CHAPTER 11
GAMBLING GAMES
491—11.1(99F) Definitions.
“Administrator” means the administrator of the racing and gaming commission or the administrator’s designee.
“Coin” means tokens, nickels, and quarters of legal tender.
“Commission” means the racing and gaming commission.
“Currency” means any coin or paper money of legal tender and paper forms of cashless wagering.
“Discount rate” means either the current prime rate as published in the Wall Street Journal or a blended rate computed by obtaining quotes for the purchase of qualified investments at least three times per month.
“Distributor’s license” means a license issued by the administrator to any entity that sells, leases, or otherwise distributes gambling games or implements of gambling to any entity licensed to conduct gambling games pursuant to Iowa Code chapter 99F.
“Facility” means an entity licensed by the commission to conduct gaming operations in Iowa.
“Facility grounds” means all real property utilized by the facility in the conduct of its gaming activity, including the grandstand, concession stands, offices, parking lots, and any other areas under the jurisdiction of the commission.
“Gambling game” means any game of chance approved by the commission for wagering, including, but not limited to, gambling games authorized by this chapter.
“Government sponsored enterprise debt instrument” means a negotiable, senior, noncallable debt obligation issued by an agency of the United States or an entity sponsored by an agency of the United States that on the date of funding possesses an issuer credit rating equivalent to the highest investment grade rating given by Standard & Poor’s or Moody’s Investment Services.
“Implement of gambling” means any device or object determined by the administrator to directly or indirectly influence the outcome of a gambling game; collect wagering information while directly connected to a slot machine; or be integral to the conduct of a commission-authorized gambling game.
“Manufacturer’s license” means a license issued by the administrator to any entity that assembles, fabricates, produces, or otherwise constructs a gambling game or implement of gambling used in the conduct of gambling games pursuant to Iowa Code chapter 99F.
“Present value” means the current value of a future payment or series of payments, discounted using the discount rate.
“Qualified investment” means an Iowa state issued debt instrument, a United States Treasury debt instrument or a government sponsored enterprise debt obligation.
“Reserve” means an account with an independent financial institution or brokerage firm consisting of cash and qualified investments used to satisfy periodic payments of prizes.
“Slot machine” means a mechanical or electronic gambling game device into which a player may deposit currency or forms of cashless wagering and from which certain numbers of credits are awarded when a particular configuration of symbols or events is displayed on the machine.
“Storage media” means EPROMs, ROMs, flash-ROMs, DVDs, CD-ROMs, compact flashes, hard drives and any other types of program storage device.
[ARC 7757B, IAB 5/6/09, effective 6/10/09; ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9987B, IAB 2/8/12, effective 3/14/12; ARC 1456C, IAB 5/14/14, effective 6/18/14]
491—11.2(99F) Conduct of all gambling games.
	11.2(1) Commission policy. It is the policy of the commission to require that all facilities conduct gambling games in a manner suitable to protect the public health, safety, morals, good order, and general welfare of the state. Responsibility for the employment and maintenance of suitable methods of operation rests with the facility. Willful or persistent use or toleration of methods of operation deemed unsuitable in the sole discretion of the commission will constitute grounds for disciplinary action, up to and including license revocation.
	11.2(2) Activities prohibited. A facility is expressly prohibited from the following activities:
	a. 	Failing to conduct advertising and public relations activities in accordance with decency, dignity, good taste, and honesty.
	b. 	Permitting persons who are visibly intoxicated to participate in gaming activity.
	c. 	Failing to comply with or make provision for compliance with all federal, state, and local laws and rules pertaining to the operation of a facility including payment of license fees, withholding payroll taxes, and violations of alcoholic beverage laws or regulations.
	d. 	Possessing, or permitting to remain in or upon any facility grounds, any associated gambling equipment which may have in any manner been marked, tampered with, or otherwise placed in a condition or operated in a manner which might affect the game and its payouts.
	e. 	Permitting, if the facility was aware of, or should have been aware of, any cheating.
	f. 	Possessing or permitting to remain in or upon any facility grounds, if the facility was aware of, or should have been aware of, any cheating device whatsoever; or conducting, carrying on, operating, or dealing any cheating or thieving game or device on the grounds.
	g. 	Possessing or permitting to remain in or upon any facility grounds, if the facility was aware of, or should have been aware of, any gambling device which tends to alter the normal random selection of criteria which determines the results of the game or deceives the public in any way.
	h. 	Failing to conduct gaming operations in accordance with proper standards of custom, decorum, and decency; or permitting any type of conduct that reflects negatively on the state or acts as a detriment to the gaming industry.
	i. 	Denying a commissioner or commission representative, upon proper and lawful demand, information or access to inspect any portion of the gaming operation.
	11.2(3) Gambling aids. No person shall use, or possess with the intent to use, any calculator, computer, or other electronic, electrical, or mechanical device that:
	a. 	Assists in projecting the outcome of a game.
	b. 	Keeps track of cards that have been dealt.
	c. 	Keeps track of changing probabilities.
	11.2(4) Wagers. Wagers may only be made:
	a. 	By a person present at a facility.
	b. 	In the form of chips, coins, or other cashless wagering.
	c. 	By persons 21 years of age or older.
[ARC 8029B, IAB 8/12/09, effective 9/16/09]
491—11.3(99F) Gambling games approved by the commission. The commission may approve a gambling game by administrative rule, resolution, or motion.
491—11.4(99F) Approval for distribution, operation, or movement of gambling games and implements of gambling.
	11.4(1) Approval. Prior to distribution, a distributor shall request that the administrator inspect, investigate, and approve a gambling game or implement of gambling for compliance with commission rules and the standards required by a commission-designated independent testing facility. The distributor, at its own expense, must provide the administrator and independent testing facility with information and product sufficient to determine the integrity and security of the product, including independent testing conducted by a designated testing facility. The commission shall designate up to two independent testing facilities for the purpose of certifying electronic gambling games or implements of gambling.
