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RETAILER
 RULES
TITLE 19: ALCOHOL, HORSE AND DOG RACING, LOTTERY, AND GAMING
                          CHAPTER 3:
              ARIZONA STATE LOTTERY COMMISSION
                     ARTICLE 2. RETAILERS




SECTION	                                                         	PAGE

R19-3-201	   Definitions	…………………….………………………..………..…			2
R19-3-202	   Retailer’s	Application	and	License	………………………………...			2
R19-3-203	   Direct	Sales	by	Lottery	………………………………………….….		6     	
R19-3-204	   Revocation,	Suspension,	or	Renewal	Denial	of	Retailer’s	
             License…………………………………………………..................			6
R19-3-205	   Lottery-issued	Equipment	…………………………………………	 		9
R19-3-206	   Retailer	Training	…………………………………………………..	 10
R19-3-207	   Compliance	Investigations	…………………………………….…..	 10
R19-3-208	   Penalties	…………………………………………………..…….…	 11
R19-3-209	   Notice	and	Service	………………………………………….……..	 11
R19-3-210	   Reportable	Events	…………………………………………………		12
R19-3-211	   Change	of	Ownership	or	Business	Location	…………………..….	 12
R19-3-212	   Retailer	Compensation...……………………………………………	12
R19-3-213	   Ticket	Sales	to	Players	…………………………………….………	 13
R19-3-214	   Payments	to	Lottery	…………………………………………….…	 13
R19-3-215	   Prize	Validation	and	Payment	…………………………………….	 14
R19-3-216	   Distribution	and	Return	of	Instant	Tickets	………………..………	 14
R19-3-217	   Unaccounted	and	Stolen	Tickets	……………………………….…	 14

	              	                                                    	




