Current through Register Vol. 54, No. 25, June 22, 2024
Section 465a.27 - Annuity jackpots(a) A slot machine licensee offering an annuity jackpot payable over 10 years or more may offer a winning patron the option to be paid in a single cash payout, in lieu of the annuity jackpot, in an amount that is equal to the present value of the face amount of the jackpot payout as calculated in subsection (b).(b) A slot machine licensee may offer a cash payment option. The present value of the cash payout option on an annuity shall be determined by applying a discount rate to each of the future annuity jackpot payments, taking into consideration the number of years until each jackpot payment would otherwise have been received and adding to that amount the amount of the first cash payment that would otherwise have been received. For the purposes of this subsection, the discount rate must equal the United States Treasury constant maturity rate for 20 year United States government securities for the week ending prior to the date of the jackpot, as identified in the applicable H.15 Statistical Release issued by the Federal Reserve Board plus 0.5%.(c) A slot machine licensee may not offer an annuity jackpot payout unless: (1) The terms and conditions of the annuity 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 website.(2) The Board has approved the specific offer of the annuity jackpot.(d) A cash payout made in connection with an annuity jackpot must be made in accordance with § 465a.26 (relating to jackpot and credit meter payouts).(e) Prior to the payment of an annuity jackpot, each slot machine licensee shall establish a comprehensive system of internal controls addressing the payment of an annuity jackpot. The internal controls shall be submitted to and approved by the Board under § 465a.2 (relating to internal control systems and audit protocols). (1) The internal control procedures developed and implemented by the slot machine licensee must include: (i) Procedures to be followed by a winning patron to exercise a cash payout option.(ii) Procedures with regard to the administration of the trust agreement established to insure the future cash payments due under the annuity jackpot award.(iii) A requirement that the trustee for the trust fund established by the trust agreement be a banking institution in this Commonwealth, a slot machine licensee or, for a wide area progressive system offering an annuity jackpot, the slot system operator for that wide area progressive system.(2) A slot machine licensee may not offer an annuity jackpot until its supporting trust agreement and the internal controls required under this section have been approved in writing by the Board under § 465a.2.The provisions of this § 465a.27 amended October 10, 2008, effective 10/11/2008, 38 Pa.B. 5652.