CHAPTER 14
MONITOR VENDING MACHINES
531—14.1(99G,252J) License eligibility criteria. An applicant shall be eligible to hold a monitor vending machine (MVM) retailer license only if the applicant meets the requirements set forth in rule 531—12.1(99G,252J). An applicant shall be eligible to hold an MVM premises license only if the applicant meets the requirements set forth in rule 531—14.5(99G).
This rule is intended to implement Iowa Code section 252J.2 and Iowa Code Supplement sections 99G.7(1), 99G.9(3), 99G.21(2), and 99G.24.
531—14.2(99G,252J) Factors relevant to license issuance. The lottery may issue an MVM license to any applicant who meets the eligibility criteria established by Iowa Code Supplement chapter 99G and these rules. In exercising its licensing discretion the lottery shall consider the factors identified in rule 531—12.2(99G,252J).
This rule is intended to implement Iowa Code section 252J.2 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), and 99G.24(5).
531—14.3(99G) Definitions. For purposes of this chapter, the following definitions shall apply:
“Applicant” and “person” shall have the definition set forth in rule 531—12.3(99G).
“Monitor vending machine” means a vending machine that dispenses or prints and dispenses lottery tickets that have been determined to be winning or losing tickets by a predetermined pool drawing machine prior to the dispensing of the tickets. Each monitor vending machine shall have a video monitor for display of ticket symbols and audio capabilities to aid in play of a game.
“MVM” means monitor vending machine.
“MVM distributor” means a person or entity, other than an MVM manufacturer or an MVM retailer, that possesses an MVM license and that purchases or leases MVMs and leases or sells MVMs to MVM retailers.
“MVM license” means either an MVM retailer license or an MVM premises license issued pursuant to these rules, or both.
“MVM premises” means a business establishment or other location where one or more MVMs are located or are proposed to be located.
“MVM premises operator” means the person who owns the primary business or enterprise conducted at the MVM premises.
“MVM retailer” means a person or entity that possesses an MVM retailer license and sells lottery products from one or more lottery-approved MVMs that are owned or leased by the person or entity and that are located on premises owned or managed by the MVM retailer or by an MVM premises operator.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3) and 99G.21(2).
531—14.4(99G,252J) MVM retailer licenses.
	14.4(1) Any MVM retailer or MVM distributor must possess an MVM retailer license before purchasing, selling, or leasing any MVMs in the state of Iowa.
	14.4(2) No MVM retailer license will be issued to an MVM manufacturer or any parent, subsidiary, or affiliated company or entity thereof.
	14.4(3) The lottery has discretion to license a qualified applicant to sell lottery products from MVMs. An MVM retailer license authorizes the licensee to sell only the type of lottery products specified on the license and only from MVMs that have been certified by the chief executive officer of the lottery pursuant to rule 14.19(99G). MVM retailer licenses also allow the licensees to distribute lottery-certified MVMs. The lottery shall maintain a list of MVMs that have been certified by the chief executive officer as meeting lottery requirements.
	14.4(4) An MVM retailer license is not limited to a specific location, but MVMs may only be used to sell lottery products on premises that have been licensed pursuant to rule 14.5(99G).
	14.4(5) Any eligible applicant may apply for an MVM retailer license by first filing with the lottery an application form together with any supplements required. Supplements may include, but are not limited to, authorizations to investigate criminal history, financial records and financial resources, and authorizations to allow the lottery to conduct site surveys.
	14.4(6) All lottery MVM license applications must be accompanied by a nonrefundable fee of $25.
	14.4(7) The lottery may waive the payment of any license fee to facilitate an experimental program or a research project.
	14.4(8) A limited number of MVM retailers may be selected from applications received. The selection shall be made based on criteria designed to produce the maximum amount of net revenue and serve the public convenience. The lottery may refuse to accept MVM retailer license applications for a period of time if the lottery determines that the number of existing MVM retailer licensees is adequate to market lottery products.
	14.4(9) The lottery will grant, deny, or place on hold all applications within 60 days of acceptance of an application. Applications placed on hold shall be considered denied for purposes of appeal. If an application is denied because the lottery has received a certificate of noncompliance from the child support recovery unit in regard to an individual, the effective date of denial of the issuance of the license, as specified in the notice required by Iowa Code section 252J.8, shall be 60 days following service of the notice upon the applicant.
