WSR 98-04-073

PROPOSED RULES

LOTTERY COMMISSION

[Filed February 4, 1998, 8:40 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-16-092 and 97-24-077.

Title of Rule: New sections WAC 315-36-010 What is Lucky 21 and how do I play? WAC 315-36-020 How much does a ticket cost? WAC 315-36-030 What are the prizes for Lucky 21? WAC 315-36-040 Can I win more than once on one ticket? WAC 315-36-050 How is the winning set of numbers selected? WAC 315-36-060 How often is the winning set of numbers chosen? WAC 315-36-070 Where can I buy or redeem Lucky 21 tickets? WAC 315-36-080 What information is included on a Lucky 21 ticket and playslip? WAC 315-36-090 What are the odds of winning Lucky 21? WAC 315-36-100 If more than one person per drawing wins the grand prize, does each person receive the entire prize of $1,000 for life or is the prize split among the winners? WAC 315-36-110 How is the "win for life" type grand prize paid? WAC 315-36-120 How are prizes, other than the "win for life" type grand prize, paid? WAC 315-36-130 What happens to unclaimed Lucky 21 prizes? WAC 315-36-140 Definitions for Lucky 21. WAC 315-36-150 Suspension or termination of Lucky 21.

Amendatory sections WAC 315-02-030 Address of commission. WAC 315-02-040 Commission activities exempt from Environmental Protection Act. WAC 315-02-060 Address of the office of the director. WAC 315-02-070 Office of the director activities exempt from Environmental Protection Act. WAC 315-02-080 Filing of adopted rules. WAC 315-02-220 Ticket defined. WAC 315-10-010 Instant games--Authorized--Director's authority. WAC 315-10-020 Definitions. WAC 315-10-023 What are the prizes available for instant games? WAC 315-10-024 What are the methods of selecting winning tickets? WAC 315-10-025 How much does it cost to purchase an instant game ticket? WAC 315-10-030 Instant games criteria.

Purpose: To establish game play rules and criteria for determining winners for a new on-line game, "Lucky 21;" and to amend chapter 315-02 and 315-10 WAC.

Statutory Authority for Adoption: RCW 67.70.040.

Statute Being Implemented: RCW 67.70.040.

Summary: See Purpose above.

Reasons Supporting Proposal: See Explanation of Rule below.

Name of Agency Personnel Responsible for Drafting: Mary Jane Ferguson, Rules Coordinator, Olympia, (360) 753-1947; Implementation and Enforcement: Merritt D. Long, Director, Olympia, (360) 753-3330.

Name of Proponent: Washington State Lottery Commission, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: Chapter 315-36 WAC, explains how the Lucky 21 game functions to players and licensed retailers. Lucky 21 is a new on-line game started for the purpose of meeting the lottery's statutory obligation to produce the maximum amount of net revenues for the state consonant with the dignity of the state and the general welfare of the people.

Proposal Changes the Following Existing Rules: Chapter 315-02 WAC, General provisions and definitions, these amendments continue the lottery's review and revision of lottery rules pursuant to Executive Order 97-03, Regulatory Improvement. These amendments update the rules and repeal redundant sections.

Chapter 315-10 WAC, Instant game general rules, these amendments streamline the process for producing instant game rules and will allow the lottery to produce new games more efficiently, thereby maximizing state revenues.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The lottery has considered whether these rules are subject to the Regulatory Fairness Act, chapter 19.85 RCW, and has determined that they are not for the following reasons: (1) The rules have no economic impact on businesses' cost of equipment, supplies, labor or administrative costs. The rules are designed to establish rules and procedures for the playing of instant lottery games; and (2) the rules will have a negligible impact, if any, on business because they are interpretive. They have been promulgated for the purpose of stating policy, procedure and practice and do not include requirements for forms, fees, appearances or other actions by business.

RCW 34.05.328 does not apply to this rule adoption. Said section does not apply to these proposed rules because they are not proposed by one of the listed agencies. As the rules are merely interpretive, the lottery does not voluntarily apply this section.

Hearing Location: Washington State Lottery, 5936 Corson Avenue South, Suite 106, Seattle, WA 98108, on March 20, 1998, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Mary Jane Ferguson by March 11, 1998, (360) 753-1947.

Submit Written Comments to: Mary Jane Ferguson, Lottery, FAX (360) 586-6586, by March 19, 1998.

Date of Intended Adoption: March 20, 1998.

