N.M. Admin. Code § 15.1.10.26

Current through Register Vol. 35, No. 21, November 5, 2024

Section 15.1.10.26 - PERIODIC PAYMENTS

A. Periodic payments of winnings and non-cash prizes awarded to a patron as the result of any licensed game offered by a racetrack gaming operator licensee shall be made if one of the following is established as the method of funding the periodic payments:

(1) an irrevocable surety bond or an irrevocable letter of credit with an independent administrator that provides periodic payments to a winner if the licensee defaults for any reason; the written agreement establishing an irrevocable surety bond or irrevocable letter of credit must be submitted to the board for approval;

(2) an irrevocable trust with an independent administrator in accordance with a written trust agreement approved by the board that provides periodic payments from an unallocated pool of assets to a group of winners; the trust shall expressly prohibit the winner from encumbering, assigning, or otherwise transferring in any way the winner's right to receive the deferred portion of the winnings except to his or her estate; the assets of the trust shall consist of federal government securities including but not limited to treasury bills, treasury bonds, savings bonds or other federally guaranteed securities in an amount sufficient to meet the periodic payments required; or

(3) another irrevocable method of providing the periodic payments to a winning patron that is approved by the board and consistent with the purpose of this rule.

B. The funding of periodic payments shall be completed within 30 days of the date the patron wins or is awarded a prize.

C. Periodic payments shall not be used for winnings of, or noncash prizes worth, fifty thousand dollars ($50,000) or less. Periodic payments for total amounts won greater than fifty thousand ($50,000) shall be paid as follows:

(1) for winnings greater than fifty thousand ($50,000) but less than one hundred thousand ($100,000), payments shall be at least ten thousand ($10,000) annually;

(2) for winnings of one hundred thousand ($100,000) or more, payments shall be no less than 1/10 of the total amount annually;

(3) for winnings of five hundred thousand ($500,000) or more, payments shall be made in the manner set forth in paragraph 15.1.10.26(C)(2) above or in such other manner approved by the board upon application by the licensee; and

(4) the first payment shall be made upon validation of the win.

D. Periodic payments of non-cash prizes awarded shall be offered if the patron has the right to decide whether to receive the non-cash prize or cash equivalent of the non-cash prize each time a periodic payment is due. The cash equivalent shall be the actual cost to the licensee of the non-cash prize on the day such prize was won. The amount of the periodic payments to be funded shall be determined by the present value of the cash equivalent of the noncash prize based on the prime rate.

E. For any licensed game for which periodic payments are or may be used, the racetrack gaming operator licensee shall display signs on each gaming device setting forth either the amount or the terms of the payment to be made.

F. If the licensee fails to fund the periodic payments as required by this rule, the licensee shall immediately notify the board in writing and shall immediately cease offering any licensed game for which periodic payments are used.

G. The present value of all winnings and non-cash prizes offered payable by a periodic payment shall be used in calculating the minimum bankroll of the location.

H. The board may waive one or more of the requirements of this section if the racetrack gaming operator licensee submits a written request for waiver to the board and the board makes a written finding that such waiver is not contrary to the public interest and the purposes of the act.

N.M. Admin. Code § 15.1.10.26

12/31/98; 15.1.10.26 NMAC - Rn, 15 NMAC 1.10.26, 3/31/00; A, 12/28/01; A, 2/28/05, Adopted by New Mexico Register, Volume XXVI, Issue 19, October 15, 2015, eff. 10/15/2015, Adopted by New Mexico Register, Volume XXVII, Issue 02, January 29, 2016, eff. 1/29/2016