	14.4(10) A lottery licensee holding a lottery license pursuant to the rules contained in 531—Chapters 12 and 13 may sell lottery products from MVMs only if that licensee possesses a separate MVM license. Any premises on which MVMs will be located must be licensed pursuant to rule 14.5(99G), even if the premises operator holds a lottery license pursuant to the rules contained in 531—Chapters 12 and 13.
	14.4(11) Notwithstanding any of the foregoing, licensees of the Iowa racing and gaming commission making application for an MVM retailer license will not be required to submit to the lottery’s criminal background check.
This rule is intended to implement Iowa Code sections 252J.2 and 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, and 99G.30.
531—14.5(99G) MVM premises license.
	14.5(1) Before an MVM may be used to vend lottery products, the premises on which the MVM is to be located must be licensed by the chief executive officer of the lottery. An MVM premises shall be licensed only after all of the following requirements have been met:
	1.	The MVM premises operator shall have passed a criminal background check.
	2.	The MVM premises shall have been demonstrated to be compatible with the dignity of the state.
	3.	The chief executive officer shall have determined that the MVM premises is an age-controlled environment. Examples of age-controlled environments are premises where the age of patrons is monitored by the employees of the establishment.
	4.	All lottery MVM premises license applications must be accompanied by a nonrefundable fee of $25.
	14.5(2) The MVM premises operator shall post its MVM license, or a facsimile, at the MVM premises. The license or a facsimile thereof may be affixed to the MVM.
	14.5(3) Any premises on which MVMs will be located must be licensed pursuant to rule 14.5(99G), even if the premises operator holds a lottery license pursuant to the rules contained in 531—Chapters 12 and 13.
	14.5(4) MVM premises licenses shall be issued in accordance with the lottery’s MVM business plan.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.30, and 99G.31.
531—14.6(99G) Transfer of MVM licenses prohibited. MVM licenses may not be transferred to any other person or entity and do not authorize the sale of lottery products at any location other than those permitted by lottery rules.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24(3), 99G.25, and 99G.30.
531—14.7(99G) Expiration of MVM licenses. An MVM license is valid until it expires, is terminated by a change of circumstances, is surrendered by the licensee, or is revoked by the lottery. An MVM license that does not have an expiration date will continue indefinitely until it is surrendered, revoked, or terminated by a change in circumstances.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24(3), and 99G.27.
531—14.8(99G,252J) Provisional MVM licenses. The lottery may issue a provisional MVM license to an applicant after receipt of a fully completed license application, the authorization for a complete personal background check, completion of a credit check, if applicable, and completion of a preliminary background check. The provisional MVM license shall expire at the time of issuance of the requested MVM license or 90 days from the date the provisional MVM license was issued, whichever occurs first, unless the provisional MVM license is extended by the lottery.
Notwithstanding the foregoing, the lottery will deny a provisional MVM license to any applicant who is an individual if the lottery has received a certificate of noncompliance from the child support recovery unit with regard to the individual, until the unit furnishes the lottery with a withdrawal of the certificate of noncompliance. If an application is denied because the lottery has received a certificate of noncompliance from the child support recovery unit in regard to an individual, the effective date of denial of the issuance of the MVM license, as specified in the notice required by Iowa Code section 252J.8, shall be 60 days following service of the notice upon the applicant.
This rule is intended to implement Iowa Code sections 252J.2 and 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.25, and 99G.27.
531—14.9(99G) MVM placement and operation. Licensed MVM retailers shall locate their MVMs at their discretion, subject to the following requirements:
	1.	All MVMs shall be located only on licensed MVM premises.
	2.	No MVM shall be located in any establishment that is incompatible with the dignity of the state.
	3.	Only MVMs certified by the lottery’s chief executive officer pursuant to rule 14.19(99G) may be placed in licensed MVM premises. A list of such certified MVMs may be obtained from the lottery.
	4.	Only graphics displays and audio authorized by the lottery shall be used on MVMs. MVM retailers shall make no changes, alterations, or additions to the lottery-authorized graphics displays, the lottery-authorized audio played by the MVMs, or to the cabinet exteriors of MVMs.
	5.	In cases where an MVM is located on an MVM premises not owned by the MVM retailer, the MVM retailer shall be solely responsible for securing the rights necessary to locate the MVM on such premises and shall provide proof of such rights to the lottery upon request. Under no circumstances shall the lottery be responsible to the MVM premises operator or owner as a consequence of the placement of an MVM by an MVM retailer.
	6.	Under no circumstances shall the lottery be responsible for the expense of installing electrical circuits or telecommunications lines or for any power or telecommunications services necessary to operate an MVM.
