Senate Bill No. 564
(By Senators Kessler, McKenzie, Bowman and Edgell)
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[Introduced February 17, 2003; referred to the Committee on the
Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact section nine, article twenty-two,
chapter twenty-nine of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to amend and reenact
section ten of said article, all relating to
allowing the use
of player-operated on-line ticket dispensing devices to play
travel and other on-line lottery games if the drawing of
winning numbers for those games occurs no more frequently than
five-minute intervals; and increasing the percentage licensed
lottery sales agents receive from gross sales to twenty
percent from seven percent.
Be it enacted by the Legislature of West Virginia:
That section nine, article twenty-two, chapter twenty-nine of
the code of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted; and that section ten of said
article 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.
(a) 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 and regulations
specifying the types of lottery games to be conducted by the lottery: Provided, That:
(1) No lottery may use the results of any amateur or
professional sporting event, dog race or horse race to determine
the winner;
(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 a machine may use machines which
dispense coins or currency;
(5) A lottery game which utilizes an electronic computer and
a video screen to operate a lottery game and communicate the
results thereof, such as the game "Travel", and which does not
utilize 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 nonintoxicating beer. Nothing in
this section shall prohibit the use of player-operated on-line
ticket dispensing devices for playing power ball, daily millions,
cash 25, travel, daily 3, daily 4 and other on-line lottery games
if the drawing of winning numbers for those games occurs no more
frequently than five minute intervals.
(6) Selection of the winner must be predicted totally on
chance.
(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 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 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 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 such
prizes shall be printed on any lottery ticket, where feasible, or
in descriptive materials, and shall be available at the offices of
the commission;
(12) No prizes shall 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
form of such 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 not be subject to review or
appeal;
(14) The commission shall institute such security procedures
as it deems 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 may 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 code of West Virginia, one thousand nine
hundred thirty-one, as amended.
(c) The commission shall proceed with operation of such
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
lottery.
§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
computer terminals therefor, subject to the following:
(1) The commission shall issue its annual license to the
lottery sales agents for each lottery outlet and for a fee
established by the commission to cover its costs, but not to exceed
one thousand dollars. Application for licensing as a lottery sales
agent shall be on forms 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 on the
license;
(7) The director may issue a temporary license when determined
necessary;
(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 determined by the director, or
shall provide other security, in an amount, form and manner
determined by the director, that 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
businesses;
(11) Licensed lottery sales agents shall receive seven twenty
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; and
(13) No person or entity or subsidiary, agent or subcontractor
of that 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.
(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
dispensing of 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 those persons, per
location or site, and shall issue a certificate of authority to act
as a lottery retailer to them. 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.
NOTE: The purpose of this bill is to allow the use of
player-operated on-line ticket dispensing devices to play Travel
and other on-line lottery games if the drawing of winning numbers
for those games occur no more frequently than five minute
intervals; and to increase the percentage that licensed lottery
sales agents receive from gross sales to 20% from 7%.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.