February 3, 1998

Mary Jane Ferguson

Rules Coordinator

NEW SECTION

WAC 315-36-010 What is Lucky 21 and how do I play? (1) Lucky 21 is an on-line lottery game in which you purchase a computer-generated ticket and try to match your set of numbers to the winning set of numbers, chosen by the lottery. The game is called Lucky 21 because you have twenty-one sets of four numbers, and so twenty-one chances to win. The game is conducted in accordance with the rules for on-line games found in chapter 315-30 WAC and the general rules found in chapter 315-06 WAC.

(2) To play Lucky 21, you first pick one set of four numbers from "00" to "99" for a chance to win the grand prize of $1,000 per week for the rest of your life. Or you can let the computer pick this set of numbers for you. If you have the computer pick for you, this is called a "quick pick" or "quick play."

(3) Next, the computer will generate twenty additional sets of four numbers from "00" to "99" for you. These sets will all be quick picks, that is, the computer selects them for you. You cannot pick any of these additional sets of numbers yourself. You will receive a computer printed ticket containing all twenty-one sets of numbers.

(4) If any one of the twenty-one sets on the ticket match two, three, or four of the numbers in the winning set of four numbers, in any order, you win a prize as specified in WAC 315-36-030.

(5) A Lucky 21 ticket will look like this:

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NEW SECTION

WAC 315-36-020 How much does a ticket cost? One Lucky 21 ticket with twenty-one sets of four numbers costs $2.

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NEW SECTION

WAC 315-36-030 What are the prizes for Lucky 21? (1) The grand prize is $1,000 per week for the rest of your life. This is the prize for matching all four of the numbers in the first set designated on the ticket.

(2) The prizes for matching all four numbers in any of the remaining twenty sets to the winning numbers are specified under headings on the ticket, and are as follows:

number of sets prize bracket

two $50,000

four $25,000

six $10,000

eight $5,000

(3) For matching three numbers (but not four or two) in one of your sets to three numbers in the winning set, you win fifty dollars. For matching two numbers (but not three or four) in one of your sets to two numbers in the winning set of numbers, you win a prize of five dollars.

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NEW SECTION

WAC 315-36-040 Can I win more than once on one ticket? Yes. If your ticket has more than one set with two, three, or four numbers which match the winning numbers, you will receive the total of the prizes for each matching set.

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NEW SECTION

WAC 315-36-050 How is the winning set of numbers selected? Lottery officials conduct the drawing for the winning set of numbers, as specified in the general rules for on-line game drawings, WAC 315-30-040. The director has the discretion to specify the means for randomly drawing the winning numbers. Each drawing shall determine, at random, four numbers from "00" through "99," which will be the winning set of numbers. No two of the four numbers in the winning set will be identical. Any drawn numbers will not be declared winning numbers until the drawing is certified by the lottery. The winning numbers shall be used to determine all Lucky 21 winners for that drawing. If a drawing is not certified, another drawing will be conducted to determine the four numbers, which will be the winning set of numbers. The drawing shall not be invalidated based on the liability of the lottery.

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NEW SECTION

WAC 315-36-060 How often is the winning set of numbers chosen? The Lucky 21 drawing for the winning set of numbers is held at least once a week and may be held up to once a day, seven days a week, at the discretion of the director of the lottery. The director in addition has the discretion to change the drawing schedule or cancel the drawing if it falls on a holiday.

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NEW SECTION

WAC 315-36-070 Where can I buy or redeem Lucky 21 tickets? You can buy or redeem Lucky 21 tickets only from a lottery retailer licensed by the director of the lottery to sell on-line, computer generated tickets. You can buy or redeem the tickets during no less than seventeen hours each day, according to a schedule determined by the director of the lottery, but each on-line retailer will sell and redeem tickets only during their normal business hours. In redeeming tickets, a retailer may only pay out prizes up to $600. For prizes over $600, you must obtain a lottery claim form as described in WAC 315-06-120, and submit your ticket to the lottery by mail or in person. Tickets will be validated and redeemed in accordance with the general rules for on-line games found in chapter 315-30 WAC. Federal income tax must be withheld from prize payments as required by law.

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NEW SECTION

WAC 315-36-080 What information is included on a Lucky 21 ticket and playslip? The front of the ticket states the selection of numbers, amount wagered, drawing date, and validation and reference numbers. The playslip states an estimate of the probability of purchasing a winning ticket, player instructions, and player information.