This rule is intended to implement Iowa Code Supplement sections 99G.7, 99G.9(3), and 99G.21.
531—14.10(99G) Duplicate licenses. Upon the loss, mutilation, or destruction of any MVM license issued by the lottery, application for a duplicate shall be made. A statement signed by the MVM retailer, distributor, or premises operator that details the circumstances under which the license was lost, mutilated, or destroyed may be required by the lottery.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, and 99G.30.
531—14.11(99G) Reporting changes in circumstances of the MVM licensee. Every change in business structure of an MVM licensee, such as from a sole proprietorship to a corporation, and every change in the name of a business must be reported to the lottery prior to the change. Substantial changes in the ownership of an MVM licensee must also be reported to the lottery prior to the change. A substantial change of ownership is defined as the transfer of 10 percent or more equity in the licensed business from or to another single individual or legal entity. If a change involves the addition or deletion of one or more existing owners or officers, the licensee shall submit a license application reflecting the change and any other documentation the lottery may require. All changes will be reviewed by the lottery to determine if the existing license should be continued.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), and 99G.27(1).
531—14.12(99G) MVM license not a vested right. The possession of an MVM license issued by the lottery to any person or entity to act as an MVM retailer, MVM distributor, or MVM premises operator is a privilege personal to that person or entity and is not a legal right. The possession of an MVM license issued by the lottery does not automatically entitle that person or entity to lease or purchase an MVM or to sell tickets or obtain materials for any particular game.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), and 99G.7.
531—14.13(99G,252J) Suspension or revocation of an MVM retailer license.
	14.13(1) The lottery may suspend or revoke any MVM retailer license issued pursuant to these rules for one or more of the following reasons:
	a. 	Failing to meet or maintain the eligibility criteria for MVM retailer license application and issuance established by Iowa Code Supplement chapter 99G or these rules.
	b. 	Violating any of the provisions of Iowa Code Supplement chapter 99G, these rules, or the MVM license terms and conditions.
	c. 	Failing to file any return or report or to keep records required by the lottery; failing to maintain an acceptable level of financial responsibility as evidenced by the financial condition of the business, incidents of failure to pay taxes or other debts, or by the giving of financial instruments which are dishonored or electronic funds transfers that are not paid; fraud, deceit, misrepresentation, or other conduct prejudicial to the public confidence in the lottery.
	d. 	If public convenience is adequately served by other licensed MVM retailers.
	e. 	Failing to sell a minimum number of tickets as established by the lottery.
	f. 	The MVM retailer has a history of thefts or other forms of losses of tickets or revenue.
	g. 	Violating federal, state, or local law or allowing the violation of any of these laws in connection with the operation of MVMs.
	h. 	Obtaining a license by fraud, misrepresentation, concealment or through inadvertence or mistake.
	i. 	Making a misrepresentation of fact to the board or lottery on any report, record, application form, or questionnaire required to be submitted to the board or lottery.
	j. 	Denying the lottery or its authorized representative, including authorized local law enforcement agencies, access to any place where a licensed activity is conducted.
	k. 	Failing promptly to produce for inspection or audit any book, record, document, or other item required to be produced by law, these rules, or the terms of the license.
	l. 	Systematically pursuing economic gain in an occupational manner or context that is in violation of the criminal or civil public policy of this state if such pursuit creates cause to believe that the participation of such person in these activities is detrimental to the proper operation of an authorized lottery.
	m. 	Failing to follow the instructions of the lottery for the conduct of any particular game or special event.
	n. 	Failing to follow security procedures of the lottery for the management of personnel, handling of tickets, or for the conduct of any particular game or special event.
	o. 	Making a misrepresentation of fact to a purchaser, or prospective purchaser, of a ticket, or to the general public with respect to the conduct of a particular game or special event.
	p. 	For a licensee who is an individual, when the lottery receives a certificate of noncompliance from the child support recovery unit in regard to the licensee, unless the unit furnishes the department with a withdrawal of the certificate of noncompliance.
