New Jersey Administrative Code
Title 17 - TREASURY - GENERAL
Chapter 20 - RULES OF THE LOTTERY COMMISSION
Subchapter 12 - COURIER SERVICES
Section 17:20-12.4 - Courier service application review

Universal Citation: NJ Admin Code 17:20-12.4

Current through Register Vol. 56, No. 18, September 16, 2024

(a) The Director may request additional information from the applicant after receipt of an application. An applicant for a courier service registration shall cooperate fully with the Division's requests in the course of the application process. Failure to cooperate with the Division shall be a violation of this section and shall be in itself sufficient grounds for denial of such application. In evaluating an application for a courier service registration, the Division shall consider the following factors, including, but not limited to:

1. Financial responsibility and security of the business or activity in which such person or business entity is engaged;

2. The sufficiency of the audit and financial controls, technical standards, and internal controls for the proposed courier service system, including the safeguarding of courier customer personal information, including credit cards, banking information, and other personal financial information, and the safeguarding of the system as a whole;

3. Business experience operating a courier service system;

4. Whether the application submitted contains a business plan demonstrating that compliance with all conditions of a courier service registration is achievable;

5. Criminal history background. All key personnel of courier service shall consent to disclosure of such information and to undergo such investigations as needed to substantiate their moral character and integrity. The criminal history background check of all key employees must be performed by the New Jersey Division of Gaming Enforcement and will be at the expense of the courier service applicant;

6. Credit reporting;

7. Sufficiency of existing lottery sales agents and courier service registrations to serve the public convenience;

8. Volume of expected sales;

9. Disclosure of any previous application for agent licensure or courier service registration with the New Jersey Lottery and/or any other state or international lottery. Disclosure of any courier service business or similar business conducted by the courier service applicant, or any entity controlling, controlled by, or under common control with the applicant, and any license, permit, or other authorization related thereto;

10. Veracity and completeness of information supplied on the application form or any supplement thereto;

11. Reputation of the applicant and verification of references including review of licensure/registration by other lotteries worldwide;

12. All officers, shareholders, and/or partners, including limited partners, holding a 10 percent or more ownership interest shall be disclosed and listed with the percentage of shares owned by each. In addition, any shareholder under the age of 21 that holds a 10 percent or more ownership interest shall also be disclosed and listed with the percentage of shares owned by each such owner. The corporate identification number and Federal identification number including all New Jersey Division of Taxation assigned suffixes shall also be noted. Failure to disclose the above information shall be cause for denial of a New Jersey Lottery registration under N.J.A.C. 17:20-5.1(a);

13. A courier service applicant shall submit a disengagement plan in the event that a courier service ceases operations in New Jersey for any reason, including bankruptcy. A disengagement plan should discuss, in sufficient detail, the following: full reimbursement of courier customers, including all winnings, delivery of winning tickets, protection of courier customer's personal information, disposition of tickets in storage, and all other related termination activities;

14. A courier service applicant shall describe, in sufficient detail, its process to securely deliver tickets to courier customers and the time frame for delivering tickets to courier customers. See N.J.A.C. 17:20-12.17(b);

15. A courier service applicant shall provide the name, address, and copy of written contractual relationship for each of its prospective affiliate agents. See N.J.A.C. 17:20-12.10(a)1;

16. A courier service applicant shall describe, in sufficient detail, how it will facilitate the requirement of the Courier Service Act that courier customers have the option at all times to obtain their ticket(s). See N.J.A.C. 17:20-12.15(d);

17. A courier service applicant shall describe, in sufficient detail, its internal controls. See N.J.A.C. 17:20-12.13;

18. A courier service applicant that is a business entity shall provide copies of all incorporation charters or other formation documents and copies of its bylaws or other procedures concerning its business entity governance; and

19. A courier service applicant shall describe, in sufficient detail, its responsible gambling/responsible play plan, including a description of related experience.

(b) The Director shall not register a courier service unless the courier service demonstrates it can comply with the requirements of the Courier Service Act and this subchapter, and demonstrates that the courier service website and/or courier service mobile application can operate in accordance with such requirements, including, but not limited to:

1. Displaying the disclosures required by the Courier Service Act and this subchapter;

2. Establishing successful geolocation and age verification of courier customers by presenting to the Division a live demonstration of the website and mobile application;

3. Securing the personal and financial information of all courier customers, including those on the self-exclusion list;

4. Meeting all of the required features and technical standards for a courier service in this subchapter;

5. If a courier service intends to employ courier service-produced play slips in its business plan, the courier service produced play slips must be at least as accurate as the play slips supplied by the Lottery. A courier service applicant must supply a sufficient number of courier service produced sample play slips to the Division for testing and written approval prior to use. Any changes to play slips will require re-testing and approval, in writing, prior to use. See N.J.A.C. 17:20-12.11(n).

(c) The courier service shall have independent third-party testing performed per the requirements of N.J.A.C. 17:20-12.14.

(d) After the Director makes a determination on an application, the Director shall notify the applicant, in writing, if the Director will permit it to become a registered courier service. Such notice shall list all requirements under this chapter that must be in place and verified prior to the courier service commencing operations. Additionally, such written notification will address the parts of the application where the prospective courier service is to propose solutions for the Director's review and approval, such as ticket delivery method(s). The notification will document which solutions are approved, disapproved, whether additional information is needed, or any other requirement that needs addressing. When the Director provides such a notice but the prospective courier service has not promptly taken steps to satisfy such requirements, or the Division has not been able to verify that the requirements are in place within 90 days after the notice was issued, the Director may issue another notice, either setting forth a date by which such requirements must be met or the notice permitting registration will be rescinded.

(e) In making a determination on an application the Director may:

1. Relax one or more requirements of this chapter to the extent that fulfilment of same is deemed unnecessary for the satisfactory completion of a particular application review. Relaxation will only be granted when the Director otherwise determines, in his or her discretion, that the applicant will operate a courier service in compliance with the Courier Services Act and this chapter, and in a manner necessary to ensure the integrity and reputation of the New Jersey Lottery is maintained; and

2. Grant a registration subject to conditions as may reasonably assure the Director, in her or his discretion, that the prospective courier service will, at the time the prospective courier service begins operations, meet the registration criteria set forth in the Courier Service Act and this chapter. In the event that a courier service is ready to begin operations and the Director determines that one or more of the conditions listed in the notice pursuant to (e)3 below have not been satisfied, the conditional registration will be revoked until such time that the Director determines that the courier service is in conformance with the notice;

3. Any such relaxation of the requirements of this chapter or conditions upon the registration shall be set forth in detail in the notice provided pursuant to this section; and

4. Upon successful registration, the Division will issue the following:
i. A courier service registration approval letter. This letter will serve as the notification that a courier service is officially approved as a registered courier service in New Jersey and that the courier service can commence courier service sales in the State of New Jersey. This letter will also detail any restrictions or limitations that the lottery may impose on a courier service, based on the courier service approved application. Additionally, the letter will document any waiver granted pursuant to N.J.A.C. 17:20-12.14(c);

ii. An official courier service certificate of registration will be issued for each location at which the courier service proposes to process tickets. These certificates must be displayed in a prominent area within the courier service's processing facilities; and

iii. An electronic logo signifying that the courier service is an officially registered courier service in New Jersey. This logo must be prominently displayed on the courier service's website and/or mobile application.

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