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NEW SECTION

WAC 315-36-090 What are the odds of winning Lucky 21? The odds of winning any prize are 1 in 7. The odds of winning specific prizes are as follows:

"Win for Life" type Grand Prize: 1:3,921,225

"$50,000 Prize": 1:1,960,613

"$25,000 Prize": 1: 980,306

"$10,000 Prize": 1: 653,538

"$5,000 Prize": 1: 490,153

Match three numbers

(but not two or four)

$50 Prize: 1:486

Match two numbers

(but not three or four)

$5 Prize: 1:7

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NEW SECTION

WAC 315-36-100 If more than one person per drawing wins the grand prize, does each person receive the entire prize of $1,000 for life or is the prize split among the winners? Each person wins the grand prize of $1,000 for life.

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NEW SECTION

WAC 315-36-110 How is the "win for life" type grand prize paid? (1) You must be a natural person (e.g., not a corporation) to claim the prize of $1,000 per week for life. Prize payments will be made twice a year in the amount of $26,000. The first payment will be upon validation of a winning ticket. Future payments will be made every six months thereafter. You are entitled to the $26,000 payment even if you do not live to the end of that six-month period.

(2) If you are under eighteen at the time of claiming the grand prize, the semiannual payments of $26,000 each will be made in accordance with RCW 67.70.220 for prizes over $5,000.

(3) If a winner dies before payment of $250,000 under this section, the winner's successor-in-interest will be entitled to receive a lump sum payment in the amount necessary to bring the amount paid as a prize under this section up to a total of $250,000. Any successor-in-interest must provide the lottery with the necessary documentation and a court order directing payment of the final amount to the successor or successors entitled to payment. The determination of the sufficiency of the documentation shall lie within the discretion of the director of the lottery. Payment to the successor or successors shall be governed by all applicable laws, including WAC 315-06-120, 315-06-123, and 315-06-130.

(4) The winner's successor-in-interest must notify the lottery of the death of the winner. If the lottery makes a payment after the winner's death, the lottery shall require return of the payment, except, at the director's discretion, the payment may be deducted from any lump sum payment due to the winner's estate.

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NEW SECTION

WAC 315-36-120 How are prizes, other than the "win for life" type grand prize, paid? Every Lucky 21 prize other than the "win for life" type grand prize will be paid in a single payment.

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NEW SECTION

WAC 315-36-130 What happens to unclaimed Lucky 21 prizes? When a player who holds a winning ticket does not claim his or her prize within one hundred eighty days of the drawing in which the prize was won, that prize is retained in the state lottery account for further use as prizes, as provided for in RCW 67.70.190.

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NEW SECTION

WAC 315-36-140 Definitions for Lucky 21. (1) Number: Any play number from "00" through "99" inclusive.

(2) Set: One selection of four numbers.

(3) Play slip: A mark-sense game card used by players to select one set of four numbers for the "Win for Life" grand prize.

(4) Lucky 21 ticket: A computer-generated receipt showing payment for one play in a Lucky 21 game. Tickets shall be issued by an on-line terminal and shall list the twenty-one sets of four numbers each that belong to the ticket holder.

(5) Quick pick or quick play: A method for choosing a set of numbers by use of the random number generator within the on-line computer terminal.

(6) Play: Twenty-one sets of four numbers.

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NEW SECTION

WAC 315-36-150 Suspension or termination of Lucky 21. At the discretion of the director, Lucky 21 may be suspended or terminated at any time, to be effective prior to the beginning of sales for any future drawing. The director may suspend or terminate sales only where no sales have been made for the drawing.

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AMENDATORY SECTION (Amending Order 3, filed 10/15/82)

WAC 315-02-030 Address of commission. Unless specifically provided elsewhere in these rules, submission of materials or requests for notice or information of any kind, may be made by addressing correspondence to: Washington State Lottery Commission, P.O. Box ((9770)) 43000, Olympia, Washington 98504-3000.

[Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-02-030, filed 10/15/82.]

AMENDATORY SECTION (Amending Order 3, filed 10/15/82)

WAC 315-02-040 Commission activities exempt from Environmental Protection Act. The commission has reviewed its authorized activities and has found them to be exempt pursuant to WAC ((197-10-040(2), 197-10-150 through 197-10-190 and the State Environmental Policy Act, chapter 43.21 RCW)) 197-11-800.

[Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-02-040, filed 10/15/82.]

AMENDATORY SECTION (Amending Order 3, filed 10/15/82)

WAC 315-02-060 Address of the office of the director. Unless specifically provided elsewhere in these rules, submission of materials or requests for notice or information of any kind, may be made by addressing correspondence to: Office of the Director, Washington State Lottery, P.O. Box ((9770)) 43000, Olympia, Washington 98504-3000.

[Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-02-060, filed 10/15/82.]

AMENDATORY SECTION (Amending Order 3, filed 10/15/82)

WAC 315-02-070 Office of the director activities exempt from Environmental Protection Act. The director has reviewed his or her authorized activities and has found them to be exempt pursuant to WAC ((197-10-040(2), 197-10-150 through 197-10-190 and the State Environmental Policy Act, chapter 43.21 RCW)) 197-11-800.

[Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-02-070, filed 10/15/82.]

AMENDATORY SECTION (Amending Order 83, filed 12/16/85)

WAC 315-02-080 Filing of adopted rules. The commission hereby authorizes each of the following to act as an agent of the commission for the purpose of signing Form ((CR-8)) CR-103 promulgated by the code reviser for the purpose of filing adopted rules:

(1) Each member of the commission;

(2) Director;

(3) Deputy director.

[Statutory Authority: RCW 67.70.040. 86-01-060 (Order 83), 315-02-080, filed 12/16/85; 84-21-013 (Order 66), 315-02-080, filed 10/5/84.]

AMENDATORY SECTION (Amending WSR 89-21-029, filed 10/10/89, effective 11/10/89)

WAC 315-02-220 Ticket defined. "Ticket" means a lottery ticket or share issued by the director for sale to the general public or for use in authorized ((media promotions)) promotional events and activities and authorized retailer incentive programs.

[Statutory Authority: RCW 67.70.040. 89-21-029, 315-02-220, filed 10/10/89, effective 11/10/89. Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-02-220, filed 10/15/82.]

REPEALER

The following sections of the Washington Administrative Code are repealed:

WAC 315-02-170 Lottery defined.

WAC 315-02-180 Person defined.

AMENDATORY SECTION (Amending WSR 97-04-047, filed 1/31/97, effective 3/3/97)

WAC 315-10-010 Instant games--Authorized--Director's authority. It is the commission's intent to provide the director broad authority in carrying out the following duties:

(1) The commission hereby authorizes the director to select, operate, and contract relating to and for the operation of instant games meeting the criteria set forth in this chapter.

(2) The director shall establish final instant game specifications, including the determination of winning tickets, in executed working papers. The director shall keep executed working papers on file at the headquarters office location and make them available for public review during normal business hours.

(3) The director or designee shall inform commission members of instant game development.

[Statutory Authority: RCW 67.70.040. 97-04-047, 315-10-010, filed 1/31/97, effective 3/3/97. Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-10-010, filed 10/15/82.]

AMENDATORY SECTION (Amending WSR 97-04-047, filed 1/31/97, effective 3/3/97)

WAC 315-10-020 Definitions. (1) Ticket. The ticket purchased for participation in an instant game and any ticket used in media promotions and retailer incentive programs authorized by the director for an instant game.

(2) Instant game. A game in which a ticket is purchased and upon removal of a latex covering on the front of the ticket, the ticket bearer determines his or her winnings, if any.

(3) Ticket bearer. The person who has signed the ticket or has possession of the unsigned ticket.

(4) Play symbols. The numbers or symbols appearing in the designated areas under the removable covering on the front of the ticket. Play symbols were formerly called play numbers. Both terms shall have the same meaning.

(5) Your(s). The ticket bearer's play area or areas (for example, "your hand(s)," "your card(s)," or "your roll(s)").

(6) Their(s). The opponent's play area or areas (for example, "their card(s)," or "their roll(s)").

(7) Validation number. The multi-digit number found on the ticket and on any ticket stub. There must be a validation number on the ticket or any stub.

(((6))) (8) Working papers. The documents providing production and winning ticket specifications for each instant ticket game. Executed working papers (including amendments, if any) are signed and dated by the lottery director.

(9) Scratch game. Instant game as defined in subsection (1) of this section.

[Statutory Authority: RCW 67.70.040. 97-04-047, 315-10-020, filed 1/31/97, effective 3/3/97; 89-21-029, 315-10-020, filed 10/10/89, effective 11/10/89; 86-01-060 (Order 83), 315-10-020, filed 12/16/85; 84-05-008 (Order 51), 315-10-020, filed 2/7/84. Statutory Authority: RCW 67.70.040 and 67.70.050. 83-05-029 (Order 14), 315-10-020, filed 2/10/83. Statutory Authority: 1982 2nd ex.s. c 7. 82-21-038 (Order 3), 315-10-020, filed 10/15/82.]