	14.13(2) Advertising by MVM retailers.
	a. 	When referring to MVMs or their associated games in advertisements, signage, promotional materials, or any other similar items, MVM retailers shall not use any false or misleading terms or statements including, but not limited to, “casino,” “slot machine,” “slots,” “video lottery,” “VLTs,” “video slots,” “video poker,” or any other related terms.
	b. 	Upon suspicion that an MVM retailer has violated 14.13(2)“a,” the lottery shall investigate and provide a written warning to the MVM retailer describing the report of the event and of the potential violation of 14.13(2)“a.” In the event the lottery can substantiate the claim that an MVM retailer has violated 14.13(2)“a,” the lottery shall suspend the license of the MVM retailer in question for 7 days. If the lottery can substantiate the claim that an MVM retailer has violated 14.13(2)“a” a second time in a period of one year from the date of the first event, the lottery shall suspend the MVM retailer license for a period of 30 days. If the lottery can substantiate the claim that an MVM retailer has violated 14.13(2)“a” at a given MVM premises a third time in a period of one year from the date of the first event as described in this rule, the lottery shall suspend the license of the MVM retailer in question for one year.
	14.13(3) The effective date of revocation or suspension of an MVM retailer license, or denial of the issuance or renewal of an MVM retailer license, as specified in the notice required by Iowa Code section 252J.8, shall be 60 days following service of the notice upon the licensee. All other notices of revocation or suspension shall be 20 days following service upon a licensee.
	14.13(4) If an MVM retailer license is suspended for more than 180 days from the effective date of the suspension, the lottery will revoke the license upon 15 days’ notice served in conformance with rule 531—12.13(99G,252J).
	14.13(5) Upon revocation or suspension of an MVM retailer license of 30 days or longer, the MVM retailer shall surrender to the lottery, by a date designated by the lottery, the MVM license, lottery identification card, and all other lottery property. The lottery will settle the MVM retailer’s account as if the MVM retailer had terminated its relationship with the lottery voluntarily.
This rule is intended to implement Iowa Code section 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, 99G.27, 99G.30(3), and 99G.35.
531—14.14(99G,252J) Suspension or revocation of an MVM premises license.
	14.14(1) The lottery may suspend or revoke any MVM premises license issued pursuant to these rules for one or more of the following reasons:
	a. 	Failing to meet or maintain the eligibility criteria for MVM premises license application and issuance established by Iowa Code Supplement chapter 99G or these rules.
	b. 	Violating any of the provisions of Iowa Code chapter 99G, these rules, or the MVM premises operator license terms and conditions.
	c. 	Fraud, deceit, misrepresentation, or other conduct prejudicial to the public confidence in the lottery.
	d. 	Violating federal, state, or local law or allowing the violation of any laws in connection with the production or operation of MVMs.
	e. 	Obtaining an MVM premises license by fraud, misrepresentation, concealment or through inadvertence or mistake.
	f. 	Making a misrepresentation of fact to the board or lottery on any report, record, application form, or questionnaire required to be submitted to the board or lottery.
	g. 	Systematically pursuing economic gain in an occupational manner or context which is in violation of the criminal or civil public policy of this state if such pursuit creates cause to believe that the participation of such person in these activities is detrimental to the proper operation of an authorized lottery.
	h. 	Failing to follow security procedures of the lottery for the management of personnel, handling of tickets, or for the conduct of any particular game or special event.
	i. 	Making a misrepresentation of fact to a purchaser, or prospective purchaser, of a ticket, or to the general public with respect to the conduct of a particular game or special event.
	j. 	When the lottery receives a certificate of noncompliance from the child support recovery unit in regard to the MVM premises operator who is an individual, unless the unit furnishes the department with a withdrawal of the certificate of noncompliance.
	k. 	A history of thefts or other forms of losses of tickets or revenue occurs at the MVM premises.
	l. 	Conduct or business activities on the premises which would undermine the public confidence in the lottery.
	m. 	Substantiated instances of purchases of lottery tickets by underage persons on the MVM premises.
	14.14(2) Advertising by MVM premises operators.
	a. 	When referring to MVMs or their associated games in advertisements, signage, promotional materials, or any other similar items, MVM premises operators shall not use any false or misleading terms or statements including, but not limited to, “casino,” “slot machine,” “slots,” video lottery,” “VLTs,” “video slots,” “video poker,” or any other related terms.
	b. 	Upon suspicion that an MVM premises operator has violated 14.14(2)“a,” the lottery shall investigate and provide a written warning to the MVM premises operator describing the report of the event and of the potential violation of 14.14(2)“a.” In the event the lottery can substantiate the claim that an MVM premises operator has violated 14.14(2)“a,” the lottery shall suspend the license of the MVM premises operator in question for 7 days. If the lottery can substantiate the claim that an MVM premises operator has violated 14.14(2)“a” a second time in a period of one year from the date of the first event on the same MVM premises, the lottery shall suspend the MVM premises operator license for a period of 30 days. If the lottery can substantiate the claim that an MVM premises operator has violated 14.14(2)“a” at a given MVM premises a third time in a period of one year from the date of the first event as described in this rule, the lottery shall suspend the license of the MVM premises operator in question for one year.
