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Statutes > North-dakota > T53 > T53c121

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CHAPTER 53-12.1LOTTERY53-12.1-01. Definitions. As used in this chapter:1.&quot;Director&quot; means the director of the lottery.2.&quot;Lottery&quot; means the division of the attorney general's office created to operate a<br>lottery.3.&quot;Onlinelottery&quot;meansagamelinkedtoacentralcomputerviaatelecommunications network in which the player selects or is assigned a number or<br>symbol or group of numbers or symbols out of a predetermined range of numbers or<br>symbols and a winning ticket is determined by chance.4.&quot;Retailer&quot; means a person the lottery has licensed to sell or redeem a ticket.5.&quot;Ticket&quot; means an original and acceptable tangible evidence of play prescribed by<br>the lottery and produced by a lottery terminal or a properly and validly registered<br>subscription play to prove participation in a draw of a game for a chance to win a<br>prize.53-12.1-02. Lottery - Administration - Line of credit.1.There is established a division of the attorney general's office called the North<br>Dakota lottery.Under the supervision of the attorney general, a director shalladminister the lottery as provided in this chapter. The director shall consider the<br>sensitive nature of the lottery, promote games, and ensure the integrity, security,<br>and fairness of the lottery's operation.The lottery is solely responsible for themanagement and control over the operation of its games.2.The attorney general's office may arrange a short-term line of credit with the Bank of<br>North Dakota should lottery funds on hand be insufficient to meet an immediate<br>major prize obligation. The line of credit is limited to the amount of each prize of one<br>hundred thousand dollars or more that relates to prize funds known to be due and<br>forthcoming to the lottery from other government-authorized lotteries through the<br>multistate lottery association. However, the line of credit may not exceed one million<br>dollars in the aggregate.53-12.1-03. Director - Responsibilities.1.The attorney general shall appoint a director who shall serve at the pleasure of the<br>attorney general.2.Subject to policy of the attorney general, the director shall:a.Employ those persons deemed necessary to operate the lottery and provide<br>secure facilities to house the lottery;b.Enter a written agreement with one or more government-authorized lotteries, or<br>with an organization created and controlled by those lotteries, for conducting<br>and marketing a joint lottery game;c.Provide for a secure computer data center and internal control system for the<br>reliable operation of the lottery;d.Prepare and submit a budget for operating the lottery;Page No. 1e.Operate the lottery so it is self-sustaining and self-funded;f.Maintain books and records which accurately reflect each day's financial<br>transactions, including the sale of tickets, receipt of funds and fees, prize<br>payments, and expenses to ensure accountability;g.License a retailer to sell or redeem a ticket;h.Require a retailer to furnish proof of financial stability or post a bond in an<br>amount the director deems necessary to protect the financial interest of the<br>state;i.Timely and efficiently transfer lottery funds due from a retailer;j.Conduct a retailer promotion to promote the sale of a ticket;k.As necessary, enter a contract for a promotional service, an annuity for the<br>payment of a prize, credit history report, security service, service from another<br>state agency, marketing and related service, gaming system and related<br>service, and other necessary service;l.Based on reasonable ground or written complaint, suspend or revoke a<br>retailer's license or impose a monetary fine, or both, for a violation, by the<br>retailer or employee of the retailer, of a lottery law or rule;m.Examine, or cause to be examined by an agent designated by the director, any<br>book or record of a retailer to ensure compliance with the lottery law and rules;n.Upon request, report to the legislative council regarding the operation of the<br>lottery;o.Make quarterly and annual financial reports to the governor and attorney<br>general and a biennial report to the legislative assembly;p.Have an annual audit, conducted by the state auditor, of the lottery.Thedirector shall present the audit report to the governor, state treasurer, and<br>legislative assembly;q.As necessary, have an independent firm conduct a study and evaluation of<br>security; andr.As necessary, conduct a survey of retailers and players or a study of reactions<br>of citizens to present and potential features of the lottery.53-12.1-04. Advisory commission - Penalty.1.There is created the lottery advisory commission, which is composed of five<br>members, three of whom are legislators selected by the chairman of the legislative<br>management and two of whom are selected by the attorney general. The term of<br>office is three years, expiring on June thirtieth with no more than two terms expiring<br>in any one year. Each member must be a citizen of the United States and a resident<br>of this state. A chairman of the commission must be chosen annually from the<br>membership of the commission by a majority of its members at the first meeting of<br>the commission each fiscal year. A member may serve as chairman for more than<br>one year.2.The lottery advisory commission shall meet at least once a quarter and any<br>additional meetings as the chairman deems necessary. Special meetings may bePage No. 2called by the chairman upon the written request of the director or any three<br>members of the commission.3.The lottery advisory commission shall advise the director and attorney general on<br>policy and general operation of the lottery and shall serve as the audit committee.4.A member of the lottery advisory commission who is not a permanent full-time state<br>employee is to be compensated at a rate of seventy-five dollars per day and entitled<br>to mileage and expenses as provided by law for state employees. A state employee<br>who is a member of the commission must receive that employee's regular salary<br>and is entitled to mileage and expenses, to be paid by the employing agency.5.No member of the lottery advisory commission, employee of the lottery, or any<br>individual who regularly resides in the same household as either of those individuals<br>may directly or indirectly, individually, as a partner of a partnership, or a stockholder,<br>director, or officer of a corporation, have an interest in the gaming system or<br>advertising agency vendor of the lottery. A knowing violation of this subsection is a<br>class B misdemeanor.53-12.1-05. Competitive bidding - Investigation of a vendor. Before a contract for agaming system or marketing services is awarded, the director shall:1.Use an open and competitive bid process which reflects the best interest of the<br>state.The director shall consider all relevant factors, including security,competence, experience, timely performance, and maximization of net proceeds;<br>and2.Conduct a thorough background investigation of the lottery's gaming system and<br>advertising agency vendors, all shareholders of ten percent or more interest, and all<br>senior officers and directors of the vendors, including a parent or subsidiary<br>corporation of the vendors.The director may use information of anothergovernment-authorized lottery or other source to determine the qualification and<br>background of the vendors.The vendors shall submit appropriate investigationauthorizations.The director may require any appropriate information from thevendors to preserve the integrity and financial security of the lottery.53-12.1-06. Retailer application - Fees - Display of license.1.An applicant for a license does not have a right to a license or granting of the<br>approval sought.A license issued or approval granted is a suspendable orrevocable privilege, and the holder does not acquire any vested interest in the<br>license or approval granted.2.An applicant for a license that has had an application denied or a license revoked<br>may not reapply until at least one year has elapsed from the date of the denial or<br>revocation unless the director determines that the reason for the denial of the<br>application or revocation of the license has been remedied. A person who has had<br>an application denied or a license revoked for a second time may not reapply until at<br>least three years have passed since the date of the second denial or revocation.