N.J. Admin. Code § 13:69D-1.40B

Current through Register Vol. 56, No. 21, November 4, 2024

Section 13:69D-1.40B - Jackpot payouts in the form of an annuity

(a) A casino licensee may offer an annuity jackpot. Prior to offering an annuity jackpot, a casino licensee or slot system operator shall obtain Division approval. No annuity jackpot shall be permitted unless it expressly prohibits the winner from encumbering, assigning, or otherwise transferring in any way his or her right to receive the future cash payments, except as permitted by 5:12-100.1.

(b) Whenever an annuity jackpot is won, the casino licensee or slot system operator shall determine if any portion of the winnings is subject to withholding for a jackpot winner who is:

1. In arrears of a child support order; or

2. A former recipient of Aid to Families with Dependent Children or Work First New Jersey, food stamp benefits, or low-income home energy assistance benefits with an overpayment that has not been repaid.

(c) If any amount is subject to withholding pursuant to (b) above, the casino licensee shall withhold payment until the Probation Division of the Superior Court or the Department of Human Services authorizes payment.

(d) A casino licensee or slot system which offers an annuity jackpot shall provide clear notice of the following:

1. That the displayed jackpot amount will be paid over time;

2.The number of payments and the time interval between payments; and

3. That the right to receive the jackpot payments may not be encumbered, assigned, or otherwise transferred in any way except as permitted by 5:12-100.1 and the rules of the Division.

(e) A casino licensee may offer an option to a patron who has won an annuity jackpot to be paid a single cash payment in lieu of future installments in an amount that is equal to the present value of the face amount of the jackpot ("cash payout option") provided that:

1. The present value shall be calculated by applying a discount rate to the amount of the jackpot taking into consideration the number of years that the annuity would otherwise be payable; and

2. The discount rate shall equal the prime rate as defined in Title 54 of the New Jersey Statues or other rate as approved by the Division.

(f) When an annuity jackpot lock up occurs, a slot attendant or above shall prepare and present to a cage or slot booth cashier an Annuity Request, which includes:

1. The date and time;

2. The asset number and location;

3. The display amount;

4. The patron's name and identification information; and

5. The patron's Social Security number.

(g) When an annuity jackpot lock up occurs, the casino licensee or slot system operator shall generate a Jackpot Report in a manner approved by the Division. The Jackpot Report shall be provided to a cage or slot booth cashier of the casino licensee where the lock up occurred. The Jackpot Report shall include, at a minimum:

1. The date and time;

2. The asset number and location;

3. A game or link description;

4. The slot system operator, if applicable;

5. The name of casino licensee; and

6. The amount to be paid.

(h) Upon receipt of the Annuity Request and Jackpot Report, either a slot department supervisor or a cage or slot booth cashier shall prepare a Jackpot Acknowledgement which shall include, at a minimum, the following information:

1. The date;

2. The patron's name and address;

3. The patron's Social Security number;

4. The jackpot amount as recorded on the Jackpot Report;

5.The amount of the annual payments calculated as a factor of the number of years over which the annuity shall be paid;

6. If applicable, the offer of a cash payout option;

7. A disclosure that the casino licensee or the slot operator will provide information to the patron within three business days as to payment options;

8. A disclosure that the patron's name and identification information shall be provided to the Department of Human Services in order to determine if any portion of the winnings shall be subject to withholding if the annuity jackpot winner is:

i. In arrears of a child support order; or

ii. Is a former recipient of Aid to Families with Dependent Children or Work First New Jersey, food stamp benefits, or low-income home energy assistance benefits with an overpayment that has not been repaid;

9. The signature of a slot attendant or above; and

10. The signature of the patron.

(i) The Annuity Jackpot Acknowledgement form shall either be a multi-part form or copied for distribution, at a minimum, to the following:

1. Casino accounting;

2. The slot system operator, if applicable; and

3. The patron.

(j) Upon confirmation that the patron is not subject to payout withholding, a casino licensee or slot system operator shall issue cash, check, or electronic payment to the patron in an amount equal to the first installment of the annuity. The payment shall be documented in accordance with internal controls.

(k) If confirmation is received that the patron is subject to a withholding, the casino licensee or slot system operator shall issue cash, check, or electronic payment to the patron in an amount equal to the first installment of the annuity less any required withholding. The payment shall be documented in accordance with internal controls.

(l) Nothing in this section shall prevent a casino licensee or slot system operator, in its discretion, from paying a patron prior to completing the checks for withholding required by this section provided that the checks are subsequently completed in accordance with the licensee's internal controls. The casino licensee shall be liable for the payment of any amount subject to withholding up to the amount it paid to the patron.

(m) The casino licensee or slot system operator shall, within three business days, provide a Jackpot Acceptance form for patron completion and notify the patron either personally or by certified mail of the following:

1. The date of notice;

2. The date of the annuity jackpot;

3. The amount and number of years over which the annuity is payable;

4. The amount of the annual payments;

5. If applicable, the cash payout value and method of calculation;

6. A disclosure that a part or all of the payment shall be withheld if the Department of Human Services determines that the winner is subject to payout withholding; and

7. A statement that the patron shall have 60 days to return the Jackpot Acceptance form selecting the annuity or, if applicable, the cash option.

(n) Upon receipt of the patron's Jackpot Acceptance form, a casino licensee or slot system operator shall:

1. If the patron selects the cash payout option, issue a check or authorize an electronic payment to the patron within five business days in an amount equal to the present value of the cash payout amount less the amount of the initial annuity installment and any required withholding; or

2. If the patron selects the annuity payout option, issue a check or authorize an electronic payment on each anniversary date of the win, for the duration of the annuity, in the amount equal to the annuity payment less any required withholding. Prior to each payment, the casino licensee or slot system operator shall determine if the payment is subject to any withholding pursuant to this section.

(o) On or before the fifth day of each month, a casino licensee or slot system operator shall submit to the Division a summary report of all annuity jackpots paid to one or more patrons during the prior month.

1. A casino licensee individually offering an annuity jackpot shall be entitled to a gross revenue deduction as follows:

i. The present value of the cash payout amount; or

ii. The first installment of the annuity jackpot and the amount used to fund the remainder payments.

2. A slot system operator shall calculate the total gross revenue deduction in the same manner as (o)1 above and prorate the deduction amount to each casino licensee participating in the annuity jackpot. The slot system operator shall distribute reports to the Division and each participating casino licensee delineating the respective gross revenue deduction amounts.

N.J. Admin. Code § 13:69D-1.40B

Adopted by 47 N.J.R. 1954(a), effective 8/3/2015

Amended by 50 N.J.R. 606(a), effective 1/16/2018