HB0211 - State lottery-2.

 

2001

State of Wyoming

01LSO-0147

 

 

 

HOUSE BILL NO.  HB0211

 

 

State lottery-2.

 

Sponsored by:


 

 

A BILL

 

for

 

 1  AN ACT relating to a state lottery; creating a state
 2  lottery commission; granting authority to operate a state
 3  lottery or to contract with other states for operating a
 4  lottery; creating a lottery agency and the office of
 5  director within the agency; providing for licensing of
 6  sales agents; creating a lottery account in the enterprise
 7  fund; authorizing expenditures for and specifying how
 8  lottery profits shall be distributed; providing generally
 9  for the operation of the lottery; exempting sales of
10  lottery tickets and shares from sales tax; providing
11  rulemaking authority; providing penalties; providing for
12  appropriations and authorizing expenditures; and providing
13  for an effective date.

14 

15  Be It Enacted by the Legislature of the State of Wyoming:

 

Page  1

 

 

 

 1 

 2         Section 1.  W.S. 40-21-101 through 40-21-113 are
 3  created to read:

 4 

 5                         CHAPTER 21

 6                   WYOMING STATE LOTTERY

 7 

 8         40-21-101.  Definitions.

 9 

10         (a)  As used in this chapter:

11 

12              (i)  "Agency" means the state lottery agency
13  created as a separate operating agency under this chapter;

14 

15              (ii)  "Commission" means the Wyoming lottery
16  commission;

17 

18              (iii)  "Director" means the director of the state
19  lottery;

20  

21              (iv)  "Lottery" means any lottery created and
22  operated under this chapter;

23 

 

Page  2

 

 

 

 1              (v)  "Supplier" means any person who enters into
 2  a contract to supply gaming materials or equipment to the
 3  lottery;

 4 

 5              (vi)  "Ticket" means any evidence issued under
 6  authority of the agency establishing proof of participation
 7  in any lottery conducted under this chapter.

 8 

 9         40-21-102.  Agency created.

10 

11  There is created the Wyoming state lottery agency.  W.S.
12  9-2-1701 through 9-2-1708 shall not apply to the separate
13  operating agency created by this chapter.

14 

15         40-21-103.  Commission created; membership;
16  appointment; removal.

17 

18         (a)  There is created the Wyoming lottery commission
19  consisting of five (5) members appointed by the governor
20  with the advice and consent of the senate, for a term of
21  five (5) years commencing March 1 following appointment. 
22  The filling of vacancies shall be under W.S. 28-12-101
23  through 28-12-103.  No more than three (3) of the five (5)
24  members shall be from the same political party.

 

Page  3

 

 

 

 1 

 2         (b)  In the initial appointments, one (1) member shall
 3  serve for one (1) year, one (1) shall serve for two (2)
 4  years, one (1) shall serve for three (3) years, one (1)
 5  shall serve for four (4) years and the remaining member
 6  shall serve for five (5) years.

 7 

 8         (c)  The governor shall appoint a chairman from among
 9  the commission membership.  The commission shall meet at
10  least quarterly.  Special meetings may be called by the
11  chairman, any three (3) commission members or by the
12  director upon seventy-two (72) hours written notice to each
13  member.  A quorum consists of three (3) members.

14 

15         (d)  The commission shall receive compensation, travel
16  expenses and per diem in the same manner and amount as
17  legislators while going to, attending or returning from
18  commission meetings.

19 

20         40-21-104.  Powers and duties of the commission.

21 

22         (a)  The commission shall:

23 

 

Page  4

 

 

 

 1              (i)  Promulgate rules and regulations governing
 2  the establishment and operation of a state lottery
 3  including:

 4 

 5                   (A)  Maximizing revenues;

 6 

 7                   (B)  The types of lotteries to be conducted,
 8  but no lottery shall be conducted by the commission based
 9  upon bingo or upon the outcome of any athletic event or
10  race of any kind;

11 

12                   (C)  The price of tickets in the lottery,
13  but no ticket in any instant lottery shall have a price of
14  less than one dollar ($1.00);

15 

16                   (D)  The number and size of the prizes on
17  the winning tickets and the manner of payment of prizes;