                                    1
          ARTICLE 2. RETAILERS                              b.	 The	 applicant’s	 current	 transaction	
R19-3-201.	 Definitions                                         privilege	 tax	 license	 number	 issued	
In	 this	 Article,	 unless	 the	 context	 otherwise	            under	A.R.S.	 §	 42-5005	 and	 federal	
requires:                                                       taxpayer	identification	number	issued	
    1.	 “Act”	means	Title	5,	Chapter	5,	Article	1	              by	the	Internal	Revenue	Service	and	
        of	the	Arizona	Revised	Statutes.                        recorded	on	Form	W-9;
    2.	 “Controlling	agent”	means	a	stockholder,	           c.	 Certification	 that	 the	 applicant’s	
        director,	 officer,	 managerial	 employee,	             business	 location	 complies	 with	 the	
        or	 other	 person	 directly	 or	 indirectly	            Americans	with	Disabilities	Act;
        controlling	 or	 operating	 the	 retailer’s	        d.	 Marketing	 and	 sales	 information	 on	
        business.                                               the	 forms	 provided	 by	 the	 Lottery.	
    3.	 “Partial	 pack	 of	 tickets”	 means	 less	              The	 information	 required	 includes	
        than	 a	 complete	 pack	 of	 consecutively	             expected	 volume	 of	 sales,	 number	
        numbered	 and	 connected	 tickets.	 If	 a	              of	cash	registers,	hours	of	operation,	
        pack	 is	 broken	 into	 individual	 tickets,	           products	 presently	 offered	 for	 sale,	
        each	 individual	 ticket	 is	 considered	 a	            and	 approximate	 daily	 volume	 of	
        partial	pack.                                           customers	 entering	 the	 place	 of	
    4.	 “Premises	 manager”	 means	 the	 contact	               business;
        representative	 for	 a	 specific	 business	         e.	 Evidence	 that	 the	 applicant’s	
        site.                                                   business	 products	 or	 services	 are	
    5.	 “Retailer”	 means	 a	 licensed	 provider	               not	 exclusively	 lottery	 products	 or	
        of	 sales	 and	 redemptions	 services	 for	             services	concerning	lotteries;
        Lottery	products.                                   f.	 Financial	 relationship	 and	 any	
    6.	 “Ticket”	 means	 one	 or	 more	 Lottery	                outstanding	 debt	 with	 the	 state	
        game	plays.                                             of	 Arizona,	 any	 of	 its	 political	
    7.	 “Validation”	 means	 confirmation	 of	 a	               subdivisions,	 or	 the	 United	 States	
        winning	Lottery	ticket	by	Lottery-issued	               government;
        equipment.                                          g.	 Evidence	 that	 the	 applicant	 is	
                                                                financially	solvent.	The	evidence	may	
R19-3-202.	 Retailer’s	 Application	 and	                       include	any	one	of	the	following:
License                                                         i.	 Equity	        or	     unencumbered	
A.	 Application.	A	person	interested	in	obtaining	                   assets	 in	 real	 estate	 or	 personal	
    a	license	to	sell	Lottery	tickets	shall:                         property,	other	than	goodwill	and	
    1.	 Submit	 to	 the	 Director	 a	 verified	                      intellectual	property,	in	an	amount	
        application	 on	 forms	 prescribed	 by	                      of	$100,000	or	more;
        the	 Director	 containing	 the	 following	              ii.	 Evidence	 the	 applicant	 has	
        information:                                                 established	 business	 credit,	 has	
        a.	 The	 applicant’s	 name,	 and	 if	                        a	 record	 of	 meeting	 its	 business	
            different,	 the	 trade	 name	 of	 the	                   debts	as	they	became	due	for	the	
            retailer’s	 business	 premise,	 address	                 last	 three	 consecutive	 years,	 and	
            of	the	physical	location	of	the	place	                   does	 not	 have	 outstanding	 legal	
            of	 business,	 the	 mailing	 address	 if	                actions,	judgments,	or	tax	liens;
            different,	and	phone	number;                        iii.	Personal	 guarantee	 in	 writing	 of	
                                                                     applicant’s	Lottery	account	signed	
                                                        2
              by	a	guarantor	and	the	guarantor’s	                    identification	 number	 to	 perform	 a	
              spouse,	 if	 community	 property	                      credit	search;	and
              is	 being	 used	 to	 guarantee	 the	               c.	 A	 completed	 authorized	 fingerprint	
              account,	or	by	the	guarantor	only,	                    card	for	each	partner	or	member.
              if	 guarantor	 provides	 proof	 that	        4.	   If	 the	 applicant	 does	 business	 as	 a	
              the	guarantee	is	based	on	sole	and	                corporation:
              separate	property.                                 a.	 The	 name,	 corporate	 address,	 and	
    h.	 Electronic	         Funds	       Transfer	                   corporate	 phone	 number	 of	 each	
         Authorization	 agreement	 showing	                          officer	 and	 director,	 and	 the	 name,	
         a	 valid	 bank	 account	 number	 from	                      home	address	and	home	phone	number	
         which	the	Lottery	will	withdraw	any	                        of	the	responsible	local	manager	who	
         amounts	due;	and                                            is	 the	 contact	 representative	 for	 the	
    i.	 Name,	case	number,	court	designation,	                       applicant’s	 corporate	 location	 in	
         and	 type	 of	 action	 for	 any	 pending	                   Arizona;
         litigation	or	judgments	for	which	the	                  b.	 Written	 authorization	 and	 tax	
         applicant	 may	 potentially	 be	 held	                      identification	 number	 to	 perform	 a	
         financially	responsible.                                    credit	search;	and
2.	 If	 the	 applicant	 does	 business	 as	 a	 sole	             c.	 A	 completed	 authorized	 fingerprint	
    proprietorship	or	partnership:                                   card	 for	 the	 appropriate	 responsible	
    a.	 The	 name,	 home	 address,	 and	                             local	manager.
         home	 phone	 number	 of	 each	 owner	             5.	   If	the	Lottery	licenses	an	applicant	under	
         or	 partner,	 including	 spouse	 if	                    subsection	 (A)(1)(g)(iii),	 the	 guarantor	
         community	 property	 owner,	 unless	                    shall	 provide	 a	 written	 authorization	 to	
         applicant	 provides	 proof	 that	 the	                  perform	a	credit	search.	If	the	guarantee	
         business	 is	 sole	 property	 separate	                 is	 based	 on	 community	 property,	 the	
         from	the	community;                                     guarantor	 and	 guarantor’s	 spouse	 shall	
    b.	 Written	 authorization	 and	 tax	                        provide	 written	 authorization	 for	 the	
         identification	number	for	the	business	                 Lottery	to	perform	a	credit	search.
         entity	and	Social	Security	number	of	             6.	   Submit	an	application	fee	of	$45.00	and	
         each	 applicant	 in	 order	 to	 obtain	 a	              the	following	fees,	if	applicable:
         credit	search	from	a	credit	reporting	                  a.	 If	any	individual	listed	on	the	personal	
         agency;	and                                                 questionnaire	has	resided	outside	the	
    c.	 A	 completed	 authorized	 fingerprint	                       state	 of	 Arizona	 within	 the	 last	 10	
         card	for	the	applicant.	If	any	general	                     years,	 a	 fingerprint	 fee	 of	 $29	 per	
         partner	is	a	corporation,	a	fingerprint	                    individual.
         card	 is	 required	 under	 subsection	                  b.	 If	 the	 applicant	 does	 business	 as	
         (A)(4).                                                     a	 corporation,	 limited	 liability	
3.	 If	the	applicant	does	business	as	a	limited	                     company,	limited	liability	partnership,	
    liability	partnership	(“LLP”)	or	a	limited	                      or	a	partnership,	a	credit	check	fee	of	
    liability	company	(“LLC”):                                       $22.
    a.	 The	name,	home	address,	and	home	                  7.	   If	the	applicant	is	a	business	with	more	
         phone	 number	 of	 each	 partner	 or	                   than	 one	 current	 licensed	 location,	 the	
         member;                                                 application	fee	for	the	new	location	shall	
    b.	 Written	 authorization	 and	 tax	                        be	pro-rated	at	$1.25	per	month	from	the	
                                                       3
        application	date	until	the	date	the	other	               or	displays	sexually	explicit	material	in	
        licenses	are	due	for	renewal	under	R19-                  violation	of	A.R.S.	§	13-3507;	or
        3-202(H)(2)(c).                                      3.	 The	 applicant	 provides	 deferred	
B.	 Prerequisites	to	obtain	or	renew	a	license.                  presentment	services	defined	in	A.R.S.	§	
    1.	 Evidence	 that	 the	 applicant	 is	 of	 good	            6-1251.
        character	and	reputation.	The	Lottery	may	 D.	 Residency	requirement.	To	obtain	a	license,	
        find	 that	 a	 person	 lacks	 good	 character	       an	applicant	shall	be	one	of	the	following:
        and	 reputation	 if	 it	 determines	 that	 the	      1.	 A	resident	of	Arizona;
        person	has	committed	any	act	which,	if	              2.	 A	corporation	incorporated	in	Arizona	or	
        committed	by	a	Lottery-licensed	retailer,	               authorized	to	do	business	in	Arizona;
        would	 be	 grounds	 for	 suspension	 or	             3.	 A	 limited	 liability	 company	 authorized	
        revocation	 of	 a	 license	 granted	 by	 the	            to	 do	 business	 in	 Arizona	 in	 which	 a	
        state	of	Arizona;                                        member	or	manager	resides	in	Arizona;
    2.	 An	 applicant,	 a	 director	 or	 officer	 of	 a	     4.	 A	partnership	in	which	at	least	one	of	the	
        corporation,	 or	 member	 of	 a	 limited	                general	partners	resides	in	Arizona;	or
        liability	 company,	 shall	 not	 have	 had	 a	       5.	 A	 limited	 liability	 partnership	 in	 which	
        business	 license	 required	 by	 statute	 in	            at	 least	 one	 of	 the	 partners	 resides	 in	
        Arizona	or	any	other	state	suspended	or	                 Arizona.
        revoked	within	the	last	12	months;               E.	 Time-frame	for	licensure.
    3.	 An	 applicant,	 a	 director	 or	 officer	 of	 a	     1.	 The	Director	shall	finish	an	administrative	
        corporation,	 or	 member	 of	 a	 limited	                completeness	review	within	15	days	from	
        liability	 company,	 shall	 not	 have	 had	 a	           the	date	of	receipt	of	the	application	and	
        Lottery	license	denied	or	revoked	at	the	                fee	prescribed	in	subsection	(A).
        address	 and	 location	 of	 the	 applicant’s	            a.	 The	 Director	 shall	 issue	 a	 notice	 of	
        place	of	business	for	reasons	other	than	                     administrative	 completeness	 to	 the	
        ADA	noncompliance,	and	shall	not	have	                        applicant	if	no	deficiencies	are	found	
        sold	 Lottery	 products	 without	 being	                      in	the	application.
        licensed	within	one	year	of	the	person’s	                b.	 If	the	application	is	incomplete	or	the	
        date	of	application;                                          fee	is	not	submitted,	the	Director	shall	
    4.	 The	 applicant	 shall	 have	 demonstrated	                    provide	 the	 applicant	 with	 a	 written	
        financial	 solvency	 based	 on	 the	                          notice	that	includes	a	comprehensive	
        information	provided	in	the	application,	                     list	 of	 the	 missing	 information.	 The	
        credit	 search,	 or	 pending	 litigation,	 if	                15-day	 time-frame	 for	 completion	
        any,	or	tax	liens,	if	any.                                    of	 the	 administrative	 completeness	
C.	 The	 Lottery	 shall	 not	 issue	 a	 license	 to	 an	              review	is	suspended	from	the	date	the	
    applicant	if	any	of	the	following	applies:                        notice	of	incompleteness	is	sent	until	
    1.	 The	 applicant	 is	 a	 minor,	 a	 partnership	                the	 applicant	 provides	 the	 Director	
        or	 LLP	 in	 which	 one	 of	 the	 partners	 is	               with	all	missing	information.
        a	 minor,	 an	 LLC	 in	 which	 one	 of	 the	             c.	 If	 the	 Director	 does	 not	 provide	
        members	is	a	minor,	or	a	corporation	in	                      the	 applicant	 with	 notice	 regarding	
        which	 a	 corporate	 officer,	 director,	 or	                 administrative	 completeness,	 the	
        manager	of	Lottery	sales	is	a	minor;                          application	shall	be	deemed	complete	
    2.	 The	 organization	 is	 an	 adult-oriented	                    15	days	after	receipt	by	the	Director.
        business	as	defined	in	A.R.S.	§	13-1422	             2.	 An	 applicant	 with	 an	 incomplete	
                                                       4
    application	shall	submit	all	of	the	missing	               b.	 Substantive	 review	 time-frame:	 75	
    information	within	20	days	of	service	of	                      days.
    the	notice	of	incompleteness.                              c.	 Overall	time-frame:	90	days.
3.	 If	an	applicant	fails	to	submit	a	complete	           6.	 If	 the	 Director	 does	 not	 provide	 the	
    application	within	the	time	allowed,	the	                  applicant	 with	 written	 notice	 granting	
    Director	 shall	 close	 the	 applicant’s	 file.	           or	 denying	 a	 license	 within	 the	 overall	
    An	 applicant	 whose	 file	 is	 closed	 and	               time-frame,	 the	 Director	 shall	 refund	
    who	later	wishes	to	obtain	a	license	shall	                the	applicant’s	application	fee	within	30	
    apply	again	according	to	this	Section.                     days	 after	 the	 expiration	 of	 the	 overall	
4.	 From	the	date	on	which	the	administrative	                 time-frame	or	the	time-frame	extension.
    completeness	 review	 of	 an	 application	 F.	 Display	 of	 license	 and	 point-of-sale	
    is	 finished,	 the	 Director	 shall	 complete	        material.
    a	 substantive	 review	 of	 the	 applicant’s	         1.	 A	 license	 issued	 under	 this	 Chapter	
    qualifications	in	no	more	than	75	days.                    shall	 be	 signed	 by	 the	 Director	 or	 the	
