Multi-state lottery.

WORKING DRAFT
2007
STATE OF
WYOMING
07LSO-0083

HOUSE BILL
NO.
HB0128

Multi-state lottery.

Sponsored by:
Joint Travel, Recreation, Wildlife and Cultural Resources Interim Committee

A BILL

for

AN ACT relating to a state lottery organization; creating the Wyoming lottery board; granting authority to the Wyoming lottery board to oversee a multi-state lottery with authority to operate instant ticket games and to participate with other states for operating a lottery as specified; providing rulemaking authority to the board; providing for licensing of lottery game retailers; creating a lottery account in the enterprise fund; authorizing expenditures for the lottery; specifying how lottery profits shall be distributed; providing generally for the operation of the lottery; exempting sales of lottery tickets from sales and use tax; providing penalties; providing a continuous appropriation and making an appropriation; and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.
W.S. 9
‑
2
‑
2901 through 9
‑
2
‑
2911 are created to read:

ARTICLE 29
WYOMING

STATE
LOTTERY ORGANIZATION

9
‑
2
‑
2901.

Definitions.

(a)

As used in this article:

(i)

"Board" means the
Wyoming
lottery board
created by W.S. 9
‑
2
‑
2903;

(ii)

"Immediate family" means any person residing as a member of the same household in the principal place of residence of a member of the board, employee or independent contractor of the board, or a licensed lottery game retailer;

(iii)

"
Lottery" means any lottery created and operated under this article, which shall be limited to instant ticket games and multi-state games operated by agreement between
Wyoming
and at least one (1) other state lottery organization;

(iv)

"Lottery game retailer" means a person who contracts with or seeks to contract with the board to sell tickets in lottery games to the public under this article;

(v)

"Supplier" means any person who enters into a contract to supply gaming materials or equipment to the lottery;

(vi)

"
Ticket" means any evidence issued under the authority of the board establishing proof of participation in any lottery conducted under this article.

9
‑
2
‑
2902.

Wyoming
lottery board; creation.

(a)

The
Wyoming
lottery board is created which shall act in all respects for the benefit of the people of the state through the operation of a state lottery and in the performance of other essential public functions entrusted to it and shall strive to maximize net lottery proceeds.

(b)

The board shall be composed of seven (7) members, subject to the following:

(i)

The members shall be appointed by the governor and confirmed by the senate as provided in W.S. 9
‑
1
‑
218;

(ii)

The members shall be residents of the state of
Wyoming
;

(iii)

No person shall serve as a member of the board who has been convicted of:

(A)

Any felony;

(B)

A misdemeanor involving gambling, theft, computer offenses, forgery, perjury, dishonesty or unlawfully selling or providing a product or substance to a minor;

(C)

Any violation of this article; or

(D)

Any offense in a federal court, military court, or court of another state, territory or jurisdiction which under the laws of this state would disqualify such person pursuant to subparagraph (A), (B) or (C) of this paragraph.

(
i
v)

Prior to the appointment of a person as a member, the governor shall submit the names of potential members to the division of criminal investigation which shall conduct a criminal history records check on all such persons. In order for the governor to determine a potential board appointee's eligibility, all persons considered for appointment to the Wyoming lottery board shall be required to submit to fingerprinting for the purpose of obtaining state and national criminal history record information. The division of criminal investigation shall contract with the federal bureau of investigation, other law enforcement agency or any other legally authorized entity to assist in such investigation. The division of criminal investigation shall conduct such investigation as soon as practicable after submission of names by the governor. The board shall pay, as an operating expense, the cost of the records check. The results of such a records check shall not be considered a record open to the public;

(v)

One (1) member shall be appointed from each of the seven (7) appointment districts pursuant to W.S. 9
‑
1
‑
218.

Appointments in each appointment district shall be rotated among the several c
ounties comprising the district
;

(vi)

Members shall serve terms of five (5) years; provided, however, that of the initial members appointed:

(A)

Two (2) members shall be appointed for an initial term of one (1) year;

(B)

Three (3) members shall be appointed for an initial term of three (3) years; and

(C)

Two (2) members shall be appointed for an initial term of five (5) years.