	11.4(2) Trial period. Prior to or after commission approval and after completing a review of a proposed gambling game, the administrator may require a trial period of up to 180 days to test the gambling game in a facility. During the trial period, minor changes in the operation or design of the gambling game may be made with prior approval of the administrator. During the trial period, a gambling game distributor shall not be entitled to receive revenue of any kind from the operation of that gambling game.
	11.4(3) Gambling game submissions. Prior to conducting a commission-authorized gambling game or for a trial period, a facility shall submit proposals for game rules, procedures, wagers, shuffling procedures, dealing procedures, cutting procedures, and payout odds. The gambling game submission, or requests for modification to an approved submission, shall be in writing and approved by the administrator or a commission representative prior to implementation.
	11.4(4) Public notice. The public shall have access to the rules of play, payout schedules, and permitted wagering amounts. Signage shall be conspicuously posted on the gaming floor to direct patrons to the gaming floor area where this information can be viewed. All participants in all licensed gambling games are required to know and follow the rules of play. No forms of cheating shall be permitted.
	11.4(5) Operation. Each gambling game shall operate and play in accordance with the representation made to the commission and the public at all times. The administrator or commission representative may order the withdrawal of any gambling game suspected of malfunction or misrepresentation, until all deficiencies are corrected. The administrator or commission representative may require additional testing by an independent testing facility at the expense of the licensee or distributor for the purpose of complying with this subrule.
	11.4(6) Distribution, movement and disposal.
	a. 	Except as otherwise authorized by the administrator, written notice, submitted by facsimile or electronic mail, shall be filed with the commission when a gambling game or implement of gambling is shipped, moved or disposed of. The written notice shall be provided as follows:
	(1)	At least five calendar days prior to arrival of a gambling game or implement of gambling at a licensed facility, the licensed distributor shall provide notice.
	(2)	At least one day before a gambling game is removed from or disposed of by a licensed facility, the licensed facility or the owner shall provide notice. All methods of disposal for gambling games or implements of gambling are subject to administrator approval.
	b. 	 The administrator may approve licensee transfers of gambling games or implements of gambling among subsidiaries of the licensee’s parent company.
[ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9018B, IAB 8/25/10, effective 9/29/10; ARC 1456C, IAB 5/14/14, effective 6/18/14]
491—11.5(99F) Gambling games authorized.
	11.5(1) Craps, roulette, twenty-one (blackjack), baccarat, and poker are authorized as table games. The administrator is authorized to approve multiplayer electronic devices simulating these games, subject to the requirements of rule 491—11.4(99F) and subrule 11.5(3).
	11.5(2) Slot machines, video poker, and other video games of chance, both progressive and nonprogressive, shall be allowed as slot machine games, subject to the administrator’s approval of individual slot machine prototypes and game variations. For racetrack enclosures without a table games license, video machines which simulate table games of chance shall not be allowed.
	11.5(3) The administrator is authorized to approve variations of approved gambling games and bonus features or progressive wagers associated with approved gambling games, subject to the requirements of rule 491—11.4(99F).
	a. 	Features utilizing a controller or a system linked to gambling games that do not require direct monetary consideration and are not otherwise integrated within a slot machine game theme may be allowed as bonus features. Payouts from these bonus features may be included in winnings for the calculation of wagering tax adjusted gross receipts when the following conditions are met:
	(1)	The only allowable nonmonetary consideration to be expended by a participant shall be active participation in a gambling game with a bonus feature or use of a player’s club card, or both.
	(2)	The actual bonus payout deductible in any month from all qualified system bonuses requiring no additional direct monetary consideration shall be:
	1.	No more than 2 percent of the coin-in for all slot machines linked to any system bonuses for that month, if slot machines linked to system bonuses exceed 20 percent of the total number of slot machines; or
	2.	No more than 3 percent of the coin-in for all slot machines linked to any system bonuses for that month, if slot machines linked to system bonuses are less than or equal to 20 percent of the total number of slot machines; or
	3.	No more than 3 percent of the amount wagered on the qualifying bets for all table games linked to any system bonus for that month.
	(3)	The probability of winning a system bonus award shall be the same for all persons participating in the bonus feature.
	b. 	Noncashable credit payouts may be allowed as bonus feature payouts subject to the administrator’s approval of individual accounting, expiration and redemption practices.
	11.5(4) Gambling games of chance involving prizes awarded to participants through promotional activities at a facility.
	a. 	Proposals. Gambling games of chance involving prizes awarded to participants through promotional activities shall be authorized and approved by the commission. Before a facility may conduct such gambling games, all proposals for terms, game rules, prizes, dates of operation and procedures for any gambling games of chance involving prizes awarded through promotional activities shall be submitted in writing to a commission representative for approval. The written submission shall be submitted to the commission representative at least 14 days in advance of the planned activity. Any changes to an approved gambling game of chance involving prizes awarded to participants through promotional activities shall also require the approval of the commission representative. Gambling games of chance involving prizes awarded to participants through promotional activities shall meet the following requirements:
	(1)	All rules of play shall be in writing and posted for public inspection;
	(2)	Such games shall be limited to participants 21 years of age or older;
	(3)	All games shall be conducted in a fair and honest manner, and all prizes advertised shall be awarded in accordance with the posted rules of play;
	(4)	All such games shall be conducted on the gaming floor and shall be conducted in accordance with the submission approved by the commission representative;
	(5)	No entry fees shall be permitted; and
	(6)	All employees of the facility shall be prohibited from participation.
	b. 	Limits. Gambling games of chance involving prizes awarded to participants through promotional activities conducted at a facility shall be subject to the wagering tax pursuant to Iowa Code section 99F.11. However, in determining the adjusted gross receipts, the facility may consider all nonmonetary consideration expended by a participant and shall certify to the commission that the nonmonetary consideration is at least equal to the value of the prizes awarded.
[ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9018B, IAB 8/25/10, effective 9/29/10; ARC 9987B, IAB 2/8/12, effective 3/14/12; ARC 0734C, IAB 5/15/13, effective 6/19/13]
491—11.6(99F) Gambling game-based tournaments.
	11.6(1) Proposals. Proposals for terms, game rules, entry fees, prizes, dates, and procedures must be submitted in writing and approved by a commission representative before a facility conducts any tournament. Any changes to approved tournaments must be submitted to the commission representative for review and approval prior to being implemented. The written proposal or change shall be submitted to a commission representative at least 14 days in advance of the planned activity. Rules, fees, and a schedule of prizes must be made available to the player prior to entry.
	11.6(2) Limits. Tournaments must be based on gambling games authorized by the commission. Entry fees, less prizes paid, are subject to the wagering tax pursuant to Iowa Code section 99F.11. In determining adjusted gross receipts, to the extent that prizes paid out exceed entry fees received, the facility shall be deemed to have paid the fees for the participants.
	11.6(3) Tournament chips. Tournament chips used as wagers in table game tournament proposals approved pursuant to this rule shall be imprinted with a number representing the value of the chip or shall be assigned a value. The facility shall provide that:
	a. 	The assigned value of tournament chips be conspicuously displayed in the tournament area.
	b. 	Internal controls which account for all tournament chips and include reconciliation, handling and variance procedures are approved by a commission representative.
[ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9987B, IAB 2/8/12, effective 3/14/12]
491—11.7(99F) Table game requirements.
	11.7(1) Removable storage media in a table game device which controls the randomness of card shufflers or progressive table game meters shall be verified and sealed with evidence tape by a commission representative prior to implementation.
	11.7(2) Wagers. All wagers at table games shall be made by placing gaming chips or coins on the appropriate areas of the layout. Information pertaining to the minimum and maximum allowed at the table shall be posted on the game. Any other fee collected to participate in a table game shall be subject to the wagering tax pursuant to Iowa Code section 99F.11.
	11.7(3) Craps.
	a. 	Wagers must be made before the dice are thrown. “Call bets,” or the calling out of bets between the time the dice leave the shooter’s hand and the time the dice come to rest, not accompanied by the placement of gaming chips, are not allowed. A wager made on any bet may be removed or reduced at any time prior to a roll that decides the outcome of such wager unless the wager is a “Pass” or “Come” bet and a point has been established with respect to such bet or the wager is a proposition bet contingent on multiple rolls.
	b. 	The shooter shall make a “Pass” or “Don’t Pass” bet and shall handle the two selected dice with one hand before throwing the dice in a simultaneous manner.
	c. 	Each die used shall be transparent.
	11.7(4) Twenty-one.
	a. 	Before the first card is dealt for each round of play, each player shall make a wager against the dealer. Once the first card of any hand has been dealt by the dealer, no player shall handle, remove, or alter any wagers that have been made until a decision has been rendered and implemented with respect to that wager. Once a wager on the insurance line, a wager to double down, or a wager to split pairs has been made and confirmed by the dealer, no player shall handle, remove, or alter the wagers until a decision has been rendered and implemented with respect to that wager, except as explicitly permitted. A facility or licensee shall not permit any player to engage in conduct that violates this paragraph.
	b. 	At the conclusion of a round of play, all cards still remaining on the layout shall be picked up by the dealer in a prescribed order and in such a way that they can be readily arranged to indicate each player’s hand in case of question or dispute. The dealer shall pick up the cards beginning with those of the player to the far right and moving counterclockwise around the table. The dealer’s hand will be the last hand collected. The cards will then be placed on top of the discard pile. No player or spectator shall remove or alter any cards used to game at twenty-one or be permitted to do so by a casino employee.
	c. 	Each player at the table shall be responsible for correctly computing the point count of the player’s hand. No player shall rely on the point counts announced by the dealer without checking the accuracy of such announcement.
	11.7(5) Roulette.
	a. 	No person at a roulette table shall be issued or permitted to game with nonvalue gaming chips that are identical in color and design to value gaming chips or to nonvalue gaming chips being used by another person at that same table.
	b. 	Each player shall be responsible for the correct positioning of the player’s wager on the roulette layout, regardless of whether the player is assisted by the dealer. Each player must ensure that any instructions the player gives to the dealer regarding the placement of the player’s wager are correctly carried out.
	c. 	Each wager shall be settled strictly in accordance with its position on the layout when the ball falls to rest in a compartment of the wheel.
	11.7(6) Big six—roulette. Rescinded IAB 2/8/12, effective 3/14/12.
	11.7(7) Poker.
	a. 	When a facility conducts poker with an imprest dealer gaming chip bank, the rules in 491—Chapter 12 for closing and distributing or removing gaming chips to or from gaming tables do not apply. The entire amount of the table rake is subject to the wagering tax pursuant to Iowa Code section 99F.11. Proposals for imprest dealer gaming chip banks must be submitted in writing and approved by a commission representative prior to use and must include, but not be limited to, controls to regularly monitor, investigate, and report table bank variances.
	b. 	All games shall be played according to table stakes game rules as follows:
	(1)	Only gaming chips or coins on the table at the start of a deal shall be in play for that pot.
	(2)	Concealed gaming chips or coins shall not play.
	(3)	A player with gaming chips may add additional gaming chips between deals, provided that the player complies with any minimum buy-in requirement.
	(4)	A player is never obliged to drop out of contention because of insufficient gaming chips to call the full amount of a bet, but may call for the amount of gaming chips the player has on the table. The excess part of the bet made by other players is either returned to the players or used to form a side pot.
	c. 	Each player in a poker game is required to act only in the player’s own best interest. The facility has the responsibility of ensuring that any behavior designed to assist one player over another is prohibited. The facility may prohibit any two players from playing in the same game.
	d. 	Poker games where winning wagers are paid by the facility according to specific payout odds or pay tables are permitted.
	e. 	The facility shall comply with and receive approval pursuant to subrule 11.4(3) for each type of poker game offered.
	f. 	The facility may elect to offer a jackpot award generated from pot contributions at a table or group of tables for predesignated high-value poker hands, subject to the following requirements:
	(1)	Approval of the jackpot award rules must be obtained from a commission representative prior to play.