    a.	 If	an	applicant	is	found	to	be	ineligible,	            Director’s	 designated	 representative.	 A	
         the	 Director	 shall	 issue	 a	 written	              retailer	 shall	 post	 the	 license	 or	 a	 copy	
         notice	of	denial	to	the	applicant.                    of	 the	 license	 held	 by	 the	 retailer	 in	 a	
    b.	 If	an	applicant	is	found	to	be	eligible,	              conspicuous	place	on	the	premises	where	
         the	 Director	 shall	 issue	 a	 license	 to	          the	retailer	sells	Lottery	products.
         the	applicant	permitting	the	applicant	          2.	 A	 retailer	 shall	 prominently	 display	 the	
         to	 engage	 in	 business	 as	 a	 Lottery	             Americans	with	Disabilities	Act	Notice,	
         retailer	 under	 the	 terms	 of	 this	                Arizona	 Problem	 Gambling	 Helpline	
         Chapter.                                              toll-free	 telephone	 number,	 and	 the	
    c.	 If	 the	 Director	 finds	 deficiencies	                Authorized	Retailer	Notice.
         during	 the	 substantive	 review	 of	 an	        3.	 A	violation	of	this	subsection	is	grounds	
         application,	 the	 Director	 shall	 issue	            for	 disciplinary	 action	 according	 to	 the	
         a	written	request	to	the	applicant	for	               provisions	of	R19-3-204.
         additional	information.                      G.	 As	 a	 condition	 of	 licensure,	 each	 retailer	
    d.	 The	75-day	time-frame	for	substantive	            shall	 agree	 to	 release,	 indemnify,	 defend,	
         review	 is	 suspended	 from	 the	 date	          and	hold	harmless,	the	Lottery,	its	directors,	
         of	 a	 written	 request	 for	 additional	        officers,	 and	 employees,	 from	 and	 against	
         information	 until	 the	 date	 that	 all	        any	 and	 all	 liability,	 damage,	 cost,	 claim,	
         information	is	received.                         loss,	 or	 expense,	 including,	 without	
    e.	 If	 the	 applicant	 and	 the	 Director	           limitation,	 reasonable	 attorney’s	 fees	 and	
         mutually	agree	in	writing,	the	75-day	           disbursements,	 resulting	 from	 or	 arising	
         substantive	 review	 time-frame	 may	            by	 reason	 of	 loss	 of	 use,	 temporary	 or	
         be	 extended	 once	 for	 no	 more	 than	         permanent	 cessation	 of	 Lottery	 equipment,	
         18	days.                                         or	 terminal	 operations.	 This	 should	 not	 be	
5.	 For	the	purpose	of	A.R.S.	§	41-1072	et	               construed	in	any	way	to	affect	the	rights	of	
    seq.,	 the	 Director	 establishes	 the	 time-         the	retailer	to	recover	for	losses	caused	by	
    frames	 for	 a	 license	 to	 sell	 Lottery	           any	third	party.
    tickets:                                          H.	 Duration	and	renewal	of	license.
    a.	 Administrative	completeness	review	               1.	 A	 license	 issued	 under	 this	 Chapter	
         time-frame:	15	days.                                  shall	expire	three	years	from	the	license	
                                                     5
    issuance	date	by	operation	of	law.                        4.	 A	 license	 issued	 under	 this	 Chapter	 is	
2.	 A	 retailer	 may	 renew	 a	 license	 to	 sell	                subject	 to	 termination	 by	 the	 Director	
    Lottery	 tickets	 by	 submitting	 to	 the	                    according	 to	 the	 provisions	 of	 this	
    Director	 a	 verified	 application	 for	                      Chapter	before	the	expiration	date.
    renewal	of	the	current	license	on	forms	
    prescribed	by	the	Director	containing	the	            R19-3-203.	 Direct	Sales	by	Lottery
    information	 required	 in	 R19-3-202(A),	             The	Lottery	may	sell	Lottery	tickets	at	its	main	
    (B),	 and	 (D).	 By	 filing	 an	 application	         office,	any	branch	it	establishes	in	the	state,	or	
    for	 renewal,	 the	 retailer	 authorizes	 the	        any	promotional	event.
    Lottery	 to	 collect	 a	 $45.00	 renewal	 fee	
    by	 an	 electronic	 transfer	 of	 funds	 from	        R19-3-204.	 Revocation,	 Suspension,	 or	
    the	bank	account	from	which	the	Lottery	              Renewal	Denial	of	Retailer’s	License
    regularly	bills	the	retailer.                         A.	 A	 retailer’s	 license	 may	 be	 revoked,	
    a.	 An	 application	 for	 renewal	 of	 a	                 suspended,	or	denied	renewal	by	the	Director	
        Lottery	 license	 received	 by	 the	                  for	any	of	the	following	reasons:
        Director	 or	 deposited	 in	 the	 United	             1.	 The	 retailer	 violates	 a	 provision	 of	 the	
        States	 mail	 postage	 prepaid	 on	                       laws	of	the	state	of	Arizona,	the	United	
        or	 before	 the	 renewal	 date,	 shall	                   States,	or	the	regulations	of	the	Lottery,	
        authorize	the	retailer	to	operate	as	a	                   which	could	be	punished	by	jail	time	or	
        retailer	 until	 actual	 issuance	 of	 the	               imprisonment,	revocation	or	suspension	
        renewal	license.                                          of	 a	 Lottery	 license,	 or	 involves	 moral	
    b.	 The	Director	may	refuse	to	renew	a	                       turpitude;
        license	according	to	the	provisions	of	               2.	 The	retailer	offers	to	sell	a	Lottery	ticket,	
        R19-3-204.                                                sells	a	Lottery	ticket	or	pays	a	prize	on	
    c.	 A	 retailer	 holding	 more	 than	 one	                    any	 winning	 Lottery	 ticket	 to	 a	 person	
        license	 may	 elect	 to	 renew	 all	                      younger	than	21	years	old;
        licenses	 on	 the	 same	 date.	 If	 more	             3.	 The	 retailer	 sells	 a	 Lottery	 ticket	 to	 a	
        than	 one	 license	 is	 renewed	 under	                   person	using	a	public	assistance	voucher	
        this	 subsection,	 the	 application	 fee	                 issued	 by	 any	 public	 entity	 or	 an	
        shall	be	pro-rated	at	$1.25	per	month	                    electronic	 benefits	 transfer	 card	 issued	
        from	the	license	expiration	date	until	                   by	the	Arizona	Department	of	Economic	
        the	 next	 renewal	 date	 of	 the	 other	                 Security	to	purchase	the	Lottery	ticket	or	
        licenses	held	by	the	same	retailer.                       sells	a	Lottery	ticket	to	a	person	during	
3.	 A	license	issued	under	this	Chapter	that	                     the	same	transaction	in	which	the	person	
    has	expired	by	operation	of	law	for	failure	                  uses	 a	 public	 assistance	 voucher	 issued	
    to	renew	may	be	activated	and	renewed	                        by	 any	 public	 entity	 or	 an	 electronic	
    within	one	year	of	its	expiration	by	filing	                  benefits	 card	 issued	 by	 the	 Department	
    the	required	application	of	renewal	and	                      of	 Economic	 Security	 to	 purchase	 any	
    payment	 of	 the	 application	 renewal	 fee	                  goods	in	addition	to	the	Lottery	ticket;
    provided	for	in	this	Chapter.	If	a	license	               4.	 The	retailer	does	not	meet	the	minimum	
    has	been	suspended	for	one	or	more	years	                     sales	 requirements	 or	 does	 not	 follow	
    for	failure	to	renew,	a	new	application	for	                  the	 guidelines	 specified	 in	 writing	 by	
    license	must	be	made	and	a	new	license	                       the	 Director.	 The	 Lottery	 shall	 provide	
    issued	according	to	this	Chapter.                             minimum	 sales	 requirements	 and	
                                                      6
    guidelines	to	each	retailer	annually.	The	                   consumer	fraud,	or	any	other	fraud;
    Lottery	 may	 also	 post	 this	 information	        11.	Facts	 are	 discovered	 which,	 if	 known	
    on	 the	 Lottery’s	 web	 site	 for	 review.	            at	the	time	the	Lottery	retailer’s	license	
    The	 minimum	 sales	 requirements	 and	                 was	issued	or	renewed,	would	have	been	
    guidelines	shall	include:                               grounds	to	deny	licensure;
    a.	 The	 formula	 used	 to	 determine	 the	         12.	The	 retailer	 adds	 a	 minor	 as	 an	 owner,	
         minimum	 sales	 requirements	 and	                 partner,	or	officer	of	the	business;	
         guidelines	 for	 the	 specified	 time	         13.	The	retailer	or	an	officer	or	employee	of	
         period;                                            the	retailer	sells	a	ticket	or	pays	a	prize	
    b.	 Resources	 available	 to	 assist	                   to	 oneself,	 to	 any	 entity	 either	 wholly	
         retailers	in	achieving	minimum	sales	              owned	or	partially	owned	by	the	retailer,	
         requirements	and	guidelines;	and                   or	 any	 entity	 with	 10	 percent	 or	 more	
    c.	 The	process	the	Lottery	will	initiate	              of	 the	 same	 shareholders,	 partners,	 or	
         if	 a	 retailer	 fails	 to	 achieve	 the	          members	as	the	retailer;
         minimum	 sales	 requirements	 or	              14.	The	 retailer	 or	 an	 officer	 or	 employee	
         follow	the	specified	guidelines.                   of	the	retailer	sells	any	Lottery	product	
5.	 The	retailer	commits	an	act	that	impairs	               for	 consideration	 other	 than	 U.S.	
    the	retailer’s	reputation	for	honesty	and	              currency,	 check,	 credit	 card,	 debit	 card	
    integrity;                                              or,	if	a	player	requests,	the	exchange	of	a	
6.	 The	retailer	 does	 not	 make	 purchase	 or	            winning	Lottery	ticket;
    redemption	of	Lottery	tickets	convenient	           15.	The	 retailer	 or	 an	 officer	 or	 employee	
    and	readily	accessible	to	the	public;                   of	 the	 retailer	 sells	 a	 Lottery	 ticket	 by	
7.	 The	 retailer	 provides	 to	 the	 Lottery	 a	           telephone,	mail,	fax,	on	the	Internet,	or	
    statement,	 representation,	 warranty,	 or	             on	premises	other	than	the	one	listed	on	
    certificate	 that	 the	 Lottery	 determines	            the	Lottery	retailer’s	license;
    is	 false,	 incorrect,	 incomplete,	 or	 omits	     16.	The	retailer	or	an	officer	or	employee	of	
    relevant	information;                                   the	retailer	sells	an	altered	Lottery	ticket,	
8.	 The	 retailer’s	 actions	 cause	 two	                   an	 expired	 Lottery	 ticket,	 or	 a	 Lottery	
    payments	 to	 be	 returned	 to	 the	 Lottery	           ticket	 after	 the	 announced	 end	 of	 the	
    for	 insufficient	 funds	 in	 a	 12-month	              game;
    period;                                             17.	The	retailer	fails	to	display	the	Americans	
9.	 The	 retailer	 becomes	 insolvent,	 unable	             with	 Disabilities	 Act	 Notice,	 Arizona	
    or	unwilling	to	pay	debts,	or	is	declared	              Problem	 Gambling	 Helpline	 toll-free	
    bankrupt;                                               telephone	 number,	 Authorized	 Retailer	
10.	The	 retailer,	 or	 an	 officer,	 controlling	          Notice,	or	license;	
    agent,	or	local	manager	of	the	retailer:            18.	The	retailer	fails	to	report	a	change	event	
    a.	 Is	convicted	of	a	felony,	felony	theft	             defined	in	R19-3-210;	or
         that	is	designated	as	a	misdemeanor,	          19.	The	retailer	fails	to	comply	or	cooperate	
         misdemeanor	 theft,	 or	 a	 crime	                 with	an	investigation	concerning	Arizona	
         involving	 gambling	 or	 fraudulent	               state	laws	or	Lottery	regulations.
         schemes	and	artifices;	or                  B.	 The	 Director	 may	 on	 the	 Director’s	 own	
    b.	 Is	 the	 subject	 of	 a	 civil	 order,	         motion,	 and	 shall	 on	 an	 allegation	 of	 a	
         judgment,	 or	 decree	 of	 a	 federal	 or	     violation	 of	 a	 provision	 of	 the	 laws	 of	 the	
         state	authority	for	misrepresentation,	        state	 of	 Arizona,	 the	 regulations	 of	 the	
                                                   7
    Lottery,	 or	 the	 written	 complaint	 of	 any	             to	 Revoke	 a	 Retailer’s	 License	 with	 a	
    person,	investigate	an	act	of	a	retailer	within	            finding	of	emergency	action	shall:
    30	days	after	receiving	the	information.	The	               a.	 Immediately	cease	all	sales	of	Lottery	
    Director	may	temporarily	suspend	a	license	                     products,	and
    under	 an	 emergency	 action,	 and	 impose	                 b.	 Surrender	the	retailer’s	license	and	all	
    specific	 conditions	 on	 a	 retailer	 during	 the	             other	 Lottery	 property	 and	 products	
    suspension	 and	 commence	 an	 action	 to	                      upon	 request	 by	 the	 Director’s	
    permanently	 revoke	 a	 license	 issued	 under	                 representative.
    this	Article	 if	 the	 retailer	 is	 found	 to	 have	   3.	 If	the	retailer	fails	to	settle	the	financial	
    committed	 an	 act	 or	 omission	 listed	 in	               account	and	surrender	the	license	and	all	
    subsection	(A).	                                            other	Lottery	property	and	products,	the	
C.	 The	 Lottery	 shall	 mail	 or	 hand-deliver	 a	             Director	shall	take	steps	allowed	by	law	
    notice	 of	 action	 to	 the	 retailer	 to	 suspend	         to	secure	payment	and	return	of	Lottery	
    or	 revoke	 a	 license.	 Written	 notice	 to	 the	          products	and	property.
    retailer	is	effective	notice	if	it	is	sent	or	hand-     4.	 The	 Director	 shall	 notify	 the	 retailer	
    delivered	to	the	address	in	the	application	or	             in	 writing	 within	 five	 days	 of	 taking	
    the	last	address	provided	under	R19-3-210.                  an	 emergency	 action	 that	 an	 expedited	
D.	 Emergency	action.                                           hearing	 or	 informal	 conference	 may	
    1.		 The	Director	may	disable	a	retailer’s	on-              be	 obtained	 before	 the	 Office	 of	
         line	terminal	and	suspend	sales	of	Lottery	            Administrative	 Hearings	 under	 R2-19-
         tickets	if	the	public	welfare	is	threatened	           103	and	R2-19-110.
         pending	 a	 proceeding	 for	 revocation,	 E.	 Procedure	 for	 hearings.	 A	 retailer	 may	
         suspension,	or	denial	of	renewal,	in	the	          request	 a	 hearing	 before	 the	 Office	 of	
         following	circumstances:                           Administrative	 Hearings	 regarding	 a	
         a.	 The	 retailer’s	 bank	 account	 has	           revocation,	 suspension,	 or	 license	 denial.	
             insufficient	funds	when	the	Lottery’s	         The	 procedures	 and	 requirements	 set	 forth	
             regularly-scheduled	            electronic	    in	 A.R.S.	 Title	 41,	 Chapter	 6,	 Article	 10	
             transfer	 of	 the	 retailer’s	 account	 is	    apply	to	hearings	under	this	subsection.
             returned	 by	 the	 bank	 as	 insufficient	 F.	 Procedure	 for	 filing	 an	 appeal	 of	 a	 final	
             funds	 or	 closed	 account	 and	 the	          administrative	decision:
             retailer	does	not	immediately	pay	the	         1.	 An	 appeal	 to	 the	 Lottery	 Commission	
             insufficiency;                                     is	 deemed	 an	 optional	 motion	 for	
         b.	 The	 retailer	 fails	 to	 comply	 or	              rehearing.
             cooperate	 with	 an	 investigation	                a.	 A	 Notice	 of	 Appeal	 to	 the	 Lottery	
             concerning	 Arizona	 state	 laws	 or	                  Commission	 shall	 be	 filed	 within	
             Lottery	regulations;                                   10	 days	 of	 receipt	 of	 the	 final	
         c.	 The	 retailer,	 corporate	 officer,	                   administrative	 decision.	 The	 Notice	
             director,	 partner,	 LLC	 member,	 or	                 shall	contain:
             premises	manager	is	charged	with	a	                    i.	 A	 copy	 of	 the	 Director’s	 final	
             felony,	felony	theft	that	is	designated	                    administrative	decision;	and
             as	 a	 misdemeanor,	 misdemeanor	                      ii.	 The	alleged	factual	or	legal	error	
             theft,	or	a	crime	involving	gambling	                       in	the	final	administrative	decision	
             or	fraudulent	schemes	and	artifices.                        from	which	the	appeal	is	taken.
    2.	 A	retailer	who	receives	a	Notice	of	Intent	             b.	 A	 person	 appealing	 the	 decision	 of	
                                                      8
            the	Director	may	file	a	written	brief	            this	Chapter.
            stating	 the	 position	 on	 the	 appeal	          1.	 Equipment	location.	A	retailer	shall:
            within	 30	 days	 after	 receipt	 of	 the	            a.	 Locate	 the	 equipment	 at	 a	 site	
            decision	being	appealed.                                  approved	 by	 the	 Lottery	 within	 the	
        c.	 The	Lottery	may	file	a	response	brief	                    retailer’s	place	of	business	and	shall	
            within	 15	 days	 after	 receipt	 of	 the	                not	 move	 the	 equipment	 from	 that	
            appellant’s	brief.                                        site	without	prior	approval	from	the	
        d.	 The	Commission	may	rule	based	on	                         Lottery.
            the	 written	 briefs,	 or	 if	 requested,	            b.	 Ensure	 that	 electrical	 service	 to	
            may	provide	for	oral	argument.                            the	 equipment	 location	 is	 installed	
        e.	 The	Commission	shall	make	its	ruling	                     according	 to	 the	 specifications	
            on	the	appeal	on	the	record.                              established	 by	 the	 Lottery.	 The	
        f.	 A	 final	 decision	 of	 the	 Lottery	                     retailer	shall	pay	monthly	charges	for	
            Commission	 is	 subject	 to	 judicial	                    electrical	service.
            review	under	A.R.S.	Title	12,	Chapter	            2.	 Equipment	conversion.
            7,	Article	6.                                         a.	 If	the	Lottery	deems	it	necessary,	the	
    2.	 A	 decision	 of	 the	 Director	 accepting,	                   Lottery	 shall	 modify	 its	 on-line	 or	
        modifying,	or	rejecting	the	recommended	                      instant	gaming	system	by:
        decision	 of	 the	 Administrative	 Law	                       i.	 Changing	         equipment	          or	
        Judge	 is	 a	 final	 administrative	 decision	                     accessories;	or
        subject	 to	 judicial	 review	 under	A.R.S.	                  ii.	 Converting	 to	 another	 on-line	 or	
        Title	12,	Chapter	7,	Article	6.                                    instant	gaming	system.
G.	 Revocation	of	a	retailer’s	license.                           b.	 A	 retailer	 shall	 assist	 the	 Lottery	 to	
    1.	 A	 retailer	 who	 receives	 a	 notice	 of	 the	               the	extent	reasonable	and	practicable	
        final	 administrative	 decision	 revoking	                    to	 accomplish	 a	 modification	 of	 the	
        the	retailer’s	license	shall:                                 on-line	or	instant	gaming	system	in	a	
        a.	 Immediately	cease	all	sales	of	Lottery	                   timely	and	economical	fashion.
            products,	and                                     3.	 The	Lottery	shall	not	be	liable	for	damages	
        b.	 Surrender	 the	 license	 and	 all	 other	             of	any	kind	due	to	interruption	or	failure	
            Lottery	 property	 and	 products	                     of	any	Lottery-issued	equipment.
            upon	 request	 of	 the	 Director’s	               4.	 Equipment	 care.	 A	 retailer	 shall	 at	 all	
            representative.                                       times:
    2.	 If	the	retailer	fails	to	settle	the	financial	            a.	 Operate	the	Lottery-issued	equipment	
        account	and	surrender	the	license	and	all	                    and	accessories	only	in	the	ordinary	
        other	Lottery	property	and	products,	the	                     course	 of	 its	 Lottery	 business	 and	
        Director	shall	 take	 all	steps	 allowed	by	                  only	 according	 to	 the	 requirements	
        law	to	secure	payment	and	the	return	of	                      established	by	the	Lottery;	and
        Lottery	products	and	property.                            b.	 Exercise	diligence	and	care	to	prevent	
                                                                      failures	 and	 malfunctions	 of,	 and	
R19-3-205.	 Lottery-issued	Equipment                                  damage	 to	 the	 equipment	 and	 other	
A.	 A	retailer	shall	only	sell	or	validate	Lottery	                   property	 of	 the	 Lottery,	 or	 property	
    products	 using	 authorized	 Lottery-issued	                      of	Lottery	contractors.
    equipment	 in	 accordance	 with	 the	Act	 and	            5.	 Equipment	 maintenance.	 A	 retailer	
                                                                  shall:
                                                          9
        a.	 Maintain	        the	     Lottery-issued	           of	 Lottery	 equipment	 and	 sale	 of	 Lottery	
            equipment	and	accessories	in	a	clean	               products,	which	may	take	place	at	a	retailer’s	
            and	orderly	condition;                              place	of	business.
        b.	 Replace	paper	stock	in	the	equipment	           B.	 A	 retailer	 shall	 ensure	 that	 all	 employees	
            as	necessary;	and                                   selling	 Lottery	 products	 or	 operating	
        c.	 Minimize	equipment	downtime	by:                     Lottery	 equipment	 are	 properly	 trained	 in	
            i.	 Notifying	 the	 Lottery	 or	 its	               these	areas	and	have	access	to	all	materials	
                 contractor	 immediately	 of	 any	              provided	by	the	Lottery	relating	to	the	sales	
                 equipment	 failure,	 malfunction,	             and	promotion	of	Lottery	products	and	the	
                 damage,	or	accident;	and                       operation	of	Lottery	equipment.
            ii.	 Making	 the	 equipment	 available	         C. A	retailer	shall	be	responsible	for:
                 for	 repair,	 adjustment,	 or	                 1.	 Any	compensation	payable	to	employees	
                 replacement	 at	 all	 times	 during	               for	 participation	 in	 Lottery	 training	
                 the	 retailer’s	 regular	 business	                courses	and	instruction;	and
                 hours.                                         2.	 All	other	costs	associated	with	employee	
    6.	 Equipment	supplies.	A	retailer	shall:                       training.
        a.	 Order	 and	 use	 equipment	 supplies	           D.	 A	 retailer	 shall	 provide	 all	 employees	
            exclusively	 from	 the	 Lottery	 or	 its	           operating	 Lottery	 equipment	 with	 copies	
            designated	 contractor.	 The	 Lottery	              of	 the	 procedures	 manuals,	 bulletins,	 and	
            shall	 furnish	 equipment	 supplies,	 at	           technical	materials	furnished	to	the	retailer	
            no	cost,	to	the	retailer;	and                       by	the	Lottery	or	its	contractors.
        b.	 Maintain	 a	 sufficient	 inventory	 of	
            Lottery	equipment	supplies.             R19-3-207.	 Compliance	Investigations
                                                    A.	 A	 retailer	 shall	 comply	 with	 all	 provisions	
B.	 A	retailer	may	sell	tickets	using	its	authorized	
    Lottery	 product	 vending	 machine	 in	             of	the	Act	and	this	Chapter.	The	Lottery	may	
    accordance	with	the	Act	and	this	Chapter.           conduct	inspections	to	verify	compliance	and,	
    1.	 A	 retailer	 shall	 establish	 safeguards	 to	  if	necessary,	order	an	audit	or	investigation	
        ensure	 that	 Lottery	 product	 vending	        of	the	business	for	verification.
        machines	 are	 not	 operated	 by	 persons	  B.	 A	 retailer	 shall	 allow	 investigations	 during	
        under	the	legal	age	to	purchase	Lottery	        the	 retailer’s	 regular	 business	 hours	 by	
        tickets.                                        authorized	Lottery	investigators	to	determine	
    2.	 The	 Lottery	 product	 vending	 machine	        whether	 the	 retailer	 is	 complying	 with	 the	
        shall	 be	 placed	 in	 an	 area	 of	 the	 store	provisions	of	the	Act	and	this	Chapter.
        that:                                       C.	 A	 retailer	 shall	 keep	 all	 invoices,	 records,	
        a.	 Is	 visible	 to	 store	 personnel	 and	     bills	and	other	papers	and	documents	relating	
            players;	and                                to	 the	 purchase,	 sale,	 and	 validation	 of	
        b.	 Is	easily	accessible	to	players.            Lottery	products	that	are	kept	in	the	normal	
    3.	 The	 retailer	 shall	 maintain	 an	 adequate	   course	of	business	for	tax	purposes	for	three	
        supply	of	instant	tickets.                      years.	 These	 records	 and	 papers	 shall	 be	
                                                        easily	 accessible	 to	 the	 Lottery-authorized	
R19-3-206.	 Retailer	Training                           investigator	 for	 examination	 or	 audit.	 The	
A.	 A	 retailer	 shall	 participate	 in	 training	      retailer	may	use	non-paper	types	of	storage,	
    provided	 by	 the	 Lottery	 in	 the	 operation	     such	as	microfiche	and	the	retailer	may	store	
                                                        records	at	a	central	location.
                                                       10
                                                           C.	 A	retailer	against	whom	a	penalty	is	assessed	
R19-3-208.	 Penalties                                          shall	 pay	 the	 penalty	 to	 the	 Lottery	 by	 the	
A.	 The	 Director	 shall	 assess	 a	 civil	 penalty	           31st	day	after	the	retailer	receives	notice	of	
    against	 a	 retailer	 for	 any	 of	 the	 following	        imposition	of	the	civil	penalty,	if	the	retailer	
    acts	of	the	retailer:                                      does	 not	 request	 a	 hearing	 as	 provided	 in	
    1.	 Offering	to	sell	or	selling	a	Lottery	ticket	          subsection	(D).
        to	any	person	who	is	under	21	years	of	            D.	 A	 retailer	 may	 request	 a	 hearing	 regarding	
        age;                                                   imposition	of	a	civil	penalty.	The	procedures	
    2.	 Selling	a	Lottery	ticket	to	a	person	who	              and	 requirements	 set	 forth	 in	 A.R.S.	 Title	
        uses	 either	 a	 public	 assistance	 voucher	          41,	Chapter	6,	Article	10	apply	to	hearings	
        issued	 by	 any	 public	 entity	 or	 an	               under	this	subsection.
        electronic	 benefits	 transfer	 card	 issued	      E.	 A	 decision	 of	 the	 Director	 accepting,	
        by	the	Arizona	Department	of	Economic	                 modifying	 or	 rejecting	 the	 recommended	
        Security	to	purchase	the	ticket	or	share;	             decision	 of	 the	 Administrative	 Law	 Judge	
        or                                                     is	 a	 final	 administrative	 decision	 subject	
    3.	 Selling	a	Lottery	ticket	during	the	same	              to	 judicial	 review	 under	 A.R.S.	 Title	 12,	
        transaction	in	which	a	person	uses	either	             Chapter	7,	Article	6.
        a	 public	 assistance	 voucher	 issued	 by	            1.	 If	 the	 retailer	 decides	 not	 to	 seek	
        any	public	entity	or	an	electronic	benefits	               judicial	 review	 of	 the	 Director’s	 final	
        transfer	 card	 issued	 by	 the	 Arizona	                  administrative	decision,	the	retailer	shall	
        Department	 of	 Economic	 Security	 to	                    pay	the	civil	penalty	to	the	Lottery	by	the	
        purchase	 any	 goods	 in	 addition	 to	 the	               36th	 day	 after	 the	 retailer	 receives	 the	
        Lottery	ticket.                                            Director’s	decision.
B.	 The	Director	shall	on	the	written	complaint	               2.	 If	 the	 retailer	 decides	 to	 seek	 judicial	
    of	 any	 person,	 and	 shall	 upon	 receipt	 of	               review	 of	 the	 Director’s	 final	
    information	 indicating	 that	 a	 retailer	 has	               administrative	decision,	the	retailer	shall	
    committed	 an	 act	 listed	 in	 subsection	 (A),	              pay	the	civil	penalty	to	the	Lottery	by	the	
    investigate	 an	 act	 of	 the	 retailer	 listed	 in	           36th	 day	 after	 the	 date	 of	 the	 Superior	
    subsection	 (A).	 The	 Director	 shall	 give	                  Court’s	decision.
    notice	 to	 the	 retailer	as	 provided	 in	A.R.S.	         3.	 If	 the	 retailer	 decides	 to	 appeal	 the	
    §§	41-1092.03	and	41-1092.04	of	imposition	                    Superior	 Court’s	 decision,	 the	 retailer	
    of	 a	 civil	 penalty	 if	 the	 Director	 finds	 that	         shall	pay	the	civil	penalty	to	the	Lottery	
    the	 retailer	 has	 committed	 an	 act	 listed	 in	            by	 the	 36th	 day	 after	 the	 date	 of	 the	
    subsection	(A).	The	civil	penalty	for	an	act	                  decision	on	appeal.
    listed	in	subsection	(A)	is:                               4.	 A	 retailer	 shall	 pay	 interest	 at	 the	 rate	
    1.	 In	 an	 amount	 up	 to	 $300	 for	 the	 first	             provided	 in	A.R.S.	 §	 44-1201	 from	 the	
        violation	within	a	12-month	period;                        date	 final	 judgment	 assessing	 a	 civil	
    2.	 In	an	amount	more	than	$300	and	up	to	                     penalty	 is	 entered	 until	 satisfaction	 of	
        $500	 for	 the	 second	 violation	 within	 a	              the	judgment.
        12-month	period;	and
    3.	 In	an	amount	more	than	$500	and	up	to	 R19-3-209.	 Notice	and	Service
        $1,000	 for	 the	 third	 violation	 within	 a	 Service	 shall	 be	 deemed	 made	 by	 the	 Lottery	
        12-month	period.	                                  for	 any	 notice,	 decision,	 order,	 subpoena,	 or	