18 

19                   (E)  The manner of selecting winning
20  tickets.  All drawings shall be public, witnessed by a
21  certified public accountant, recorded by both video and
22  audio recording and shall be actually performed by a person
23  who is not an employee of the agency or member of the
24  commission;

 

Page  5

 

 

 

 1 

 2                   (F)  The frequency of the drawings or
 3  selection of winning tickets;

 4 

 5                   (G)  The types of locations at which tickets
 6  may be sold;

 7 

 8                   (H)  The method used in selling tickets;

 9 

10                   (J)  The licensing of agents to sell
11  tickets, except no person under the age of eighteen (18)
12  years shall be licensed as an agent and no license shall be
13  transferable;

14 

15                   (K)  The manner and compensation to be paid
16  licensed sales agents including special bonuses or
17  incentives, as necessary to provide for the adequate
18  availability of tickets to prospective buyers and for the
19  convenience of the public;

20 

21                   (M)  Other matters necessary for the
22  efficient and economical operation and administration of
23  the lottery and for the convenience of purchasers of
24  tickets or holders of winning tickets.

 

Page  6

 

 

 

 1 

 2              (ii)  Hear appeals regarding the granting,
 3  revocation, suspension or renewal of licenses for lottery
 4  sales agents;

 5 

 6              (iii)  Make an annual report to the legislature
 7  regarding the operation of the lottery and recommendations
 8  for improvement.

 9 

10         (b)  The commission may contract with other states for
11  the operation, marketing and promotion of any lottery.  The
12  commission may enter into agreements to participate in
13  multi-state lotteries, and those lotteries may be conducted
14  in Wyoming subject to the terms and conditions of those
15  agreements.

16 

17         40-21-105.  Director; appointment; qualifications;
18  duties.

19 

20         (a)  The director of the agency shall be appointed by
21  and serve at the pleasure of the governor.  The director
22  shall devote full time to the duties of his office and
23  shall be qualified by training and experience to administer
24  the state lottery.

 

Page  7

 

 

 

 1 

 2         (b)  The director shall:

 3 

 4              (i)  Manage and supervise the agency;

 5 

 6              (ii)  Supervise and administer the operation of
 7  the lottery in accordance with this chapter and rules and
 8  regulations promulgated by the commission;

 9  

10              (iii)  Under the rules and regulations of the
11  commission, license agents to sell lottery tickets;

12 

13              (iv)  Have an annual audit of all lottery
14  accounts and transactions performed by an independent
15  certified public accountant and submit it to the governor,
16  the legislature, the state treasurer and the commission;

17 

18              (v)  Employ an assistant director for lottery
19  security and a security staff who shall have peace officer
20  authority;

21 

22              (vi)  Not be subject to W.S. 9-2-1019 through
23  9-2-1022 and 9-3-101 through 9-3-105.

24 

 

Page  8

 

 

 

 1         (c)  In addition to subsection (b) of this section,
 2  the director shall:

 3 

 4              (i)  Maintain records accurately and fairly
 5  reflecting transactions for each twenty-four (24) hour
 6  period, including the distribution of tickets to licensed
 7  sales agents, receipt of funds, prize claims, prize
 8  disbursements, expenses and other financial transactions of
 9  the lottery as necessary;

10 

11              (ii)  Report to the governor pursuant to W.S.
12  9-2-1014, including a complete statement of the financial
13  position and operation of the lottery;

14 

15              (iii)  Contract with a state agency or a private
16  business experienced in security procedures to periodically
17  conduct a comprehensive study and evaluation of all aspects
18  of security in the operation of the lottery.

19 

20         (d)  The director may:

21 

22              (i)  Suspend or revoke any license issued under
23  this chapter;

24 

 

Page  9

 

 

 

 1              (ii)  Employ personnel necessary to implement
 2  this chapter;

 3 

 4              (iii)  With the approval of the commission,
 5  contract for materials, equipment and supplies to design,
 6  install, operate and promote the lottery and for studies
 7  relevant to successful operation of the lottery.  W.S.
 8  9-2-1016 does not apply to the commission, but any contract
 9  for an amount in excess of seven thousand five hundred
10  dollars ($7,500.00) shall be approved by the commission and
11  the governor.

