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STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
SENATE BILL 164 By: Murdock
AS INTRODUCED
An Act relating to the Oklahoma Education Lottery
Act; amending 3A O.S. 2021, Section 703, as amended
by Section 1, Chapter 443, O.S.L. 2024 (3A O.S. Supp.
2024, Section 703), which relates to definitions;
updating statutory language; defining terms; amending
3A O.S. 2021, Section 709, which relates to the
powers of the Oklahoma Lottery Commission; updating
statutory reference; authorizing the board of
trustees to enter into agreements or contracts for
the implementation of sports pools; allowing for
certain agreements to be made; providing for
promulgation of rules for the implementation of
sports pools; authorizing the board of trustees to
develop criteria for licensure of retailers seeking
to operate sports pools; specifying certain criteria
for licensure; providing for licensing fees;
requiring the Oklahoma Lottery Commission to provide
annual reports, conduct internal audits, and maintain
records; exempting individuals from certain penalty
if played lawfully; providing for promulgation of
rules; creating the Sports Pools Fund; stating
purpose; establishing funding procedures; requiring a
certain appropriation; repealing 3A O.S. 2021,
Section 735, which relates to prohibition of other
Class III gaming; providing for codification; and
providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 1. AMENDATORY 3A O.S. 2021, Section 703, as
amended by Section 1, Chapter 443, O.S.L. 2024 (3A O.S. Supp. 2024,
Section 703), is amended to read as follows:
Section 703. As used in the Oklahoma Education Lottery Act:
1. “Administrative expenses” means operating expenses,
excluding amounts set aside for prizes, regardless of whether such
prizes are claimed;
2. “Board” means the board of trustees of the Oklahoma Lottery
Commission;
3. “Capital outlay projects” means the acquisition,
construction, installation, modification, renovation, repair,
extension, renewal, replacement, or rehabilitation of land,
interests in land, buildings, structures, facilities, or other
improvements and the acquisition, installation, modification,
renovation, repair, extension, renewal, replacement, rehabilitation,
or furnishing of fixtures, machinery, equipment, computers,
software, laboratories, furniture, textbooks, and reference material
or other property of any nature whatsoever used on, in, or in
connection with educational facilities;
4. “Commission” means the Oklahoma Lottery Commission;
5. “Educational facilities” means land, structures, and
buildings owned or operated by and through the Oklahoma State
Regents for Higher Education, the State Board of Education, the
Oklahoma Department of Career and Technology Education, or by any
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school district within this state. A public road or highway leading
to an educational facility shall not be considered an educational
facility;
6. “Executive director” means the chief executive officer and
administrator of the Oklahoma Lottery Commission;
7. “Gross proceeds” means all revenue derived from the sale of
lottery tickets or shares and all other monies derived from the
lottery;
8. “Instant ticket” means a lottery ticket that requires the
player to remove a coating to determine if a prize has been won;
9. “Lottery”, “lotteries”, “lottery game”, or “lottery games”
means an activity conducted by the Commission under the Oklahoma
Education Lottery Act through which prizes are awarded or
distributed by chance among persons who have paid for a chance or
other opportunity to receive a prize, including, but not limited to,
instant tickets and on-line online games, but excluding charity
bingo and games conducted pursuant to the Oklahoma Charity Games
Act, poker, blackjack, slot machines, pulltab machines, card games,
dice, dominos, roulette wheels, or other similar forms of gambling,
or electronic or video forms of these gambling activities, or games
where winners are determined by the outcome of a sports contest, or
pari-mutuel betting conducted pursuant to the Oklahoma Horse Racing
Act;
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10. “Major procurement contract” means any gaming product or
service costing in excess of Twenty-five Thousand Dollars
($25,000.00), including, but not limited to, major advertising
contracts, annuity contracts, prize payment agreements, consulting
services, equipment, tickets, and other products and services unique
to the Oklahoma lottery, but not including materials, supplies,
equipment, and services common to the ordinary operations of the
Commission;
11. “Member” or “members” means a trustee or trustees of the
board of trustees of the Oklahoma Lottery Commission;
12. “Member of a minority” means an individual who is a member
of a race which comprises less than fifty percent (50%) of the total
population of Oklahoma;
13. “Minority business” means any business which is owned by:
a. an individual who is a member of a minority who
reports as the personal income of the individual for
Oklahoma income tax purposes the income of the
business,
b. a partnership in which a majority of the ownership