	(2)	Jackpot award rules and jackpot award amounts shall be posted in a conspicuous location within the poker room. Jackpot award amounts shall be updated no less than once per day.
	(3)	The facility shall divide pot contributions for any single qualifying award circumstance or event into no more than three jackpot award pools.
	(4)	The jackpot award pool containing the highest monetary value amount shall be the amount posted in the poker room and awarded to a qualifying player or players.
	(5)	If additional jackpot award pools are in use, the award pool containing the highest monetary value shall be used to seed the primary jackpot award pool.
	(6)	All moneys collected as pot contributions to a jackpot award payout shall be distributed in their entirety to the players; no facility shall charge an administration fee for distribution of a jackpot award.
	11.7(8) Baccarat. Before the first card is dealt for each round of play, each player is permitted to make a wager on the Banker’s Hand, Player’s Hand, Tie Bet, and any proposition bet if offered. All wagers shall be made by placing gaming chips on the appropriate areas of the layout. Once the first card has been dealt by the dealer, no player shall handle, remove, or alter any wagers that have been made until a decision has been rendered and implemented with respect to that wager.
[ARC 9987B, IAB 2/8/12, effective 3/14/12]
491—11.8(99F) Keno.
	11.8(1) Keno shall be conducted using an automated ticket writing and redemption system where a game’s winning numbers are selected by a random number generator.
	11.8(2) Each game shall consist of the selection of 20 numbers out of 80 possible numbers, 1 through 80.
	11.8(3) For any type of wager offered, the payout must be at least 70 percent.
	11.8(4) Multigame tickets shall be limited to 20 games.
	11.8(5) Writing or voiding tickets for a game after that game has closed is prohibited.
	11.8(6) All winning tickets shall be valid up to a maximum of one year from the date of purchase. All expired, unclaimed winning tickets shall be subject to the requirements in 491—paragraph 12.11(2)“b.”
	11.8(7) The administrator shall determine minimum hardware and software requirements to ensure the integrity of play. An automated keno system must be proven to accurately account for adjusted gross receipts to the satisfaction of the administrator.
	11.8(8) Adjusted gross receipts from keno games shall be the difference between dollar value of tickets written and dollar value of winning tickets as determined from the automated keno system. The wagering tax pursuant to Iowa Code section 99F.11 shall apply to adjusted gross receipts of keno games.
	11.8(9) An area of a facility shall not be designated as gaming floor for the sole purpose of keno runners, who accept patron wagering funds remotely from the keno game location.
[ARC 9018B, IAB 8/25/10, effective 9/29/10]
491—11.9(99F) Slot machine requirements.
	11.9(1) Payout percentage. A slot machine game must meet the following maximum and minimum theoretical percentage payouts during the expected lifetime of the game.
	a. 	A slot machine game’s theoretical payout must be at least 80 percent and no more than 100 percent of the amount wagered. The theoretical payout percentage is determined using standard methods of probability theory. Slot machine games with a bonus feature that is available with varying payouts based on the player’s ability shall be allowed if the difference between the minimum and maximum payout for all ability-based outcomes does not exceed a 4 percent contribution to the overall theoretical payout of the slot machine game.
	b. 	A slot machine game shall have a probability of obtaining the highest single advertised payout, which must statistically occur at least once in 50 million games.
	11.9(2) Features. Unless otherwise authorized by the administrator, each slot machine in a casino shall have the following features:
	a. 	A casino number at least two inches in height permanently imprinted, affixed, or impressed on the outside of the machine so that the number may be observed by the surveillance camera.
	b. 	A clear description displayed on the slot machine of any merchandise or thing of value offered as a payout including the cash equivalent value of the merchandise or thing of value offered, the dates the merchandise or thing of value will be offered if the facility establishes a time limit upon initially offering the merchandise or thing of value, and the availability or unavailability to the patron of the optional cash equivalent value. A cash equivalent value shall be at least 75 percent of the fair market value of the merchandise or thing of value offered.
	c. 	Devices, equipment, features, and capabilities, as may be required by the commission, that are specific to each slot machine after the prototype model is approved by the commission.
	11.9(3) Storage media. Hardware media devices which contain game functions or characteristics, including but not limited to pay tables and random number generators, shall be verified and sealed with evidence tape by a commission representative prior to being placed in operation, as determined by the administrator.
	11.9(4) Posting of the actual aggregate payout percentage. The actual aggregate payout percentage to the nearest one-tenth of 1 percent (0.1%) of all slot machine games in operation during the preceding three calendar months shall be posted at the main casino entrance, cashier cages, and slot booths by the fifteenth day of each calendar month. For the purpose of this calculation, the actual aggregate payout percentage shall be the slot revenue reported to the commission during the preceding three calendar months divided by the slot coin-in reported to the commission during the preceding three calendar months subtracted from 100 percent.
	11.9(5) Communication equipment. Equipment must be installed in each slot machine that allows for communication to an online monitoring and control system accessible, with read-only access, to the commission representatives using a communications protocol provided to each licensed manufacturer by the commission for the information and control programs approved by the administrator.
	11.9(6) Meter clears. Prior to the clearing of electronic accounting meters detailed in paragraph 11.10(2)“c,” a licensee must notify a commission representative. All meters recorded by the game must be retained according to the requirements in 491—subrule 5.4(14).
[ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9018B, IAB 8/25/10, effective 9/29/10]
491—11.10(99F) Slot machine hardware and software specifications.