12 

13         (e)  For purposes of enforcing this chapter, the
14  director through his employees or agents may examine the
15  records, books of account and other papers of any licensed
16  sales agent. In any examination, the director may require
17  by subpoena the production of books, papers, records,
18  files, correspondence, documents and other evidence
19  relevant to the inquiry.  Refusal to obey a subpoena may
20  upon issuance of a court order requiring compliance with
21  the subpoena, be punished by the court as contempt.

22 

23         40-21-106.  Licenses; issuance; suspension and
24  revocation; persons prohibited from holding.

 

Page 10

 

 

 

 1 

 2         (a)  The commission shall include in its licensing
 3  rules and regulations requirements relating to:

 4 

 5              (i)  Financial responsibility and bonding of
 6  sales agents;

 7 

 8              (ii)  Accessibility of the licensee's place of
 9  business to the public;

10 

11              (iii)  Sufficiency of existing licenses;

12 

13              (iv)  Volume of expected sales;

14 

15              (v)  Character of the licensee;

16 

17              (vi)  Public display of the license;

18 

19              (vii)  Other matters related to the security and
20  efficient operation of the lottery.

21 

22         (b)  The director shall issue licenses under rules and
23  regulations of the commission.

24 

 

Page 11

 

 

 

 1         (c)  A license shall be revoked if the director finds,
 2  after a hearing, that the licensee has:

 3 

 4              (i)  Provided false or misleading information to
 5  the agency;

 6 

 7              (ii)  Been convicted of any felony or gambling
 8  related offense;

 9 

10              (iii)  Endangered the security of the lottery; or

11 

12              (iv)  Become a person whose character is no
13  longer consistent with the protection of the public
14  interest and trust in the lottery.

15 

16         (d)  A license may be suspended, revoked or not
17  renewed for any of the following if after a hearing the
18  director finds the holder has:

19 

20              (i)  Changed business location;

21 

22              (ii)  An insufficient sales volume;

23 

 

Page 12

 

 

 

 1              (iii)  A delinquency in remitting money owed to
 2  the lottery;

 3 

 4              (iv)  Endangered the efficient operation of the
 5  lottery; or

 6 

 7              (v)  Violated this chapter or any rule or
 8  regulation of the commission.

 9 

10         (e)  Any person including an organization, may be a
11  licensed sales agent except:

12 

13              (i)  Those who will engage in business
14  exclusively as a lottery sales agent;

15 

16              (ii)  Those convicted of a felony, a crime
17  involving fraud or misrepresentation or a gambling related
18  offense;

19 

20              (iii)  Professional gamblers;

21 

22              (iv)  Those engaged in any form of illegal
23  gambling;

24 

 

Page 13

 

 

 

 1              (v)  A person not of good character and
 2  reputation in the community in which he resides; or

 3 

 4              (vi)  An organization in which a person listed in
 5  paragraph (e)(ii), (iii) or (iv) of this section:

 6 

 7                   (A)  Has a financial interest;

 8 

 9                   (B)  Is an officer, director or managing
10  agent;

11 

12                   (C)  Will participate in the management or
13  sales of lottery tickets.

14 

15         (f)  Each licensed sales agent shall maintain records
16  to completely describe lottery transactions and other
17  information necessary for the proper administration of the
18  lottery as required by commission rules and regulations. 
19  These records shall be available for agency review during
20  business hours.  The director may require an audit of the
21  records.

22 

 

Page 14

 

 

 

 1         (g)  Licenses shall specify the place at which the
 2  sales will occur, but no license shall be issued for
 3  residential premises.

 4 

 5         40-21-107.  Contractors supplying gaming equipment;
 6  disclosures.

 7 

 8         (a)  Any person submitting application to contract as
 9  a supplier under this chapter shall disclose under oath in
10  the application:

11 

12              (i)  The business name and address and names and
13  addresses of the following:

14 

15                   (A)  If the applicant is a partnership, all
16  general and limited partners;

17 

18                   (B)  If the applicant is a trust, the
19  trustee and all persons entitled to receive income or
20  benefit from the trust;

21 

22                   (C)  If the applicant is an association, the
23  members, officers and directors;

24 

 

Page 15

 

 

 

 1                   (D)  If the applicant is a corporation, the
 2  officers, directors and each owner or holder, directly or
 3  indirectly, of any equity security or other evidence of
 4  ownership of any interest in the corporation, except in the
 5  case of owners or holders of publicly held equity
 6  securities of a publicly traded corporation, only the names
 7  and addresses of those owning or holding one percent (1%)
 8  or more of the publicly held securities;

 9 

10                   (E)  If the applicant is a subsidiary
11  company, the holding or parent company involved and the
12  officers, directors and stockholders of each, in the case
13  of owners or holders of publicly held securities of a
14  holding company that is a publicly traded corporation, only
15  the names and addresses of those owning or holding one
16  percent (1%) or more of the publicly held securities.

