§ 465a.28. Merchandise jackpots.
(a) A slot machine licensee may not offer a merchandise jackpot payout unless:
(1) The terms and conditions of the merchandise jackpot, including the effect on the calculation of the theoretical payout percentage, comply with the act, this subpart and technical standards on jackpot payouts approved by the Board and published in the Pennsylvania Bulletin and posted on the Board’s web site.
(2) The Executive Director has approved the specific offer of the merchandise jackpot. To obtain the Executive Director’s approval, a slot machine licensee shall file a written request with the Bureau of Gaming Operations containing all of the details related to the merchandise jackpot payout including:
(i) A detailed description of the merchandise jackpot.
(ii) A description of the slot machines that will offer the merchandise jackpot.
(iii) Supporting documentation relating to the valuation of the merchandise offered as the merchandise jackpot.
(b) A merchandise jackpot may consist of one of the following:
(1) A payout that consists of both merchandise and cash.
(2) A payout of merchandise only with an optional cash payout that the patron may elect to receive in lieu of receiving the merchandise.
(c) A cash payout made in connection with a merchandise jackpot shall be made in accordance with § 465a.26 (relating to jackpot and credit meter payouts).
(d) Prior to offering a merchandise jackpot, each slot machine licensee shall establish a comprehensive system of internal controls addressing the payment of a merchandise jackpot. The internal controls shall be submitted to and approved by the Board under § 465a.2 (relating to internal control systems and audit protocols).
(e) Whenever a slot machine licensee offers a merchandise jackpot consisting of merchandise or an optional cash payment, the cash equivalent value of the merchandise must equal or exceed the value of the optional cash payment. The cash equivalent value of the merchandise shall be determined as follows:
(1) Merchandise that is sold directly to the public in the normal course of the slot machine licensee’s business shall be recorded at an amount based upon full retail price normally charged for the item.
(2) Merchandise which is not offered for sale to the public in the normal course of the slot machine licensee’s business but which is provided directly to the patron by the slot machine licensee shall be recorded at an amount based upon the actual cost to the slot machine licensee of providing the item.
(3) Merchandise provided directly or indirectly to the patron on behalf of a slot machine licensee by a third party not affiliated with the slot machine licensee shall be recorded at an amount based upon the actual cost to the slot machine licensee of having the third party provide the item.
(4) Merchandise provided directly or indirectly to the patron on behalf of a slot machine licensee by a third party who is affiliated with the slot machine licensee shall be recorded by the slot machine licensee in accordance with this subsection as if the affiliated party were the slot machine licensee.
(f) Slot machine licensees shall retain and make available to the Board upon request supporting documentation relating to the acquisition and valuation of merchandise offered as a merchandise jackpot.
(g) A merchandise jackpot will be considered to be winnings for the purpose of calculating gross terminal revenue and the payout percentage of any slot machine. The value of the merchandise jackpot will be determined as follows:
(1) For a combination of merchandise and cash, the cash equivalent value of the merchandise as calculated under subsection (e) plus the amount of cash awarded.
(2) For merchandise or an optional cash payment in lieu of the merchandise, the value of the award selected by the winning patron.
(h) Slot machine licensees shall notify the Department of the slot machines that will be offering the merchandise jackpot and the value of each merchandise jackpot awarded.
(i) Advertising of merchandise jackpots must include the following at a minimum:
(1) An accurate description of the merchandise jackpot.
(2) The dates the merchandise jackpot will be offered.
(3) The cash equivalent value of the merchandise jackpot.
(4) The optional cash payment that will be offered in lieu of the merchandise, if an optional cash payment is offered.
(j) Until the merchandise jackpot is won by a patron, a slot machine licensee may not decrease the probability of winning the merchandise jackpot, increase the denomination of a slot machine offering the merchandise jackpot, nor in any other way vary the terms upon which the merchandise jackpot is offered to the public.
(k) Slot machines which are linked to offer the same merchandise jackpot must have the same probability of winning that jackpot.
(l) A slot machine which offers a merchandise jackpot as a payout which is removed from the gaming floor shall be returned to or replaced on the gaming floor within 5 days. If the slot machine is not returned or replaced, the merchandise jackpot shall, within 5 days of the slot machine’s removal, be offered as a payout on another slot machine or slot system approved by the Board which offers the same or a greater probability of winning the merchandise jackpot, and accepts a denomination of coin the same or less than the denomination accepted by the slot machine which was removed.
Source The provisions of this § 465a.28 amended October 10, 2008, effective October 11, 2008, 38 Pa.B. 5652; amended August 28, 2009, effective August 29, 2009, 39 Pa.B. 5125. Immediately preceding text appears at serial pages (338712) to (338714).
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