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Oregon Bulletin

November 1, 2013

Oregon State Lottery, Chapter 177

Rule Caption: Amends Powerball game rules, including Power Play multiplier; prize accounts; pari-mutuel prizes and calculations

Adm. Order No.: LOTT 4-2013

Filed with Sec. of State: 9-27-2013

Certified to be Effective: 10-1-13

Notice Publication Date: 9-1-2013

Rules Amended: 177-085-0005, 177-085-0020, 177-085-0025, 177-085-0035, 177-085-0050, 177-085-0065

Subject: The Oregon Lottery proposes to amend the above referenced administrative rules for the Powerball game. These changes are necessary to implement the changes to the Powerball game rules made by the Multi-State Lottery Association (MUSL), the national organization that administers the multi-state Powerball game and to make Division 85 rules consistent with the MUSL Powerball game rules.

   Amendments to these rules return the Power Play option to a random multiplier option, which will multiply a set prize amount by 2, 3, 4, or 5, depending on the multiplier randomly selected. Neither the Grand Prize nor the Match 5 prize will be multiplied when the Power Play option is purchased as an add-on to a Powerball play.

   Other amendments provide for the creation of new prize reserve and prize pool accounts for funding of the various prizes and clarify the calculation of the set prizes when the set prizes become pari-mutuel.

   Other amendments to the Division 85 rules make Lottery’s rules consistent with the MUSL Powerball game rules.

Rules Coordinator: Mark W. Hohlt—(503) 540-1417

177-085-0005

Definitions

The following definitions apply unless the context requires a different meaning.

(1) “Drawing” means the formal process of selecting winning numbers that determine the number of winners for each prize level of the game.

(2) “Game Board” or “Boards” means that area of the game slip that contains two sets of numbered squares to be marked by the player, the first set containing fifty-nine squares, numbered one through fifty-nine, and the second set containing thirty-five squares, numbered one through thirty-five.

(3) “Game Ticket” or “Ticket” means a ticket produced by a terminal which contains the caption Powerball®, one or more lettered game plays followed by the drawing date, the price of the ticket, a six digit retailer number and a serial number that is compatible with the Lottery’s central computer system.

(4) “Licensee Lottery” means a state lottery or lottery of a governmental unit, political subdivision, or entity thereof that is not a Party Lottery but has agreed to comply with all applicable MUSL and Product Group requirements and has been authorized by the MUSL and by the Powerball® Product Group to sell the Powerball® game.

(5) “Lottery” means the Oregon State Lottery.

(6) “MUSL” means the Multi-State Lottery Association

(7) “MUSL Board” means the governing body of the MUSL which is comprised of the chief executive officer of each Party Lottery.

(8) “Party Lottery” means a state lottery or lottery of a political subdivision or entity that participates in MUSL and is authorized to sell the Powerball® game.

(9) “Game Play” means the six numbers, the first five from a field of fifty-nine numbers and the last one from a field of thirty-five numbers that appear on a ticket as a single lettered selection and are to be played by a player in the game.

(10) “Game Slip” means the paper used in marking a player’s game plays and containing one or more boards.

(11) “Product Group” means a group of lotteries which has joined together to offer a product pursuant to the terms of the Multi-State Lottery Agreement and the Product Group’s own rules.

(12) “Quick Pick” means the random selection by the computer system of two-digit numbers that appear on a ticket and are played by a player in the game.

(13) “Retailer” means a person or entity authorized by the Lottery to sell lottery tickets.

(14) “Set Prize” means all prizes except the Grand Prize that are advertised to be paid by a single lump sum payment and, except in instances outlined in these division 85 rules, will be equal to the prize amount established by the MUSL Board for the prize level.

(15) “Draw game terminal” or “Terminal” has the meaning set forth in OAR 177-070-0005(5).

(16) “Winning Numbers” means the six numbers, the first five from a field of fifty-nine numbers and the last one from a field of thirty-five numbers, randomly selected at each drawing, which shall be used to determine winning plays contained on a game ticket.

Stat. Auth.: OR Const. Art. XV, Sec. 4(4) & ORS 461

Stats. Implemented: ORS 461.200

Hist.: LC 6-1988(Temp), f. & cert. ef. 1-26-88; LC 9-1988, f. & cert. ef. 2-23-88; LC 3-1989(Temp), f. & cert. ef. 1-23-89; LC 6-1989, f. 2-28-89, cert. ef. 3-2-89; LC 1-1992, f. 2-25-92, cert. ef. 4-19-92; LC 10-1996, f. & cert. ef. 9-4-96; LC 7-1997, f. 10-30-97, cert. ef. 11-2-97; LC 9-1997(Temp), f. & cert. ef. 11-7-97; LOTT 2-1998, f. & cert. ef. 5-28-98; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 4-2003(Temp), f. & cert. ef. 4-15-03 thru 10-10-03; LOTT 10-2003, f. & cert. ef. 6-30-03; LOTT 7-2005(Temp), f. 8-8-05, cert. ef. 8-28-05 thru 2-23-06; LOTT 23-2005, f. 12-21-05, cert. ef. 12-31-05; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 6-2009, f. 9-28-09, cert. ef. 10-1-09; LOTT 9-2011, f. 12-20-11, cert. ef. 1-15-12; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13

177-085-0020

Prize Claims

(1) General: A ticket, subject to the validation requirements set forth in OAR 177-085-0040, is the only proof of a game play or plays. The submission of a winning ticket to the Lottery or an authorized retailer as required by OAR 177-046-0110 is the sole method of claiming a prize or prizes, except that a Grand Prize (and a Match 5+0 prize) must be claimed in person at Lottery Headquarters. A game slip or a copy of a ticket has no pecuniary or prize value and does not constitute evidence of ticket purchase or of numbers selected. A terminal produced paper receipt has no pecuniary or prize value and does not constitute evidence of ticket purchase or of numbers selected.

(2) Prize Claims: Powerball® prize claim procedures are governed by the administrative rules of the Oregon State Lottery. MUSL and the Party Lotteries are not responsible for Powerball® prizes that are not claimed following the proper procedures as determined by the Oregon State Lottery.

Stat. Auth.: OR Const. Art. XV, Sec. 4(4)

Stats. Implemented: ORS 461.250

Hist.: LC 6-1988(Temp), f. & cert. ef. 1-26-88; LC 9-1988, f. & cert. ef. 2-23-88; LC 1-1992, f. 2-25-92, cert. ef. 4-19-92; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 7-2005(Temp), f. 8-8-05, cert. ef. 8-28-05 thru 2-23-06; LOTT 23-2005, f. 12-21-05, cert. ef. 12-31-05; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 9-2011, f. 12-20-11, cert. ef. 1-15-12; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13

177-085-0025

Powerball® Prize Pool

(1) Prize Pool: The prize pool for all prize categories shall consist of 50 percent of each drawing period’s sales, including any specific statutorily-mandated tax of a Party Lottery or a Licensee Lottery to be included in the price of a lottery ticket, after the prize pool accounts and prize reserve accounts are funded to the amounts established by the Product Group. Any amount remaining in the prize pool at the end of the Powerball® game shall be returned to all lotteries participating in the prize pool after the end of all claims periods of all Party Lotteries and Licensee Lotteries, carried forward to a replacement game or expended in a manner as directed by the members of the Product Group in accordance with state law.