17 

18              (ii)  If the applicant is a corporation, all the
19  states in which the applicant is incorporated to do
20  business and the nature of that business;

21 

22              (iii)  Other jurisdictions in which the applicant
23  has contracts to supply gaming materials or equipment;

24 

 

Page 16

 

 

 

 1              (iv)  The details of any state or federal
 2  criminal conviction of the applicant or any person whose
 3  name and address is required under paragraph (a)(i) of this
 4  section. This paragraph applies notwithstanding any laws to
 5  the contrary regarding expungement or sealed records;

 6 

 7              (v)  The details of any disciplinary action taken
 8  by any state against the applicant or any person whose name
 9  and address is required under paragraph (a)(i) of this
10  section regarding any matter related to the selling,
11  leasing, offering for sale or lease, buying or servicing of
12  gaming materials or equipment;

13 

14              (vi)  A statement of the gross receipts realized
15  in the preceding year from the sale, lease or distribution
16  of gaming materials or equipment to states operating
17  lotteries and to private persons licensed to conduct
18  gambling.  The statement shall differentiate that portion
19  of the gross receipts attributable to transactions with
20  states operating lotteries from that portion of the gross
21  receipts attributable to transactions with private persons
22  licensed to conduct gambling;

23 

 

Page 17

 

 

 

 1              (vii)  The name and address of any source of
 2  gaming materials or equipment for the applicant;

 3 

 4              (viii)  The number of years the applicant has
 5  been in the business of supplying gaming materials or
 6  equipment;

 7 

 8              (ix)  Any other information accompanied by any
 9  documents the commission may by rule or regulation require
10  as necessary or appropriate.

11 

12         (b)  If the applicant is a subsidiary company, the
13  involved holding or parent company shall supply the
14  information required by this section of the applicant.

15 

16         (c)  The costs of any investigation into the
17  background of the applicant seeking a contract shall be
18  assessed against the applicant and shall be paid by the
19  applicant at the time of billing by the state. 
20  Investigation may be conducted by the commission or the
21  attorney general.  Investigators shall have peace officer
22  authority during the period of investigation.

23 

 

Page 18

 

 

 

 1         (d)  No person, firm, association or corporation
 2  contracting to supply gaming equipment or materials to the
 3  state for use in the operation of the state lottery shall
 4  be directly or indirectly connected with any person, firm,
 5  association or corporation licensed as a sales agent under
 6  this chapter, any employee of the agency or a member of the
 7  commission.

 8 

 9         (e)  No contract shall be formed with an applicant if:

10 

11              (i)  A person disclosed pursuant to paragraph
12  (a)(i) or (vii) of this section has been convicted of a
13  felony or gambling related offense, engaged in any form of
14  illegal gambling, is not of good character and reputation
15  relevant to the secure and efficient operation of the
16  lottery or has been convicted of a crime involving fraud or
17  misrepresentation; or

18 

19              (ii)  A disciplinary action disclosed pursuant to
20  paragraph (a)(v) of this section was resolved adversely to
21  the supplier.

22 

23         (f)  No contract for the supply of gaming materials or
24  equipment for use in the operation of the state lottery

Page 19

 

 

 

 1  shall be enforceable against the state if the supplier
 2  fails to comply with the provisions of this section.

 3 

 4         (g)  If a contract for lottery tickets, lottery
 5  consulting services or lottery terminals or equipment
 6  exceeds one hundred thousand dollars ($100,000.00) or if a
 7  contract is for drawing equipment regardless of value, each
 8  prospective corporate supplier shall at the time of
 9  submission of its bid or proposal, provide a current
10  personal financial statement and individual federal and
11  state income tax returns from the past three (3) years for
12  each of its officers and directors and for each of the
13  officers and directors of all parent and holding companies
14  affiliated with the supplier.