	14.14(3) The effective date of revocation or suspension of a certification, or denial of the issuance or renewal of a certification, as specified in the notice required by Iowa Code section 252J.8, shall be 60 days following service of the notice. All other notices of revocation or suspension shall be 20 days following service upon a licensee.
	14.14(4) Upon suspicion that an underage player has purchased one or more lottery products from an MVM, the lottery will investigate and provide a written warning to the MVM retailer and the MVM premises operator describing the report of the event and of the potential violation of Iowa Code Supplement section 99G.24(9). In the event the lottery can substantiate the claim that an underage player has purchased a product from an MVM, the lottery shall suspend the license of the MVM premises in question for 7 days. If the lottery can substantiate the claim that an underage player has purchased a product from an MVM a second time in a period of one year from the date of the first event on the same MVM premises, the lottery shall suspend the MVM premises license for a period of 30 days. If the lottery can substantiate the claim that an underage player has purchased a product from an MVM at a given MVM premises a third time in a period of one year from the date of the first event as described in this rule, the lottery shall suspend the license of the MVM premises in question for one year.
This rule is intended to implement Iowa Code section 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, and 99G.27.
531—14.15(99G,252J) Methods of service. Notice required by Iowa Code section 252J.8 and notice of a license revocation or a suspension for the reasons described in rules 14.13(99G,252J) and 14.14 (99G,252J) shall be as set forth in rule 531—12.13(99G,252J). The notice shall set forth the reasons for the suspension or revocation and provide for an opportunity for a hearing. A hearing on the suspension or revocation shall be held within 180 days or less after the notice has been served.
This rule is intended to implement Iowa Code section 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), and 99G.24.
531—14.16(99G,252J) Licensee’s obligation. MVM retailers, distributors, premises operators, and license applicants shall keep the lottery informed of all court actions and all relevant child support recovery unit actions taken under or in connection with Iowa Code chapter 252J and shall provide the lottery with copies, within seven days of filing or issuance, of all applications filed with the district court pursuant to Iowa Code section 252J.9, all court orders entered in such actions, and withdrawals of certificates of noncompliance by the child support recovery unit.
This rule is intended to implement Iowa Code section 252J.8 and Iowa Code Supplement sections 99G.9(3) and 99G.21(2).
531—14.17(99G,252J) Calculating the effective date. In the event an MVM licensee or applicant files a timely district court action following service of a lottery notice pursuant to Iowa Code sections 252J.8 and 252J.9, the lottery shall continue with the intended action described in the notice upon the receipt of a court order lifting the stay, dismissing the action, or otherwise directing the lottery to proceed. For purposes of determining the effective date of revocation or suspension, or denial of the issuance or renewal of an MVM license, the lottery shall count the number of days before the action was filed and the number of days after the action was disposed of by the court.
This rule is intended to implement Iowa Code sections 252J.8 and 252J.9 and Iowa Code Supplement sections 99G.9(3) and 99G.21(2).
531—14.18(99G) Financial responsibility of MVM retailers and MVM distributors. The lottery shall use the following guidelines to determine financial responsibility for a person seeking an MVM retailer license.
	14.18(1) Sole proprietorship. The lottery will not require a bond from a sole proprietor if the account history for the applicant for the past two years discloses no more than four accounts past due and no accounts over 90 days past due.
	14.18(2) Partnership. If the MVM license applicant is a partnership, 50 percent of the partners must meet the credit guidelines listed in subrule 14.18(1). If the credit history discloses that the requirements of subrule 14.18(1) are satisfied, the lottery will not require a bond.
	14.18(3) Fraternal or civic associations. If the MVM license applicant is a fraternal association, civic organization or other nonprofit entity, the applicant must meet the credit guidelines set forth in subrule 14.18(1). If the fraternal or civic association or other nonprofit entity has no credit history or the credit history is incomplete as determined in the sole discretion of the lottery, then the officers of the fraternal or civic association or other nonprofit entity must meet the requirements of subrule 14.18(1). If the credit history discloses that the requirements of subrule 14.18(1) are satisfied, the lottery will not require a bond.