(vii)

A member's term may be terminated by the governor as provided by W.S. 9
‑
1
‑
202(a). Members shall continue in office until their successors are appointed and qualified. If a vacancy occurs, the governor shall appoint a successor to serve in accordance with W.S. 28
‑
12
‑
101;

(
vii
i)

A member of the board, or any member of their immediate family, shall not have a direct or indirect interest at the time of their appointment, or within a period of two (2) years prior to their appointment, in any undertaking that puts their personal interest in conflict with that of the board, including, but not limited to, any interest, through ownership, stock or otherwise, in a major procurement contract or a participating retailer; provided, however, that a board member or a member of the member's immediate family, may hold an incidental interest not to exceed one percent (1%) of the outstanding stock of a participating retailer;

(
i
x)

The members shall elect from their membership a chair and vice chair;

(x)

The board of directors may delegate to one (1) or more of its members or to any agent or employee of the board such powers and duties as it may deem proper;

(xi)

A majority of the members shall constitute a quorum for the transaction of any business and for the exercise of any power or function of the board. Action may be taken and motions and resolutions adopted by the board at any board meeting by the affirmative vote of a majority of present and voting members;

(xii)

Upon approval by the chair, members of the board shall be reimbursed for actual and reasonable expenses incurred or a per diem not to exceed the per diem provided to state employees for each day's service spent in the performance of the duties of the board;

(xi
ii
)

The members of the board shall receive as compensation one hundred fifty dollars ($150.00) for each day necessarily employed in attending the meetings of the board
.

9
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2
‑
2903.

Wyoming
lottery board; powers and duties.

(a)

The board shall:

(i)

Promulgate rules governing supervision and oversight of the
Wyoming
lottery, including:

(A)

The types of lotteries to be conducted, but no lottery shall be conducted by the board based upon the outcome of any athletic event or race of any kind, and no lottery shall be conducted that is not an instant ticket game or a multi-state game operated by agreement between Wyoming and at least one (1) other state lottery organization;

(B)

The price of tickets in the lottery, but no ticket in any instant lottery shall have a price of less than one dollar ($1.00);

(C)

The number and size of the prizes on the winning tickets and the manner in which prizes are paid to holders of winning tickets;

(D)

The frequency of the drawings or selection of winning tickets;

(E)

The types of locations at which tickets may be sold;

(F)

The methods by which tickets are advertised to prospective buyers;

(G)

The licensing of lottery game retailers to sell tickets, except no person under the age of eighteen (18) years shall be licensed as a lottery game retailer and no license shall be transferable;

(H)

The manner and compensation to be paid to licensed lottery game retailers including special bonuses or incentives, as necessary, to provide for the adequate availability of tickets to prospective buyers and for the convenience of the public;

(J)

The type and form of records, books of accounts and other papers the board requires for the examination of licensed lottery game retailers pursuant to W.S. 9
‑
2
‑
2905(e);

(K)

Other matters necessary for the efficient and economical operation and administration of the lottery and for the convenience of purchasers of tickets or holders of winning tickets.

(ii)

By October 1 each year, submit
an annual report to the joint revenue interim committee and the joint travel, recreation, wildlife and cultural resources interim committee regarding the operation of the lottery and recommendations for improvement;

(iii)

Meet at least quarterly to carry out the duties prescribed by this article;

(iv)

Direct the operation of the lottery in accordance with this article;

(v)

Arrange an annual audit of all lottery accounts and transactions performed by an independent certified public accountant and submit the audit to the governor, the legislature and the state treasurer;

(vi)

Maintain accurate records, including the distribution of tickets to licensed lottery game retailers, receipt of funds, prize claims, prize disbursements, expenses and other financial transactions of the lottery as necessary;

(vii)

Report to the governor pursuant to W.S. 9
‑
2
‑
1014, including a complete statement of the financial position and operation of the lottery;

(viii)

Contract with a state agency or a private business experienced in security procedures to periodically conduct a comprehensive study and evaluation of all aspects of security in the operation of the lottery.

