Mississippi Administrative Code › Title 13 - Gaming › Part 3 - OPERATIONS › Chapter 1 - IN GENERAL › Rule 13-3-1.9 - Periodic Payments

Current through June 25, 2024
(a) Except as
				provided in this regulation, a licensee shall remit the total prizes awarded to
				a patron as the result of conducting any game, including a tournament, contest,
				or promotional activity (hereinafter collectively referred to as "gaming or
				promotional activity") conducted in Mississippi upon validation of the prize
				payout.
(b) As used in this section
				of the regulation:
1. "Approved funding
				sources" means cash, U.S. GSE securities or U.S. Treasury securities that are
				used for the funding of a trust pursuant to subsection (c)(2) hereof or the
				reserve method of funding periodic payments pursuant to subsection (c)(3)
				hereof.
2. "Brokerage firm" means
				an entity that:
i. Is both a broker-dealer
				and an investment adviser;
ii. Has
				one or more classes of its equity securities listed on the New York Stock
				Exchange or American Stock Exchange, or is a wholly-owned subsidiary of such an
				entity; and
iii. Has assets under
				management in an amount of $10 billion or more as reported in its most recent
				report on Form 10-K or Form 10-Q filed with the United States Securities and
				Exchange Commission, or is a wholly-owned subsidiary of such an
				entity.
3.
				"Broker-dealer" means any person engaged in the business of effecting
				transactions in securities for the account of others or for his own account
				and:
i. Is registered as a broker-dealer with
				the Mississippi Secretary of State pursuant to Section
				75-71-301
				of the Mississippi Code of 1972, as amended; or
ii. Is exempt from registration pursuant to
				Section
				75-71-105(b)
				of the Mississippi Code of 1972, as amended, and is registered as a
				broker-dealer with the United States Securities and Exchange Commission and the
				National Association of Securities Dealers pursuant to Title 15 USC 78 o, as
				amended.
iii. "Executive Director"
				means the Executive Director of the Mississippi Gaming Commission or his
				designee.
iv. "Date of
				calculation" means the last day for which a discount rate was obtained prior to
				the conclusion of the validation period.
4. "Discount rate" means the current prime
				rate as published in the Wall Street Journal. For those licensees using the
				reserve method of funding pursuant to subsection (c)(3) hereof, "discount rate"
				means either:
i. The aforementioned current
				prime rate; or
ii. A blended rate
				computed from the various U.S. GSE securities or U.S. Treasury securities
				selected by the licensee for which quotes are obtained at least three times a
				month.
5. "Independent
				financial institution" means an institution that is not affiliated through
				common ownership with the licensee and is either:
i. A bank or national banking association
				that is authorized to do business in this state, a banking corporation formed
				or regulated under the laws of this state or a wholly owned subsidiary of such
				a banking association or corporation that is formed or regulated under the laws
				of this state or a national bank with an office in Mississippi; or
ii. An insurance company admitted to transact
				insurance in the State of Mississippi with an A.M. Best Insurance rating of at
				least "A+" or such other equivalent rating.
6. "Investment Adviser" means any person who,
				for compensation, engages in the business of advising others, either directly
				or through publications or writings, as to the value of securities or as to the
				advisability of investing in, purchasing or selling securities, or who, for
				compensation and as a part of a regular business, issues or promulgates
				analyses or reports concerning securities and:
i. Is registered as an investment adviser
				with the Mississippi Secretary of State pursuant to Section
				75-71-303
				of the Mississippi Code of 1972, as amended; or
ii. Is exempt from registration pursuant to
				Section
				75-71-105(g)
				of the Mississippi Code of 1972, as amended, and is registered as an investment
				adviser with the United States Securities and Exchange Commission pursuant to
				Title
				15 USC
				80b-3a, as amended.
7. "Periodic payments," for purposes of this
				regulation only, means a series of payments that are paid at least annually for
				prizes awarded through gaming or promotional activity.
8. "Present value" means the current value of
				a future payment or series of payments, discounted using the discount
				rate.
9. "Qualified prize" means
				the sum of periodic payments, awarded to a patron as a result of any gaming or
				promotional activity, payable over a period of at least 10 years.
10. "Qualified prize option" means an option
				that entitles a patron to receive from a licensee a single cash payment in lieu
				of receiving a qualified prize, or any remaining portion thereof, which shall
				be exercised no later than 60 days after validation of the qualified
				prize.
11. "Reserve" means a
				restricted account consisting of approved funding sources used exclusively to
				satisfy periodic payments of prizes arising from all gaming or promotional
				activity conducted in Mississippi. Any existing funding methods previously
				approved by the Executive Director or Commission must comply with this
				Regulation as of its effective date. The reserve shall not be less than the sum
				of the following:
i. The present value of the
				aggregate remaining balances owed on all prizes awarded to patrons who are
				receiving periodic payments. For balances previously funded using U.S. GSE
				securities or U.S. Treasury securities, the discount rate on the date of
				funding shall be used for calculating the present value of this portion of the
				reserve.
ii. An amount sufficient
				to pay the single cash payments offered in Conjunction with qualified prize
				options for prizes previously awarded for which elections have not been made by
				the patrons;
iii. An amount
				sufficient to fully fund the present value of all prizes currently on public
				display for which periodic payments are offered;
iv. If cash is used as the approved funding
				source, an amount equal to satisfy the current liabilities to all patrons
				receiving periodic payments due and payable within 12 months; and
v. Any additional amounts administratively
				required by the Executive Director.
12. "Restricted account" means an account
				with an independent financial institution described in subsection (b)(5)
				hereof, or a brokerage firm, which is to be exclusively used for the reserve
				method of funding of gaming or promotional activity as provided in this
				regulation.
13. "Single cash
				payment" means a single discounted, lump-sum cash payment in the amount of the
				present value of the total periodic payments otherwise due and owing for a
				qualified prize, less the amount of any partial payment of such qualified prize
				previously made by the licensee to a patron.
14. "Trust" means an irrevocable fiduciary
				relationship in which one person is the holder of the title to the property
				subject to an equitable obligation to keep or use the property for the benefit
				of another.
15. "U.S. Government
				Sponsored Enterprise" or "U.S. GSE" means, for purpose of this regulation,
				either the Federal National Mortgage Association, also known as Fannie Mae, or
				the Federal Home Loan Mortgage Corporation, also known as Freddie
				Mac.
16. "U.S. GSE securities"
				means negotiable, senior, non-callable, debt obligations issued by a U.S. GSE
				that on the date of funding possesses an issuer credit rating equivalent to the
				highest investment grade rating given by Standards & Poor's Rating Services
				and Moody's Investors Service.
17.
				"U.S. Treasury securities" means a negotiable debt obligation issued and
				guaranteed by the U.S. Government.
18. "Validation period" means the period of
				time between when a patron has met the conditions required to receive a prize,
				and when the prize payout is validated. The validation period shall not exceed
				72 hours, unless otherwise extended by the Executive
				Director.