interest is owned by one or more members of a minority
who report as their personal income for Oklahoma
income tax purposes more than fifty percent (50%) of
the income of the partnership, or
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c. a corporation organized under the laws of this state
in which a majority of the common stock is owned by
one or more members of a minority who report as their
personal income for Oklahoma income tax purposes more
than fifty percent (50%) of the distributed earnings
of the corporation;
14. “Net proceeds” means all revenue derived from the sale of
lottery tickets or shares and all other monies derived from the
lottery less operating expenses;
15. “On-line “Online games” means a game where tickets or
shares are purchased through a network of computer terminals located
at retail outlets, and such terminals are linked to a central
computer that records the purchases;
16. “Operating expenses” means all costs of doing business,
including, but not limited to, prizes, commissions, and other
compensation paid to retailers, advertising and marketing costs,
personnel costs, capital costs, administration, and operation of the
Commission and the lottery, and other operating costs;
17. “Pari-mutuel betting” means the pari-mutuel system of
wagering as defined in Section 200.1 of this title. Such term shall
not include a lottery game which may be predicated on a horse-racing
scheme that does not involve actual track events or traditional
lottery games which may involve the distribution of winnings by
pools;
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18. “Person” means any individual, corporation, partnership,
unincorporated association, limited liability company, or other
legal entity;
19. “Retailer” means a person who sells lottery tickets or
shares on behalf of the Commission pursuant to a contract;
20. “Share” means any intangible evidence of participation in a
lottery game;
21. “Sports pools” means any in-person wagering and wagering
conducted on a mobile device on the outcome of sporting events or
other events, other than horse or other animal races;
22. “Sports pools retailer” means any licensed in-person
establishment or Internet-based application that allows for an
individual to wager on sports pools;
23. “Ticket” means any tangible evidence issued by the lottery
to provide participation in a lottery game; and
22. 24. “Vendor” means a person who provides or proposes to
provide goods or services to the Commission pursuant to a major
procurement contract, but does not include an employee of the
Commission, a retailer, or a state agency or instrumentality
thereof. Such term does not include any corporation whose shares
are publicly traded and which is the parent company of the
contracting party in a major procurement contract.
SECTION 2. AMENDATORY 3A O.S. 2021, Section 709, is
amended to read as follows:
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Section 709. A. The Oklahoma Lottery Commission shall have any
and all powers necessary or convenient to its usefulness in carrying
out and effectuating the purposes and provisions of the Oklahoma
Education Lottery Act which are not in conflict with the Oklahoma
Constitution and laws of this state including, but not limited to,
the following:
1. To sue and be sued in contract, equity, mandamus, and
similar actions in its own name and to complain and defend in all
courts;
2. To adopt and alter a seal;
3. To hold copyrights, trademarks, and service marks and
enforce its rights with respect thereto;
4. To acquire or lease real property and make improvements
thereon and acquire by lease or by purchase personal property,
including, but not limited to, computers and intangible property,
including, but not limited to, computer programs, systems, and
software;
5. To enter into contracts to incur debt in its own name and
enter into financing agreements with the state, agencies or
instrumentalities of the state, or with any commercial financial
institution or credit provider as provided in Section 732 of this
title;
6. To select and contract with vendors and retailers;
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7. To enter into contracts or agreements with state or local
law enforcement agencies for the performance of law enforcement,
background investigations, and security checks;
8. To administer oaths, take depositions, issue subpoenas, and
compel the attendance of witnesses and the production of books,
papers, documents, and other evidence relative to any investigation
or proceeding conducted by the Commission;
9. To enter into contracts of any and all types on such terms
and conditions as the Commission may determine;
10. To advertise and promote the lottery and lottery games.
None of the advertisement and promotion for games and products
offered by the Oklahoma Lottery allowed by this paragraph shall
involve children under the age of eighteen (18) in any manner;
11. To inform the public about Oklahoma Lottery Commission
contributions to Oklahoma education programs; and
12. To act as a retailer, to conduct promotions which involve
the dispensing of lottery tickets or shares, and to establish and
operate a sales facility to sell lottery tickets or shares and any
related merchandise.