(b)

The board may:

(i)

Investigate any person who has applied for or has been awarded any license or contract issued or formed by the board under this article. The board is authorized to access criminal history record information for all licensees or contractors under W.S. 9
‑
1
‑
627(d) for the purposes of this article
;

(ii)

Employ personnel necessary to implement this article;

(iii)

C
ontract for materials, equipment and supplies to design, install, operate and promote the lottery and for studies relevant to the successful operation of the lottery;

(iv)

License lottery game retailers to sell lottery tickets;

(v)

Enter into written agreements with one (1) or more government authorized lotteries to participate in the conduct and operation of lottery games, including powerball, and may enter into written agreements with one (1) or more government authorized lotteries or other persons, entities, organizations or associations to purchase goods or services in support of lottery games when necessary or desirable to make lottery games more remunerative for the state of Wyoming, so long as the games and purchases are consistent with this article.

(c)

For purposes of enforcing this article, the board through its chairman, employees or agents may examine during business hours the records, books or other documentation of the conduct of the lottery kept by licensed lottery game retailers. In any examination, the board may require by subpoena the production of all documentation and other evidence relevant to the inquiry.

(d)

Any
Wyoming
district court, upon application by the board
through
its chairman, may issue an order requiring compliance with a subpoena issued by the board. Failure to obey the order of the court may be punished as contempt.

9
‑
2
‑
2904.

Licenses; issuance; suspension and revocation; persons prohibited from holding.

(a)

The board shall include in its licensing rules and regulations requirements relating to:

(i)

Financial responsibility and bonding of lottery game retailers;

(ii)

Accessibility of the licensee's place of business to the public;

(iii)

Volume of expected sales;

(iv)

Public display of the license;

(v
)

Other matters relating to the security and efficient operation of the lottery organization.

(b)

A license shall be revoked if the board finds, after notice and an opportunity for a hearing, that the licensee has:

(i)

Provided false or misleading information to the board;

(ii)

Been convicted of any felony, a crime involving fraud or misrepresentation or a gambling related offense;
or

(iii)

Endangered the security of the lottery.

(c)

A license may be suspended, revoked or not renewed for any of the following if after notice and opportunity for a hearing the board finds the holder has:

(i)

Changed business location;

(ii)

An insufficient sales volume;

(iii)

Failed to pay monies owed to the lottery organization;

(iv)

Endangered the efficient operation of the lottery organization; or

(v)

Violated this article or any rule or regulation of the board.

(d)

Any person who has reached the age of eighteen (18) years or an organization may be a licensed lottery game retailer except:

(i)

A person employed solely as a lottery game retailer;

(ii)

A person convicted of a felony, a crime involving fraud or misrepresentation or a gambling related offense;

(iii)

A person who is or has been engaged in any form of illegal gambling;
or

(iv)

An organization in which a person listed in paragraph (
i
i)
or
(
iii
) of this subsection:

(A)

Has a financial interest;

(B)

Is an officer, director or managing agent;

(C)

P
articipates in the management or sales of lottery tickets.

(e)

Each licensed lottery game retailer shall maintain records and other documentation that completely describes all lottery transactions and any other information necessary for the proper administration of the lottery as required by the board's rules and regulations.

(f)

Licenses shall specify the place at which the sales will occur, but no license shall be issued for any premises that provides living accommodations for the lottery game retailer.

(g)

All hearings and appeals from board decisions regarding the granting, renewing, suspending or revoking of a license shall be governed by the Wyoming Administrative Procedure Act.

9
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2
‑
2905.

Contractors supplying gaming equipment; disclosures.