	11.10(1) Hardware specifications.
	a. 	Electrical and mechanical parts and design principles shall not subject players to physical hazards.
	b. 	The battery backup, or an equivalent, for the electronic meters must be capable of maintaining accuracy of all required information for 30 days after power is discontinued from a slot machine. The backup shall be kept within the locked logic board compartment.
	c. 	An identification badge permanently affixed by the manufacturer to the exterior of the cabinet shall include the following information:
	(1)	The manufacturer;
	(2)	A unique serial number;
	(3)	The gaming device model number; and
	(4)	The date of manufacture.
	d. 	The operations and outcomes of each slot machine must not be adversely affected by influences from outside the device.
	e. 	The internal space of a slot machine shall not be readily accessible when the front door is both closed and locked.
	f. 	Logic boards and software storage media which significantly influence the operation of the game must be in a locked compartment within the slot machine.
	g. 	The currency drop container must be in a locked compartment within or attached to the slot machine. Access to the currency storage areas shall be secured by separate locks which shall be fitted with sensors that indicate door open/closed or stacker removed.
	h. 	No hardware switches may be installed that alter the pay tables or payout percentages in the operation of a slot machine. Hardware switches may be installed to control graphic routines, speed of play, and sound.
	i. 	A display which automatically illuminates when a player has won a jackpot or other award not paid automatically and totally by the slot machine and which advises players that they will be paid by an attendant shall be located conspicuously on the slot machine.
	j. 	A payglass/video display shall be clearly identified and shall accurately state the rules of the game and the award that will be paid to the player when the player obtains a specific combination of symbols or other criteria. All information required in this paragraph must be available and readable at all times the slot machine is in service.
	k. 	A light that automatically illuminates when a player has won an amount or is redeeming credits that the machine cannot automatically pay, an error condition has occurred, or a “Call attendant” condition has been intitiated by the player shall be located conspicuously on top of the gaming device. At the discretion of the administrator, tower lights may be shared among certain machines or substituted by an audible alarm.
	l. 	If credits are collected and the total credit value is unable to be paid automatically by the gaming device, the device shall lock up until the credits have been paid and the amount collected has been cleared by an attendant handpay or normal operation has been restored.
	11.10(2) Software specifications.
	a. 	Random number generator. Each slot machine must have a random number generator to determine the results of the game symbol selections or production of game outcomes. The selection shall:
	(1)	Be statistically independent.
	(2)	Conform to the desired random distribution.
	(3)	Pass various recognized statistical tests.
	(4)	Be unpredictable.
	(5)	Have a testing confidence level of 99 percent.
	b. 	Continuation of game after malfunction is cleared. Each slot machine must be capable of continuing the current game with all current game features after a malfunction is cleared. This paragraph does not apply if a slot machine is rendered totally inoperable; however, the current wager and all credits appearing on the screen prior to the malfunction must be returned to the player.
	c. 	Electronic accounting meters.  Each slot machine must maintain electronic accounting meters at all times, regardless of whether the slot machine is being supplied with power. For each meter recording values, the slot machine must be capable of maintaining no fewer than ten digits. For each meter recording occurrences, the slot machine must be capable of maintaining no fewer than eight digits. No slot machine may have a mechanism that will cause the electronic accounting meters to automatically clear due to an error. The electronic meters must record, at a minimum, the following:
	(1)	Coin-in.
	(2)	Coin-out.
	(3)	Drop.
	(4)	Attendant-paid jackpots.
	(5)	Currency in.
	(6)	Currency out.
	(7)	External door.
	(8)	Bill validator door.
	(9)	Machine-paid external bonus payout.
	(10)	Attendant-paid external bonus payout.
	(11)	Attendant-paid progressive payout.
	(12)	Machine-paid progressive payout.
	d. 	Error conditions. Each slot machine shall display and report error conditions to the online monitoring system. For machines that display only a code, definitions for all codes must be permanently affixed to the interior of the slot machine. Error conditions that must be displayed and reported include but are not limited to:
	(1)	Currency in.
	(2)	Currency out.
	(3)	Door open.
	(4)	RAM.
	(5)	Low battery.
	(6)	Program authentication.
	(7)	Reel spin.
	(8)	Power reset.
	11.10(3) Previous slot machine models. Subject to administrator approval of specific gaming devices, slot machines may be used that do not meet the requirements of subrules 11.10(1) and 11.10(2) but have been certified under previously approved specifications by a commission-designated independent testing facility and maintain a current certification.
[ARC 8029B, IAB 8/12/09, effective 9/16/09]
491—11.11(99F) Slot machine specifications. Rescinded IAB 8/12/09, effective 9/16/09.
491—11.12(99F) Progressive slot machines.
	11.12(1) Meter required. A progressive machine is a slot machine game with an award amount that increases based on a function of credits bet on the slot machine and that is awarded when a particular configuration of symbols or events is displayed on the slot machine. Random events generating awards independent of the base slot machine game and not dependent on any specific slot machine game shall be considered bonus features. A progressive slot machine or group of linked progressive slot machines must have a meter showing the progressive jackpot payout.
	11.12(2) Progressive controllers. The reset or base value and the rate of increment of a progressive jackpot game must be filed with a commission representative prior to implementation. A reset or base value must equal or exceed the equivalent nonprogressive jackpot payout.
	11.12(3) Limits. A facility may impose a limit on the progressive jackpot payout of a slot machine if the limit imposed is greater than the progressive jackpot payout at the time the limit is imposed. The facility must prominently display a notice informing the public of the limit. No progressive meter may be turned back to a lesser amount unless one of the following circumstances occurs:
	a. 	The amount shown on the progressive meter is paid to a player as a jackpot.
	b. 	It is necessary to adjust the progressive meter to prevent it from displaying an amount greater than the limit imposed by the facility.
	c. 	It is necessary to change the progressive indicator because of game malfunction.
