11VAC5-41 Lottery Game Regulations

REGULATIONS

Vol. 28 Iss. 16 - April 09, 2012

TITLE 11. GAMING

STATE LOTTERY BOARD

Chapter 41

Proposed Regulation

Title of Regulation: 11VAC5-41. Lottery Game Regulations (amending 11VAC5-41-10, 11VAC5-41-30 through 11VAC5-41-80, 11VAC5-41-100, 11VAC5-41-110, 11VAC5-41-130 through 11VAC5-41-210, 11VAC5-41-230, 11VAC5-41-250, 11VAC5-41-280, 11VAC5-41-310, 11VAC5-41-320; repealing 11VAC5-41-260).

Statutory Authority: § 58.1-4007 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: June 8, 2012.

Agency Contact: Mitch Belton, Contract and Project Coordinator, State Lottery Department, 900 East Main Street, 12th Floor, Richmond, VA 23219, telephone [phone], FAX [phone], or email [e-mail].

Basis: Pursuant to § 58.1-4007 of the Code of Virginia, the State Lottery Board has the power to adopt regulations governing the establishment and operation of a lottery after consultation with the Director of the State Lottery Department.

Purpose: The proposed amendments will update the regulations that were last amended approximately nine years ago. Clarification of the games offered by the State Lottery Department will promote the general welfare of citizens by increasing transparency and avoiding confusion.

Substance: Many definitions that referred to the department's games were amended, added, or deleted to avoid potential confusion. The amendments clarify how and where claims can be validated, add flexibility as to how taxes will be calculated based on the IRS requirements at the time of payment, and extend the redemption period for a "free ticket" to 180 days.

Issues: The proposed amendments will enhance transparency to citizens and add additional clarification to games. The agency does not foresee any disadvantages to the citizens and businesses of the Commonwealth.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Lottery Department (department) proposes to 1) extend the time a winning ticket for which the prize is a free ticket must be claimed from 60 days to 180 days after the drawing, 2) specify that the use of electro-mechanical, electronic printing or other automated devices to play choices is allowed if they are developed by the department and that the department's website and social media may be utilized to publicize the lottery, and 3) delete language pertaining to grand prize events and include numerous other clarifications, reference updates, format changes, and removal of obsolete forms from the regulations.

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact. One of the proposed changes will extend the time a winning ticket for which the prize is a free ticket must be claimed from 60 days to 180 days after the drawing. Currently, all other types of winning tickets must be claimed within 180 days after the drawing. This change will make expiration date of winning tickets with free ticket prizes consistent with all other types of winning tickets, afford free ticket winners more time to claim their prizes, and potentially reduce the amount of unclaimed free ticket prizes. However, the department believes that the number of cases where a free ticket winning has not been claimed within the first 60 days after the drawing is negligible. Thus, no significant economic effect is expected from this change beyond improving the consistency between similar rules. Another proposed change will specify that the use of electro-mechanical, electronic printing or other automated devices to play choices is allowed if they are developed by the department. Current language does not specify that utilization of such devices developed by the department is allowed. The proposed changes will also specify that the department's website and social media may be utilized to publicize the lottery. Similar to the previous change, the current language does not specify the media types that may be utilized to publicize the lottery. The main effect of these two changes appears to be an improvement in the clarity of the regulatory language.

Also, the proposed changes will delete language pertaining to grand prize events.

According to the department, no grand prize events have been held in the last 4-5 years and this language is obsolete. Finally, the remaining changes include numerous other clarifications, reference updates, format changes, and removal of obsolete forms from the regulations. None of these changes are expected to create any significant economic effect other than improving the clarity and organization of the regulations.

Businesses and Entities Affected. Currently, these regulations apply to 5,191 licensed retailers and approximately 3.1 million players per year.

Localities Particularly Affected. The proposed regulations apply throughout the Commonwealth.

Projected Impact on Employment. No significant effect on employment is expected.

Effects on the Use and Value of Private Property. No significant effect on the use and value of private property is expected other than preserving the value of free ticket winnings not claimed within the 60 days from the date of drawing for an additional 120 days.