                                                      11
other	process	when	the	document	or	a	copy	is	                   13.	Change	in	bank	account	from	which	the	
delivered	to	the	retailer,	guarantor,	or	the	attorney	              Lottery’s	 electronic	 funds	 transfers	 are	
of	record,	or	is	deposited	as	certified	mail	in	the	                made;
United	 States	 Postal	 Service,	 addressed	 to	 the	           14.	Change	 in	 mailing	 address	 or	 phone	
retailer	or	guarantor	at	the	address	listed	on	the	                 number	of	retailer	or	guarantor;	or
application	for	license	or	as	noticed	as	a	change	              15.	The	 applicant,	 a	 director	 or	 officer	 of	
event	under	R19-3-210.                                              a	 corporation,	 a	 member	 of	 a	 limited	
                                                                    liability	 company,	 or	 a	 local	 manager	
R19-3-210.	 Reportable	Events                                       is	 charged	 with	 a	 felony,	 felony	
A	 retailer	 shall	 report	 the	 following	 events	 to	             theft	 designated	 as	 a	 misdemeanor,	
the	Lottery	in	writing	at	least	10	business	days	                   misdemeanor	theft,	embezzlement,	or	a	
before	the	event	or	as	otherwise	specified	in	this	                 crime	involving	gambling.
Section:
    1.	 Change	in	business	location;                        R19-3-211.	 Change	 of	 Ownership	 or	
    2.	 Sale	of	ownership	of	the	business;                  Business	Location
    3.	 Death	 of	 a	 licensed	 retailer	 within	 10	       A	 license	 is	 not	 assignable	 or	 transferable.	 A	
        business	days	after	the	death	occurs;               license	 authorizes	 the	 entity	 described	 in	 the	
    4.	 Addition	 or	 removal	 of	 a	 partner	 in	          application	 to	 sell	 Lottery	 tickets	 only	 at	 the	
        a	 partnership	 or	 a	 limited	 liability	          specific	premise	stated	on	the	license.
        partnership;                                            1.	 If	 there	 is	 a	 change	 of	 ownership,	
    5.	 Substantial	change	in	ownership	of	a	non-                   business	 location,	 or	 for	 changes	 listed	
        public	 corporation	 with	 unencumbered	                    in	R19-3-210(1)	through	R19-3-210(7),	
        assets	 of	 less	 than	 $100,000	 by	 a	                    the	retailer	shall:
        transfer	of	stock	(equity)	that	removes	a	                  a.	 Surrender	the	license	to	the	Director	
        shareholder	 that	 holds	 10%	 or	 more	 of	                    on	the	date	of	the	event;
        a	corporation	or	adds	a	shareholder	that	                   b.	 Not	 sell	 any	 additional	 Lottery	
        holds	10%	or	more	of	a	corporation;                             tickets;
    6.	 Merger	 or	 acquisition	 of	 the	 licensed	                 c.	 Not	allow	the	sale	of	Lottery	products	
        entity;                                                         under	a	subcontract.
    7.	 Addition	 or	 removal	 of	 a	 member	 in	 a	            2.	 If	the	retailer	does	not	notify	the	Lottery	
        limited	liability	company;                                  of	 a	 change	 in	 ownership	 or	 business	
    8.	 Addition	 or	 removal	 of	 a	 controlling	                  location	at	least	10	business	days	before	
        agent	 or	 designated	 corporate	 contact	                  the	change,	the	retailer	may	not	receive	
        representative;                                             credit	for	any	activated	partial	packs	of	
    9.	 Divorce	 or	 legal	 separation	 action	 filed	              tickets.
        by	 an	 individual	 retailer	 or	 retailer’s	           3.	 The	new	owner	shall	apply	for	a	license	
        spouse,	 if	 the	 licensed	 entity	 is	 a	 sole	            according	to	R19-3-202.
        proprietorship	or	a	partnership;
    10.	Retailer	 or	 guarantor	 becomes	                   R19-3-212.	 Retailer	Compensation
        insolvent;                                          A.	 The	Lottery	shall	pay	a	retailer	a	commission	
    11.	Retailer	or	guarantor	files	bankruptcy;                 of	 six	 and	 one-half	 percent	 of	 the	 price	 of	
    12.	Retailer	 is	 sued	 for	 a	 monetary	                   each	 Lottery	 ticket	 sold.	 The	 Lottery	 shall	
        judgment;                                               not	 pay	 a	 retailer	 a	 commission	 on	 sales	