	11.12(4) Transfer of jackpots. In the event of malfunction, replacement, or other reason approved by the commission, a progressive jackpot that is removed shall be transferred, less the reset value, to other progressive slot machine jackpots of similar progressive wager and probability at the same facility within 30 days from the removal date. In the event a similar progressive jackpot at the same facility is unavailable, other transfers shall be allowed. A commission representative shall be notified in writing prior to a removal or transfer.
	11.12(5) Records required. Records must be maintained that record the amount shown on a progressive jackpot meter. Supporting documents must be maintained to explain any reduction in the payoff amount from a previous entry. The records and documents must be retained for a period of three years unless permission to destroy them earlier is given in writing by the administrator.
	11.12(6) Transfer of progressive slot machines. A progressive slot machine, upon permission of the administrator, may be moved to a different facility if a bankruptcy, loss of license, or other good cause warrants.
	11.12(7) Linked machines. Each machine on the link shall have the same probability of winning the progressive jackpot, adjusted for the total amount wagered. The product of the odds of winning the progressive jackpot multiplied by the maximum amount wagered shall be equal for all games on the link.
	11.12(8) Wide area progressive systems. A wide area progressive system is a method of linking progressive slot machines or electronic gaming machines across telecommunication lines as part of a network connecting participating facilities. The purpose of a wide area progressive system is to offer a common progressive jackpot (system jackpot) at all participating locations. The operation of a wide area progressive system (multilink) is permitted subject to the following conditions:
	a. 	The method of communication over the multilink must consist of dedicated on-line communication lines (direct connect) or equivalent as determined by the administrator, dial-tone lines, or wireless communication which may be subject to certain restrictions imposed by the administrator.
	b. 	All communication between each facility location and the central system site must be encrypted.
	c. 	All meter reading data must be obtained in real time in an on-line automated fashion. When requested to do so, the system must return meter readings on all slot machines or electronic gaming machines attached to the multilink within a reasonable time of the meter acquisition request. Manual reading of meter values may not be substituted for these requirements. There is no restriction as to the acceptable method of obtaining meter reading values, provided that the methods consist of either pulses from any machine computer board or associated wiring, or the use of serial interface to the machine’s random access memory (RAM) or other nonvolatile memory.
	d. 	The multilink must have the ability to monitor entry into the front door of the machine as well as the logic area of the machine and report such data to a central system.
	e. 	The central system site must be located in the state of Iowa, be equipped with a noninterruptible power supply, and the central computer must be capable of on-line data redundancy should hard disk peripherals fail during operation. The office containing the central computer shall be equipped with a surveillance system that has been approved by the administrator. Any person authorized to provide a multilink shall be required to keep and maintain an entry and exit log for the office containing the central computer. Any person authorized to provide a multilink shall provide access to the office containing the central computer to the administrator and shall make available to the administrator all books, records, and information required by the administrator in fulfilling its regulatory purpose.
	f. 	Any person authorized to provide a multilink must suspend play on the multilink if a communication failure of the system cannot be corrected within 24 consecutive hours.
	g. 	Approval by a commission representative of any multilink shall occur only after the administrator has reviewed the multilink software and hardware and is satisfied that the operation of the system meets accepted industry standards for multilink products, as well as any other requirements that the administrator may impose to ensure the integrity, security, and legal operation of the multilink.
	h. 	A meter that shows the amount of the system jackpot must be conspicuously displayed at or near the machines to which the jackpot applies. The system jackpot meter need not precisely show the actual moneys in the system jackpot award at each instant. Nothing shall prohibit the use of odometer or other paced updating progressive displays. In the case of the use of paced updating displays, the system jackpot meter must display the winning value after the jackpot broadcast is received from the central system, providing the remote site is communicating to the central computer. If a system jackpot is recognized in the middle of a systemwide poll cycle, the system jackpot display may contain a value less than the aggregated amount calculated by the central system. The coin values from the remaining portion of the poll cycle will be received by the central system but not the local site, in which case the system jackpot amount paid will always be the higher of the two reporting amounts.
	i. 	When a system jackpot is won, a person authorized to provide the multilink shall have the opportunity to inspect the machine, storage media, the error events received by the central system, and any other data which could reasonably be used to ascertain the validity of the jackpot.
	(1)	The central system shall produce reports that will clearly demonstrate the method of arriving at the payoff amount. This shall include the coins contributed beginning with the polling cycle immediately following the previous jackpot and will include all coins contributed up to, and including, the polling cycle, which includes the jackpot signal. Coins contributed to and registered by the system before the jackpot message is received will be deemed to have been contributed to the progressive amount prior to the current jackpot. Coins contributed to the system subsequent to the jackpot message’s being received as well as coins contributed to the system before the jackpot message is received by the system, but registered after the jackpot message is received at the system, will be deemed to have been contributed to the progressive amount of the next jackpot.
	(2)	The system jackpot may be disbursed in periodic payments as long as each machine clearly displays the fact that the jackpot will be paid in such periodic payments. In addition, the number of periodic payments and time between payments must be clearly displayed on the face of the slot machine in a nonmisleading manner.
	(3)	Two system jackpots which occur in the same polling cycle before the progressive amount can reset will be deemed to have occurred simultaneously; therefore, each winner shall receive the full amount shown on the system jackpot meter.
	j. 	Any person authorized to provide a multilink must supply to the commission, as requested, reports which support and verify the economic activity of the system.
	(1)	Any person authorized to provide a multilink must supply to the commission, as requested, reports and information indicating the amount of, and basis for, the current system jackpot. Such reports may include an aggregate report and a detail report. The aggregate report may show only the balancing of the system with regard to systemwide totals. The detail report shall be in such form as to indicate for each machine, summarized by location, the coin-in totals as such terms are commonly understood in the industry.