(2) Prize Pool Accounts and Prize Reserve Accounts: An amount up to five percent of a Party Lottery’s sales, including any specific statutorily-mandated tax of a Party Lottery to be included in the price of a lottery ticket, 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 a Party Lottery’s share of the prize reserve accounts reaches the amounts designated by the Product Group. The Product Group has established the following prize reserve accounts and prize pool accounts for the Powerball® game:

(a) Prize Reserve Accounts: The Product Group has established the following prize reserve accounts for the Powerball® game:

(A) 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 (subject to the limitations of these rules); and

(B) The Set Prize Reserve Account, which is used to fund deficiencies in low-tier prize payments (subject to the limitations of these rules).

(b) Prize Pool Accounts: The Product Group has established the following prize pool accounts for the Powerball® game:

(A) The Grand Prize Pool Account, which is used to fund the immediate Grand Prize;

(B) The Set-Aside Account, which is used to guarantee payment of the minimum or starting Grand Prize;

(C) The Power Play® Prize Pool Account, which is described in OAR 177-085-0065; and

(D) The Low-Tier Prize Pool Account, which holds the temporary balances that may result from having fewer than expected winners in the low-tier set prize categories. (The source of the Low-Tier Prize Pool Account is the Party Lottery’s weekly prize contributions less actual set prize liability.) Once the prize pool accounts and a Party Lottery’s share of the prize reserve accounts exceed the designated amounts, the excess shall become part of the Grand Prize Pool Account.

(3) Balances: The Product Group, with approval of the Finance & Audit Committee, may establish a maximum balance for the prize pool accounts and prize reserve accounts. The 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 as follows:

(a) 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

(b) 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 the Powerball® game shall be returned to all lotteries participating in the accounts after the end of all claims periods of all Party Lotteries and Licensee Lotteries, carried forward to a replacement game or a replacement prize reserve account or expended in a manner as directed by the members of the Product Group in accordance with state law.

(4) Expected Prize Payout Percentages: The Grand Prize shall be determined on a pari-mutuel basis. Except as otherwise provided in these rules, all other prizes awarded shall be paid as set lump sum prizes with the following expected prize payout percentages: [Table not included. See ED. NOTE.]

(a) Division of Grand Prize Among Winners: The prize money allocated to the Grand Prize category shall be divided equally by the number of game plays winning the Grand Prize.

(b) Set Prize Pool Carried Forward: The Set Prize Pool(for the single lump sum prizes of $1,000,000 or less) shall be carried forward to subsequent draws if all or a portion of it is not needed to pay the set prizes awarded in the current draw.

(c) Pari-Mutuel Prize Determination: Except as provided in OAR 177-085-0025(4)(c)(C), for Party Lotteries:

(A) If the total of the set prizes awarded in a drawing exceeds the percentage of the prize pool allocated to the set prizes, then the amount needed to fund the set prizes, including Power Play® prizes, awarded shall be drawn from the following sources, in the following order:

(i) The amount allocated to the set prizes and carried forward from previous draws, if any;

(ii) An amount from the Set Prize Reserve Account, if available, not to exceed $40,000,000 per drawing.

(B) Lack of Sufficient Prize Funds: If, after these sources are depleted, there are not sufficient funds to pay the set prizes awarded, including Power Play® prizes, then the highest set prize shall become a pari-mutuel prize. If the amount of the highest set prize, when paid on a pari-mutuel basis, drops to or below the next highest set prize and there are still not sufficient funds to pay the remaining set prizes awarded, then the next highest set prize shall become a pari-mutuel prize. This procedure shall continue down through all set prize levels, if necessary, until all set prize levels become pari-mutuel prize levels.

(C) By agreement with the Licensee Lotteries, the Licensee Lotteries shall independently calculate their set pari-mutuel 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.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: OR Const. Art. XV, Sec. 4(4)

Stat. Implemented: ORS 461.220

Hist.: LC 6-1988(Temp), f. & cert. ef. 1-26-88; LC 9-1988, f. & cert. ef. 2-23-88; LC 17-1988(Temp), f. & cert. ef. 6-2-88; LC 18-1988, f. & cert. ef. 6-28-88; LC 3-1989(Temp), f. & cert. ef. 1-23-89; LC 6-1989, f. 2-28-89, cert. ef. 3-2-89; LC 1-1992, f. 2-25-92, cert. ef. 4-19-92; LC 4-1993, f. & cert ef. 4-2-93; LC 11-1995, f. 10-30-95, cert. ef. 11-1-95; LC 10-1996, f. & cert. ef. 9-4-96; LC 7-1997, f. 10-30-97, cert. ef. 11-2-97; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 7-2005(Temp), f. 8-8-05, cert. ef. 8-28-05 thru 2-23-06; LOTT 23-2005, f. 12-21-05, cert. ef. 12-31-05; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 9-2011, f. 12-20-11, cert. ef. 1-15-12; LOTT 10-2011(Temp), f. 12-22-11, cert. ef. 1-15-12 thru 7-7-12; LOTT 2-2012, f. 4-30-12, cert. ef. 5-1-12; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13

177-085-0035

Prize Payment

(1) Selection of Payment Type: Grand prizes shall be paid, at the election of the player made no later than 60 days after validation of the prize, with either a per winner annuity or single lump sum payment. If the payment election is not made by the player within 60 days after validation, then the prize shall be paid as an annuity prize. The election to take the single lump sum payment may be made at the time of validation of the prize claim or within 60 days thereafter. An election made after validation is final and cannot be revoked, withdrawn, or otherwise changed.

(2) Share of the Grand Prize: Shares of the Grand Prize shall be determined by dividing the amount available in the Grand Prize pool equally among all winning game plays of the Grand Prize.

(3) Lump Sum Payment: Winner(s) who elect a lump sum payment shall be paid their share(s) in a single lump sum payment. (Application of the MUSL annuity factor generally is anticipated to result in the Grand Prize winner who elects a single lump sum payment receiving an amount that roughly approximates one-half of the advertised Grand Prize amount. The actual single lump sum payment amount will vary as a function of the MUSL annuity factor determined as described in subsection (4)(a) of this rule.)

(4) Annuity Payment: The annuitized option prize shall be determined by multiplying a winner’s share of the Grand Prize pool by the MUSL annuity factor.

(a) The MUSL annuity factor is determined by the best total securities price obtained through a competitive bid of qualified, pre-approved brokers made after it is determined that the prize is to be paid as an annuity prize or after the expiration of 60 days after the winner becomes entitled to the prize.

(b) Neither MUSL nor the Party Lotteries or the Licensee Lotteries shall be responsible or liable for changes in the advertised or estimated annuity prize amount and the actual amount purchased after the prize payment method is actually known to MUSL. In certain instances announced by the Product Group, the Grand Prize shall be a guaranteed amount and shall be determined pursuant to subsection (11) of this rule. If individual shares of the cash held to fund an annuity are less than $250,000.00, the Product Group, in its sole discretion, may elect to pay the winners their share of the amount held in the Grand Prize pool.