                                                       12
    transactions	that	are	prohibited	by	any	state	            facsimiles	 or	 copies	 of	 selection	 slips,	
    or	federal	statute	or	rule.                               or	other	materials	that	are	not	printed	or	
B.	 In	 addition	 to	 the	 compensation	 specified	           approved	 by	 the	 Lottery.	 Plays	 may	 be	
    in	 subsection	 (A),	 the	 Lottery	 shall	 pay	 an	       entered	by	using	the	Lottery	equipment	
    incentive	 of	 up	 to	 one-half	 percent	 on	 the	        touch	 screen	 or	 by	 using	 a	 selection	
    price	 of	 each	 ticket	 sold	 to	 a	 retailer	 who	      slip	 provided	 by	 the	 Lottery	 and	 hand-
    meets	 specifications	 established	 in	 writing	          marked	by	the	player.
    by	 the	 Director.	 The	 written	 specifications	 E.	 Instant	tickets.
    shall	 be	 provided	 to	 the	 retailer	 before	 the	  1.	 All	instant	ticket	sales	are	final.
    incentive	program	begins.                             2.	 The	 retailer	 shall	 sell	 instant	 tickets	
                                                              within	each	pack	in	sequential	order.
R19-3-213.	 Ticket	Sales	to	Players                       3.	 The	retailer	shall	not	sell	an	instant	ticket	
A.	 A	Lottery	retailer	shall	sell	only	the	type	of	           after	the	announced	end	of	game.
    Lottery	product	authorized	by	the	Lottery.
    1.	 The	Director	may	require	a	retailer	to	sell	 R19-3-214.	 Payments	to	Lottery
         any	 one	 or	 any	 combination	 of	 Lottery	 A.	 Money	 collected	 from	 the	 sale	 of	 Lottery	
         game	products.                                   tickets	 are	 trust	 monies	 required	 to	 be	
    2.	 The	Director	may	require	a	retailer	to	sell	      collected	 for	 the	 benefit	 of	 the	 state	 and	
         instant	 tickets	 as	 a	 condition	 of	 selling	 shall	 be	 paid	 to	 the	 Lottery	 according	 to	
         on-line	tickets.                                 subsection	(B).	
B.	 A	retailer	shall	only	sell	or	validate	Lottery	 B.	 A	 retailer	 shall	 pay	 for	 ticket	 sales	 in	 the	
    products	 using	 authorized	 Lottery-issued	          following	manner:
    equipment	 in	 accordance	 with	 the	Act	 and	        1.	 Pay	 to	 the	 Lottery	 each	 Friday,	 by	 an	
    this	Chapter.                                             electronic	funds	transfer,	the	amount	due	
C.	 Other	 than	 informing	 a	 player	 of	 publicly	          from	the	sale	of	its	Lottery	tickets	for	the	
    available	game	odds,	a	retailer	shall	not	make	           seven-day	period	ending	at	the	close	of	
    any	 representation	 to	 a	 player	 regarding	 a	         business	on	the	previous	Saturday.	
    likelihood	to	win,	a	guaranteed	return	on	a	          2.	 The	 amount	 due	 for	 on-line	 tickets	
    percentage	 of	 purchases,	 or	 better	 chances	          means	 the	 retailer’s	 gross	 on-line	 sales	
    or	odds	of	winning.                                       revenue,	minus	any	promotional	tickets,	
D.	 On-line	tickets.                                          prize	 winnings	 paid	 out	 by	 the	 retailer,	
    1.	 All	 on-line	 ticket	 sales	 are	 final.	 If	 a	      the	 retailer’s	 sales	 commission	 and	
         retailer	accepts	a	returned	on-line	ticket	          plus	 or	 minus	 any	 accounting	 or	 prize	
         from	 a	 player	 or	 generates	 an	 on-line	         adjustments.
         ticket	 that	 is	 refused	 by	 the	 player	 and	 3.	 The	 amount	 due	 for	 instant	 tickets	 is	
         the	retailer	does	not	resell	the	ticket,	the	        based	on	billing	for	instant	ticket	packs	
         Lottery	 shall	deem	 the	 on-line	 ticket	 to	       issued	to	a	retailer	with	billing	occurring	
         be	owned	by	the	retailer.                            45	days	after	a	pack	is	activated,	or	after	
    2.	 A	retailer	shall	not	devote	more	than	15	             85%	 of	 winning	 tickets	 in	 the	 pack	 are	
         consecutive	 minutes	 of	 sales	 to	 an	 on-         validated,	whichever	occurs	first,	minus	
         line	game	purchase	by	any	single	player	             any	promotional	tickets,	returned	tickets,	
         if	other	customers	are	waiting	to	make	a	            prize	 winnings	 paid	 out	 by	 the	 retailer,	
         purchase.                                            the	 retailer’s	 sales	 commission	 and	
    3.	 A	 retailer	 shall	 not	 permit	 the	 use	 of	
                                                     13
       plus	 or	 minus	 any	 accounting	 or	 prize	       B.	 A	retailer	shall	pay	all	winning	prizes	up	to	
       adjustments.                                           and	including	$100,	and	may	pay	all	winning	
   4.	 The	 retailer	 shall	 deposit	 funds	 in	 a	           prizes	from	$101	up	to	and	including	$599.	
       timely	manner	into	a	bank	account	from	                A	 winning	 instant	 ticket	 shall	 satisfy	 the	
       which	the	electronic	funds	transfer	will	              validation	 criteria	 in	 R19-3-705	 and	 R19-
       be	made	to	the	Lottery.                                3-706	and	 have	 a	 proper	validation	receipt	
       a.	 The	retailer	shall	provide	the	Lottery	            issued	 by	 the	 terminal.	 A	 winning	 on-line	
           with	 an	 electronic	 funds	 transfer	             ticket	shall	satisfy	the	validation	criteria	in	
           authorization	 showing	 a	 valid	 bank	            R19-3-406	and	R19-3-407	and	have	a	proper	
           account	 number	 from	 which	 the	                 validation	receipt	issued	by	the	terminal.
           amounts	 due	 the	 Lottery	 will	 be	          C.	 Prizes	shall	be	paid	by	cash,	check,	money	
           transferred;	and                                   order,	 or	 if	 requested	 by	 the	 player,	 by	
       b.	 The	 retailer	 shall	 notify	 the	 Lottery	        Lottery	tickets.
           of	any	bank	account	changes	within	
           10	business	days	before	the	effective	         R19-3-216.	 Distribution	 and	 Return	 of	
           date	of	the	change.                            Instant	Tickets
   5.	 If	a	retailer’s	payment	is	returned	to	the	        The	Lottery	or	its	authorized	representative	shall	
       Lottery	for	any	reason,	the	retailer	shall	        distribute	 instant	 tickets	 and	 accept	 returned	
       deliver	a	certified	check,	cashier’s	check,	       instant	tickets	as	follows:
       or	money	order,	or	make	a	direct	deposit	              1.	 Distribute	 to	 each	 retailer	 the	 quantity	
       for	the	amount	due	to	the	Lottery’s	bank	                  of	tickets	on	which	the	Lottery	and	the	
       account	within	24	hours	of	notification.	                  retailer	 agree,	 based	 on	 the	 retailer’s	
       Additionally,	if	the	retailer’s	payment	is	                anticipated	volume	of	sales.
       returned	to	the	Lottery:	                              2.	 Collect	 full	 and	 partial	 packs	 of	 tickets	
       a.	 The	 Director	 may	 require	 that	 the	                during	 a	 game	 if	 the	 Lottery	 and	 the	
           retailer’s	 Lottery	 equipment	 be	                    retailer	determine	that	the	retailer’s	sales	
           disabled;                                              for	a	specific	game	are	minimal.
       b.	 The	Director	may	revoke,	suspend,	or	              3.	 Collect	 full	 and	 partial	 packs	 of	 tickets	
           deny	renewal	of	the	retailer’s	license	                when	a	game	is	ended.	The	Lottery	shall	
           according	to	R19-3-204;                                announce	the	ending	date	of	a	game	and	
       c.	 The	Director	may	require	the	payment	                  communicate	 this	 information	 to	 all	
           for	instant	tickets	upon	activating	the	               retailers	in	a	timely	manner.
           pack	for	sale;	and                                 4.	 Credit	to	the	retailer,	in	the	billing	period	
       d.	 The	Director	may	require	the	return	                   following	 the	 receipt	 of	 the	 Lottery-
           of	the	retailer’s	current	inventory	of	                authorized	returned	tickets,	the	net	dollar	
           instant	 tickets	 and	 suspend	 further	               value	 of	 any	 unopened	 full	 packs	 and	
           delivery	of	instant	tickets.                           partial	packs	of	tickets.