<br>The decision of the director to deny an application or revoke a license is final and not<br>appealable.3.The director may charge an application fee to a person applying to become a retailer<br>and a license fee.4.A retailer license is:a.Renewable annually unless it is sooner relinquished, suspended, or revoked;Page No. 3b.Not transferable or assignable to another person; andc.Required to be conspicuously displayed at the retailer's site.53-12.1-07. Selection and qualifications of a retailer.1.The director shall select a person that the director deems best able to serve the<br>public convenience and promote the sale of a ticket. The director shall consider<br>relevant factors, including the applicant's credit history, physical security and public<br>accessibility of the applicant's site, integrity, sufficiency of existing retailers to serve<br>the public convenience, especially in a geographically remote area of the state, and<br>volume of expected sales of tickets. A person lawfully engaged in nongovernmental<br>business on state property or a person within the exterior boundary of an Indian<br>reservation or on tribal trust land may be selected as a retailer.2.A retailer may not be the lottery's gaming system or advertising agency vendor or an<br>employee or agent of the vendor.3.To be eligible as a retailer, an individual acting as a sole proprietor must:a.Have a satisfactory credit check;b.Be current in payment of all taxes, interest, and penalties owed to the state and<br>be current under a payment plan, excluding an item under formal dispute or<br>appeal pursuant to law;c.Be at least eighteen years of age;d.Be of good character and reputation;e.Not have been convicted of a felony in this or any other jurisdiction, unless at<br>least ten years have passed since satisfactory completion of the sentence or<br>probation imposed by the court in each felony;f.Not have been found to have knowingly violated a lottery law or rule;g.Not have been found to have a background, including a criminal record, or prior<br>activities that pose a threat to the public interests of this state or to the security<br>and integrity of the lottery, create or enhance the dangers of unsuitable or<br>illegal practices in the conduct of lottery activities, or present questionable<br>business practices and financial arrangements incidental to the lottery activity;h.Not be a parent, stepparent, child, stepchild, spouse, or sibling who is a regular<br>member of the same household of an employee of the lottery or member of the<br>lottery advisory commission; andi.Not have knowingly made a false statement of material fact to the lottery.4.To be eligible as a retailer, a partnership must meet the requirement of subdivision a<br>of subsection 3 and each partner must meet the requirements of subdivisions b<br>through i of subsection 3.5.To be eligible as a retailer, an organization other than a partnership must meet the<br>requirements of subdivisions a and b of subsection 3 and each officer and director<br>who is primarily responsible for making financial decisions and each shareholder<br>who owns ten percent or more of an ownership interest in the organization must<br>meet the requirements of subdivisions c through i of subsection 3.Page No. 453-12.1-08. Purchase of ticket or payment of prize to certain persons prohibited -Price of a ticket - Sale by retailer only - Second chance drawings - Prize paid to owner of a<br>winning ticket - Prize subject to taxation - Discharge of liability - Penalty.1.A North Dakota lottery ticket may not be bought by or otherwise provided to, and a<br>prize may not be paid to, the following individuals or to a parent, stepparent, child,<br>stepchild, spouse, or sibling who is a regular member of the same household of the<br>following individuals:a.A member of the lottery advisory commission or employee of the lottery, unless<br>authorized in writing by the director; orb.An officer or employee of the lottery's gaming system vendor.A person who knowingly violates this subsection is guilty of a class B misdemeanor<br>on the first offense and a class A misdemeanor on a subsequent offense.2.A retailer or employee of a retailer may buy a ticket and be paid a prize for a winning<br>ticket.3.Only a retailer may sell a ticket. A retailer may sell a ticket only at the site stated on<br>the license or at a temporary site for a special event authorized by the lottery. A<br>retailer may not sell a ticket at a price greater than the price set by the lottery rules.<br>A person convicted of violating this subsection is guilty of a class A misdemeanor on<br>the first offense and a class C felony on a subsequent offense.4.A retailer may conduct a second chance drawing of entry forms or tickets to promote<br>the sale of a ticket at that site provided that a person is not required to purchase a<br>ticket to participate.5.No ticket may be sold or given to a minor. A retailer, employee of a retailer, or any<br>other person who knowingly violates this subsection is guilty of a class B<br>misdemeanor on the first offense and a class A misdemeanor on a subsequent<br>offense.6.The prize to be paid or awarded for a winning ticket must be paid to the person who<br>the director determines is the owner of the ticket. However, the prize of a deceased<br>winning player must be paid to the lawful representative of the estate. No prize may<br>be paid on a winning ticket that has been purchased by use of a stolen lottery gift<br>certificate or acquired illegally.7.If an individual steals a ticket or lottery gift certificate from a retailer, the individual is<br>guilty of a class A misdemeanor. However, if the total value of the tickets or gift<br>certificates stolen exceeds five hundred dollars, the offense is a class C felony.8.A prize awarded is subject to state and federal income tax laws and rules.9.A person who, with intent to defraud, falsely makes, alters, forges, passes, or<br>counterfeits a ticket or gift certificate issued by the lottery, regardless of the amount<br>gained, is guilty of a class C felony.10.The state, members of the lottery advisory commission, and employees of the lottery<br>are discharged of all further liability upon payment of a prize.53-12.1-09.Operating fund - Continuing appropriation - Authorization ofdisbursements - Report - Net proceeds. There is established within the state treasury the<br>lottery operating fund into which must be deposited all revenue from the sale of tickets, interest<br>received on money in the fund, and all other fees and moneys collected, less a prize on a lottery<br>promotion, prize on a winning ticket paid by a retailer, and a retailer's