Small Businesses: Costs and Other Effects. While most of the licensed retailers are believed to be small businesses, no significant costs and other effects are expected as discussed above.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No adverse impact on small businesses is expected.

Real Estate Development Costs. No significant effect on real estate development costs is expected.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

Agency's Response to Economic Impact Analysis: The agency has reviewed the economic impact analysis presented by the Department of Planning and Budget and has no comment.

Summary:

The proposed amendments (i) repeal the ability of merchants to provide free game tickets with the purchase of other goods or services customarily sold by the merchant; (ii) extend the time a winning ticket for which the prize is a free ticket must be claimed from 60 days to 180 days after the drawing; (iii) specify that the use of electro-mechanical, electronic printing, or other automated devices to play choices is allowed if developed by the department; (iv) allow use of the department's website and social media to publicize the lottery; (v) delete language pertaining to grand prize events; and (vi) include numerous other clarifications, reference updates, format changes, and removal of obsolete forms from the regulations.

11VAC5-41-10. Definitions for lottery games.

The following words and terms when used in any of the department's regulations shall have the same meanings as defined in this chapter unless the context clearly indicates otherwise:

"Altered ticket" means a lottery ticket that has been forged, counterfeited, or tampered with in any manner.

"Barcode" means the individual coded number assigned to a lottery ticket for the purpose of electronic scanning, validation, redemption or other tracking purpose.

"Board" means the State Lottery Board established by the State Lottery Law (Chapter 40 (§ 58.1-4000 et seq.) of Title 58.1 of the Code of Virginia).

"Breakage" means the money accumulated from the rounding down of the parimutuel pari-mutuel prize levels to the next lowest whole dollar amount.

"Certified drawing" means a drawing in which lottery officials and an independent certified public accountant attest that the drawing equipment functioned properly and that a random selection of a winning combination occurred.

"Cashing retailer" means a department licensed retailer that sells lottery products and is authorized to pay prizes.

"Computer gaming system" means any computer system owned, operated, or contracted by the department that supports the sale, redemption, or validation of lottery tickets or wagers.

"Coupon" is a device (electronic or paper or otherwise) that is approved by the department for redemption.

"Department" means the State Lottery Department created by State Lottery Law (Chapter 40 (§ 58.1-4000 et seq.) of Title 58.1 of the Code of Virginia).

"Director" means the Director of the State Lottery Department or his designee.

"Drawing" means a formal process of randomly selecting numbers, names, or items in accordance with the specific game or promotion rules for those games or promotions requiring the random selection of numbers, names, or items.

"Game" means any individual or particular type of lottery authorized by the board.

"Instant game" means a game that, when played, reveals or informs the player immediately whether the player has won a prize or entry into a prize drawing, or both whether he has won a prize, entry into a prize drawing, prize points, or any or all of the aforementioned as specified in game rules.

"Misprinted ticket" means a lottery ticket that contains a manufacturing or printing defect or play that contains a manufacturing, programming, or printing defect that causes the game to no longer play as defined in game rules or does not properly validate against the game's validation files.

"Natural person" means a human being, and not a corporation, company, partnership, association, trust or other entity.

"On-line system" means the department's on-line computer system consisting of on-line terminals, central processing equipment, and a communication network.

"On-line terminal" or "terminal" means a device that is authorized by the department to function in an on-line, interactive mode with the department's computer system for the purpose of issuing tickets or an electronic facsimile thereof, and entering, receiving and processing game-related transactions.

"On-line ticket" means a computer-generated or electronically-produced ticket on lottery stock issued by an on-line lottery retailer to a player as a receipt for the number, numbers, or items or combination of numbers or items the player has selected.

"Pack" means a set quantity of consecutively numbered scratch tickets that all bear an identical pack number unique to that pack among all the tickets manufactured for that particular game.

"Prize" means any cash or noncash award to a holder of a winning lottery game ticket entry or play.

"Prize structure" means the percentage of sales that is dedicated to prizes the number, value, and odds of winning prizes for a game and the prize tiers within a game and the chances of winning a prize in each tier in an individual game as determined by the department and as specified in the game rules.

"Probability game" means a game in which all of the tickets sold are potentially winning tickets, and the outcome of the game depends entirely upon the player's scratch choice of a limited number of play spots choice or choices during game play.