R19-3-215.	 Prize	Validation	and	Payment           R19-3-217.	 Unaccounted	 and	 Stolen	
A.	 A	 retailer	 shall	 provide	 prize	 winner	 Tickets
    validation	 and	 payment	 services	 to	 any	 A.	 All	Lottery	tickets	issued	to	a	retailer	shall	
    Lottery	 claimant	 regardless	 of	 where	 the	   be	 the	 property	 of	 the	 retailer	 until	 their	
    ticket	was	purchased.	                           return	is	acknowledged	by	the	Lottery.

                                                     14
B.	 The	retailer	shall	report	stolen	Lottery	tickets	         that	has	been	reported	as	stolen	or	a	ticket	
    to	the	local	law	enforcement	agency	and	the	              unaccounted	for	by	the	retailer,	the	Lottery	
    Lottery	Investigations	unit	within	one	hour	              shall	hold	the	prize	money	in	trust	pending	
    from	 the	 time	 the	 theft	 occurs	 or	 the	 theft	      the	 findings	 of	 an	 investigation	 by	 an	
    first	could	have	been	discovered.                         appropriate	law	enforcement	agency.
    1.	 The	retailer	shall	provide	a	copy	of	the	
         written	police	report	to	the	Lottery.
    2.	 The	 retailer	 shall	 cooperate	 in	 any	
         investigation	 and	 prosecution	 of	 the	
         theft.
    3.	 The	 retailer	 shall	 sign	 an	 affidavit	
         providing	 the	 details	 as	 known	 by	 the	
         retailer.
    4.	 The	 retailer	 shall	 maintain	 and	
         report	 current	 game,	 pack,	 and	 ticket	
         inventory.	
C.	 After	 sustaining	 a	 loss	 from	 stolen	 tickets,	
    the	retailer’s	insurance	is	the	loss	payee.
D.	 If	 there	 is	 insufficient	 insurance	 to	 pay	 for	
    the	 retailer’s	 loss	 and	 the	 retailer	 complies	
    with	subsection	(B),	the	Lottery	will	credit	
    the	retailer’s	account	for	instant	tickets	that	
    are	stolen	as	follows:
    1.	 The	 Lottery	 shall	 credit	 all	 charges	
         against	 the	 retailer’s	 account	 for	 the	
         stolen	 tickets	 if	 the	 Lottery	 determines	
         that	 the	 theft	 was	 from	 a	 source	 not	
         associated	 with	 the	 retailer	 or	 by	 an	
         unknown	party.
    2.	 The	 Lottery	 shall	 credit	 50%	 of	 the	
         charges	 against	 the	 retailer’s	 account	
         for	 the	 stolen	 tickets	 if	 the	 Lottery	
         determines	 that	 the	 theft	 was	 from	 an	
         employee,	manager,	officer,	director,	or	
         a	relative	with	access	to	Lottery	tickets.
    3.	 Each	retailer	is	limited	to	no	more	than	
         two	 stolen	 ticket	 credit	 requests	 within	
         any	12-month	period.
E.	 The	Lottery	shall	not	issue	a	credit	for	stolen	
    tickets	 if	 the	 Lottery	 finds	 that	 the	 retailer	
    was	negligent	or	did	not	enforce	reasonable	
    loss-prevention	procedures	to	protect	tickets,	
    ticket	processing,	and	ticket	accounting.
F.	 If	 a	 prize	 claim	 is	 made	 against	 a	 ticket	
                                                         15
                    Retailers	and	Employees
                                    Notice
The	Security	Department	of	the	Arizona	Lottery	keeps	track	of	all	activities	that	in-
volve	the	Lottery,	which	includes	ScratchersSM	tickets	and	online	games.	If	suspicious	
activity	is	detected,	the	Arizona	Lottery	Security	Unit	will	initiate	an	investigation	
that	could	lead	to	local	police	involvement,	arrests,	and	convictions.