commission. Except forPage No. 5moneys in the lottery operating fund appropriated by the legislative assembly for administrative<br>and operating costs of the lottery under section 53-12.1-10, all other money in the fund is<br>continuously appropriated for the purposes specified in this section. During each regular session,<br>the attorney general shall present a report to the appropriations committee of each house of the<br>legislative assembly on the actual and estimated operating revenue and expenditures for the<br>current biennium and projected operating revenue and expenditures for the subsequent biennium<br>authorized by this section. A payment of a prize or expense or transfer of net proceeds by the<br>lottery may be made only against the fund or money collected from a retailer on the sale of a<br>ticket. A disbursement from the fund must be for the following purposes:1.Payment of a prize as the director deems appropriate to the owner of a valid,<br>winning ticket;2.Notwithstanding section 53-12.1-10, payment of a marketing expense that is directly<br>offset by cosponsorship funds collected;3.Payment of a gaming system or related service expense, retailer record and credit<br>check fees, game group dues, and retailer commissions; and4.Transfer of net proceeds:a.Fifty thousand dollars must be transferred to the state treasurer each quarter<br>for deposit in the compulsive gambling prevention and treatment fund;b.An amount for the lottery's share of a game's prize reserve pool must be<br>transferred to the multistate lottery association;c.Starting July 1, 2007, one hundred five thousand six hundred twenty-five dollars<br>must be transferred to the state treasurer each quarter for deposit in the<br>attorney general multijurisdictional drug task force grant fund; andd.The balance of the net proceeds, less holdback of any reserve funds the<br>director may need for continuing operations, must be transferred to the state<br>treasurer on at least an annual basis for deposit in the state general fund.53-12.1-10.Administrative and other operating costs of the lottery - Lotteryoperating fund.Money in the lottery operating fund may be spent pursuant to legislativeappropriation for costs of administering and operating the lottery, including costs relating to<br>employees, supplies, surveys, advertising and marketing, printing, promotion, premium incentive<br>items, a facility, and services provided by another state agency.53-12.1-11. Confidentiality of records.1.The following information and records of the lottery are confidential:a.Sales and income tax information, financial statements, and a credit report of a<br>retailer applicant or person seeking or doing business with the lottery, and<br>retailer application information other than the applicant's name and location;b.Information related to a person owing a debt to the state or having a debt<br>collected through a state agency that is made confidential by another state law<br>or rule;c.Internal control and security procedures, security information on a winning<br>ticket, and information on a bid or contractual data, the disclosure of which is<br>harmful to the efforts of the lottery to contract for goods and services on<br>favorable terms;Page No. 6d.Personal information on a player who purchases a subscription or a player who<br>wins a prize on a winning ticket unless the player authorizes, in writing, release<br>of the information; ande.Lottery sales data, the disclosure of which is harmful to the competitive position<br>of the lottery, retailer, or person seeking or doing business with the lottery.<br>However, a retailer may authorize the lottery to release the retailer's lottery<br>sales data.2.To be confidential, information must relate to the security and integrity of the lottery.<br>Information and records may be disclosed within the attorney general's office or to<br>an authorized person in the proper administration of the lottery law and rules or in<br>accordance with a judicial order. Criminal history record check information on an<br>individual seeking or doing business with the lottery may be released only according<br>to chapter 12-60.53-12.1-12. Setoff of prize.1.A claimant agency and the director shall cooperate on the setoff of a winning lottery<br>ticket or promotional cash prize against a delinquent debt. A claimant agency is an<br>agency of the state of North Dakota that a person owes money to or that collects<br>money on behalf of another party to satisfy a debt.The claimant agency anddirector shall share necessary information, including the person's full name, social<br>security number, and amount and type of debt, through a mutually convenient<br>method to timely achieve a setoff of a prize.2.The director shall establish a debt setoff process in which a lottery prize claim of an<br>amount equal to or greater than six hundred dollars must be used to set off a<br>delinquent debt owed to or collected through a claimant agency.3.If the director determines that a winning player owes a delinquent debt to or has a<br>delinquent debt collected through a claimant agency, the director shall set off the<br>amount of the debt from the prize due and notify the player, in writing, of the setoff.<br>If the setoff accounts for only a portion of the prize due, the remainder of the prize<br>must be paid to the player. The director shall transfer the setoff amount to the<br>claimant agency unless the player notifies the director, in writing, within thirty days of<br>the date of the notice of the setoff, that the player disputes all or part of the debt<br>owed to or collected through the claimant agency.If the director receives anotification that the player disputes the setoff amount or claim upon which the setoff<br>is based, the director shall grant a hearing to the player to determine whether the<br>setoff is proper or the claim is valid, unless a review by a court is authorized under<br>section 50-09-14. At a hearing, no issue may be reconsidered that the player has or<br>could have previously litigated in a court or administrative proceeding.4.The lottery is discharged of all further liability for the amount of any debt setoff paid<br>to a claimant agency.5.If two or more claimant agencies have delinquent accounts for the same player, the<br>director shall apportion the prize equally among them. However, a setoff to the<br>department of human services for child support payments has priority over all other<br>setoffs.6.If the prize is insufficient to satisfy the entire debt, the remainder of the debt may be<br>collected by a claimant agency as provided by law or rule and resubmitted for setoff<br>against any other prize awarded.7.If two or more claimant agencies make adverse claims to all or a part of a prize<br>payment, upon receipt of written notice from the claimant agencies setting forth their<br>claims, the director may deposit, in accordance with section 32-11-02, the contestedPage No. 7amount of the prize payment with the clerk of court in the district in which an action<br>pertaining to the contested amount is pending or with a court-authorized depository.<br>If one of the claims is for child support, the director shall transfer the setoff amount to<br>the state disbursement unit before depositing any remaining prize payment or<br>award. Any review of this transfer to the state disbursement unit must be done<br>pursuant to section 50-09-14. Upon making the deposit or transfer, the state and its<br>officials and employees are discharged and relieved from further liability to any<br>person or claimant agency related to the prize payment.53-12.1-13. Rules. The attorney general shall adopt rules governing the operation of thelottery. The attorney general may adopt emergency rules as necessary without the grounds<br>otherwise required under section 28-32-03. The attorney general shall adopt rules to address<br>any matters necessary for the efficient operation of the lottery or convenience of the public,<br>including:1.Type of retailer where a ticket may be sold;2.Qualification for selecting a retailer and amount of application and license fees;3.Licensing procedure;4.Method used to sell a ticket, including a gift certificate and subscription;5.Financial responsibility of a retailer;6.Retailer promotions;7.Amount and method of commission to be paid to a retailer, including a special bonus<br>or incentive;8.Deadline for claiming a prize by the owner of a winning ticket, however, the deadline<br>may not exceed one year;9.Manner of paying a prize to the owner of a winning ticket; and10.Setoff of a prize.Page No. 8Document Outlinechapter 53-12.1 lottery