(5) Initial and Annual Payments: Except as may be controlled by statute, all annuitized prizes shall be paid annually in thirty payments with the initial payment being made directly with available funds, to be followed by twenty-nine payments funded by the annuity. All annuitized prizes shall be paid annually in thirty graduated payments (increasing each year) by a rate as determined by the Product Group. Prize payments may be rounded down to the nearest $1,000. Annual payments after the initial payment shall be made by the lottery on the anniversary date of the first payment or if such date falls on a non-business day, then the first business day following the anniversary date of the first payment. Funds for the initial payment of an annuitized prize or the lump sum payment prize shall be made available by MUSL for payment by the Party Lottery or the Licensee Lottery which sold the winning ticket no earlier than the 15th calendar day (or the next banking day if the fifteenth day is a holiday) following the drawing.

(6) Lack of Available Funds: If necessary, when the due date for the payment of a prize occurs before the receipt of sufficient funds in the prize pool trust to pay the prize, then the transfer of funds for the payment of the full lump sum payment amount may be delayed pending receipt of funds from the Party Lotteries and Licensee Lotteries. The Lottery may elect to make the initial payment from its own funds after validation, with notice to MUSL.

(7) Death of Winner: In the event of the death of a lottery winner during the annuity payment period, the MUSL Finance and Audit Committee, in its sole discretion excepting a discretionary review by the Product Group, upon the petition of the estate of the lottery winner (the “Estate”) or the persons identified on the winner’s Beneficiary Designation form (BDF), whichever is applicable, to the state lottery of the state in which the deceased lottery winner purchased the winning ticket, and subject to applicable federal, state, or district laws, may make payment to the Estate or the designated beneficiary of the discounted present value of the annuitized prize payments. If a determination is made, then securities and/or amounts held to fund the deceased lottery winner’s annuitized prize may be distributed to the Estate or the persons on the BDF. The identification of the securities, if any, to fund the annuitized prize shall be at the sole discretion of the MUSL Finance and Audit Committee or the Product Group.

(8) Low-Tier Prizes: All low-tier prizes (all prizes except the Grand Prize) shall be paid directly through the Lottery that sold the winning ticket. The Lottery may begin paying low-tier prizes after receiving authorization to pay from the MUSL central office.

(9) Rounding of Grand Prize Payments: Annuitized payments of the Grand Prize or a share of the Grand Prize may be rounded to facilitate the purchase of an appropriate funding mechanism. Breakage on an annuitized Grand Prize win shall be added to the first payment to the winner or winners. Prizes other than the Grand Prize which, under OAR 177-085-0025(4)(c) and 177-085-0065(12), may become single-payment, pari-mutuel prizes, may be rounded down so that prizes can be paid in multiples of whole dollars. Breakage resulting from rounding these prizes shall be carried forward to the prize pool for the next drawing.

(10) Roll Over of Grand Prize: If the Grand Prize is not won in a drawing, the prize money allocated for the Grand Prize shall roll over and be added to the Grand Prize pool for the following drawing.

(11) Minimum Grand Prizes and Increases: The Product Group may offer guaranteed minimum Grand Prize amounts or minimum increases in the Grand Prize amount between drawings or make other changes in the allocation of prize money where the Product Group finds that it would be in the best interest of the game. If a minimum Grand Prize amount or a minimum increase in the Grand prize amount between drawings is offered by the Product Group, then the Grand Prize amount shall be determined as follows.

(a) All Winners Select Annuity: If there are multiple Grand Prize winners during a single drawing, each selecting the annuitized option prize, then a winner’s share of the guaranteed annuitized Grand Prize shall be determined by dividing the guaranteed annuitized Grand Prize by the number of winning game plays.

(b) Mix of Lump Sum and Annuity: If there are multiple Grand Prize winners during a single drawing and at least one of the Grand Prize winners has elected the annuitized option prize, then the best bid submitted by MUSL’s pre-approved qualified brokers shall determine the cash pool needed to fund the guaranteed annuitized Grand Prize.

(c) No Winners Select Annuity: If no winner of the Grand Prize during a single drawing has elected the annuitized option prize, then the amount of the cash in the Grand Prize pool shall be an amount equal to the guaranteed annuitized amount divided by the average annuity factor of the most recent three best quotes provided by MUSL’s pre-approved qualified brokers submitting quotes.

(d) Changes in Allocation of Prizes: In no case shall quotes be used that are more than two weeks old, and if less than three quotes are submitted, then MUSL shall use the average of all quotes submitted. Changes in the allocation of prize money shall be designed to retain approximately the same prize allocation percentages, over a year’s time, set out in OAR 177-085-0025(4). Minimum guaranteed prizes or increases may be waived if the alternate funding mechanism set out in OAR 177-085-0025(4)(c) becomes necessary.

(12) One Prize per Board: The holder of a winning ticket may win only one prize per board in connection with the winning numbers drawn, and shall be entitled only to the prize won by those numbers in the highest matching prize category.

(13) Claim Expires in One Year: Claims for all prize categories, including the Grand Prize, must be submitted within one year after the date of the drawing.

Stat. Auth.: OR Const. Art. XV, Sec. 4(4) & ORS 461

Stats. Implemented: ORS 461.20

Hist.: LC 6-1988(Temp), f. & cert. ef. 1-26-88; LC 9-1988, f. & cert. ef. 2-23-88; LC 3-1989(Temp), f. & cert. ef. 1-23-89; LC 6-1989, f. 2-28-89, cert. ef. 3-2-89; LC 1-1992, f. 2-25-92, cert. ef. 4-19-92; LC 8-1992, f. & cert. ef. 7-23-92; LC 4-1993, f. & cert. ef. 4-2-93; LC 10-1996, f. & cert. ef. 9-4-96; LC 7-1997, f. 10-30-97, cert. ef. 11-2-97; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 4-2003(Temp), f. & cert. ef. 4-15-03 thru 10-10-03; LOTT 10-2003, f. & cert. ef. 6-30-03; LOTT 7-2005(Temp), f. 8-8-05, cert. ef. 8-28-05 thru 2-23-06; LOTT 23-2005, f. 12-21-05, cert. ef. 12-31-05; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 9-2011, f. 12-20-11, cert. ef. 1-15-12; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13

177-085-0050

Ineligible Players

(1) MUSL Restrictions: A ticket or share issued by the MUSL or any of its Party Lotteries or Licensee Lotteries shall not be purchased by, and a prize won by any such ticket or share shall not be paid to:

(a) A MUSL employee, officer, or director;

(b) A contractor or consultant under agreement with the MUSL to review the MUSL audit and security procedures;

(c) An employee of an independent accounting firm under contract with MUSL to observe drawings or site operations and actually assigned to the MUSL account and all partners, share-holders, or owners in the local office of the firm; or

(d) An immediate family member (parent, stepparent, child, stepchild, spouse, or sibling) of an individual described in subsections (a) through (c) of this section and residing in the same household.