(a)

Any person submitting an application to contract as a supplier under this article shall disclose under oath in the application:

(i)

The business name and address and names and addresses of the following:

(A)

A
ll general and limited partners if the applicant is a partnership;

(B)

The trustee and all persons entitled to receive income or benefit from the trust if the applicant is a trust;

(C)

T
he members, officers and directors if the applicant is an association or limited liability company;

(D)

The officers, d
irectors and each owner or holder, directly or indirectly, of any equity security or other evidence of ownership of any interest if the applicant is a corporation. In the case of owners or holders of publicly held equity securities of a publicly traded corporation, then only the names and addresses of those owning or holding one percent (1%) or more of the publicly held securities shall be provided;

(E)

The holding or parent company involved if the applicant is a subsidiary company, and the officers, directors and stockholders of each. In the case of owners or holders of publicly held securities of a holding company that is a publicly traded corporation, then only the names and addresses of those owning or holding one percent (1%) or more of the publicly held securities shall be provided.

(ii)

A
ll the states in which a business organization applicant is incorporated or otherwise registered to do business and the nature of that business;

(iii)

Other jurisdictions in which the applicant has contracts to supply gaming materials or equipment;

(iv)

The details of any state or federal criminal conviction of the applicant or any person whose name and address is required under paragraph (i) of this subsection;

(v)

The details of any disciplinary action taken by any state against the applicant or any person whose name and address is required under paragraph (i) of this subsection regarding any matter related to the selling, leasing, offering for sale or lease, buying or servicing of gaming materials or equipment;

(vi)

A statement of the gross receipts realized in the preceding year from the sale, lease or distribution of gaming materials or equipment to states operating lotteries and to private persons licensed to conduct gambling. The statement shall differentiate that portion of the gross receipts attributable to transactions with states operating lotteries from that portion of the gross receipts attributable to transactions with private persons licensed to conduct gambling;

(vii)

The name and address of any source of gaming materials or equipment for the applicant;

(viii)

The number of years the applicant has been in the business of supplying gaming materials or equipment;

(ix)

Any other information accompanied by any documents the board may by rule or regulation require as necessary or appropriate.

(b)

The involved holding or parent company shall supply the information required of the applicant by this section if the applicant is a subsidiary company.

(c)

The
reasonable
costs of any investigation into the background of the applicant seeking a contract shall be assessed against the applicant and shall be paid by the applicant at the time the application is filed. Investigations may be conducted by the board, any qualified investigator hired or designated by the board, or another law enforcement entity as appropriate.

(d)

No person, firm, association or corporation contracting to supply gaming equipment or materials to the state for use in the operation of the state lottery organization shall be:

(i)

Directly or indirectly associated with any person, corporation or other business organization licensed as a lottery game retailer under this article;

(ii)

A member of the board;

(iii)

An employee or independent contractor of the board; or

(iv)

The immediate family of members, employees or independent contractors of the board.

(e)

No contract shall be formed with an applicant if:

(i)

A person disclosed pursuant to paragraph (a)(i) or (vii) of this section has been convicted of a felony or gambling related offense, engaged in any form of illegal gambling, is not of good character and reputation relevant to the secure and efficient operation of the lottery or has been convicted of a crime involving fraud or misrepresentation; or

(ii)

A disciplinary action disclosed pursuant to paragraph (a)(v) of this section was resolved adversely to the supplier.

(f)

No contract for the supply of gaming materials or equipment for use in the operation of the state lottery organization shall be enforceable against the state if the supplier fails to comply with the provisions of this section.

(g)

If a contract for lottery tickets, lottery consulting services or lottery terminals or equipment exceeds one hundred thousand dollars ($100,000.00) or if a contract is for drawing equipment regardless of value, each prospective corporate supplier shall at the time of submission of its bid or proposal, provide a current personal financial statement and individual federal and state income tax returns from the past three (3) years for each of its officers and directors and for each of the officers and directors of all parent and holding companies affiliated with the supplier.

9
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2
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2906.

Conflicts of interest.

(a)

No member of the board, employee or independent contractor of the board, or member of their immediate families shall have any financial interest in:

(i)

Any lottery;

(ii)

The sale of any lottery tickets; or

(iii)

Any organization supplying equipment, materials or services for use in the operation of the lottery or licensed as a lottery game retailer under this article.