State Codes and Statutes

Statutes > North-dakota > T53 > T53c121

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CHAPTER 53-12.1LOTTERY53-12.1-01. Definitions. As used in this chapter:1.&quot;Director&quot; means the director of the lottery.2.&quot;Lottery&quot; means the division of the attorney general's office created to operate a<br>lottery.3.&quot;Onlinelottery&quot;meansagamelinkedtoacentralcomputerviaatelecommunications network in which the player selects or is assigned a number or<br>symbol or group of numbers or symbols out of a predetermined range of numbers or<br>symbols and a winning ticket is determined by chance.4.&quot;Retailer&quot; means a person the lottery has licensed to sell or redeem a ticket.5.&quot;Ticket&quot; means an original and acceptable tangible evidence of play prescribed by<br>the lottery and produced by a lottery terminal or a properly and validly registered<br>subscription play to prove participation in a draw of a game for a chance to win a<br>prize.53-12.1-02. Lottery - Administration - Line of credit.1.There is established a division of the attorney general's office called the North<br>Dakota lottery.Under the supervision of the attorney general, a director shalladminister the lottery as provided in this chapter. The director shall consider the<br>sensitive nature of the lottery, promote games, and ensure the integrity, security,<br>and fairness of the lottery's operation.The lottery is solely responsible for themanagement and control over the operation of its games.2.The attorney general's office may arrange a short-term line of credit with the Bank of<br>North Dakota should lottery funds on hand be insufficient to meet an immediate<br>major prize obligation. The line of credit is limited to the amount of each prize of one<br>hundred thousand dollars or more that relates to prize funds known to be due and<br>forthcoming to the lottery from other government-authorized lotteries through the<br>multistate lottery association. However, the line of credit may not exceed one million<br>dollars in the aggregate.53-12.1-03. Director - Responsibilities.1.The attorney general shall appoint a director who shall serve at the pleasure of the<br>attorney general.2.Subject to policy of the attorney general, the director shall:a.Employ those persons deemed necessary to operate the lottery and provide<br>secure facilities to house the lottery;b.Enter a written agreement with one or more government-authorized lotteries, or<br>with an organization created and controlled by those lotteries, for conducting<br>and marketing a joint lottery game;c.Provide for a secure computer data center and internal control system for the<br>reliable operation of the lottery;d.Prepare and submit a budget for operating the lottery;Page No. 1e.Operate the lottery so it is self-sustaining and self-funded;f.Maintain books and records which accurately reflect each day's financial<br>transactions, including the sale of tickets, receipt of funds and fees, prize<br>payments, and expenses to ensure accountability;g.License a retailer to sell or redeem a ticket;h.Require a retailer to furnish proof of financial stability or post a bond in an<br>amount the director deems necessary to protect the financial interest of the<br>state;i.Timely and efficiently transfer lottery funds due from a retailer;j.Conduct a retailer promotion to promote the sale of a ticket;k.As necessary, enter a contract for a promotional service, an annuity for the<br>payment of a prize, credit history report, security service, service from another<br>state agency, marketing and related service, gaming system and related<br>service, and other necessary service;l.Based on reasonable ground or written complaint, suspend or revoke a<br>retailer's license or impose a monetary fine, or both, for a violation, by the<br>retailer or employee of the retailer, of a lottery law or rule;m.Examine, or cause to be examined by an agent designated by the director, any<br>book or record of a retailer to ensure compliance with the lottery law and rules;n.Upon request, report to the legislative council regarding the operation of the<br>lottery;o.Make quarterly and annual financial reports to the governor and attorney<br>general and a biennial report to the legislative assembly;p.Have an annual audit, conducted by the state auditor, of the lottery.Thedirector shall present the audit report to the governor, state treasurer, and<br>legislative assembly;q.As necessary, have an independent firm conduct a study and evaluation of<br>security; andr.As necessary, conduct a survey of retailers and players or a study of reactions<br>of citizens to present and potential features of the lottery.53-12.1-04. Advisory commission - Penalty.1.There is created the lottery advisory commission, which is composed of five<br>members, three of whom are legislators selected by the chairman of the legislative<br>management and two of whom are selected by the attorney general. The term of<br>office is three years, expiring on June thirtieth with no more than two terms expiring<br>in any one year. Each member must be a citizen of the United States and a resident<br>of this state. A chairman of the commission must be chosen annually from the<br>membership of the commission by a majority of its members at the first meeting of<br>the commission each fiscal year. A member may serve as chairman for more than<br>one year.2.The lottery advisory commission shall meet at least once a quarter and any<br>additional meetings as the chairman deems necessary. Special meetings may bePage No. 2called by the chairman upon the written request of the director or any three<br>members of the commission.3.The lottery advisory commission shall advise the director and attorney general on<br>policy and general operation of the lottery and shall serve as the audit committee.4.A member of the lottery advisory commission who is not a permanent full-time state<br>employee is to be compensated at a rate of seventy-five dollars per day and entitled<br>to mileage and expenses as provided by law for state employees. A state employee<br>who is a member of the commission must receive that employee's regular salary<br>and is entitled to mileage and expenses, to be paid by the employing agency.5.No member of the lottery advisory commission, employee of the lottery, or any<br>individual who regularly resides in the same household as either of those individuals<br>may directly or indirectly, individually, as a partner of a partnership, or a stockholder,<br>director, or officer of a corporation, have an interest in the gaming system or<br>advertising agency