	(2)	In addition, upon the invoicing of any facility participating in a multilink, each such facility must be given a printout of each machine operated by that facility, the coins contributed by each machine to the system jackpot for the period for which an invoice is remitted, and any other information required by the commission to confirm the validity of the facility’s contributions to the system jackpot.
	k. 	In calculating adjusted gross receipts, a facility may deduct its pro-rata share of the present value of any system jackpots awarded. Such deduction shall be listed on the detailed accounting records provided by the person authorized to provide the multilink. A facility’s pro-rata share is based on the number of coins in from that facility’s machines on the multilink, compared to the total amount of coins in on the whole system for the time period(s) between jackpot(s) awarded.
	l. 	In the event a facility ceases operations and a progressive jackpot is awarded subsequent to the last day of the final month of operation, the facility may not file an amended wagering tax submission or make a claim for a wagering tax refund based on its contributions to that particular progressive prize pool.
	m. 	A facility, or an entity that is licensed as a manufacturer or distributor, shall provide the multilink, in accordance with a written agreement which shall be reviewed and approved by the commission prior to offering the jackpots.
	n. 	The payment of any system jackpot offered on a multilink shall be administered by the person authorized to provide the multilink, and such person shall have primary liability for payment of any system jackpot the person administers. In addition, any facility shall have secondary liability for the payment of system jackpots won on a multilink in which the licensee is or was a participant if and to the extent that the person authorized to provide the multilink fails to make payment when due.
	o. 	A person who is authorized to provide the multilink shall comply with the following:
	(1)	A reserve shall be established and maintained by the provider of the multilink in an amount of not less than the sum of the following amounts:
	1.	The present value of the aggregate remaining balances owed on all jackpots previously won by patrons on the multilink.
	2.	The present value of the amount currently reflected on the jackpot meters of the multilink.
	3.	The present value of one additional reset (start amount) of the multilink.
	(2)	The reserve shall continue to be maintained until all payments owed to winners of the system jackpots have been made.
	(3)	For system jackpots disbursed in periodic payments, any qualified investment shall be purchased within 90 days following notice of the win of the system jackpot, and a copy of such qualified investment will be provided to the commission office within 30 days of purchase. Any qualified investment shall have a surrender value at maturity, excluding any interest paid before the maturity date, equal to or greater than the value of the corresponding periodic jackpot payment, and shall have a maturity date prior to the date the periodic jackpot payment is required to be made.
	(4)	The person authorized to provide the multilink shall not be permitted to sell, trade, or otherwise dispose of any qualified investments prior to their maturity unless approval to do so is first obtained from the commission.
	(5)	Upon becoming aware of an event of noncompliance with the terms of the reserve requirement mandated by subparagraph (1) above, the person authorized to provide the multilink must immediately notify the commission of such event. An event of noncompliance includes a nonpayment of a jackpot periodic payment or a circumstance which may cause the person authorized to provide the multilink to be unable to fulfill, or which may otherwise impair the person's ability to satisfy, the person's jackpot payment obligations.
	(6)	On a quarterly basis, the person authorized to provide the multilink must deliver to the commission office a calculation of system reserves required under subparagraph (1) above. The calculation shall come with a certification of financial compliance signed by a duly authorized financial officer of the person authorized to provide the multilink, on a form prescribed by the commission, validating the calculation.
	(7)	The reserve required under subparagraph (1) must be examined by an independent certified public accountant according to procedures approved by the commission. Two copies of the report must be submitted to the commission office within 90 days after the conclusion of the fiscal year of the person authorized to provide the multilink.
	p. 	For system jackpots disbursed in periodic payments, subsequent to the date of the win, a winner may be offered the option to receive, in lieu of periodic payments, a discounted single cash payment in the form of a “qualified prize option,” as that term is defined in Section 451(h) of the Internal Revenue Code. The person authorized to provide the multilink shall calculate the single cash payment based on the discount rate. Until the new discount rate becomes effective, the discount rate selected by the person authorized to provide the multilink shall be used to calculate the single cash payment for all qualified prizes that occur subsequent to the date of the selected discount rate.
[ARC 7757B, IAB 5/6/09, effective 6/10/09; ARC 8029B, IAB 8/12/09, effective 9/16/09; ARC 9018B, IAB 8/25/10, effective 9/29/10]
491—11.13(99F) Licensing of manufacturers and distributors of gambling games or implements of gambling.
	11.13(1) Impact on gambling. In considering whether a manufacturer or distributor applicant will be licensed or a specific product will be distributed, the administrator shall give due consideration to the economic impact of the applicant’s product, the willingness of a licensed facility to offer the product to the public, and whether its revenue potential warrants the investigative time and effort required to maintain effective control over the product.
	11.13(2) Licensing standards. Standards which shall be considered when determining the qualifications of an applicant shall include, but are not limited to, financial stability; business ability and experience; good character and reputation of the applicant as well as all directors, officers, partners, and employees; integrity of financial backers; and any effect on the Iowa economy.
	11.13(3) Application procedure. Application for a manufacturer’s or a distributor’s license shall be made to the commission for approval by the administrator. In addition to the application, the following must be completed and presented when the application is filed:
	a. 	Disclosure of ownership interest, directors, or officers of licensees.
	(1)	An applicant or licensee shall notify the administrator of the identity of each director, corporate officer, owner, partner, joint venture participant, trustee, or any other person who has any beneficial interest of 5 percent or more, direct or indirect, in the business entity. For any of the above, as required by the administrator, the applicant or licensee shall submit background information on forms supplied by the division of criminal investigation and any other information the administrator may require.
For purposes of this rule, beneficial interest includes all direct and indirect forms of ownership or control, voting power, or investment power held through any contract, lien, lease, partnership, stockholding, syndication, joint venture, understanding, relationship (including family relationship), present or reversionary right, title or interest, or otherwise.
	(2)	For ownership interests of less than 5 percent, the administrator may request a list of these interests. The list shall include names, percentages owned, addresses, social security numbers, and dates of birth. The administrator may request the same information required of those individuals in subparagraph (1) above.
	b. 	Investigative fees.
	(1)	Advance payment. The department of public safety may request payment of the investigative fee in advance as a condition to beginning investigation.