	14.18(4) Corporations and limited liability companies in existence two years or more if a credit risk appraisal is available through a financial and credit reporting entity. If the MVM license applicant is a corporation or a limited liability company and the corporation or the limited liability company has been in existence for more than two years from the date of the application and a credit risk appraisal is available through a financial and credit reporting entity, the MVM license applicant must meet the following financial responsibility guidelines:
	a. 	The MVM license applicant is paying 60 percent of its suppliers on time or within terms; and
	b. 	The license applicant must have a credit risk appraisal provided by a financial and credit reporting entity that indicates the corporation or limited liability company’s financial condition is fair or better. If the corporation or the limited liability company meets the guidelines described in this rule, the lottery will not require a bond from the license applicant.
	14.18(5) Corporations and limited liability companies in existence less than two years or if a credit risk appraisal is not available through a financial and credit reporting entity. If a corporation has been in existence for less than two years from the date of the application or a credit risk appraisal is not available through a financial and credit reporting entity, the lottery will review the credit history of the corporate officers who hold 10 percent or more of the stock of the corporation. If a limited liability company has been in existence for less than two years or a credit risk appraisal is not available through a financial and credit reporting entity, the lottery will review the credit history of the members of a limited liability company who have contributed 10 percent or more to the capital of the limited liability company. Fifty percent or more of the corporate officers or members of the limited liability company must meet the credit guidelines set forth in subrule 14.18(1). If the corporate officers or the members of the limited liability company meet the requirements set forth in subrule 14.18(1), the lottery will not require the corporation or the limited liability company to obtain a bond.
	14.18(6) Bonding requirements. With respect to any MVM license applicant whose credit history does not meet the guidelines described in subrules 14.18(1) through 14.18(5), the applicant will be required to obtain a bond from a surety company authorized to do business in Iowa or offer a cash bond in the amount of $250 per MVM to be operated by the MVM license applicant; provided, however, that the total amount of such bond shall not exceed $50,000.
	14.18(7) Holding period for bond. The lottery will hold the bond provided by the license applicant for a minimum time period of one year. Thereafter, the lottery will review the credit history of the licensed retailer. If the retailer’s account history shows no delinquent payments, the lottery will release the bond.
This rule is intended to implement Iowa Code Supplement sections 99G.7(1) and 99G.26.
531—14.19(99G) MVM certification. Before an MVM may be used to vend lottery products, it must be certified by the chief executive officer of the lottery. No MVM shall be placed in an MVM premises prior to being certified by the lottery. An MVM shall be certified only after all of the following requirements have been met:
	14.19(1) The manufacturer of the MVM shall have passed a criminal background check pursuant to rule 531—2.16(99G).
	14.19(2) The manufacturer shall have passed a financial responsibility background check.
	14.19(3) The manufacturer shall demonstrate to the lottery’s satisfaction that the MVM can perform all of the following:
	a. 	Reliably vend lottery-approved tickets, either preprinted or printed on demand from a predetermined electronic “pack” of tickets.
	b. 	Display, in the process of vending tickets, lottery-approved graphics and sound, indicating whether the vended ticket is a winner.
	c. 	Communicate reliably with a central computer system, as described below, in order to transmit data.
	d. 	Disable itself if it fails to communicate with the central computer system for a period not to exceed 50 hours.
	e. 	Keep lottery tickets and cash receipts secure.
	f. 	Account for the number of tickets sold and prizes awarded.
	14.19(4) The manufacturer shall demonstrate the ability to securely, reliably, and consistently produce either preprinted tickets or electronic “packs” of tickets that meet the lottery’s specifications as set forth in the game rules.
	14.19(5) The manufacturer shall demonstrate that the MVM can operate reliably with a central computer system capable, at a minimum, of all of the following:
	a. 	Communicating with MVMs located in all parts of the state.
	b. 	Retrieving data from MVMs.
	c. 	Transmitting data to MVMs.
	d. 	Storing data received from MVMs.
	e. 	Allowing secure access to data by the lottery and MVM retailers.
	f. 	Producing printed reports in a format usable by the lottery.
	g. 	Performing security checks on MVMs.
	h. 	Consistently and reliably operating at least 16 hours per day.
	14.19(6) The MVM manufacturer must commit contractually to provide the lottery with the data required by the lottery in a timely manner. The lottery may negotiate directly with manufacturers of certified MVMs for these services.
	14.19(7) The manufacturer shall pay a fee of $25, plus all actual costs incurred by the lottery in performing the necessary criminal background and financial responsibility checks. The lottery may require a manufacturer to pay the estimated cost of the criminal background and financial responsibility checks in advance.
	14.19(8) As a condition of certification, the manufacturer shall provide to the lottery a working example of each model of MVM it proposes to have certified for testing and troubleshooting purposes. The lottery may keep the working example for such time as the model remains certified.