vendor of the lottery. A knowing violation of this subsection is a<br>class B misdemeanor.53-12.1-05. Competitive bidding - Investigation of a vendor. Before a contract for agaming system or marketing services is awarded, the director shall:1.Use an open and competitive bid process which reflects the best interest of the<br>state.The director shall consider all relevant factors, including security,competence, experience, timely performance, and maximization of net proceeds;<br>and2.Conduct a thorough background investigation of the lottery's gaming system and<br>advertising agency vendors, all shareholders of ten percent or more interest, and all<br>senior officers and directors of the vendors, including a parent or subsidiary<br>corporation of the vendors.The director may use information of anothergovernment-authorized lottery or other source to determine the qualification and<br>background of the vendors.The vendors shall submit appropriate investigationauthorizations.The director may require any appropriate information from thevendors to preserve the integrity and financial security of the lottery.53-12.1-06. Retailer application - Fees - Display of license.1.An applicant for a license does not have a right to a license or granting of the<br>approval sought.A license issued or approval granted is a suspendable orrevocable privilege, and the holder does not acquire any vested interest in the<br>license or approval granted.2.An applicant for a license that has had an application denied or a license revoked<br>may not reapply until at least one year has elapsed from the date of the denial or<br>revocation unless the director determines that the reason for the denial of the<br>application or revocation of the license has been remedied. A person who has had<br>an application denied or a license revoked for a second time may not reapply until at<br>least three years have passed since the date of the second denial or revocation.<br>The decision of the director to deny an application or revoke a license is final and not<br>appealable.3.The director may charge an application fee to a person applying to become a retailer<br>and a license fee.4.A retailer license is:a.Renewable annually unless it is sooner relinquished, suspended, or revoked;Page No. 3b.Not transferable or assignable to another person; andc.Required to be conspicuously displayed at the retailer's site.53-12.1-07. Selection and qualifications of a retailer.1.The director shall select a person that the director deems best able to serve the<br>public convenience and promote the sale of a ticket. The director shall consider<br>relevant factors, including the applicant's credit history, physical security and public<br>accessibility of the applicant's site, integrity, sufficiency of existing retailers to serve<br>the public convenience, especially in a geographically remote area of the state, and<br>volume of expected sales of tickets. A person lawfully engaged in nongovernmental<br>business on state property or a person within the exterior boundary of an Indian<br>reservation or on tribal trust land may be selected as a retailer.2.A retailer may not be the lottery's gaming system or advertising agency vendor or an<br>employee or agent of the vendor.3.To be eligible as a retailer, an individual acting as a sole proprietor must:a.Have a satisfactory credit check;b.Be current in payment of all taxes, interest, and penalties owed to the state and<br>be current under a payment plan, excluding an item under formal dispute or<br>appeal pursuant to law;c.Be at least eighteen years of age;d.Be of good character and reputation;e.Not have been convicted of a felony in this or any other jurisdiction, unless at<br>least ten years have passed since satisfactory completion of the sentence or<br>probation imposed by the court in each felony;f.Not have been found to have knowingly violated a lottery law or rule;g.Not have been found to have a background, including a criminal record, or prior<br>activities that pose a threat to the public interests of this state or to the security<br>and integrity of the lottery, create or enhance the dangers of unsuitable or<br>illegal practices in the conduct of lottery activities, or present questionable<br>business practices and financial arrangements incidental to the lottery activity;h.Not be a parent, stepparent, child, stepchild, spouse, or sibling who is a regular<br>member of the same household of an employee of the lottery or member of the<br>lottery advisory commission; andi.Not have knowingly made a false statement of material fact to the lottery.4.To be eligible as a retailer, a partnership must meet the requirement of subdivision a<br>of subsection 3 and each partner must meet the requirements of subdivisions b<br>through i of subsection 3.5.To be eligible as a retailer, an organization other than a partnership must meet the<br>requirements of subdivisions a and b of subsection 3 and each officer and director<br>who is primarily responsible for making financial decisions and each shareholder<br>who owns ten percent or more of an ownership interest in the organization must<br>meet the requirements of subdivisions c through i of subsection 3.Page No. 453-12.1-08. Purchase of ticket or payment of prize to certain persons prohibited -Price of a ticket - Sale by retailer only - Second chance drawings - Prize paid to owner of a<br>winning ticket - Prize subject to taxation - Discharge of liability - Penalty.1.A North Dakota lottery ticket may not be bought by or otherwise provided to, and a<br>prize may not be paid to, the following individuals or to a parent, stepparent, child,<br>stepchild, spouse, or sibling who is a regular member of the same household of the<br>following individuals:a.A member of the lottery advisory commission or employee of the lottery, unless<br>authorized in writing by the director; orb.An officer or employee of the lottery's gaming system vendor.A person who knowingly violates this subsection is guilty of a class B misdemeanor<br>on the first offense and a class A misdemeanor on a subsequent offense.2.A retailer or employee of a retailer may buy a ticket and be paid a prize for a winning<br>ticket.3.Only a retailer may sell a ticket. A retailer may sell a ticket only at the site stated on<br>the license or at a temporary site for a special event authorized by the lottery. A<br>retailer may not sell a ticket at a price greater than the price set by the lottery rules.<br>A person convicted of violating this subsection is guilty of a class A misdemeanor on<br>the first offense and a class C felony on a subsequent offense.4.A retailer may conduct a second chance drawing of entry forms or tickets to promote<br>the sale of a ticket at that site provided that a person is not required to purchase a<br>ticket to participate.5.No ticket may be sold or given to a minor. A retailer, employee of a retailer, or any<br>other person who knowingly violates this subsection is guilty of a class B<br>misdemeanor on the first offense and a class A misdemeanor on a subsequent<br>offense.6.The prize to be paid or awarded for a winning ticket must be paid to the person who<br>the director determines is the owner of the ticket. However, the prize of a deceased<br>winning player must be paid to the lawful representative of the estate. No prize may<br>be paid on a winning ticket that has been purchased by use of a stolen lottery gift<br>certificate or acquired illegally.7.If an individual steals a ticket or lottery gift certificate from a retailer, the individual is<br>guilty of a class A misdemeanor. However, if the total value of the tickets or