(2) Local Lottery Restrictions: Those persons designated by a Party Lottery’s or Licensee Lottery’s law as ineligible to play its games shall also be ineligible to play Powerball® in that Party Lottery’s or Licensee Lottery’s jurisdiction.

Stat. Auth.: OR Const. Art. XV, Sec. 4(4)

Stats. Implemented: ORS 461.250

Hist.: LC 6-1988(Temp), f. & cert. ef. 1-26-88; LC 9-1988, f. & cert. ef. 2-23-88; LC 12-1990, f. & cert. ef. 10-2-90; LC 1-1992, f. 2-25-92, cert. ef. 4-19-92; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13

177-085-0065

Power Play®

(1) General: Power Play® is an optional, limited extension of the Powerball® Game described in OAR Division 85. The Lottery Director, in the Lottery Director’s sole discretion and based on agreements with MUSL, is authorized to initiate and terminate the Power Play® option.

(2) Set Prizes Only: Power Play® increases the amount of any of the cash Set Prizes (the cash prizes normally paying $4 to $1,000,000) won in a drawing. The Grand Prize Jackpot is not a Set Prize and will not be increased.

(3) Power Play® Purchase: A qualifying Power Play® option play is any single Powerball® Play for which the player selects the Power Play® option on either the game slip or by selecting the Power Play® option through a clerk-activated or player-activated terminal, pays one extra dollar for the Power Play® option play, and which is recorded at the Lottery’s central computer as a qualifying play.

(4) Qualifying Play: Except as otherwise provided in these rules, for drawings before January 22, 2014, a qualifying play which wins one of the eight lump sum Set Prizes (excluding the Grand Prize Jackpot) shall be paid as follows: [Table not included. See ED. NOTE.]

(5) Power Play® Drawings: Effective for drawings on or after January 22, 2014, MUSL will conduct a separate random Power Play® drawing and announce results during each of the regular Powerball® drawings held during the promotion. During each Powerball® drawing a single number, 2, 3, 4, or 5, shall be drawn. The Powerball® Product Group may modify the multiplier features for special promotions from time to time.

(6) Prizes to be Increased: Except as provided in these rules, effective for drawings on or after January 22, 2014, a qualifying play which wins one of the seven lowest lump sum set prizes (excluding the Match 5+0 prize) will be multiplied by the number selected, either 2, 3, 4, or 5, in a separate random Power Play® drawing announced during the official Powerball® drawing show. The announced Match 5+0 prize, for players selecting the Power Play® option, shall be paid $2,000,000 unless a higher limited promotional dollar amount is announced by the Group.

(7) Power Play® Prize Pool:

(a) Drawings Prior to January 22, 2014:The prize pool for all prize categories shall consists of up to 49.96 percent of each drawing period’s sales, including any specific statutorily-mandated tax of a Party Lottery or Licensee Lottery to be included in the price of a lottery ticket.

(b) Drawings On or After January 22, 2014: Effective for drawings on or after January 22, 2014, the prize pool for all prize categories shall consist of up to 49.36 percent of each drawing period’s sales, including any specific statutorily-mandated tax of a Party Lottery or Licensee Lottery to be included in the price of a lottery ticket.

(c) Carry Forward: The Power Play® Prize Pool shall be carried forward to subsequent draws if all or a portion of it is not need to pay the Power Play® prizes awarded in the current draw and held in the Power Play® Pool Account.

(8) Power Play® Pool Account:

(a) Drawings Prior to January 22, 2014: For drawings prior to January 22, 2014, an additional 0.04 percent of sales, including any specific statutorily-mandated tax of a Party Lottery or Licensee Lottery to be included in the price of a lottery ticket, may be collected and placed in trust in the Power Play® Pool Account, for the purpose of paying Power Play® prizes.

(b) Drawings On or After January 22, 2014: For drawings on or after January 22, 2014, an additional 0.64 percent of sales, including any specific statutorily-mandated tax of a Party Lottery or Licensee Lottery to be included in the price of a lottery ticket, may be collected and placed in trust in the Power Play® Pool Account, for the purpose of paying Power Play® prizes.

(c) Remaining Amounts: Any amount remaining in the Power Play® Pool Account at the end of this game shall be returned to all lotteries participating in the account after the end of all claim periods of all Party Lotteries and Licensee Lotteries, carried forward to a replacement game, or expended in a manner as directed by the members of the Product Group in accordance with jurisdiction statute.

(9) Power Play® Payout: Except as otherwise provided in these rules, all prizes awarded shall be paid as lump sum set prizes. Instead of the Powerball® set prize amounts, qualifying Power Play® option plays will pay the Power Play® prize amounts shown in sections (4) or (10) of this rule as applicable. In certain rare instances, and as determined under OAR 177-085-0025(4)(c)(B) and section (12) of this rule, the Powerball® set prize amount may be less than the amounts shown in sections (4) and (10) of this rule. In such case, the eight Power Play® prize amounts will be changed to an amount announced after the draw.

(10) Expected Power Play® Prize Payout — Effective for Drawings on or after January 22, 2014: [Table not included. See ED. NOTE.] In certain rare instances, the Powerball® set prize amount may be less than the amount shown. In such case, the eight lowest Power Play® prizes will be changed to an amount announced after the draw. For example, if the Match 4+1 Powerball® set prize amount of $10,000.00 becomes $5,000.00 under the rules of the Powerball® game and a 5x Power Play® multiplier is selected, then a Power Play® player winning that prize amount would win $25,000.00.

(11) Probability of Winning: Effective for drawings on or after January 22, 2014, the following table sets forth the probability of the various Power Play® numbers being drawn during a single Powerball® drawing, except that the Power Play® amount for the Match 5+0 prize will be $2,000,000. The Group may elect to run limited promotions that may modify the multiplier features.

Power Play® — Probability of Prize Increase

5X - Prize Won Times 5 — 1 in 10

4X - Prize Won Times 4 — 1in 10

3X - Prize Won Times 3 — 1 in 3.33

2X - Prize Won Times 2 — 1 in 2

Power Play® does not apply to the Powerball® Grand Prize. Except as provided in OAR 177-085-0065(10), a Power Play® Match 5 set prize is set at $2,000,000, regardless of the multiplier selected.

(12) Pari-Mutuel Prizes — All Prize Amounts: Except as provided in subsection (d) of this rule, for Party Lotteries, if the total of the original Powerball® set prizes and the Power Play® prizes awarded in a drawing exceeds the percentage of the prize pools allocated to the set prizes, then the amount needed to fund the set prizes (including the Power Play® prize amounts) awarded shall be drawn from the following sources, in the following order:

(a) The amount allocated to the set prizes and carried forward from previous draws, if any;

(b) An amount from the Powerball® Set-Prize Reserve Account, if available in the account, not to exceed $40,000,000 per drawing; and

(c) If, after these sources are depleted, there are not sufficient funds to pay the set prizes awarded (including Power Play® prize amounts), then the highest set prize (including the Power Play® prize amounts) shall become a pari-mutuel prize. If the amount of the highest set prize, when paid on a pari-mutuel basis, drops to or below the next highest set prize and there are still not sufficient funds to pay the remaining set prizes awarded, then the next highest set prize, including the Power Play® prize amount, shall become a pari-mutuel prize. This procedure shall continue down through all set prizes levels, if necessary, until all set prize levels become pari-mutuel prize levels. In that instance, the money available from the funding sources listed in this rule shall be divided among the winning plays in proportion to their respective prize percentages. Powerball® and Power Play® prizes will be reduced by the same percentage.