	14.19(9) The certification process, including the financial responsibility background check, is solely for the use of the lottery. The lottery does not warrant the financial stability of any MVM manufacturer, and lottery certification of an MVM model shall not be considered to constitute a representation or a warranty that a particular MVM of that model is merchantable, fit for any particular purpose, or free of defects. MVM retailers and distributors shall conduct their own due diligence, including financial responsibility, prior to purchasing or leasing an MVM.
	14.19(10) No MVM manufacturer or any parent, subsidiary, or affiliated company or entity thereof shall be licensed as an MVM retailer or an MVM premises operator.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.30, and 99G.31.
531—14.20(99G,252J) Suspension or revocation of certification of an MVM.
	14.20(1) The lottery may suspend or revoke any certification made pursuant to these rules for one or more of the following reasons:
	a. 	Failing to meet or maintain the certification criteria established by Iowa Code Supplement chapter 99G or these rules.
	b. 	Violating any of the provisions of Iowa Code Supplement chapter 99G or these rules.
	c. 	Fraud, deceit, misrepresentation, or other conduct prejudicial to the public confidence in the lottery.
	d. 	Violating federal, state, or local law or allowing the violation of any laws in connection with the production or operation of MVMs.
	e. 	Obtaining a certification by fraud, misrepresentation, concealment or through inadvertence or mistake.
	f. 	Making a misrepresentation of fact to the board or lottery on any report, record, application form, or questionnaire required to be submitted to the board or lottery.
	g. 	Systematically pursuing economic gain in an occupational manner or context which is in violation of the criminal or civil public policy of this state if such pursuit creates cause to believe that the participation of such person in these activities is detrimental to the proper operation of an authorized lottery.
	h. 	Failing to follow security procedures of the lottery for the management of personnel, handling of tickets, or for the conduct of any particular game or special event.
	i. 	Making a misrepresentation of fact to a purchaser, or prospective purchaser, of a ticket, or to the general public with respect to the conduct of a particular game or special event.
	j. 	Repeated failure or inability of the MVM or the associated central computer system to operate properly.
	k. 	The occurrence of any event or the existence of any state of facts that would cause the MVM manufacturer to fail a criminal background check or a financial responsibility check.
	14.20(2) The effective date of revocation or suspension of a certification, or denial of the issuance or renewal of a certification, as specified in the notice required by Iowa Code section 252J.8, shall be 60 days following service of the notice.
This rule is intended to implement Iowa Code section 252J.8 and Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, and 99G.27.
531—14.21(99G) Requirements for the sale of tickets.
	14.21(1) Prior to the vending of any lottery products by an MVM retailer, the lottery and the MVM retailer shall enter into a written agreement specifying the share of revenue to be remitted to the lottery, providing for the provisioning of tickets and paper stock, and other matters as the parties shall agree upon.
	14.21(2) Tickets shall be sold at the price designated by the lottery unless the lottery specifically authorizes their sale at a different price.
	14.21(3) No MVM retailer or any employee, member, or agent of an MVM retailer shall attempt to identify a winning ticket prior to the sale of the ticket.
	14.21(4) MVM retailers shall arrange for the MVM premises operator or agent(s) or employees of the MVM premises operator to pay all prizes of $600 or less during normal business hours at the MVM premises where the prize-winning ticket was vended. Prizes in excess of $600 shall be paid at a lottery regional office or at lottery headquarters in Des Moines. Prizes to be claimed from an MVM premises operator must be claimed prior to the MVM premises’ first close of business following the vending of the winning ticket. Prizes to be claimed from a lottery regional office or at lottery headquarters must be claimed within 90 days of the date of sale of the ticket.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, 99G.30, and 99G.31.
531—14.22(99G) Ownership of tickets and other property. All tickets or electronic “packs” of tickets accepted by a licensed MVM retailer are the property of the MVM retailer. After confirmation of delivery, the retailer is responsible for the condition and security of the tickets and for any losses resulting from tickets that become lost, stolen, or damaged. The lottery may credit MVM retailers for lost, stolen, or damaged tickets if the MVM retailer licensee has been billed for the lost, stolen, or damaged tickets and only if the lottery determines that the best interests of the lottery will be served by issuing a credit.
Unless otherwise indicated in writing, all lottery property provided to an MVM retailer for use in selling products, as opposed to property and tickets sold to an MVM retailer, remains the property of the lottery. The retailer shall deliver lottery property to the lottery upon request.