gift<br>certificates stolen exceeds five hundred dollars, the offense is a class C felony.8.A prize awarded is subject to state and federal income tax laws and rules.9.A person who, with intent to defraud, falsely makes, alters, forges, passes, or<br>counterfeits a ticket or gift certificate issued by the lottery, regardless of the amount<br>gained, is guilty of a class C felony.10.The state, members of the lottery advisory commission, and employees of the lottery<br>are discharged of all further liability upon payment of a prize.53-12.1-09.Operating fund - Continuing appropriation - Authorization ofdisbursements - Report - Net proceeds. There is established within the state treasury the<br>lottery operating fund into which must be deposited all revenue from the sale of tickets, interest<br>received on money in the fund, and all other fees and moneys collected, less a prize on a lottery<br>promotion, prize on a winning ticket paid by a retailer, and a retailer's commission. Except forPage No. 5moneys in the lottery operating fund appropriated by the legislative assembly for administrative<br>and operating costs of the lottery under section 53-12.1-10, all other money in the fund is<br>continuously appropriated for the purposes specified in this section. During each regular session,<br>the attorney general shall present a report to the appropriations committee of each house of the<br>legislative assembly on the actual and estimated operating revenue and expenditures for the<br>current biennium and projected operating revenue and expenditures for the subsequent biennium<br>authorized by this section. A payment of a prize or expense or transfer of net proceeds by the<br>lottery may be made only against the fund or money collected from a retailer on the sale of a<br>ticket. A disbursement from the fund must be for the following purposes:1.Payment of a prize as the director deems appropriate to the owner of a valid,<br>winning ticket;2.Notwithstanding section 53-12.1-10, payment of a marketing expense that is directly<br>offset by cosponsorship funds collected;3.Payment of a gaming system or related service expense, retailer record and credit<br>check fees, game group dues, and retailer commissions; and4.Transfer of net proceeds:a.Fifty thousand dollars must be transferred to the state treasurer each quarter<br>for deposit in the compulsive gambling prevention and treatment fund;b.An amount for the lottery's share of a game's prize reserve pool must be<br>transferred to the multistate lottery association;c.Starting July 1, 2007, one hundred five thousand six hundred twenty-five dollars<br>must be transferred to the state treasurer each quarter for deposit in the<br>attorney general multijurisdictional drug task force grant fund; andd.The balance of the net proceeds, less holdback of any reserve funds the<br>director may need for continuing operations, must be transferred to the state<br>treasurer on at least an annual basis for deposit in the state general fund.53-12.1-10.Administrative and other operating costs of the lottery - Lotteryoperating fund.Money in the lottery operating fund may be spent pursuant to legislativeappropriation for costs of administering and operating the lottery, including costs relating to<br>employees, supplies, surveys, advertising and marketing, printing, promotion, premium incentive<br>items, a facility, and services provided by another state agency.53-12.1-11. Confidentiality of records.1.The following information and records of the lottery are confidential:a.Sales and income tax information, financial statements, and a credit report of a<br>retailer applicant or person seeking or doing business with the lottery, and<br>retailer application information other than the applicant's name and location;b.Information related to a person owing a debt to the state or having a debt<br>collected through a state agency that is made confidential by another state law<br>or rule;c.Internal control and security procedures, security information on a winning<br>ticket, and information on a bid or contractual data, the disclosure of which is<br>harmful to the efforts of the lottery to contract for goods and services on<br>favorable terms;Page No. 6d.Personal information on a player who purchases a subscription or a player who<br>wins a prize on a winning ticket unless the player authorizes, in writing, release<br>of the information; ande.Lottery sales data, the disclosure of which is harmful to the competitive position<br>of the lottery, retailer, or person seeking or doing business with the lottery.<br>However, a retailer may authorize the lottery to release the retailer's lottery<br>sales data.2.To be confidential, information must relate to the security and integrity of the lottery.<br>Information and records may be disclosed within the attorney general's office or to<br>an authorized person in the proper administration of the lottery law and rules or in<br>accordance with a judicial order. Criminal history record check information on an<br>individual seeking or doing business with the lottery may be released only according<br>to chapter 12-60.53-12.1-12. Setoff of prize.1.A claimant agency and the director shall cooperate on the setoff of a winning lottery<br>ticket or promotional cash prize against a delinquent debt. A claimant agency is an<br>agency of the state of North Dakota that a person owes money to or that collects<br>money on behalf of another party to satisfy a debt.The claimant agency anddirector shall share necessary information, including the person's full name, social<br>security number, and amount and type of debt, through a mutually convenient<br>method to timely achieve a setoff of a prize.2.The director shall establish a debt setoff process in which a lottery prize claim of an<br>amount equal to or greater than six hundred dollars must be used to set off a<br>delinquent debt owed to or collected through a claimant agency.3.If the director determines that a winning player owes a delinquent debt to or has a<br>delinquent debt collected through a claimant agency, the director shall set off the<br>amount of the debt from the prize due and notify the player, in writing, of the setoff.<br>If the setoff accounts for only a portion of the prize due, the remainder of the prize<br>must be paid to the player. The director shall transfer the setoff amount to the<br>claimant agency unless the player notifies the director, in writing, within thirty days of<br>the date of the notice of the setoff, that the player disputes all or part of the debt<br>owed to or collected through the claimant agency.If the director receives anotification that the player disputes the setoff amount or claim upon which the setoff<br>is based, the director shall grant a hearing to the player to determine whether the<br>setoff is proper or the claim is valid, unless a review by a court is authorized under<br>section 50-09-14. At a hearing, no issue may be reconsidered that the player has or<br>could have previously litigated in a court or administrative proceeding.4.The lottery is discharged of all further liability for the amount of any debt setoff paid<br>to a claimant agency.5.If two or more claimant agencies have delinquent accounts for the same player, the<br>director shall apportion the prize equally among them. However, a setoff to the<br>department of human services for child support payments has priority over all other<br>setoffs.6.If the prize is insufficient to satisfy the entire debt, the remainder of the debt may be<br>collected by a claimant agency as provided by law or rule and resubmitted for setoff<br>against any other prize awarded.7.If two or more claimant agencies make adverse claims to all or a part of a prize<br>payment, upon receipt of written notice from the claimant agencies setting forth their<br>claims, the director may deposit, in accordance with section 32-11-02, the contestedPage No. 7amount of the prize payment with the clerk of court in the district in which an action<br>pertaining to the contested amount is pending or with a court-authorized depository.