H. B. 4496
(By Delegate Webb)
[Introduced February 10, 2000; referred to the
Committee on Finance.]
A BILL to amend and reenact sections nine, ten and eleven, article
twenty-two, chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all relating
to the state lottery; providing restrictions on types of
lottery games; increasing minimum age for playing lottery;
prohibiting certain advertising; requiring lottery commission
to develop signs warning of the dangers and risks of gambling
and requiring lottery sales agents to post the signs;
requiring commission to develop and implement an initiative to
reduce sales dependence on low-income, less educated
minorities and heavy players, including limiting advertising
and the number of sales outlets in low-income areas;
restricting the commission from issuing or renewing licenses
in primarily residential areas; and requiring comprehensive
gambling impact statement prior to considering new or expanded lottery games.
Be it enacted by the Legislature of West Virginia:
That sections nine, ten and eleven, article twenty-two,
chapter twenty-nine of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 22. STATE LOTTERY ACT.
§29-22-9. Initiation and operation of lottery; restrictions;
prohibited themes, games, machines or devices;
distinguishing numbers; winner selection; public
drawings; witnessing of results; testing and
inspection of equipment; price of tickets; claim for
and payment of prizes; invalid, counterfeit tickets;
estimated prizes and odds of winning; participant
bound by lottery rules and validation procedures;
security procedures; additional games; electronic
and computer systems.
The commission shall initiate operation of the state
lottery on a continuous basis at the earliest feasible and
practical time, first initiating operation of the preprinted
instant winner type lottery. The lottery shall be initiated and
shall continue to be operated so as to produce the maximum amount
of net revenues to benefit the public purpose described in this article consonant with the public good. Other state government
departments, boards, commissions, agencies and their officers shall
cooperate with the lottery commission so as to aid the lottery
commission in fulfilling these objectives.
(b) The commission shall promulgate rules
specifying the types of lottery games to be conducted by the
lottery, Provided except that:
(1) No lottery may use the results of any amateur or
professional sporting event, dog race or horse race to determine
(2) Electronic video lottery systems must include a central
site system of monitoring the lottery terminals utilizing an
on-line or dial-up inquiry.
(3) In a lottery utilizing a ticket, each ticket shall bear
a unique number distinguishing it from each other ticket.
(4) No lottery
utilizing using a machine may use machines
which dispense coins or currency.
(5) A lottery game which
utilizes uses an electronic computer
and a video screen to operate a lottery game and communicate the
results thereof of the game, such as the game "Travel", and which
does not utilize use an interactive electronic terminal device
allowing input by an individual player, may only be made available
by the commission in:
(A) Private clubs licensed in accordance with the provisions of article seven, chapter sixty of this code;
(B) Retail licensees licensed in accordance with the
provisions of article three-a of said chapter sixty; and
(C) In the facilities of class A licensees which are licensed
in accordance with the provisions of section nine, article sixteen,
chapter eleven of this code, in which facility at least
seventy-five percent of the nonintoxicating beer sold by the class
A licensee in the preceding year was sold for consumption on the
premises: Provided, That if sales information is not available for
the preceding year, the commission in its discretion may base any
issuance or denial of an annual license upon a reasonable
projection of the volume of sales of nonintoxicating beer for
consumption on the premises as a percentage of the total sales of
(6) Selection of the winner must be predicted totally on
(7) Any drawings or winner selections shall be held in public
and witnessed by an independent accountant designated by the
director for such purposes.
(8) All lottery equipment and materials shall be regularly
inspected and tested, before and after any drawings or winner
selections, by independent qualified technicians.
(9) The director shall establish the price for each lottery
and determine the method of selecting winners and the manner of payment of prizes, including providing for payment by the purchase
of annuities for prizes payable in installments.
(10) All claims for prizes shall be examined and no prize
shall may be paid as a result of altered, stolen or counterfeit
tickets or materials, or which fail to meet validation rules or
regulations established for a lottery. No prize shall may be paid
more than once, and, in the event of a binding determination by the
commission that more than one person is entitled to a particular
prize, the sole remedy of the claimants shall be is the award to
each of them of an equal share in the single prize.
(11) A detailed tabulation of the estimated number of prizes
of each particular prize denomination that are expected to be
awarded in each lottery, or the estimated odds of winning
prizes shall be printed on any lottery ticket, where feasible, or
in descriptive materials, and shall be available at the offices of
(12) No prizes
shall may be paid which are invalid and not
contemplated by the prize structure of the lottery involved.