NEW SECTION

WAC 315-10-023 What are the prizes available for instant games? Prizes available are as set forth on the instant game ticket. Prizes may range from one dollar up to and including one million dollars. Prizes may also include Win for Life prizes. Win for Life prizes will be paid in accordance with WAC 315-06-120(14) and may include prizes exceeding one million dollars.

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NEW SECTION

WAC 315-10-024 What are the methods of selecting winning tickets? (1) Methods for selecting winning tickets shall be as set forth on the instant game ticket and in the executed working papers on file at lottery headquarters in Olympia, Washington. Methods for selecting winning tickets include:

(a) Higher number. Your (the player's) number is greater than their number.

(b) Match one or more. Match your play symbols to the winning play symbol(s).

(c) Bonus play. Uncover a bonus symbol to win a bonus prize instantly.

(d) Match two or more consecutive. Match two or more consecutive "Game Cards" within a game to the "Draw Cards" to win the corresponding amount shown on the ticket.

(e) Match two or more. Match two or more "Game Cards" within a game to the "Draw Cards" to win the corresponding amount shown on the legend on the ticket.

(f) Three like cards. Get three like cards with one hand to win the corresponding amount shown on the ticket.

(g) Grand prize drawing. Uncover a bonus symbol that qualifies you to enter a grand prize drawing or submit one or more nonwinning tickets to enter a grand prize drawing.

(h) Match symbols. Uncover a specified number of identical play symbols on a play area.

(i) Add up "yours." Add up the play symbols designated as "yours" and the total is greater than or equal to the symbol or symbols designated as "theirs."

(j) Add up. Add up the play symbols and the amount is greater than or equal to the designated symbols on the ticket.

(k) Tic tac toe. Uncover three identical play symbols, in a row, column, or diagonal, on a 9 symbol grid on the play area.

(l) Sequence. Uncover the designated play symbols in the specified sequential order.

(m) Spellout. Uncover the play symbols to form the designated word or words.

(n) In between. Uncover the play symbol or symbols designated as "yours" with a value less than the play symbol or symbols designated as "their high card" and greater than the play symbol or symbols designated as "their low card."

(2) Each of the methods described in subsection (1) of this section may include a special variant such as "automatic win feature," "doubler," "wild card," or "free space" that provides added or alternative methods of winning.

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AMENDATORY SECTION (Amending WSR 97-04-047, filed 1/31/97, effective 3/3/97)

WAC 315-10-025 How much does it cost to purchase an instant game ticket? The price of an instant game ticket shall not be less than $1.00 and not more than (($5.00)) $20.00, except for those tickets used in media promotions and retailer incentive programs authorized by the director.

[Statutory Authority: RCW 67.70.040. 97-04-047, 315-10-025, filed 1/31/97, effective 3/3/97.]

AMENDATORY SECTION (Amending WSR 97-04-047, filed 1/31/97, effective 3/3/97)

WAC 315-10-030 Instant games criteria. (1) The total of all prizes available to be won in an instant game shall not be less than forty-five percent of the instant game's projected revenue.

(2) ((The instant game shall pay out both lower tier prizes and higher tier prizes. Lower tier prizes are of $25.00 or less. Higher tier prizes are of more than $25.00. The director shall determine the number of lower and higher tier prizes.

(3))) There is no required frequency of drawing or method of selection of a winner in an instant game.

(((4))) (3) At the director's discretion, an instant game may include a grand prize drawing(s). The criteria for the grand prize drawing shall be as follows:

(a) Finalists for a grand prize drawing shall be selected in an elimination drawing(s) from redeemed tickets meeting the criteria stated ((in specific game rules as determined by)) on the ticket and in executed working papers on file at lottery headquarters or stated in lottery promotional materials, at the discretion of the director. Participation in the elimination drawing(s) shall be limited to such tickets which are actually received and validated by the director on or before a date to be announced by the director. The director may reserve the right to place any semi-finalist whose entry was not entered in the elimination drawing(s) and who is subsequently determined to have been entitled to such entry into an elimination drawing of a subsequent instant game, and the determination of the director shall be final.

(b) The number of prizes and the amount of each prize in the grand prize drawing(s) shall be determined by the director to correspond with the size and length of the instant game and to comply with subsection (1) of this section.

(c) The dates and times as well as the procedures for conducting the elimination drawing and grand prize drawing shall be determined by the director.