Arkansas Administrative Code
Agency 216 - Arkansas Lottery Commission
Rule 216.00.09-002 - Retailer Rules

1.1 "Act" means the Arkansas Scholarship Lottery Act (Act 606 of 2009).

1.2 "ALC" means the Arkansas Lottery Commission as created by the Act.

1.3 "Applicant" means any person applying for a contract with the ALC for the purpose of selling lottery games to the public.

1.4 "Application" means the forms, documents or other information that the ALC requires an applicant to submit to the ALC in order to apply for or maintain a retailer contract.

1.5 "Compensation" means money or anything of value received or to be received as a claim for services, whether in the form of a retainer, fee, salary, expense, allowance, forbearance, forgiveness, interest, dividend, royalty, rent, or any other form of recompense or any combination thereof.

1.6 "Director" means the director of the ALC.

1.7 "Game" means any individual or particular type of lottery authorized by the ALC pursuant to the Act including without limitation instant tickets and online game tickets.

1.8 "Immediate Family" means the father, mother, sister, brother, husband, wife, child, grandmother, grandfather, grandchild, father-in-law, mother-in-law, sister-in-law, brother-in-law, daughter-in-law, son-in-law, stepchild, grandmother-in-iaw, grandfather-in-law, step grandchild, or any individual acting as parent or guardian.

1.9 "Instant Game" means a game in which a ticket is purchased and upon removal of a latex covering or other covering on the front of the ticket or the opening of the sealed ticket, the ticket bearer determines his or her winnings, if any, which are payable upon presentation to a retailer or to the ALC for payment.

1.10 "Instant Ticket" means a printed card or slip purchased for participation in an instant game.

1.11 "License" means an authorization granted by the ALC to a person to sell lottery games, including without limitation the execution of a contract between the ALC and the person relating to obligations and terms for operating as a retailer.

1.12 "Lottery Proceeds" includes without limitation:

1.13 "Online Game" means a lottery game in which a player pays a fee to a retailer and selects or requests a randomly generated (Quick Pick) combination of digits, numbers, or symbols, the type and amount of play, and the drawing date, and receives a computer-generated ticket with those selections printed on it.

1.14 "Online Terminal" means the electronic computer terminal through which a retailer enters manually or by play slip the combination of digits, numbers, or symbols selected by a player or by random number generator (Quick Pick).

1.15 "Online Ticket" means a computer-generated ticket issued by a retailer to a player as a receipt for the combination of digits, numbers, or symbols a player has selected by him or herself or through a Quick Pick.

1.16 "Person" means any individual, combination of individuals, corporation, partnership, unincorporated association, or other legal entity.

1.17 "Preliminary background check" means a completed Arkansas State Police check.

1.18 "Prize" means any award, financial or otherwise, awarded by the ALC.

1.19 "Retailer" means a person who is licensed by the ALC to sell lottery games.

1.20 "Responsible Person" means an individual who has the authority to enter into a contract with the ALC on behalf of themselves or any applicant.

1.21 'Share" means any intangible evidence of participation in a lottery.

1.22 "Ticket" means any tangible evidence issued by a lottery to prove participation in a lottery.

2.1 Application. These rules shall apply to the administration of the statewide network of lottery retailers as licensed and regulated by the ALC. In any decision made under these rules, the ALC shall take Into account the particularly sensitive nature of the state lottery and shall act to promote and ensure security, honesty, fairness, and integrity in the operation and administration of the lottery and the objectives of raising net lottery proceeds for the benefit of educational programs and purposes.

2.2 Administrative Hearings. All administrative hearings held under these rules shall be held in accordance with the Arkansas Administrative Procedure Act, Arkansas Code § 25-15-201 et seq.

2.3 Authority of Director. The Director may:

3.1 General. Retailers must meet the statutory and regulatory requirements for licensing, the security and integrity standards of the ALC and promote the best interest of the Arkansas Scholarship Lottery.

3.2 Application. A person interested In obtaining a license must submit an application to the ALC on a form supplied for that purpose by the ALC. The retail sales application shall be designed to solicit sufficient relevant information from an applicant to permit the ALC to evaluate the applicant and the sales location as required by the Act and regulations for issuance of a license by the ALC.

3.3 Application Fee. An applicant for a retailer license shall be charged the following fees:

3.4 Disclosure. The Director may require any degree or type of disclosure necessary of the applicant or any other person in order to assure the security and integrity of the lottery including the source of funds, financing, and business income used for the purchase and operation of the applicant's business, the name and address of the owner or owners of the sales location, a copy of all agreements whereby the applicant is entitled to possession of the sales location and the names and addresses of owners, officers, directors or trustees who oversee or direct the operation of the business. If the parent company, general partner, limited partner, joint venturer, stockholder, member or manager of a limited liability company is itself a corporation, trust, association, subsidiary, partnership, joint venture or limited liability company, then the Director may require that the applicant provide disclosure for such entity as if such entity were a responsible person itself. An applicant must disclose to the ALC all Information required by the Director.

3.5 Qualifications/Criteria.

3.6 Prohibitions. An applicant shall not provide a gift or compensation to the Director, an ALC member or ALC employee, or the immediate family member of the Director, ALC member or ALC employee.

3.7 Background Check. An applicant for a retailer license is subject to a background check including a credit check and a criminal history check conducted by the Arkansas State Police and the Federal Bureau of Investigation. Issuance of a retailer license is dependent on passing the required background checks. The applicant shall sign a consent to the release of information for all checks.