15 

16         40-21-108.  Conflicts of interests.

17 

18         (a)  No member of the commission, employee of the
19  agency or member of their immediate families shall have any
20  financial interest in:

21 

22              (i)  Any lottery;

23 

24              (ii)  The sale of any lottery tickets; or

 

Page 20

 

 

 

 1 

 2              (iii)  Any organization supplying equipment,
 3  materials or services for use in the operation of the
 4  lottery or licensed as a sales agent under this chapter.

 5 

 6         (b)  No member of the commission, employee of the
 7  agency or member of their immediate families shall receive
 8  any gift, gratuity or anything of value from any person
 9  contracting with the state to provide equipment, materials
10  or services for use in the operation of the lottery or from
11  any person licensed as a sales agent under this chapter.

12 

13         (c)  No member of the commission, employee of the
14  agency, licensed sales agent or member of their immediate
15  families shall purchase any ticket for or receive any prize
16  from a lottery under this chapter.

17 

18         (d)  As used in this section, "immediate family" means
19  any person residing as a member of the same household in
20  the principal place of residence of a member of the
21  commission, employee of the agency or a licensed sales
22  agent.

23 

 

Page 21

 

 

 

 1         40-21-109.  Prizes; not assignable; withholding of
 2  amounts owed state; discharge of liability.

 3 

 4         (a)  The right of any person to a prize is not
 5  assignable, except payment of a prize may be paid to the
 6  estate of a deceased prizewinner or to a person pursuant to
 7  appropriate judicial order.

 8 

 9         (b)  Unclaimed prizes shall be retained by the agency
10  for the prizewinner for one (1) year after the prize is
11  available to be claimed.  Any person who fails to claim a
12  prize during this period shall forfeit all rights to the
13  prize.

14 

15         (c)  If a person entitled to a prize is a minor,
16  payment shall be made to the person's parent, legal
17  guardian, a person legally responsible for the care and
18  custody of the minor or a trustee under a trust which
19  provides for the care and education of the minor and
20  entitles the minor to the corpus of the trust when he
21  becomes an adult.

22 

23         (d)  Before payment of any prize in excess of one
24  hundred dollars ($100.00), the director shall provide the

Page 22

 

 

 

 1  name and address, the value of the prize and the social
 2  security number of the person claiming the prize to the
 3  department of revenue and taxation and the department of
 4  family services.  If either department notifies the
 5  director within ten (10) days following receipt of the
 6  information, the director shall withhold payment of any
 7  amount owed to the state by that person.

 8 

 9         (e)  The agency is discharged of all liability upon
10  payment of any prize under this section.

11 

12         40-21-110.  Prohibited acts.

13 

14         (a)  No person shall:

15 

16              (i)  Sell a lottery ticket at a price different
17  from that fixed by the commission;

18 

19              (ii)  Sell a lottery ticket unless licensed to do
20  so under this chapter;

21 

22              (iii)  Sell a lottery ticket to a minor;

23 

24              (iv)  If a minor, purchase a lottery ticket;

 

Page 23

 

 

 

 1 

 2              (v)  Sell a lottery ticket at a location other
 3  than that specified on the license.

 4 

 5         (b)  Nothing in this section prohibits the gift of a
 6  lottery ticket to a minor.

 7 

 8         40-21-111.  Advertising.

 9 

10  Promotional advertising regarding the lottery shall state
11  the odds of winning and the average return on the dollar in
12  prize money to the public.  Promotional advertising
13  expenses shall be paid from the lottery account.

14 

15         40-21-112.  Revenue from sales; disposition; lottery
16  account created.

17 

18         (a)  There is created a lottery account in the
19  enterprise fund.

20 

21         (b)  Revenues from the sale of lottery tickets shall
22  be deposited into the lottery account.  All expenses of the
23  commission and agency including salaries shall be paid from
24  the lottery account as appropriated by the legislature.

