sufficient funds to pay the remaining prizes, the next highest set prize, including the prize increased by the power play option, shall become a parimutuel prize. If necessary under the same test set forth in the preceding sentence, each succeeding set prize level shall be converted to a parimutuel prize, in order, until all set prizes become parimutuel. If all set prizes are converted to parimutuel prizes, the money available from the funding sources listed in subsection (g) shall be divided among the winning plays in proportion to their respective prize percentages.

 (viii) Section 871.20(m) (relating to power play promotion). By agreement with the Licensee Lotteries, the Licensee Lotteries shall independently calculate their set parimutuel prize amounts, including the power play prize amounts. The Party Lotteries and the Licensee Lotteries shall then agree to set the pari-mutuel prize amounts for all lotteries selling the game at the lesser of the independently-calculated prize amounts.

DANIEL MEUSER, 
Secretary

[Pa.B. Doc. No. 13-1818. Filed for public inspection September 27, 2013, 9:00 a.m.]


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