B. The board of trustees of the Oklahoma Lottery Commission
shall have any and all powers necessary or convenient to its
usefulness in carrying out and effectuating the purposes and
provisions of the Oklahoma Education Lottery Act which are not in
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conflict with the Oklahoma Constitution and laws of this state
including, but not limited to, the following:
1. To adopt, amend, and repeal policies and procedures and to
promulgate rules for the regulation of its affairs and the conduct
of its business, to prescribe the duties of officers of the board,
and to perform such other duties as may be required by law. In the
promulgation of rules, the board shall be subject to the
Administrative Procedures Act;
2. To procure insurance;
3. To initiate, supervise, and administer the operation of the
lottery in accordance with the provisions of the Oklahoma Education
Lottery Act and rules, policies, and procedures adopted pursuant
thereto;
4. To enter into written agreements with one or more other
states or sovereigns for the operation, participation in marketing,
and promotion of a joint lottery or joint lottery games. Such an
agreement may be entered into with a federally recognized Indian
tribe only if a cooperative agreement authorizing the Commission to
do so has been entered into by the Governor and such a tribe and has
been further approved by the Joint Committee on State-Tribal
Relations pursuant to the provisions of Section 1221 et seq. of
Title 74 of the Oklahoma Statutes;
5. To direct the executive director to conduct or have
conducted such market research as is necessary or appropriate, which
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may include an analysis of the demographic characteristics of the
players of each lottery game and an analysis of advertising,
promotion, public relations, incentives, and other aspects of
communication; and
6. To adopt and amend such rules, policies, and procedures as
necessary to implement its powers and duties, organize and operate
the Commission, regulate the conduct of lottery games in general,
and any other matters necessary or desirable for the efficient and
effective operation of the lottery or the convenience of the public;
7. To enter into written agreements with one or more other
states or sovereigns for the operation, participation in marketing,
and promotion of sports pools. Such an agreement may be entered
into with a federally recognized Indian tribe for in-person sports
pool games only if a cooperative agreement authorizing the
Commission to do so has been entered into by the Governor and such a
tribe and has been further approved by the Joint Committee on State-
Tribal Relations pursuant to the provisions of Section 1221 et seq.
of Title 74 of the Oklahoma Statutes; and
8. To adopt and amend such rules, policies, and procedures as
necessary to implement its powers and duties, organize and operate
the Commission, regulate the conduct of sports pools in general, and
any other matters necessary or desirable for the efficient and
effective operation of the sports pools or the convenience of the
public.
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C. The powers enumerated in subsections A and B of this section
are cumulative of and in addition to those powers enumerated
elsewhere in the Oklahoma Education Lottery Act, and no such powers
limit or restrict any other powers of the Oklahoma Lottery
Commission or the board of trustees.
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 713.1A of Title 3A, unless there
is created a duplication in numbering, reads as follows:
There is hereby created in the State Treasury a fund for the
Oklahoma Lottery Commission to be designated the “Sports Pools
Fund”. The fund shall be a continuing fund, not subject to fiscal
year limitations, and shall consist of all monies received by the
Commission from net revenue received from sports pools wagering and
license fees collected pursuant to Section 4 of this act. All
monies accruing to the credit of the fund shall be appropriated at
the discretion of the Legislature for the purpose of funding
gambling addiction programs, common education, and administrative
costs associated with implementing this act; provided, an
appropriation from the fund no less than One Million Dollars
($1,000,000.00) shall be made to the Department of Mental Health and
Substance Abuse Services for the purpose of treating individuals who
may struggle with gambling addiction.
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SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 717.1 of Title 3A, unless there
is created a duplication in numbering, reads as follows:
A. The board of trustees of the Oklahoma Lottery Commission
shall develop a list of objective criteria upon which the
qualification of a licensed sports pools retailer, as defined in
Section 703 of Title 3A of the Oklahoma Statutes, shall be based.