(b)

No member of the board, employee or independent contractor of the board, licensed lottery game retailer or member of their immediate families shall purchase any ticket for or receive any prize from a lottery under this article.

9
‑
2
‑
2907.

Prizes; not assignable; withholding of amounts owed state; discharge of liability.

(a)

The right of any person to a prize is not assignable, except payment of a prize may be paid to the estate of a deceased prizewinner or as directed by court order.

(b)

Unclaimed prize money shall be retained for a period set by rule of the board. Any person who fails to claim a prize after the period set by the board shall forfeit all rights to the prize. If a valid claim is not made for the money within the period set by the board, the prize money shall be added to future prize pools.

(c)

Before payment of any prize in excess of five hundred dollars ($500.00), the director shall check the name, address and social security number of the person claiming the prize with lists of people identified as having an outstanding debt owed to the state of
Wyoming
or from a support order, as defined in W.S. 20
‑
6
‑
102. The department of revenue and the department of family services shall provide lists to the board. The chairman shall withhold payment of prize money from any prizewinner whose name appears on a list, but shall, after notice and hearing, transfer it to pay the outstanding debt as provided by applicable law.

(d)

The board is discharged of all liability upon payment of any prize under this section.

9
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2
‑
2908.

Prohibited acts.

(a)

No person shall:

(i)

Sell a lottery ticket at a price different from that fixed by the board;

(ii)

Sell a lottery ticket unless licensed to do so under this article;

(iii)

Sell or transfer a lottery ticket to a minor;

(iv)

Sell a lottery ticket at a location other than that specified on the license;

(v)

If a minor, purchase a lottery ticket.

9
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2
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2909.

Advertising.

Promotional advertising regarding the lottery shall state the odds of winning. Promotional advertising expenses shall be paid from the lottery account.

9
‑
2
‑
2910.

Revenue from sales; disposition; lottery account created.

(a)

There is created a lottery account in the enterprise fund.

(b)

Revenues from the sale of lottery tickets shall be paid to the state treasurer for deposit into the lottery account. All expenses of the board incurred under this article including salaries
and benefits
shall be paid from the lottery account, as appropriated by the legislature.

(c)

Prizes shall be paid from the lottery account. Total disbursements for lottery prizes shall be not less than forty-five percent (45%) of the total revenue accruing from the sale of lottery tickets, and sufficient funds to pay prizes are continuously appropriated from that account.

(d)

By rule and regulation the board may reserve up to one percent (1.0%) of the total revenue accruing from the sale of lottery tickets for grants to be awarded to local governments and nonprofit organizations to support prevention and treatment of problem gambling.
Criteria
for the award of grants shall include consideration of the program's:

(i)

Determination of the characteristics and symptoms of
compulsive
or pathological gambling behavior;

(ii)

Determination of the prevalence of compulsive gambling in the general population;

(iii)

Studies of the relation of compulsive gambling to other addictions;

(iv)

Studies of the social costs of compulsive gambling;

(v)

Identification of individuals with compulsive or addictive gambling behavior;

(vi)

Intervention techniques to be employed where a compulsive gambling problem is identified or suspected; and

(vii)

Assistance and referral programs, including specific resources and training on how to discuss compulsive gambling and give advice concerning access to available resources.

(
e
)

Annually, the state treasurer shall transfer remaining revenues in excess of expenses, prizes
, grants
and reserves necessary for efficient operation as follows:

(i)

The first five million dollars ($5,000,000.00) in revenues under this subsection
shall be
transferred to the Wyoming
game and fish
fund created by W.S. 23
‑
1
‑
501
for the purpose of providing additional funding for the annual operation of the game and fish commission;

(ii)

All remaining r
evenues
to the
department of state parks and cultural resources' capital construction account
.

9
‑
2
‑
2911.

Criminal penalties.

(a)

Except as provided by subsection (b) of this section, a person violating this article commits a misdemeanor punishable by a fine of not more than one thousand dollars ($1,000.00), imprisonment for not more than one (1) year, or both. Each violation is a separate offense.