(d) By agreement with the Licensee Lotteries, the Licensee Lotteries shall independently calculate their set pari-mutuel 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.

(13) Prize Payment: All Power Play® prizes shall be paid in one lump sum. The Lottery may begin paying Power Play® prizes after receiving authorization to pay from the MUSL central office.

(14) Prizes Rounded: Prizes, which under these rules may become pari-mutuel prizes, may be rounded down so that prizes can be paid in whole dollars. Breakage resulting from rounding these prizes shall be carried forward to the prize pool for the next drawing.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: OR Const. Art. XV, Sec. 4(4) & ORS 461

Stats. Implemented: ORS 461

Hist.: LOTT 3-2001(Temp), f. 3-1-01, cert. ef 3-2-01 thru 8-29-01; LOTT 10-2001, f. 5-25-01, cert. ef. 5-29-01; LOTT 9-2002(Temp), f. 9-4-02, cert. ef. 10-6-02 thru 3-31-03; LOTT 1-2003, f. & cert. ef. 2-3-03; LOTT 7-2005(Temp), f. 8-8-05, cert. ef. 8-28-05 thru 2-23-06; LOTT 23-2005, f. 12-21-05, cert. ef. 12-31-05; LOTT 11-2008, f. 11-21-08, cert. ef. 1-4-09; LOTT 10-2010, f. 11-19-10, cert. ef. 12-12-10; LOTT 9-2011, f. 12-20-11, cert. ef. 1-15-12; LOTT 10-2011(Temp), f. 12-22-11, cert. ef. 1-15-12 thru 7-7-12; LOTT 2-2012, f. 4-30-12, cert. ef. 5-1-12; LOTT 5-2012(Temp), f. & cert. ef. 8-16-12 thru 1-31-13; LOTT 7-2012, f. 10-26-12, cert. ef. 11-1-12; LOTT 4-2013, f. 9-27-13, cert. ef. 10-1-13


Rule Caption: Amends game matrix; creates 30-year Jackpot annuity; Modifies prize accounts; Specifies when prizes become pari-mutuel

Adm. Order No.: LOTT 5-2013

Filed with Sec. of State: 9-27-2013

Certified to be Effective: 10-19-13

Notice Publication Date: 8-1-2013

Rules Amended: 177-098-0010, 177-098-0020, 177-098-0030, 177-098-0040, 177-098-0050, 177-098-0060, 177-098-0110

Subject: The Oregon Lottery amended the above referenced administrative rules for the Mega Millions game. The Mega Millions game has been updated with a new matrix and Megaplier multipliers which modify the odds of winning. It is anticipated that these changes will attract more players resulting in higher jackpots and more prize payments. Other amendments provide:

   1. In the event the multiplier drawing does not occur prior to the Mega Millions drawing, the multiplier number will be a 5;

   2. The Jackpot prize will be paid in thirty graduated annual payments increasing by 5% each year;

   3. The creation of new prize reserve and prize pool accounts for funding of the various prizes; and

   4. Circumstances under which prizes will become pari-mutuel are being modified.

   These changes were necessary to implement the changes to the Mega Millions game rules made by the national organization that administers the multi-state Mega Millions game.

Rules Coordinator: Mark W. Hohlt—(503) 540-1417

177-098-0010

Definitions

The following definitions apply unless the context requires a different meaning:

(1) “Drawing” means the formal process of selecting winning numbers which determine the number of winners for each prize level of the game.

(2) “Draw game terminal” or “Terminal” has the meaning set forth in OAR 177-070-0005(4).

(3) “Finance & Audit Committee” means the committee established by the Multi-State Lottery Association Agreement.

(4) “Game board” or “Boards” means that area of the play slip which contains two sets of numbered squares to be marked by the player, the first set containing seventy-five squares, numbered one through seventy-five and the second set containing fifteen squares, numbered one through fifteen.

(5) “Game ticket” or “Ticket” means a ticket produced by a terminal which contains the caption Mega Millions®, one or more lettered game plays followed by the drawing date, the price of the ticket, whether or not the player has purchased the Megaplier® option, the number of draws, the drawing dates if more than one drawing was purchased, a six digit retailer number, and a serial number that is compatible with the Lottery’s central computer system.

(6) “Jackpot” means the top prize of the Mega Millions® game. The annuity Jackpot Prize is an amount that would be paid in thirty graduated annual installments with the annual payments increasing by five percent each year.

(7) “Mega Millions® Finance Committee” means a committee of the Mega Millions® Lotteries which determines the Jackpot Prize amount (cash and annuity).

(8) “Mega Millions® Lottery or Lotteries” means those lotteries which have joined under the Mega Millions® Lottery Agreement and through a Cross-Selling Agreement with MUSL, to operate and sell the Mega Millions® game.

(9) “Megaplier®” means Mega Millions® game feature, known as “Megaplier®”, by which a player, for an additional wager of $1 per play, can increase the guaranteed prize amount or pari-mutuel prize amount, as applicable, excluding the Jackpot Prize by a factor of two, three, four, or five times depending upon the multiplier number that is drawn prior to the Mega Millions® game drawing.

(10) “MUSL” means the Multi-State Lottery Association.

(11) “MUSL Board” means the governing body of MUSL which is comprised of the chief executive officer of each Party Lottery.

(12) “Participating Lottery” or “Selling Lottery” means a state lottery or lottery of a political subdivision or entity which is participating in selling the Mega Millions® game and which may be a member of either group.

(13) “Party Lottery” means a state lottery or lottery of a political subdivision or entity which has joined the MUSL and, in the context of these Product Group Rules, which has joined in selling the games offered by the MUSL Mega Millions® Product Group.

(14) “Play” means the six numbers, the first five from a field of seventy-five numbers and the last one from a field of fifteen numbers, that appear on a ticket as a single lettered selection and are to be played by a player in the game.

(15) “Play slip” means a card used in marking a player’s game plays and containing one or more boards.

(16) “Product Group” means the group of lotteries which has joined together to offer the Mega Millions® lottery game product pursuant to the terms of a Cross-Selling Agreement with the Mega Millions® Lotteries, the Multi-State Lottery Agreement and the Group’s own rules.

(17) “Quick Pick” means the random selection by the computer system of two-digit numbers that appear on a ticket and are played by a player in the game.

(18) “Retailer” means a person or entity authorized by the Lottery to sell lottery tickets.

(19) “Set Prize” means all other prizes except the Jackpot Prize that are advertised to be paid by a single lump sum payment and, except in instances outlined in these rules, will be equal to the prize amount established by the MUSL Board for the prize level.

(20) “Winning numbers” means the six numbers, the first five from a field of seventy-five numbers and the last one from a field of fifteen numbers, randomly selected at each drawing, which shall be used to determine winning plays contained on a game ticket.