 

Page 24

 

 

 

 1 

 2         (c)  Prizes shall be paid from the lottery account.
 3  Total disbursements for lottery prizes shall be not less
 4  than forty-five percent (45%) of the total revenue accruing
 5  from the sale of lottery tickets, and sufficient funds to
 6  pay prizes are continuously appropriated from that account.

 7 

 8         (d)  Not less than monthly, revenues in excess of
 9  expenses, prizes and reserves necessary for efficient
10  operation shall be transferred as follows:

11 

12              (i)  Fifty percent (50%) to the general fund; and

13 

14              (ii)  Fifty percent (50%) to the school capital
15  construction account.

16 

17         40-21-113.  Criminal penalties.

18 

19         (a)  Except as provided by subsection (b) of this
20  section, a person violating this chapter commits a
21  misdemeanor punishable by a fine of not more than one
22  thousand dollars ($1,000.00), imprisonment for not more
23  than one (1) year, or both.  Each violation is a separate
24  offense.

 

Page 25

 

 

 

 1 

 2         (b)  Any person who knowingly falsifies, alters,
 3  forges, passes or counterfeits a lottery ticket or receipt
 4  for the purchase of a lottery ticket issued under this
 5  chapter is guilty of a felony punishable by a fine of not
 6  less than five thousand dollars ($5,000.00), imprisonment
 7  for not less than one (1) year, or both.  Each violation is
 8  a separate offense.

 9 

10         Section 2.  W.S. 6-7-101(a)(iii) by creating a new
11  subparagraph (H), 9-2-1704(d) by creating a new paragraph
12  (xv) and 39-15-105(a)(iv) by creating a new subparagraph
13  (J) are amended to read:

14 

15         6-7-101.  Definitions.

16 

17         (a)  As used in this article:

18 

19              (iii)  "Gambling" means risking any property for
20  gain contingent in whole or in part upon lot, chance, the
21  operation of a gambling device or the happening or outcome
22  of an event, including a sporting event, over which the
23  person taking a risk has no control, but does not include:

24 

 

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 1                   (H)  A lottery operated by the Wyoming
 2  lottery commission under W.S. 40-21-101 through 40-21-113.

 3 

 4         9-2-1704.  Reorganization plan; structure; time frame.

 5 

 6         (d)  The entities of state government specified in
 7  this subsection are designated as separate operating
 8  agencies, which are separate and distinct from the
 9  departments and offices specified in subsection (a) of this
10  section because of their quasi-judicial responsibility or
11  because of their unique, specialized function which
12  precludes their inclusion in another department. This act
13  does not otherwise apply to separate operating agencies.
14  Separate operating agencies are as follows:

15 

16              (xv)  State lottery agency.

17 

18         39-15-105.  Exemptions.

19 

20         (a)  The following sales or leases are exempt from the
21  excise tax imposed by this article:

22 

23              (iv)  For the purpose of exempting sales of
24  services and tangible personal property sold to government,

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 1  charitable and nonprofit organizations, irrigation
 2  districts and weed and pest control districts, the
 3  following are exempt:

 4 

 5                   (J)  Sales of lottery tickets or shares of
 6  the Wyoming state lottery under W.S. 40-21-101 through
 7  40-21-113.

 8 

 9         Section 3. There is appropriated from the general fund
10  to the lottery account in the enterprise fund the sum of
11  seven hundred fifty thousand dollars ($750,000.00), or as
12  much thereof as necessary, to carry out the purpose of this
13  act.  This appropriation is an advance to facilitate
14  establishment of the lottery and shall be repaid from
15  profits as soon as practicable but in no event later than
16  January 1, 2003, or one (1) year after the first prize is
17  paid out, whichever is later.

18 

19         Section 4. The Wyoming state lottery commission is
20  authorized to expend and there is appropriated from the
21  lottery account in the enterprise fund forty percent (40%)
22  of total revenue from sale of lottery tickets to the
23  commission for salaries and all administrative expenses,
24  except prizes and repayment of the advance from the 

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 1  general fund, necessary to operate the lottery through June
 2  30, 2002, or as much thereof as necessary to carry out the
 3  purposes of this act.

 4 

 5         Section 5.  This act is effective immediately upon
 6  completion of all acts necessary for a bill to become law
 7  as provided by Article 4, Section 8 of the Wyoming
 8  Constitution.

 9 

10                         (END)

 

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