"Promotion" is defined as an "added value" offer to consumers or licensed retailers sanctioned by the director or approved by the board when required.

"Roll stock" or "ticket stock" means the paper roll issued or approved for use by the department placed into the lottery retailer terminal from which a unique lottery ticket is generated by the computer, displaying displaying the selected items or numbers.

"Scratch ticket" means an instant game ticket with a latex or electronically produced covering over the game symbols located in the play area. Each ticket has a unique barcode, validation number and ticket number a printed instant win ticket with a covering over the play area that when scratched reveals a specific result.

"Share" means a percentage of ownership in a winning ticket, play, or subscription plan.

"Terminal" means a device that is authorized by the department to function in an interactive mode with the department's computer gaming system or systems for the purpose of issuing tickets, plays, or an electronic facsimile thereof, and entering, receiving, and processing game-related transactions.

"Terminal ticket" means a computer-generated or electronically-produced ticket issued through the computer gaming system by a retailer to a player as a receipt for the number, numbers, or items or combination of numbers or items the player has selected.

"Ticket number" means the preassigned unique number or combination of letters and numbers which or barcode that identifies that particular ticket as one within a particular game or drawing.

"Validation" means the process of reviewing and certifying a lottery ticket to determine whether it is a winning ticket.

"Validation number" means the unique number or number-and-letter code used to determine whether a lottery ticket is a winning ticket.

"Validation barcode" means the unique number or number-and-letter code or barcode used to determine whether a lottery ticket is a winning ticket.

"Winning ticket, winning wager, or winning play" means that the ticket, wager, or play that meets the criteria and specific rules for winning prizes as published for each game by the director.

11VAC5-41-30. Prize structure.

A. The prize structure for each lottery game shall be approved in advance by the board and may be adjusted in accordance with policy adopted by the board.

B. Prizes may be cash or noncash awards, including game tickets.

11VAC5-41-40. Chances of winning.

The director shall publicize the overall chances of winning a prize in each lottery game. The chances may be printed on the ticket or contained in informational materials, or both or may be in electronic form.

11VAC5-41-50. Ticket price.

A. The sale price of a lottery ticket for each game will be determined by the board. The ticket price shall not operate to prevent the sale of more than one lottery play on a single ticket. Unless authorized by the board, lottery retailers may not discount the sale price of tickets or provide free lottery tickets as a promotion with the sale of tickets. This section shall not prevent a licensed retailer from providing free game tickets with the purchase of other goods or services customarily offered for sale at the retailer's place of business; provided, however, that such promotion shall not violate any law.

B. This section shall not apply to the redemption of a winning ticket, the prize for which is one or more free tickets Retailers shall sell tickets at the prices fixed by the board.

C. This section shall not apply to the redemption of a winning ticket, the prize for which is one or more free tickets.

11VAC5-41-60. Drawing and selling times.

A. Drawings shall be conducted at times and places designated by the director and publicly announced by the department.

B. Retailers may sell tickets from new instant games upon receipt of the tickets from the department, but shall not sell tickets for an instant game after the announced end of that game.

C. Retailers may sell on-line terminal tickets up to a designated time prior to the drawing as specified in the on-line terminal game rules. That time will be designated by the director.

11VAC5-41-70. Ticket Terminal ticket cancellation.

A ticket may be canceled in accordance with the procedures contained in the rules for each game.

11VAC5-41-80. Ticket Scratch ticket returns.

A. Ticket sales to retailers are final. The department will not accept returned, unsold tickets for credit except as specifically authorized by and provided for in the department's policy for scratch ticket returns procedures.

B. Once tickets are accepted by a retailer, the department will not replace mutilated or damaged tickets, or be responsible for lost, stolen or destroyed tickets, unless specifically authorized by the director.:

1. May hold the retailer financially responsible for the replacement of mutilated, damaged, or otherwise unaccounted for tickets.

2. Will not be responsible for lost, stolen, destroyed, or otherwise unaccounted for tickets, unless specifically authorized and provided for in the department's procedures.

11VAC5-41-100. Validation requirements.