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 12-2010, f. 11-19-10, cert. ef. 12-12-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0020

Game Description

(1) General Information: Mega Millions® is a five out of seventy-five plus one out of fifteen lottery game, drawn on the day(s), time(s) and location(s) as determined by the Mega Millions® Lotteries, and which pays the Jackpot Prize, at the election of the player made in accordance with these rules or by a default election made in accordance with these rules, either on a graduated annual pari-mutuel basis or as a cash value option using a rate determined by the Mega Millions® Finance Committee on a pari-mutuel basis. Except as provided in these rules, all other prizes are paid as a single lump sum payment.

(2) Selection of Numbers: To play the Mega Millions® game, a player shall select five different numbers, from one through seventy-five and one additional number from one through fifteen (the Mega ball), for input into a terminal. The Mega ball may be the same as one of the first five numbers selected by the player, as long as it is from one through fifteen.

(3) Purchase of Tickets: Tickets can be purchased for one dollar (U.S. $1.00), either from a terminal operated by a retailer (i.e., a clerk-activated terminal) or from a terminal operated by the player (i.e., a player-activated terminal).

(a) If purchased from a retailer, the retailer will issue a ticket, via the terminal, containing the player’s selected set or sets of numbers, each of which constitutes a game play. The player may select a set of five numbers from one to seventy-five and one additional number from one through fifteen by:

(A) Marking six numbered squares in any one game board on a play slip and submitting the play slip to the retailer; or

(B) Requesting “Quick Pick” from the retailer.

(b) Tickets can be purchased from a player-activated terminal by use of a touch screen or by inserting a play slip into the machine.

(c) A player may purchase tickets for future consecutive drawings up to the maximum permitted by the Lottery.

(4) Player Responsibility: It is the sole responsibility of the player to verify the accuracy of the game play or plays and other data printed on the ticket. A ticket may not be voided or canceled by returning the ticket to the retailer or to the Lottery, including tickets that are printed in error. No ticket may be returned to the Lottery for credit. The placing of plays is done at the player’s own risk through the Lottery retailer, who when entering the play or plays is acting on behalf of the player.

(5) Determination of Winning Numbers: The winning numbers for the Mega Millions® game shall be determined at a drawing conducted under the supervision of the Mega Millions® Lotteries and the MUSL Board. Winning numbers shall be selected at random with the aid of mechanical drawing equipment or a random number generator. The Lottery Director shall designate a Drawing Manager who shall review and randomly observe the Mega Millions® game drawings conducted.

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0030

Prize Claims

(1) General: A ticket, subject to the validation requirements set forth in these rules and OAR 177-070-0035, is the only proof of a game play or plays and the submission of a winning ticket to the Lottery or an authorized retailer as required by these rules is the sole method of claiming a prize or prizes. A play slip or a copy of a ticket has no pecuniary or prize value and does not constitute evidence of ticket purchase or of numbers selected. A terminal produced paper receipt has no pecuniary or prize value and does not constitute evidence of ticket purchase or of numbers selected.

(2) Prize Claims: Mega Millions® prize claim procedures are governed by the administrative rules of the Oregon State Lottery. MUSL and the selling lotteries are not responsible for Mega Millions® prizes that are not claimed following the proper procedures as determined by the Oregon State Lottery.

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0040

Prize Pool

(1) Prize Pool: The prize pool for all prize categories shall consist of up to fifty-five percent of each drawing period’s sales, including any specific statutorily-mandated tax of a Party Lottery to be included in the price of a lottery ticket, after the prize reserve accounts are funded to the amounts set by the Product Group. The prize pool may be higher or lower than fifty-five percent based upon the number of winners at each prize level, as well as the funding required to meet a guaranteed Annuity Jackpot Prize as may be required by OAR 177-098-0060(5). Any amount remaining in the prize pool at the end of the Mega Millions® game shall be carried forward to a replacement game or expended in a manner as directed by the Product Group in accordance with the law of the state or jurisdiction.

(2) Prize Pool Accounts and Prize Reserve Accounts: An amount up to five percent of a Party Lottery’s sales, including any specific statutorily-mandated tax of a Party Lottery to be included in the price of a lottery ticket, shall be added to a Party Lottery’s Jackpot Prize Pool contribution and placed in trust in one or more prize pool accounts and prize reserve account(s) held by the Product Group at any time that the prize pool accounts and Party Lottery’s share of the prize reserve account(s) is below the amounts designated by the Product Group. The Product Group has established the following prize reserve account and prize pool accounts for the Mega Millions® game:

(a) The Prize Reserve Account, which is used to guarantee the payment of valid, but unanticipated, Jackpot Prize claims that may result from a system error or other reason (subject to the limitations of these rules);

(b) The Jackpot Prize Pool Account, which is used to fund the immediate Jackpot Prize;

(c) The Set-Aside Account, which is used to guarantee payment of the minimum or starting Jackpot Prize The source of the Set-Aside Account funding is the difference between the amount in the Jackpot Prize Pool Account and the amount needed to fund Jackpot Prize payments as determined by the Mega Millions® lotteries;

(d) The Megaplier® Prize Pool Account described in OAR 177-098-0110; and

(e) The Low-Tier Prize Pool Account, which holds the temporary balances that may result from having fewer than expected winners in the low-tier Set Prize categories. The source of the Low-Tier Prize Pool Account is the Party Lottery’s weekly prize contributions less actual Set Prize liability.

(3) Balances: The Product Group, with approval of the Finance & Audit Committee, may establish a maximum balance for the prize pool accounts and prize reserve account. The Product Group may determine to expend all or a portion of the funds in the prize pool accounts (except the Jackpot Prize Pool Account) and the prize reserve accounts:

(a) For the purpose of indemnifying the Party Lotteries and the Mega Millions® Lotteries in the payment of prizes to be made by the participating lotteries, subject to the approval of the MUSL Board; and

(b) For the payment of prizes or special prizes in the game; subject to the approval of the 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 account 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 account at the end of the Mega Millions® game shall be carried forward to a replacement game or expended in a manner as directed by the Members of the Product Group in accordance with the law of the state or jurisdiction.

(4) Expected Prize Payout Percentages: The Jackpot Prize shall be determined on a pari-mutuel basis. Except as provided in these rules and except for winning prizes sold by the California Lottery, all other prizes awarded shall be paid as Set Prizes with the following expected prize payout percentages, which does not include an additional amount held in prize reserves: [Table not included. See ED. NOTE.]

(a) Division of Jackpot Prize Among Winners: The Jackpot Prize amount shall be divided equally by the number of game tickets winning the Jackpot Prize.

(b) Set Prizes: The prize pool percentage allocated to the Set Prizes (the single lump sum prizes of $1,000,000 or less) shall be carried forward to subsequent draws if all or a portion of it is not needed to pay the Set Prizes awarded in the current draw.

(c) Pari-Mutuel Prize Determinations:

(A) Except as otherwise provided for in OAR 177-098-0110(10)(c), if the total of the Set Prizes awarded in a drawing exceeds the percentage of the prize pool allocated to the Set Prizes, then the amount needed to fund the Set Prizes, including Megaplier® prizes, awarded shall be drawn from the following sources, in the following order:

(i) The amount allocated to the Set Prizes and carried forward from previous draws, if any;

(ii) An amount from the prize reserve account described in section (2) of this rule, if available, not to exceed $40,000,000 per drawing.