In developing these criteria, the board shall consider such factors
as the financial responsibility of the applicant, security of the
place of business or activity of the applicant, accessibility to the
public, integrity, and reputation. The board shall not consider
political affiliation, activities, or contributions to political
committees or candidates for any public office. The criteria shall
include, but not be limited to, the following:
1. The applicant shall be current in filing all applicable tax
returns and in payment of all taxes, interest, and penalties owed on
state or federal taxes, excluding items under formal appeal pursuant
to applicable statutes;
2. No person, partnership, unincorporated association,
corporation, or other business entity or principal, officer, or
director of a corporation or other business entity shall be selected
as a licensed sports pools retailer who:
a. has been convicted of or is awaiting sentencing on a
plea of guilty or nolo contendere to a criminal
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offense related to the security or integrity of the
lottery in this or any other jurisdiction,
b. has been convicted of or is awaiting sentencing on a
plea of guilty or nolo contendere to any illegal
gambling activity, false statements, false swearing,
or perjury in this or any other jurisdiction,
c. has been convicted of or is awaiting sentencing on a
plea of guilty or nolo contendere to any crime
punishable by more than one (1) year of imprisonment
or a fine more than One Thousand Dollars ($1,000.00)
or both, unless the civil rights of the person have
been restored and at least five (5) years have elapsed
from the date of the completion of the sentence
without a subsequent conviction of a crime described
in this subparagraph,
d. has been found to have violated the provisions of the
Oklahoma Education Lottery Act or any rule, policy, or
procedure of the Commission unless either ten (10)
years have passed since the violation or the board
finds the violation both minor and unintentional in
nature,
e. is a vendor or any employee or agent of any vendor
doing business with the Commission,
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f. resides in the same household as the executive
director, any board member, or any employee of the
Commission, or
g. has made a statement of material fact to the
Commission knowing such statement to be false;
3. Any sports pools retailer contract executed pursuant to this
section may, for good cause, be suspended, revoked, or terminated by
the executive director or designee if the retailer is found to have
violated any provisions of the Oklahoma Education Lottery Act or
objective criteria established by the board. Review of such
activities shall be in accordance with the procedures outlined in
the Oklahoma Education Lottery Act and shall not be subject to the
Administrative Procedures Act; and
4. All sports pools retailer contracts may be renewable
annually in the discretion of the Commission unless sooner canceled
or terminated.
B. Licenses issued by the Oklahoma Lottery Commission for
sports pools retailers shall be as follows:
1. For in-person wagering, fifteen percent (15%) of the
adjusted gross revenues received in a calendar year from the play of
sports pools; and
2. For wagering conducted on a mobile device, the following:
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a. an initial fee of Five Hundred Thousand Dollars
($500,000.00) with an annual fee of One Hundred
Thousand Dollars ($100,000.00), and
b. twenty percent (20%) of the adjusted gross revenues
received in a calendar year from the play of sports
pools.
C. To ensure the financial integrity of sports pools, the
Oklahoma Lottery Commission through its board of trustees shall:
1. Electronically submit annual reports to the Governor, State
Auditor and Inspector, Oklahoma State Bureau of Investigation, and
Attorney General, disclosing the total sports pools revenues, prize
disbursements, operating expenses, and administrative expenses of
the Commission. The annual report shall additionally describe the
organizational structure of the Commission and summarize the
functions performed by each organizational division within the
Commission;
2. Adopt a system of internal audits; and
3. Maintain weekly or more frequent records of lottery
transactions, including the distribution of tickets or shares to
retailers, revenues received, claims for prizes, prizes paid, prizes
forfeited, and other financial transactions of the Commission.
D. Notwithstanding the provisions of Sections 941 through 988
of Title 21 of the Oklahoma Statutes, the conducting of and
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participation in any game authorized pursuant to this section is
lawful when played pursuant to this section.
E. The board of trustees of the Oklahoma Lottery Commission
shall promulgate any rules necessary for the implementation of
sports pool wagering in this state.
SECTION 5. REPEALER 3A O.S. 2021, Section 735, is hereby
repealed.
SECTION 6. This act shall become effective November 1, 2025.
60-1-1232 CAD 12/30/2024 12:21:53 PM