<br>If one of the claims is for child support, the director shall transfer the setoff amount to<br>the state disbursement unit before depositing any remaining prize payment or<br>award. Any review of this transfer to the state disbursement unit must be done<br>pursuant to section 50-09-14. Upon making the deposit or transfer, the state and its<br>officials and employees are discharged and relieved from further liability to any<br>person or claimant agency related to the prize payment.53-12.1-13. Rules. The attorney general shall adopt rules governing the operation of thelottery. The attorney general may adopt emergency rules as necessary without the grounds<br>otherwise required under section 28-32-03. The attorney general shall adopt rules to address<br>any matters necessary for the efficient operation of the lottery or convenience of the public,<br>including:1.Type of retailer where a ticket may be sold;2.Qualification for selecting a retailer and amount of application and license fees;3.Licensing procedure;4.Method used to sell a ticket, including a gift certificate and subscription;5.Financial responsibility of a retailer;6.Retailer promotions;7.Amount and method of commission to be paid to a retailer, including a special bonus<br>or incentive;8.Deadline for claiming a prize by the owner of a winning ticket, however, the deadline<br>may not exceed one year;9.Manner of paying a prize to the owner of a winning ticket; and10.Setoff of a prize.Page No. 8Document Outlinechapter 53-12.1 lottery

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State Codes and Statutes

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CHAPTER 53-12.1LOTTERY53-12.1-01. Definitions. As used in this chapter:1.&quot;Director&quot; means the director of the lottery.2.&quot;Lottery&quot; means the division of the attorney general's office created to operate a<br>lottery.3.&quot;Onlinelottery&quot;meansagamelinkedtoacentralcomputerviaatelecommunications network in which the player selects or is assigned a number or<br>symbol or group of numbers or symbols out of a predetermined range of numbers or<br>symbols and a winning ticket is determined by chance.4.&quot;Retailer&quot; means a person the lottery has licensed to sell or redeem a ticket.5.&quot;Ticket&quot; means an original and acceptable tangible evidence of play prescribed by<br>the lottery and produced by a lottery terminal or a properly and validly registered<br>subscription play to prove participation in a draw of a game for a chance to win a<br>prize.53-12.1-02. Lottery - Administration - Line of credit.1.There is established a division of the attorney general's office called the North<br>Dakota lottery.Under the supervision of the attorney general, a director shalladminister the lottery as provided in this chapter. The director shall consider the<br>sensitive nature of the lottery, promote games, and ensure the integrity, security,<br>and fairness of the lottery's operation.The lottery is solely responsible for themanagement and control over the operation of its games.2.The attorney general's office may arrange a short-term line of credit with the Bank of<br>North Dakota should lottery funds on hand be insufficient to meet an immediate<br>major prize obligation. The line of credit is limited to the amount of each prize of one<br>hundred thousand dollars or more that relates to prize funds known to be due and<br>forthcoming to the lottery from other government-authorized lotteries through the<br>multistate lottery association. However, the line of credit may not exceed one million<br>dollars in the aggregate.53-12.1-03. Director - Responsibilities.1.The attorney general shall appoint a director who shall serve at the pleasure of the<br>attorney general.2.Subject to policy of the attorney general, the director shall:a.Employ those persons deemed necessary to operate the lottery and provide<br>secure facilities to house the lottery;b.Enter a written agreement with one or more government-authorized lotteries, or<br>with an organization created and controlled by those lotteries, for conducting<br>and marketing a joint lottery game;c.Provide for a secure computer data center and internal control system for the<br>reliable operation of the lottery;d.Prepare and submit a budget for operating the lottery;Page No. 1e.Operate the lottery so it is self-sustaining and self-funded;f.Maintain books and records which accurately reflect each day's financial<br>transactions, including the sale of tickets, receipt of funds and fees, prize<br>payments, and expenses to ensure accountability;g.License a retailer to sell or redeem a ticket;h.Require a retailer to furnish proof of financial stability or post a bond in an<br>amount the director deems necessary to protect the financial interest of the<br>state;i.Timely and efficiently transfer lottery funds due from a retailer;j.Conduct a retailer promotion to promote the sale of a ticket;k.As necessary, enter a contract for a promotional service, an annuity for the<br>payment of a prize, credit history report, security service, service from another<br>state agency, marketing and related service, gaming system and related<br>service, and other necessary service;l.Based on reasonable ground or written complaint, suspend or revoke a<br>retailer's license or impose a monetary fine, or both, for a violation, by the<br>retailer or employee of the retailer, of a lottery law or rule;m.Examine, or cause to be examined by an agent designated by the director, any<br>book or record of a retailer to ensure compliance with the lottery law and rules;n.Upon request, report to the legislative council regarding the operation of the<br>lottery;o.Make quarterly and annual financial reports to the governor and attorney<br>general and a biennial report to the legislative assembly;p.Have an annual audit, conducted by the state auditor, of the lottery.Thedirector shall present the audit report to the governor, state treasurer, and<br>legislative assembly;q.As necessary, have an independent firm conduct a study and evaluation of<br>security; andr.As necessary, conduct a survey of retailers and players or a study of reactions<br>of citizens to present and potential features of the lottery.53-12.1-04. Advisory commission - Penalty.1.There is created the lottery advisory commission, which is composed of five<br>members, three of whom are legislators selected by the chairman of the legislative<br>management and two of whom are selected by the attorney general. The term of<br>office is three years, expiring on June thirtieth with no more than two terms expiring<br>in any one year. Each member must be a citizen of the United States and a resident<br>of this state. A chairman of the commission must be chosen annually from the<br>membership of the commission by a majority of its members at the first meeting of<br>the commission each fiscal year. A member may serve as chairman for more than<br>one year.2.The lottery advisory commission shall meet at least once a quarter and any<br>additional meetings as the chairman deems necessary. Special meetings may bePage No. 2called by the chairman upon the written request of the director or any