3.8 Waiver. In submitting an application, the applicant expressly waives any claim against the State of Arkansas, its agents, officers, employees, and representatives, and the ALC, its Director, agents, officers, employees, and representatives for damages that may result. Each applicant also accepts any risk of adverse public notice, embarrassment, criticism, damages, or claims which may result from any disclosure or publication by a third party of any public Information on file with the ALC.

4.1 Non-transferability of license. A retailer license is not transferable and shall not be sold, given or assigned to any person. In the event of the proven incapacity, death, receivership, bankruptcy or assignment for benefit of creditors of any retailer, upon approval of the Director, the license may be transferred to a court appointed or court confirmed guardian, executor or administrator, receiver, trustee, or assignee for the benefit of creditors, who may continue to operate the activity under the license, subject to the provisions of these rules.

4.2 License Term and Renewal. A retailer's license remains in full force and effect until the termination date indicated upon the license, but in no case more than one (1) year from the date of the issuance of the license, the first operational year excepted. To request renewal of a retailer license, every licensed retailer shall file a renewal application and shall pay a renewal fee as set forth in Section 3.3 of these rules. A license shall not be issued or renewed until the retailer contract is signed.

4.3 Inspection. A license grants the ALC the irrevocable authority to inspect the location where games may be sold or any other location under the control of the retailer where the Director may have good cause to believe ALC materials and/or games are stored or kept.

4.4 Retailer Loss Coverage. A retailer shall be assessed an annual fee of up to one hundred dollars ($100) per sales location to be deposited into the ALC's fidelity fund. A retailer is required to obtain and maintain a surety bond listing the ALC as principal in an amount determined by the Director for each sales location, using an insurance company acceptable to the ALC. The Director may also allow a retailer to deposit and maintain with the ALC securities that are interest bearing or accruing. The securities shall be held in trust in the name of the commission. Securities eligible are limited to:

4.5 Change in Application Information. A license is valid only for the information contained in the application. Any change to the information submitted in the application including change of business name, change of location, change of ownership, or change of status of background check may make the license invalid.

4.6 Provisional License. A provisional license temporarily authorizes a lottery retailer to conduct the sale of tickets pending processing of the general license or application renewal.

4.7 Promotional License.

4.8 Chain Retailers. The ALC may treat more than one (1) retail location with identical owners as one (1) chain retailer. Each retail location shall be issued a separate retailer number or numbers and a unique "Retailer License". The Director may issue one (1) billing statement for all retail locations or separate billing statements for each retail location. If the chain retailer wishes to add a new retail location, the chain retailer will not be required to undergo a new background investigation.

5.1 A retailer shall receive commissions as compensation from the ALC as follows:

6.1 This section contains duties to be performed by the retailer in addition to any duties and responsibilities that may be described in the retailer contract. The duties herein are not meant to be exclusive. Other duties and requirements for retailers may be contained elsewhere in these rules or in the Act.

6.2 Notices. The retailer must notify the ALC if the following occurs:

6.3 Games. The retailer must perform the following duties as a condition of their license:

6.4 Prizes.

6.5 Financial - Lottery Proceeds.

7.1 Sale of Tickets of Shares.

7.2 Prizes. A retailer may not charge a player to either play a lottery game, nor charge any fees or impose any requirements to redeem a valid winning ticket. A retailer must not pay to the winner a prize amount more than the prize established by the game.

7.3 Retailer Conduct. A retailer may not exchange books, lottery tickets or paper ticket stock with any other retailer. A retailer must sell tickets in book, page or numerical order and may not play instant lottery tickets using any other method other than fair chance or any method that is contrary to the principle that every ticket has an equal and random chance of winning.

7.4 Inducements to Play. A retailer shall not induce persons to play lottery games by extending credit or by providing financial assistance, alcohol or any other compensation.

7.5 Trademark. A retailer may not use the logo, trademark, or other advertising materials of the ALC without prior written permission or authorization of the ALC unless the materials have been provided to the Retailer by the ALC.

7.6 False promises. A retailer must not conduct false or misleading advertising, in any form about the ALC or lottery games including, but not limited to, claiming the odds of winning a lottery game are different at the retailer's business than at any other retailer's business.

7.7 Contracting for Goods or Services. A retailer shall not contract with any person other than the ALC for Arkansas Scholarship Lottery products or services except with the written approval of the ALC.

7.8 Gifts. A retailer shall not provide a gift or compensation to the Director, an ALC member or an ALC employee, or the immediate family member of the Director, ALC member or ALC employee.

8.1 Generally. If upon approval of the ALC, the Director or his or her designee determines that cancellation, denial, revocation, suspension, or rejection of renewal of a retailer license is in the best interest of the Arkansas Scholarship Lottery, the public welfare, or the State of Arkansas, the Director or his or her designee may cancel, suspend, revoke, or terminate, after notice and a right to a hearing, a retailer license issued hereunder.

8.2 Temporary Suspension. The retailer license may be temporarily suspended by the Director or his or her designee without commission approval or prior notice pending a hearing.

8.3 Reasons. A retailer license may be suspended, revoked, or terminated by the Director or his or her designee for any one (1) or more of the following reasons:

8.4 Removal of ALC Material If a retailer fails to meet any of the objective criteria established by the ALC, the Director or his or her designee may remove instant tickets, online ticket stock, and any and all property of the ALC from the retail location.

8.5 Administrative Hearing. Any retailer or applicant aggrieved ("Aggrieved Party") by an administrative decision by the Director may appeal that decision.

9.1 Authority-Notice.

9.2 Avoiding Closure. A retailer may avoid closure of the business by:

9.3 Administrative Hearing.

9.4 Judicial Relief.

9.5 Procedure for Closure.

9.6 Revocation and Suspension of Business License.