A. To receive payment for a prize, a Virginia lottery game ticket or play shall be validated by the retailer or the department as set out in this chapter and in any other manner that the director may prescribe in the specific rules for the lottery game, which shall include but not be limited to the following:

1. The original ticket must be presented for validation;

2. The ticket validation number shall be present in its entirety;

3. The ticket shall not be mutilated, altered, or tampered with in any manner. If a ticket is partially mutilated or if the ticket is not intact and cannot be validated through normal procedures but can still be validated by other validation tests, the director may pay the prize for that ticket;

4. The ticket shall not be counterfeited, forged, fraudulently made or a duplicate of another winning ticket;

5. The ticket shall have been issued by the department or by a licensed lottery retailer in an authorized manner;

6. The ticket shall not have been cancelled or previously paid;

7. The ticket shall be validated in accordance with procedures for claiming and paying prizes as set out in the game rules;

8. The ticket data shall have been recorded in the central computer system before the on-line game drawing or the instant game ticket sale, and the ticket data shall match this computer record in every respect;

9. The ticket may not be misregistered or defectively printed to an extent that it cannot be processed by the department; and

10. The ticket shall pass all other confidential security checks of the department.

1. If the game's rules specify that the physical ticket must be presented for validation then:

a. The original ticket must be presented for validation;

b. The ticket shall not be mutilated, altered, or tampered with in any manner. If a ticket is partially mutilated or if the ticket is not intact and cannot be validated through normal procedures but can still be validated by other validation tests, the director may pay the prize for that ticket;

c. The ticket may not be misregistered or defectively printed to an extent that it cannot be processed by the department;

d. The ticket shall pass all other confidential security checks of the department;

e. The ticket validation number shall be present in its entirety; and

f. The ticket shall not be counterfeited, forged, fraudulently made, or a duplicate of another winning ticket.

2. Where a winning ticket or play has been issued by a terminal:

a. The ticket or play shall have been issued by the department or by a licensed lottery retailer in an authorized manner;

b. The terminal ticket or play shall not have been cancelled or previously paid;

c. The terminal ticket or play shall be validated in accordance with procedures for claiming and paying prizes as set out in the game rules; and

d. The terminal ticket or play data shall have been recorded in the computer gaming system before the drawing or the instant game ticket sale, and the ticket data shall match this computer record in every respect.

3. If the games rules specify that a physical ticket, play, or record of play is not required for validation there may be other lottery requirements, as defined by the director, for winners to collect prizes.

B. Any lottery cash prize or free ticket (at its equivalent value) resulting from a ticket that is purchased or claimed by a person ineligible to play the lottery game is invalid and reverts to the State Lottery Fund.

11VAC5-41-110. Use of playslips.

A. A playslip issued by the department may be used to select a player's number or numbers to be played in an on-line game. If a playslip is used to select the player's number or numbers for an on-line game, the playslip number selections shall be manually marked and not marked by any electro-mechanical, electronic printing or other automated device. choice or choices to be played in a department-authorized computer gaming system. If a playslip is used to select the player's choice or choices for use in a computer gaming system, the playslip selections shall be manually or electronically marked as authorized by the department's game rules and not marked by any electro-mechanical, electronic printing, or other automated device, except for play utilizing materials or systems developed by the department.

B. Any playslip marked by methods other than those authorized by this chapter is invalid and subject to seizure by the department if presented for play at any lottery terminal. Any tickets produced from the use of invalid playslips are also invalid and subject to seizure by the department.

C. Nothing in this chapter shall be deemed to prevent a person with a physical handicap who is unable to mark a playslip manually from using any device intended to permit such person to make such a mark for his sole personal use or benefit.

11VAC5-41-130. Winning Terminal-generated winning tickets.

A. When more than one ticket containing the winning numbers is issued for the same drawing of the same game, the holder of each ticket is entitled only to his share of the prize, regardless of whether the other holders of tickets with the winning numbers actually claim their share of the prize.

B. The department shall not redeem prizes for tickets that would have been winning tickets but for the fact that they have been cancelled by the retailer unless specifically authorized by the director.

C. When the department's internal controls indicate that a winning ticket was issued but no claim is made for the prize, there shall be a rebuttable presumption that such ticket was in fact issued and the prize shall be paid in accordance with the provisions of § 58.1-4020 of the Code of Virginia and regulations of the department.