	(2)	Payment required. The administrator may withhold final action with respect to any application until all investigative fees have been paid in full.
	c. 	A bank or cashier’s check made payable to the Iowa Racing and Gaming Commission for the annual license fee as follows:
	(1)	A manufacturer’s license shall be $250.
	(2)	A distributor’s license shall be $1,000.
	d. 	A copy of each of the following:
	(1)	Articles of incorporation and certificate of incorporation, if the business entity is a corporation.
	(2)	Partnership agreement, if the business entity is a partnership.
	(3)	Trust agreement, if the business entity is a trust.
	(4)	Joint venture agreement, if the business entity is a joint venture.
	(5)	List of employees of the aforementioned who may have contact with persons within the state of Iowa.
	e. 	A copy of each of the following types of proposed distribution agreements, where applicable:
	(1)	Purchase agreement(s).
	(2)	Lease agreement(s).
	(3)	Bill(s) of sale.
	(4)	Participation agreement(s).
	f. 	Supplementary information. Each applicant shall promptly furnish the administrator with all additional information pertaining to the application or the applicant which the administrator may require. Failure to supply the information requested within five days after the request has been received by the applicant shall constitute grounds for delaying consideration of the application.
	g. 	Any and all changes in the applicant’s legal structure, directors, officers, or the respective ownership interests must be promptly filed with the administrator.
	h. 	The administrator may deny, suspend, or revoke the license of an applicant or licensee in which a director, corporate officer, or holder of a beneficial interest includes or involves any person or entity which would be, or is, ineligible in any respect, such as through want of character, moral fitness, financial responsibility, professional qualifications, or due to failure to meet other criteria employed by the administrator, to participate in gaming regardless of the percentage of ownership interest involved. The administrator may order the ineligible person or entity to terminate all relationships with the licensee or applicant, including divestiture of any ownership interest or beneficial interest at acquisition cost.
	i. 	Disclosure. Disclosure of the full nature and extent of all beneficial interests may be requested by the administrator and shall include the names of individuals and entities, the nature of their relationships, and the exact nature of their beneficial interest.
	j. 	Public disclosure. Disclosure is made for the benefit of the public, and all documents pertaining to the ownership filed with the administrator shall be available for public inspection.
	11.13(4) Temporary license certificates.
	a. 	A temporary license certificate may be issued at the discretion of the administrator.
	b. 	Temporary licenses—period valid. Any certificate issued at the discretion of the administrator shall be valid for a maximum of 120 calendar days from the date of issue.
Failure to obtain a permanent license within the designated time may result in revocation of the license eligibility, fine, or suspension.
	11.13(5) Withdrawal of application. A written notice of withdrawal of application may be filed by an applicant at any time prior to final action. No application shall be permitted to be withdrawn unless the administrator determines the withdrawal to be in the public interest. No fee or other payment relating to any application shall become refundable by reason of withdrawal of the application.
	11.13(6) Record keeping.
	a. 	Record storage required. Distributors and manufacturers shall maintain adequate records of business operations, which shall be made available to the administrator upon request. These records shall include:
	(1)	All correspondence with the administrator and other governmental agencies on the local, state, and federal level.
	(2)	All correspondence between the licensee and any of its customers who are applicants or licensees under Iowa Code chapter 99F.
	(3)	A personnel file on each employee of the licensee, including sales representatives.
	(4)	Financial records of all transactions with facilities and all other licensees under these regulations.
	b. 	Record retention. The records listed in 11.13(6)“a” shall be retained as required by 491—subrule 5.4(14).
	11.13(7) Violation of laws or regulations. Violation of any provision of any laws of the state or of the United States of America or of any rules of the commission may constitute an unsuitable method of operation, subjecting the licensee to limiting, conditioning, restricting, revoking or suspending the license, or fining the licensee, or any combination of the above.
	11.13(8) Consent to inspections, searches, and seizures. Each manufacturer or distributor licensed under this chapter shall consent to inspections, searches, and seizures deemed necessary by the administrator and authorized by law in order to enforce licensing requirements.
These rules are intended to implement Iowa Code chapter 99F.
[Filed 10/13/00, Notice 9/6/00—published 11/1/00, effective 12/6/00]
[Filed 4/24/01, Notice 2/7/01—published 5/16/01, effective 6/20/01]
[Filed 5/17/02, Notice 4/3/02—published 6/12/02, effective 7/17/02]
[Filed 7/18/02, Notice 6/12/02—published 8/7/02, effective 9/11/02]
[Filed 1/17/03, Notice 12/11/02—published 2/5/03, effective 3/12/03]
[Filed 9/7/04, Notice 7/7/04—published 9/29/04, effective 11/3/04]
[Filed 4/21/06, Notice 2/15/06—published 5/10/06, effective 6/14/06]
[Filed 4/20/07, Notice 2/14/07—published 5/9/07, effective 6/13/07]
[Filed 1/11/08, Notice 11/7/07—published 1/30/08, effective 3/5/08]
[Filed 6/6/08, Notice 3/26/08—published 7/2/08, effective 8/6/08]
[Filed 10/10/08, Notice 8/13/08—published 11/5/08, effective 12/10/08]
[Filed ARC 7757B (Notice ARC 7554B, IAB 2/11/09), IAB 5/6/09, effective 6/10/09]
[Filed ARC 8029B (Notice ARC 7758B, IAB 5/6/09), IAB 8/12/09, effective 9/16/09]
[Filed ARC 9018B (Notice ARC 8726B, IAB 5/5/10), IAB 8/25/10, effective 9/29/10]
[Filed ARC 9987B (Notice ARC 9808B, IAB 10/19/11), IAB 2/8/12, effective 3/14/12]
[Filed ARC 0734C (Notice ARC 0604C, IAB 2/20/13), IAB 5/15/13, effective 6/19/13]
[Filed ARC 1456C (Notice ARC 1310C, IAB 2/5/14), IAB 5/14/14, effective 6/18/14]