(B) If, after these sources are depleted, there are not sufficient funds to pay the Set Prizes awarded, including Megaplier® prizes, then the highest Set Prize shall become a pari-mutuel prize. If the amount of the highest Set Prize, when paid on a pari-mutuel basis, drops to or below the next highest Set Prize and there are still not sufficient funds to pay the remaining Set Prizes awarded, then the next highest Set Prize shall become a pari-mutuel prize. This procedure shall continue down through all Set Prize levels, if necessary, until all Set Prize levels become pari-mutuel prize levels.

(C) By agreement with the Mega Millions® Lotteries, the Mega Millions® Lotteries shall independently calculate their set pari-mutuel prize amounts. The Party Lotteries and the Mega Millions® Lotteries shall than agree to set the pari-mutuel prize amounts for all lotteries selling the game at the lesser of the independently-calculated prize amounts.

(5) Advertised Jackpot Prize Annuity Amount: Except as required by OAR 177-098-0060 the official advertised Jackpot Prize annuity amount is subject to change based on sales forecasts and/or actual sales.

(6) Changes to Prize Categories: The number of prize categories and the allocation of the prize fund among the prize categories may be changed at the discretion of the Mega Millions® Lotteries, for promotional purposes. Such change shall be announced by the Lottery prior to the drawing to which the change applies.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 12-2010, f. 11-19-10, cert. ef. 12-12-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0050

Probability of Winning

General: The following table sets forth the probability of winning and the probable distribution of winners in and among each prize category, based upon the total number of possible combinations in Mega Millions®. All prize winning tickets sold by the California Lottery are paid on a pari-mutuel basis. [Table not included. See ED. NOTE.]

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0060

Prize Payment

(1) Selection of Payment Type: Jackpot Prizes shall be paid, at the election of the player made no later than 60 days after validation of the prize, with either a per winner annuity or single lump sum payment. If the payment election is not made by the player within 60 days after validation, then the prize shall be paid as an annuity prize. The election to take the single lump sum payment may be made at the time of validation of the prize claim or within 60 days thereafter. An election made after validation is final and cannot be revoked, withdrawn, or otherwise changed.

(2) Share of the Jackpot Prize: Shares of the Jackpot Prize shall be determined by dividing the amount available in the Jackpot Prize pool equally among all winning game plays of the Jackpot Prize in all participating lotteries. The prize money allocated from the current Mega Millions® Jackpot Prize Pool Account for the Jackpot Prize, plus any previous portions of prize money allocated to the Jackpot Prize category in which no matching tickets were sold will be divided equally among all Jackpot Prize winning game plays in all participating lotteries.

(3) Lump Sum Payment: Jackpot Prize winner(s) who elect a lump sum payment (cash value option) shall be paid their share(s) in a single lump sum payment. The lump sum payment amount shall be determined by the Product Group. The lump sum payment shall be paid upon completion of all internal validation procedures. Prize payments may be rounded down to the nearest $1,000.

(4) Initial and Annual Annuitized Payments: All annuitized prizes shall be paid in graduated annual payments, with the initial payment being made in cash. Graduated annual payment option Jackpot Prizes will be paid in thirty graduated annual installments. The initial payment shall be paid upon completion of all internal validation procedures. The subsequent twenty-nine payments shall be paid graduated annually to coincide with the month of the Federal auction date at which the bonds were purchased to fund the annuity, with graduated annual installments defined in the Mega Millions® Lotteries’ Finance and Operations Procedures. Payments shall escalate by a factor of five percent annually, and annual payments shall be rounded down to the nearest even one thousand dollar increment. All such payments shall be made within seven days of the anniversary of the annual auction date.

(5) Jackpot Prizes and Increases: The Mega Millions® lotteries may set a minimum guaranteed annuity Jackpot Prize amount, which shall be advertised by the selling lotteries as the starting guaranteed annuity Jackpot Prize amount.

(6) Roll Over of Jackpot Prize: If in any Mega Millions® drawing there are no Mega Millions® plays which qualify for the Jackpot Prize category, the portion of the prize fund allocated to such Jackpot Prize category shall remain in the Jackpot Prize category and be added to the amount allocated for the Jackpot Prize category in the next consecutive Mega Millions® drawing.

(7) Funding the Annuity: Funds for the initial payment of an annuitized prize or the lump sum cash prize shall be made available by MUSL for payment by the Party Lottery on a schedule approved by the Product Group. If individual shares of the cash held to fund an annuity is less than $250,000, the Product Group, in its sole discretion, may elect to pay the winners their share of the cash held in the Jackpot Prize pool. Neither MUSL nor the party lotteries shall be responsible or liable for changes in the advertised or estimated annuity prize amount and the actual amount purchased after the prize payment method is actually known to MUSL.

(8) Lack of Available Funds: If necessary, when the due date for the payment of a prize occurs before the receipt of funds in the prize pool trust sufficient to pay the prize, the transfer of funds for the payment of the full lump sum cash amount may be delayed pending receipt of funds from the Party Lotteries or other lotteries participating in the Mega Millions® Game. A Party Lottery may elect to make the initial payment from its own funds after validation, with notice to MUSL.

(9) Death of Winner: In the event of the death of a lottery winner sold by a Party Lottery during the annuity payment period, the MUSL Finance & Audit Committee, in its sole discretion excepting a discretionary review by the Product Group, upon the petition of the estate of the lottery winner (the “Estate”) to the lottery of the jurisdiction in which the deceased lottery winner purchased the winning ticket, and subject to federal, state, district or territorial applicable laws, may accelerate the payment of all of the remaining lottery proceeds to the Estate. If such a determination is made, then securities and/or cash held to fund the deceased lottery winner’s annuitized prize may be distributed to the Estate. The identification of the securities to fund the annuitized prize shall be at the sole discretion of the Finance & Audit Committee or the Product Group.

(10) Low-Tier Cash Prize Payments: All low-tier cash prizes (all prizes except the Jackpot Prize) shall be paid in cash through the Party Lottery which sold the winning ticket(s). A Party Lottery may begin paying low-tier cash prizes after receiving authorization to pay from the MUSL central office.

(11) Rounding of Prize Payments: Annuitized payments of the Jackpot Prize or a share of the Jackpot Prize may be rounded to facilitate the purchase of an appropriate funding mechanism. Breakage on an annuitized Jackpot Prize win shall be added to the first payment to the winner or winners. Prizes other than the Jackpot Prize which, under these rules, may become single-payment, pari-mutuel prizes, may be rounded down so that prizes can be paid in multiples of whole dollars. Breakage resulting from rounding these prizes shall be carried forward to the prize pool for the next drawing.

(12) Roll Over of Jackpot Prize: If the Jackpot Prize is not won in a drawing, the prize money allocated for the Jackpot Prize shall roll over and be added to the Jackpot Prize pool for the following drawing.

(13) One Prize per Game Play: The holder of a winning ticket may win only one prize per game play in connection with the winning numbers drawn, and shall be entitled only to the prize won by those numbers in the highest matching prize category.