This rule is intended to implement Iowa Code Supplement sections 99G.7, 99G.9(3), 99G.24, and 99G.27.
531—14.23(99G) MVM retailer compensation. The lottery, with board approval, shall set the amount of MVM retailer compensation.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21, and 99G.24.
531—14.24(99G) MVM retailer payment methods. MVM retailers are required to pay for lottery tickets or shares by means of an electronic funds transfer (EFT) from the MVM retailer’s account. The lottery may allow an MVM retailer to make payments by another method if the MVM retailer can show that the electronic funds transfer system imposes a significant hardship on the MVM retailer or if the lottery determines that the MVM retailer’s payment history justifies use of an alternative payment method.
This rule is intended to implement Iowa Code Supplement sections 99G.7, 99G.9(3), 99G.27, 99G.28, and 99G.40.
531—14.25(99G) Dishonored checks and electronic funds transfers. Any payment made to the lottery by an applicant for a license or by a licensed MVM retailer either by a check which is dishonored or by an electronic funds transfer which is not paid by the depository shall be grounds for immediate denial of the application for a license or for the suspension or revocation of an existing license. The lottery may assess a surcharge up to the maximum allowed by applicable state law for each dishonored check or EFT. The lottery may also alter the payment terms of an MVM retailer’s license and require an MVM retailer to reimburse the lottery for costs that occur as a result of a dishonored check or EFT. The lottery may disable all MVMs associated with the licensed MVM retailer until such time as the lottery receives certified funds to compensate for the dishonored item.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.24, and 99G.27.
531—14.26(99G) Inspection of lottery materials and licensed premises. MVM retailers and MVM premises operators shall allow the lottery to inspect lottery materials, tickets, and the premises. All books and records pertaining to the MVM retailer’s and the MVM premises operator’s lottery activities shall be available to the lottery for inspection and copying during the normal business hours of the MVM retailer or the MVM premises operator and between 8 a.m.	and 5 p.m., Monday through Friday. All books and records pertaining to the MVM retailer’s and MVM premises operator’s lottery activities are subject to seizure by the lottery without prior notice.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.24, 99G.27, and 99G.28.
531—14.27(99G) Payment of MVM ticket prizes. Prizes won by MVM tickets may be paid only by an agent or employee of the MVM premises operator where the winning ticket was vended or by an agent or employee of the Iowa lottery authority, as specified in subrule 14.21(4). If the MVM premises operator is a nonprofit organization, members of the organization may also pay prizes if authorized by the organization. The MVM retailer shall be responsible for ensuring that prizes up to $600 are paid.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, 99G.30, and 99G.31.
531—14.28(99G) Ticket sales restrictions.
	14.28(1) The lottery reserves the right to limit or terminate the sale of tickets from any MVM or at any MVM premises if such sales may compromise the operation and integrity of the lottery, reflect conduct prejudicial to the public confidence in the lottery or reflect activity of an illegal nature under local, state or federal laws.
	14.28(2) No officer, employee, agent, or subcontractor of any MVM manufacturer, or any spouse, child, sibling, or parent residing in such a person’s household, shall purchase tickets from MVMs produced by that particular manufacturer. However, tickets may be purchased by the aforementioned persons from MVMs produced by other manufacturers. No officer, employee, agent, or subcontractor of any MVM retailer or distributor, or any spouse, child, sibling, or parent residing in such a person’s household, shall purchase tickets from MVMs owned, distributed, serviced, or otherwise under the care, custody, or control of that MVM retailer or distributor. However, tickets may be purchased by the aforementioned persons from MVMs owned, distributed, serviced, or otherwise under the care, custody, or control of other MVM retailers or manufacturers.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, 99G.27, 99G.30, and 99G.31.
531—14.29(99G) Transfer of MVMs. MVMs may only be transferred to authorized entities.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3), 99G.21(2), 99G.24, and 99G.27.
531—14.30(99G) Tax reporting. MVM retailers are responsible for tax reporting requirements related to MVM premises locations.
This rule is intended to implement Iowa Code Supplement sections 99G.9(3) and 99G.21(2).
[Filed emergency 8/28/03—published 9/17/03, effective 8/28/03]
[Filed 3/12/04, Notice 9/17/03—published 3/31/04, effective 5/7/04]
[Filed emergency 6/29/04—published 7/21/04, effective 6/29/04]
[Filed emergency 3/15/05—published 4/13/05, effective 3/15/05]
[Filed 4/7/06, Notice 12/21/05—published 4/26/06, effective 5/31/06]