(13) By purchasing a ticket or participation in a lottery, a
participant agrees to abide by, and be bound by, the lottery rules
which apply to the lottery or game play involved. An abbreviated
such the rules may appear on tickets and shall appear on
descriptive materials and shall be available at the offices of the
commission. A participant in a lottery agrees that the determination of whether the participant is a valid winner is
subject to the lottery or game play rules and the winner validation
tests established by the commission. The determination of the
winner by the commission shall be final and binding upon all
participants in a lottery and shall is not be subject to review or
(14) The commission shall institute such security procedures
as it deems it considers necessary to ensure the honesty and
integrity of the winner selection process for each lottery. All
such security and validation procedures and techniques shall be,
and remain, confidential, and shall are not be subject to any
discovery procedure in any civil judicial, administrative or other
proceeding, nor subject to the provisions of article one, chapter
twenty-nine-b of the this code. of West Virginia, one thousand nine
hundred thirty-one, as amended(15) Beginning on the first day of January, two thousand one,
no instant lottery game may be based on a simulation of live card
or casino type games.
(c) The commission shall proceed with operation of
additional lottery games, including the implementation of games
utilizing a variety of existing or future technological advances at
the earliest feasible date. The commission may operate lottery
games utilizing electronic computers and electronic computer
terminal devices and systems, which systems must include a central site system of monitoring the lottery terminals utilizing direct
communication systems, or other technological advances and
procedures, ensuring honesty and integrity in the operation of the
(d) After the first day of May, two thousand, the commission
may not adopt aggressive advertising strategies, or enter into any
contract for advertising services that target people in
impoverished areas or youth.
(e) The commission shall develop a variety of signs that warn
of the dangers and risks of gambling. After the first day of
September, two thousand, the commission shall make available the
signs to all licensed lottery sales agents. The agents are
required to post a sufficient number of the signs so that the signs
may be easily seen by persons playing a lottery game.
(f) The commission shall develop and implement an initiative
that attempts to reduce sales dependence on low-income, less
educated minorities and heavy players, which shall include, but not
be limited to, limiting advertising and the number of sales outlets
in low-income areas.
(g) The commission shall, prior to considering the
introduction of new lottery games or the significant expansion of
lottery games existing on the first day of September, two thousand,
provide for the preparation of a comprehensive gambling impact
statement. The statement must be prepared by a qualified independent research organization and must encompass, to the extent
possible, the social, economic and regional effects of the proposed
§29-22-10. Licensed lottery sales agents; restrictions; annual
license and fee; factors; application; bond; age;
nonassignable license; organizations qualified;
commissions; display of license; geographic
distribution; monopoly prohibited; lottery
retailers; preprinted instant type lottery tickets;
fee; certificate of authority; security; bond.
(a) The commission shall propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code, for the licensing of lottery
sales agents for the sale and dispensing of lottery tickets,
materials and lottery games, and the operations of electronic
therefor for the games, subject to the
(1) The commission shall issue its annual license to the
lottery sales agents for each lottery outlet and for
such a fee as
is established by the commission to cover its costs thereof in
issuing the license, but not to exceed one thousand dollars.
Application for licensing as a lottery sales agent shall be on
forms to be prescribed and furnished by the director.
(2) No licensee may engage in business exclusively as a
lottery sales agent.
(3) The commission shall ensure geographic distribution of
lottery sales agents throughout the state.
(4) Before issuance of a license to an applicant, the
commission shall consider factors such as the financial
responsibility, security, background, accessibility of the place of
business or activity to the public, public convenience and the
volume of expected sales.
(5) No person under the age of twenty-one may be licensed as
an agent. No licensed agent may employ any person under the age of
eighteen for sales or dispensing of lottery tickets or materials or
operation of a lottery terminal.
(6) A license is valid only for the premises stated
(7) The director may issue a temporary license when determined
(8) A license is not assignable or transferable.
(9) Before a license is issued, an agent shall be bonded for
an amount and in the form and manner to be determined by the
director, or shall provide
such other security, in an amount, form
and manner determined by the director, as will ensure the
performance of the agent's duties and responsibilities as a
licensed lottery agent or the indemnification of the commission.