(14) Claim Expires in One Year: Claims for all prize categories, including the Jackpot Prize, shall be submitted within one year after the date of the drawing in accordance with these rules and OAR 177-070-0025(3).

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 12-2010, f. 11-19-10, cert. ef. 12-12-10; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

177-098-0110

Megaplier®

(1) General: Megaplier® is an optional, limited extension promotion of the Mega Millions® Game described in OAR division 98. The Lottery Director, in the Lottery Director’s sole discretion and based on agreements with MUSL, is authorized to initiate and terminate the Megaplier® option.

(2) Set Prizes Only: Megaplier® multiplies or increases the amount of any of the lump sum Set Prizes (the cash prizes normally paying $1 to $1,000,000) won in a drawing held during the promotion. The Jackpot Prize is not a Set Prize and will not be multiplied or increased by means of the Megaplier® promotion.

(3) Qualifying Play: A qualifying Megaplier® option play is any single Mega Millions® Play for which the player selects the Megaplier® option on either the Play Slip or by selecting the Megaplier® option through a clerk-activated or player-activated terminal, pays one extra dollar for the Megaplier® option play, and which is recorded at the Party Lottery’s central computer as a qualifying play.

(4) Prizes to be Multiplied or Increased:

(a) Set Prizes: A qualifying play which wins one of the lump sum Set Prizes will be multiplied by the number selected (either 2, 3, 4, or 5), in a separate random Megaplier® drawing announced in a manner determined by the Product Group.

(5) Selection of Multiplier®: MUSL will either itself conduct, or authorize a U.S. Lottery to conduct on its behalf, a separate random “Megaplier®” drawing. Before each Mega Millions® drawing a single number (2, 3, 4 or 5) shall be drawn. The Mega Millions® Product Group may change one or more of the multiplier features for special promotions from time to time. In the event the “Megaplier®” drawing does not occur prior to the Mega Millions® drawing, the multiplier number will be a 5, which shall solely be determined by the lottery authorized to conduct the Megaplier® drawing.

(6) Megaplier® Prize Pool Account: The Megaplier® Prize Pool Account for all prize categories offered by the Party Lotteries shall consist of up to fifty-five percent of each drawing period’s sales, as determined by the Product Group, including any specific statutorily-mandated tax of a Party Lottery to be included in the price of a lottery ticket. The Megaplier® Prize Pool Account shall be carried forward to subsequent draws if all or a portion of it is not needed to pay the Megaplier® prizes awarded in the current draw and held in the Megaplier® Prize Pool Account. Any amount not used to pay for multiplied prizes may be collected and placed in the Megaplier® Prize Pool Account until the prize pool account reaches the amount designated by the Product Group. Any amount remaining in the Megaplier® Prize Pool Account at the end of this game shall be carried forward to a replacement game or expended in a manner as directed by the members of the Product Group in accordance with jurisdiction law.

(7) Expected Prize Payout: Except as provided in these rules, all prizes awarded shall be paid as lump sum Set Prizes. Instead of the Mega Millions® Set Prize amounts, qualifying Megaplier® plays will pay the amounts shown below when matched with the Megaplier® number drawn: [Table not included. See ED. NOTE.] Megaplier® multiplier numbers do not apply to the Mega Millions® Jackpot Prize. In certain rare instances, the Mega Millions® Set Prize amount may be less than the amount shown. In such case, the Megaplier® prizes will be a multiple of the changed Mega Millions® prize amount announced after the draw.

For example, if the Match 4+1 Mega Millions® Set Prize amount of $5,000 becomes $2,000 under the rules of the Mega Millions® game, then a Megaplier® player winning that prize amount with a 4X multiplier would win $8,000 ($2,000 x 4).

(8) Probability of Winning: The following table sets forth the probability of the various Megaplier® numbers being drawn during a single Mega Millions® drawing. The Product Group may elect to run limited promotions that may modify the multiplier features. [Table not included. See ED. NOTE.] Megaplier® multiplier numbers do not apply to the Mega Millions® Jackpot Prize.

(9) Prize Pool Carried Forward: The prize pool percentage allocated to the Megaplier® Set Prizes shall be carried forward to subsequent draws if all or a portion of it is not needed to pay the Set Prizes awarded in the current draw or may be held in a prize reserve account.

(10) Pari-Mutuel Prizes — All Prize Amounts: Except as otherwise provided in OAR 177-098-0110(10)(c):

(a) If the total of the original Mega Millions® Set Prizes and the Megaplier® prize amounts awarded in a drawing exceeds the percentage of the prize pools allocated to the Set Prizes, then the amount needed to fund the Set Prizes (including the Megaplier® prize amounts) awarded shall be drawn from the following sources, in the following order:

(A) The amount allocated to the Set Prizes (including Megaplier® prize amounts) and carried forward from previous draws, if any.

(B) An amount from the Mega Millions® prize reserve account, if available in the account, not to exceed $40,000,000 per drawing.

(b) If, after these sources are depleted, there are not sufficient funds to pay the Set Prizes awarded (including Megaplier® prize amounts), then the highest Set Prize (including the Megaplier® prize amounts) shall become a pari-mutuel prize. If the amount of the highest Set Prize, when paid on a pari-mutuel basis, drops to or below the next highest Set Prize and there are still not sufficient funds to pay the remaining Set Prizes awarded, then the next highest Set Prize, including the Megaplier® prize amount, shall become a pari-mutuel prize. This procedure shall continue down through all Set Prize levels, if necessary, until all Set Prizes become pari-mutuel prize levels. In that instance, the money available from the funding sources listed in this rule shall be divided among the winning plays in proportion to their respective prize percentages. Mega Millions® and Megaplier® prizes will be reduced by the same percentage.

(c) By agreement with the Mega Millions® Lotteries, the Mega Millions® Lotteries shall independently calculate their set pari-mutuel prize amounts, including the Megaplier® prize amounts. The party lotteries and the Mega Millions® 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.

(11) Prize Payment: All Megaplier® prizes shall be paid in one lump sum. The Lottery may begin paying Megaplier® prizes after receiving authorization to pay from the MUSL central office.

(12) Prizes Rounded: Prizes, which under these rules may become pari-mutuel prizes, may be rounded down so that prizes can be paid in whole dollars. Breakage resulting from rounding these prizes shall be carried forward to the prize pool for the next drawing.

[ED. NOTE: Tables referenced are available from the agency.]

Stat. Auth.: ORS 190, 461, OR Const. Art. XV, Sec. 4(4) &

Stats. Implemented: ORS 461

Hist.: LOTT 6-2010, f. 3-18-10, cert. ef. 3-21-10; LOTT 12-2010, f. 11-19-10, cert. ef. 12-12-10; LOTT 1-2012(Temp), f. & cert. ef. 1-9-12 thru 7-2-12; LOTT 3-2012, f. 4-30-12, cert. ef. 5-1-12; LOTT 5-2013, f. 9-27-13, cert. ef. 10-19-13

Notes
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2.) Copyright 2013 Oregon Secretary of State: Terms and Conditions of Use

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