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Coat the inside of a slow cooker with cooking spray.
In a medium bowl, whisk together flour, pudding mix, 1/4 cup sugar, baking powder and salt. Make a well in the center and add milk, oil and vanilla. Gently stir until batter is smooth. Stir in butterscotch chips. Pour evenly into slow cooker.
In a small bowl, stir together butterscotch sauce and the remaining 1/2 cup sugar; pour in 1 1/3 cups boiling water and stir until smooth. Pour over the batter in the slow cooker. Cover and cook on High for about 2 1/2 hours or until cake is puffed and top layer is set. Let stand, covered, for 30 minutes before serving. Serve with whipped cream, if desired.