11VAC5-41-140. Where prizes claimed.

Winners may claim game prizes from any licensed lottery retailer or from the department in the manner as specified in this chapter or in the game rules., including:

1. At department headquarters;

2. At a department customer service center;

3. From a cashing retailer;

4. By mail; or

5. At any other location specifically authorized by the department.

11VAC5-41-150. Retailers' prize payment procedures.

Procedures for prize payments by retailers are as follows:

1. Retailers may pay cash prizes in cash, by certified check, cashier's check, business check, money order, other cash equivalent or by any combination of these methods.

2. If a check for payment of a prize by a retailer to a claimant is denied for any reason, the retailer is subject to the same service charge, interest and penalty payments for referring a debt to the department for collection that would apply if the check were made payable to the department. A claimant whose prize check is denied shall notify the department to obtain the prize.

3. During normal business hours of the lottery retailer when the validations equipment is operational and with operational validation equipment by which the ticket claim can be validated, a lottery retailer shall pay any lottery prize of $601 $600 or less, unless otherwise determined by the director, regardless of the location from which the winning ticket was purchased.

4. A prize claim shall be paid only at the location specified on the retailer's license or at a lottery office.

5. The department will reimburse a retailer for all valid prizes paid by the retailer within the specified prize redemption period for the game from which the prize resulted.

6. In no case shall a retailer impose a fee, additional charge or discount for cashing a winning lottery game ticket.

7. Retailers who pay claims without validating the tickets do so at their own financial risk.

8. Federal Internal Revenue Code, 26 USC § 6050I requires lottery retailers who receive more than $10,000 in cash in one transaction or two or more related transactions in the aggregate, from a single player or his agent, to file a return or such information with the Internal Revenue Service (IRS). The IRS encourages retailers to report all suspicious transactions, even if they do not meet the $10,000 threshold. For purposes of this requirement only, "cash" includes coin and currency only and does not include bank checks or drafts, traveler's checks, wire transfers, or other negotiable or monetary instruments.

11VAC5-41-160. No reimbursement for retailer errors.

Unless otherwise determined by the director, the department shall not reimburse retailers for prize claims a retailer has paid in error or for which a retailer failed to properly and completely validate the lottery game tickets in accordance with department procedures.

11VAC5-41-170. When prize shall be claimed from the department.

A. The department will pay prizes in any of the following circumstances:

1. If a retailer cannot validate a claim which the retailer otherwise would pay, the ticket holder shall present the original signed ticket to any department office including the department's headquarters or mail the signed ticket to the department's headquarters;

2. If a ticket holder is unable to return to any retailer to claim a prize that the retailer otherwise would pay, the ticket holder may present the original signed ticket at any department office or mail the signed ticket to the department's headquarters; or

3. If the prize amount is more than $601 $600, the ticket holder may present the original signed ticket at any department office or mail the signed ticket to the department headquarters.; or

4. Where an electronic entry or an electronic record of a ticket is permitted, a presentation of a physical ticket may not be required to claim a prize.

B. The department may require a claim form.

C. A player shall bear all risk of loss or damage by sending the ticket through the mail.

11VAC5-41-180. Department action on claims for prizes submitted to department.

A. The department shall validate the winning ticket claim according to procedures contained in this chapter.

B. If the claim cannot be validated, the department will promptly notify the ticket holder.

C. If the claim is mailed to the department and the department validates the claim, a check for the prize amount, merchandise, or experiential prizes will be presented or mailed to the winner.

D. If an individual presents a claim to the department in person and the department validates the claim, a check for the prize amount, merchandise, or experiential prizes will be presented to the winner.

11VAC5-41-190. Withholding, notification of prize payments.

A. When paying any prize in excess of $601 or more $600, the department shall:

1. File the appropriate income reporting forms with the Virginia Department of Taxation and the federal Internal Revenue Service; and

2. Withhold federal and state taxes from any winning ticket in excess of $5,001 accordance with the tax regulation in effect at the time.