(10) The commission may issue licenses to any legitimate
business, organization, person or entity, including, but not
limited to, civic or fraternal organizations; parks and recreation
commissions or similar authorities; senior citizen centers,
state-owned stores, persons lawfully engaged in nongovernmental
business on state property, persons lawfully engaged in the sale of
alcoholic beverages; political subdivisions or their agencies or
departments, state agencies, commission-operated agencies; persons
licensed under the provisions of article twenty-three, chapter
nineteen of this code, and religious, charitable or seasonal
(11) Licensed lottery sales agents shall receive six and one
quarter percent of gross sales as commission for the performance of
their duties: Provided, That a portion of the commission not to
exceed one and one quarter percent of gross sales may be paid from
unclaimed prize moneys accumulated under section sixteen of this
article. In addition, the commission may promulgate a
bonus-incentive plan as additional compensation not to exceed one
percent of annual gross sales. The method and time of payment
shall be determined by the commission.
(12) Licensed lottery sales agents shall prominently display
the license on the premises where lottery sales are made.
(13) No person or entity or subsidiary, agent or subcontractor
thereof of the person or entity may receive or hold more than twenty-five percent of the licenses to act as licensed lottery
sales agent in any one county or municipality nor more than five
percent of the licenses issued throughout this state: Provided,
That the limitations of twenty-five percent and five percent in
this subdivision do not apply if it is determined by the commission
that there are not a sufficient number of qualified applicants for
licenses to comply with these requirements.
(14) Notwithstanding any provision of this article to the
contrary, after the first day of May, two thousand, the commission
may not issue or renew a license for a lottery sales agent whose
place of business is in any area that is primarily residential.
(b) The commission shall propose rules for legislative
approval in accordance with the provisions of article three,
chapter twenty-nine-a of this code, specifying the terms and
conditions for contracting with lottery retailers for sale of
preprinted instant type lottery tickets and may provide for the
such the tickets through machines and devices.
Tickets may be sold or dispensed in any public or private store,
operation or organization, without limitation. The commission may
establish an annual fee not to exceed fifty dollars for such the
persons, per location or site, and shall issue a certificate of
authority to act as a lottery retailer to such the persons. The
commission shall establish procedures to ensure the security,
honesty and integrity of the lottery and distribution system. The commission shall establish the method of payment, commission
structure, methods of payment of winners, including payment in
merchandise and tickets, and may require prepayment by lottery
retailers, require bond or security for payment and require deposit
of receipts in accounts established therefor. Retailers shall
prominently display the certificate of authority issued by the
commission on the premises where lottery sales are made.
§29-22-11. Prohibited acts; restrictions on sales agents and
retailers; unauthorized sales; sales to minors;
gifts to minors; prizes to commission officers and
staff prohibited; criminal penalties for prohibited
(a) No person may sell lottery tickets or materials unless
authorized by the commission to so act. No person may perform the
functions of a licensed lottery sales agent unless licensed by the
commission. No person may perform the functions of a lottery
retailer unless authorized therefor by the commission. No person
may sell a lottery ticket or material at a price greater than that
established by the commission; except, that nothing in this section
may be construed to prevent prevents any person from giving a
lottery ticket or material to another as a gift or bonus. No
person other than a licensed lottery sales agent or an employee
thereof of the agent while acting within the scope of such employment, shall may sell lottery tickets, and then only on the
premises stated on the license.
(b) No ticket
shall may be sold to any person under the age of
eighteen twenty-one years. This section does not prohibit the
purchase of a ticket by a person eighteen twenty-one years of age
or older for the purpose of making the ticket a gift to a person
less than that age.
(c) No ticket may be purchased by and no prizes received by or
awarded to any officers or employees of the commission or any
member of their immediate household.
(d) Any person who violates the provisions of this section is
guilty of a misdemeanor, and, upon conviction thereof, shall be
fined not less than fifty dollars nor more than five hundred
imprisoned confined in the county or regional jail not
more than one year, or both fined and imprisoned.
NOTE: The purpose of this bill is to implement several
recommendations of the National Gambling Study Commission. The bill
would provide restrictions on certain types of lottery games;
increase the minimum age for playing the lottery to twenty-one;
prohibit certain advertising; require the Lottery Commission to
develop signs warning of the dangers and risks of gambling and
require lottery sales agents to post the signs; require the
Commission to develop and implement an initiative to reduce sales
dependence on low-income, less educated minorities and heavy
players, including limiting advertising and the number of sales
outlets in low-income areas; restrict the Commission from issuing
or renewing licenses in primarily residential areas; and require a
comprehensive gambling impact statement prior to considering new or
expanded lottery games.
Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would