(b)

Any person who knowingly falsifies, alters, forges, passes or counterfeits a lottery ticket or receipt for the purchase of a lottery ticket issued under this article is guilty of a felony punishable by a fine of not less than five thousand dollars ($5,000.00), imprisonment for not less than one (1) year, nor more than five (5) years, or both. Each violation is a separate offense.

Section 2.
W.S. 6
‑
7
‑
101(a)(iii)(C), 9
‑
1
‑
627(d), 39
‑
15
‑
105(a)(iv) by creating a new subparagraph (K) and 39
‑
16
‑
105(a)(iv) by creating a new subparagraph (G) are amended to read:

6
‑
7
‑
101.

Definitions.

(a)

As used in this article:

(iii)

"Gambling" means risking any property for gain contingent in whole or in part upon lot, chance, the operation of a gambling device or the happening or outcome of an event, including a sporting event, over which the person taking a risk has no control, but does not include:

(C)

Other acts or transactions now or hereafter expressly authorized by law
including participation in any state authorized lottery
;

9
‑
1
‑
627.

Authority to compile, disseminate and exchange information; immunity; access to information limited; security precautions.

(d)

Access to criminal history record information is available to the
Wyoming
pari-mutuel commission
and
Wyoming
lottery board
as provided by W.S. 11
‑
25
‑
104(k)
and 9
‑
2
‑
2902(b) and 9
‑
2
‑
2903(b)
. The commission
and board
shall take reasonable security precautions to prevent unauthorized persons from gaining access to criminal history record information in accordance with rules and regulations established by the
Wyoming
division of criminal investigation. For the purpose of this subsection "criminal history record information" means information, records and data compiled by criminal justice agencies on individuals for the purpose of identifying criminal offenders consisting of identifiable descriptions of the offenders and notations or a summary of arrests, detentions, indictments, information, pre-trial proceedings, nature and disposition of criminal charges, sentencing, rehabilitation, incarceration, correctional supervision and release. Criminal history record information is limited to information recorded as the result of the initiation of criminal proceedings. It does not include intelligence data, analytical prosecutorial files, investigative reports and files of statistical records and reports in which individual identities are not ascertainable.

39
‑
15
‑
105.

Exemptions.

(a)

The following sales or leases are exempt from the excise tax imposed by this article:

(iv)

For the purpose of exempting sales of services and tangible personal property sold to government, charitable and nonprofit organizations, irrigation districts and weed and pest control districts, the following are exempt:

(K)

Sales of and retail commissions on lottery tickets issued by the
Wyoming
state lottery organization under W.S. 9
‑
2
‑
2901 through 9
‑
2
‑
2911.

39
‑
16
‑
105.

Exemptions.

(a)

The following purchases or leases are exempt from the excise tax imposed by this article:

(iv)

For the purpose of exempting sales of services and tangible personal property sold to government, charitable and nonprofit organizations, irrigation districts and weed and pest control districts, the following are exempt:

(G)

Purchases of and retail commissions on lottery tickets issued by the
Wyoming
state lottery organization under W.S. 9
‑
2
‑
2901 through 9
‑
2
‑
2911.

Section 3.
There is appropriated from the general fund to the lottery account in the enterprise fund the sum of two million dollars ($2,000,000.00), or as much thereof as necessary, to carry out the purpose of this act. This appropriation is an advance to facilitate establishment of the lottery and shall be repaid from profits as soon as practicable but in no event later than one (1) year after the first prize is paid out. Repayment of these funds shall be made prior to any distributions pursuant to W.S. 9
‑
2
‑
29
10
(
e
).

Section
4
.

The Wyoming lottery board is authorized to expend and there is appropriated from the lottery account in the enterprise fund
up to
twenty percent (20%) of total revenue from sales of lottery tickets, to the board for salaries
, benefits
and all administrative expenses, except prizes and repayment of the advance from the general fund, necessary to operate the lottery through June 30, 20
09
, or as much thereof as necessary to carry out the purposes of this act.

Section
5
.
This act is effective July 1, 2007.

(END)

1
HB0128