B. Additionally, when paying any cash prize of $100 or more, the department shall withhold any moneys due for delinquent debts as provided by the Commonwealth's Setoff Debt Collection Act, Article 21 (§ 58.1-520 et seq.) of Chapter 3 of Title 58.1 of the Code of Virginia.

11VAC5-41-200. Ticket is bearer instrument.

A ticket that has been legally issued by a licensed lottery retailer is a bearer instrument until the ticket has been signed. The person who signs the ticket or enters through an electronic validation process is considered the owner of the ticket.

11VAC5-41-210. Payment made to bearer.

Payment of any prize will be made to the bearer of a validated winning ticket for that prize upon submission of the ticket and a prize claim form, if one is required, unless otherwise delayed in accordance with this chapter. If a validated winning ticket has been signed, the bearer may be required to present proper identification. one or more of the following, as required by the game rules:

1. The ticket.

2. Validation information.

3. Prize claim form, unless otherwise delayed in accordance with this chapter.

4. The bearer may be required to present proper identification.

11VAC5-41-230. Delay of payment allowed.

A. The Subject to the provisions in § 58.1-4013 D of the Code of Virginia, the director may refrain from making payment of a prize pending a final determination by the director under any of the following circumstances:

1. If a dispute arises, or it appears that a dispute may arise, relative to any ownership of a winning ticket or any prize;

2. If there is any question regarding the identity of the claimant;

3. If there is any question regarding the validity of any ticket presented for payment;

4. If there is any question whether a claimant has made a valid cash option election; or

5. If the claim is subject to any set off for delinquent debts owed to any agency eligible to participate in the Setoff Debt Collection Act (Article 21 (§ 58.1-520 et seq.) of Chapter 3 of Title 58.1 of the Code of Virginia) if the agency has registered such debt with the Virginia Department of Taxation and timely notice of the debt has been furnished by the Virginia Department of Taxation to the department.

B. The director may, at any time, delay any periodic or installment payment in order to review a change in circumstance relative to the prize awarded, the payee, the claim, or any other matter that has been brought to the department's attention. All delayed installments shall be brought up to date immediately upon the director's confirmation. Delayed installments shall continue to be paid according to the original payment schedule after the director's decision is given.

C. No liability for interest for any delay of any prize payment in accordance with subsections A and B, or any delay beyond the department's control, shall accrue to the benefit of the claimant pending payment of the claim. The department is neither liable for nor has it any responsibility to resolve disputes between or among competing claimants.

11VAC5-41-250. Using winners' names and information.

The department may require prize winners to participate in press conferences and to use the names and photographs of such prize winners and the city, town or county in which they live, as well as the prize amounts won for public information purposes and to foster the integrity of the games. No consideration shall be paid by the department for this purpose, unless authorized by the director. The department can use a winner's name and the city, town, or county in which a winner lives, as well as the prizes won, for public information purposes and to foster the integrity of the games. The department may require prize winners to participate in news conferences. The department can use the winner's information described in this section and winner's photographs for public information or promotional purposes in mediums such as, but not limited to, the department's website (www.valottery.com), social media, in-store, television, Internet, and radio. No consideration shall be paid by the department for this purpose.

11VAC5-41-260. Grand prize event. (Repealed.)

If a lottery game includes a grand prize event, the following general criteria shall be used:

1. Entrants in the event shall be selected from tickets that meet the criteria stated in specific game rules set by the director;

2. Participation in the drawings shall be limited to those tickets that are actually purchased by the entrants on or before the date announced by the director;

3. If, after the event is held, the director determines that a ticket should have been entered in the event, the director may place that ticket into a grand prize drawing for the next equivalent event, which action shall be the extent of the department's liability; and

4. The director shall determine the dates, times and procedures for selecting grand prize winners for each on-line game, and the proceedings for selection of the winners shall be open to the public.

11VAC5-41-280. When prize payable for "life."

If a prize is advertised as payable for the life of the winner, unless there is a cash option available selected by the winner or winners at the time a claim is made, the prize will be payable in installments, as provided by specific game rules in accordance with the rules for the specific game, for the lifetime of the winner and will cease upon the death of the winner. When the prize is won by two or more persons on a single ticket, each winner's share of the prize shall expire upon his death, unless otherwise specified in the game rules.