Persons	involved	in	the	THEFT	or	FRAUDULENT	USE	of	Lottery	tickets	may	be	
CRIMINALLY PROSECUTED.

Persons	prosecuted	for	these	crimes	may	receive	a	PRISON	SENTENCE	of	up	to
10	YEARS	and	a	CRIMINAL	RECORD.

          FOLLOW THESE SIMPLE RULES:

          •	Retailers	and	their	employees	are	not	allowed	to	play	any	of	the	Lottery	
          		games	(Scratchers	or	online)	while	working.

          •	Retailers	and	their	employees	are	not	allowed	to	validate	their	own	tickets
          		(Scratchers	or	online).

          •	Retailers	and	their	employees	must	purchase	their	tickets	from	an	on-duty
          		employee	and	must	pay	for	the	tickets	prior	to	playing	the	games
          		(Scratchers	or	online).

          •	Retailers	are	advised	to	follow	Arizona	Lottery	recommended	policies	and
          		procedures	for	the	receipt,	activation,	validation,	and	final	disposition	of
          		Lottery	tickets.

                    LOTTERY FRAUD IS A CRIME
If	you	witness	or	suspect	any	violation	of	Arizona	Lottery	rules	or	regulations,	please	
contact	Arizona	Lottery	Security	at	480-921-4400.




                                            16
   4740	E.	University	Drive	•	Phoenix,	Arizona	85034	•	www.arizonalottery.com



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                                 Revised	1/2008

								
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