11VAC5-41-310. Lost, stolen, or destroyed tickets.

The department is not liable for lost, stolen, or destroyed tickets. The director may honor a prize claim of an apparent winner who does not possess the original ticket if the claimant is in possession of information that demonstrates that the original ticket meets the following criteria and can be validated through other means. Such information may include, but is not limited to, the following:

1. The claim form, if required, and a photocopy of the ticket, or photocopy of the original claim form, if required, and ticket, are timely filed with the department;

2. The prize for which the claim is filed is a winning prize that has not been claimed within the required redemption period, as verified in the department's records. In no case will the claim be paid within the redemption period; and

3. The claim is filed within the redemption period, as established by the game rules.; and

4. Except in extenuating circumstances or for just cause as the director may deem appropriate, the redemption period for claims has expired.

11VAC5-41-320. Unclaimed prizes.

A. Except for a free ticket prize, a claim for a lottery game winning ticket must be mailed in an envelope bearing a postmark of the United States Postal Service or another sovereign nation or received for payment as prescribed in this chapter within either 180 days after the date of the drawing for which the ticket was purchased, or of the event which caused the ticket to be a winning entry, or, in the case of an instant game ticket, within 180 days after the announced end of the game. In the event that the 180th day falls on a Saturday, Sunday or legal holiday, the winning ticket will be accepted for validation on the next business day only at a lottery office.

B. Any lottery cash prize that remains unclaimed after either 180 days following the drawing that determined the prize or 180 days after the announced end of the instant game shall revert to the State Literary Fund. Cash prizes do not include free ticket prizes or other noncash prizes such as merchandise, vacations, admission to events and the like.

C. All claims for on-line terminal game winning tickets for which the prize is a free ticket must be mailed in an envelope bearing a postmark of the United States Postal Service or another sovereign nation or received for redemption as prescribed in this chapter within 60 180 days after the date of the drawing for which the ticket was purchased. In the event the sixtieth 180th day falls on a Saturday, Sunday, or legal holiday, a claimant may only redeem his winning ticket for a free ticket at an on-line lottery a cashing retailer on or before the sixtieth 180th day.

Except for claims for free ticket prizes mailed to lottery headquarters and postmarked on or before the sixtieth 180th day, claims for such prizes will not be accepted at any lottery office after the sixtieth day. This section does not apply to the redemption of free tickets awarded through the subscription program.

D. Any instant game winning ticket of $25 or less that has been purchased, but that is not claimed within 180 days after the announced end of the instant game, shall revert to the State Lottery Fund.

E. In case of a prize payable over time, if such prize is shared by two or more winning tickets, one or more of which is not presented to the department for payment within the prize redemption period as established by the game rules, the department will transfer that portion of the prize to the Literary Fund in accordance with procedures approved by the State Treasurer.

F. In accordance with the provisions of the Soldiers' and Sailors' Civil Relief Act Servicemembers Civil Relief Act of 1940 (50 USCA Appx USC App § 525) 526), any person while in active military service may claim exemption from the 180-day ticket redemption requirement. Such person, however, must claim his winning ticket or share as soon as practicable, and in no event later than 180 days after discharge from active military service.

NOTICE: The following forms used in administering the regulation were filed by the agency. The forms are not being published; however, online users of this issue of the Virginia Register of Regulations may click on the name to access a form. The forms are also available from the agency contact or may be viewed at the Office of the Registrar of Regulations, General Assembly Building, 2nd Floor, Richmond, Virginia 23219.

FORMS (11VAC5-41)

Pick 3 Playslip (3/01).

Pick 4 Playslip (3/01).

Cash 5 Playslip (2/99).

Lotto South Playslip (7/01).

Mega Millions Playslip (2/02).

Winner Claim Form, SLD-0007 (rev. 7/97).

Agreement to Share Ownership and Proceeds of Lottery Ticket.

Lotto South and Mega Millions Payout Election Form (5/02).

Prizewinner Designation of Beneficiary(ies).

Split Ownership/Proceeds Verification Form (rev. 2/10).

VA.R. Doc. No. R12-3033; Filed March 22, 2012, 2:54 p.m.