three<br>members of the commission.3.The lottery advisory commission shall advise the director and attorney general on<br>policy and general operation of the lottery and shall serve as the audit committee.4.A member of the lottery advisory commission who is not a permanent full-time state<br>employee is to be compensated at a rate of seventy-five dollars per day and entitled<br>to mileage and expenses as provided by law for state employees. A state employee<br>who is a member of the commission must receive that employee's regular salary<br>and is entitled to mileage and expenses, to be paid by the employing agency.5.No member of the lottery advisory commission, employee of the lottery, or any<br>individual who regularly resides in the same household as either of those individuals<br>may directly or indirectly, individually, as a partner of a partnership, or a stockholder,<br>director, or officer of a corporation, have an interest in the gaming system or<br>advertising agency vendor of the lottery. A knowing violation of this subsection is a<br>class B misdemeanor.53-12.1-05. Competitive bidding - Investigation of a vendor. Before a contract for agaming system or marketing services is awarded, the director shall:1.Use an open and competitive bid process which reflects the best interest of the<br>state.The director shall consider all relevant factors, including security,competence, experience, timely performance, and maximization of net proceeds;<br>and2.Conduct a thorough background investigation of the lottery's gaming system and<br>advertising agency vendors, all shareholders of ten percent or more interest, and all<br>senior officers and directors of the vendors, including a parent or subsidiary<br>corporation of the vendors.The director may use information of anothergovernment-authorized lottery or other source to determine the qualification and<br>background of the vendors.The vendors shall submit appropriate investigationauthorizations.The director may require any appropriate information from thevendors to preserve the integrity and financial security of the lottery.53-12.1-06. Retailer application - Fees - Display of license.1.An applicant for a license does not have a right to a license or granting of the<br>approval sought.A license issued or approval granted is a suspendable orrevocable privilege, and the holder does not acquire any vested interest in the<br>license or approval granted.2.An applicant for a license that has had an application denied or a license revoked<br>may not reapply until at least one year has elapsed from the date of the denial or<br>revocation unless the director determines that the reason for the denial of the<br>application or revocation of the license has been remedied. A person who has had<br>an application denied or a license revoked for a second time may not reapply until at<br>least three years have passed since the date of the second denial or revocation.<br>The decision of the director to deny an application or revoke a license is final and not<br>appealable.3.The director may charge an application fee to a person applying to become a retailer<br>and a license fee.4.A retailer license is:a.Renewable annually unless it is sooner relinquished, suspended, or revoked;Page No. 3b.Not transferable or assignable to another person; andc.Required to be conspicuously displayed at the retailer's site.53-12.1-07. Selection and qualifications of a retailer.1.The director shall select a person that the director deems best able to serve the<br>public convenience and promote the sale of a ticket. The director shall consider<br>relevant factors, including the applicant's credit history, physical security and public<br>accessibility of the applicant's site, integrity, sufficiency of existing retailers to serve<br>the public convenience, especially in a geographically remote area of the state, and<br>volume of expected sales of tickets. A person lawfully engaged in nongovernmental<br>business on state property or a person within the exterior boundary of an Indian<br>reservation or on tribal trust land may be selected as a retailer.2.A retailer may not be the lottery's gaming system or advertising agency vendor or an<br>employee or agent of the vendor.3.To be eligible as a retailer, an individual acting as a sole proprietor must:a.Have a satisfactory credit check;b.Be current in payment of all taxes, interest, and penalties owed to the state and<br>be current under a payment plan, excluding an item under formal dispute or<br>appeal pursuant to law;c.Be at least eighteen years of age;d.Be of good character and reputation;e.Not have been convicted of a felony in this or any other jurisdiction, unless at<br>least ten years have passed since satisfactory completion of the sentence or<br>probation imposed by the court in each felony;f.Not have been found to have knowingly violated a lottery law or rule;g.Not have been found to have a background, including a criminal record, or prior<br>activities that pose a threat to the public interests of this state or to the security<br>and integrity of the lottery, create or enhance the dangers of unsuitable or<br>illegal practices in the conduct of lottery activities, or present questionable<br>business practices and financial arrangements incidental to the lottery activity;h.Not be a parent, stepparent, child, stepchild, spouse, or sibling who is a regular<br>member of the same household of an employee of the lottery or member of the<br>lottery advisory commission; andi.Not have knowingly made a false statement of material fact to the lottery.4.To be eligible as a retailer, a partnership must meet the requirement of subdivision a<br>of subsection 3 and each partner must meet the requirements of subdivisions b<br>through i of subsection 3.5.To be eligible as a retailer, an organization other than a partnership must meet the<br>requirements of subdivisions a and b of subsection 3 and each officer and director<br>who is primarily responsible for making financial decisions and each shareholder<br>who owns ten percent or more of an ownership interest in the organization must<br>meet the requirements of subdivisions c through i of subsection 3.Page No. 453-12.1-08. Purchase of ticket or payment of prize to certain persons prohibited -Price of a ticket - Sale by retailer only - Second chance drawings - Prize paid to owner of a<br>winning ticket - Prize subject to taxation - Discharge of liability - Penalty.1.A North Dakota lottery ticket may not be bought by or otherwise provided to, and a<br>prize may not be paid to, the following individuals or to a parent, stepparent, child,<br>stepchild, spouse, or sibling who is a regular member of the same household of the<br>following individuals:a.A member of the lottery advisory commission or employee of the lottery, unless<br>authorized in writing by the director; orb.An officer or employee of the lottery's gaming system vendor.A person who knowingly violates this subsection is guilty of a class B misdemeanor<br>on the first offense and a class A misdemeanor on a subsequent offense.2.A retailer or employee of a retailer may buy a ticket and be paid a prize for a winning<br>ticket.3.Only a retailer may sell a ticket. A retailer may sell a ticket only at the site stated on<br>the license or at a temporary site for a special event authorized by the lottery. A<br>retailer may not sell a ticket at a price greater than the price set by the lottery rules.<br>A person convicted of violating this subsection is guilty of a class A misdemeanor on<br>the first offense and a class C felony on a subsequent offense.4.A retailer may conduct a second chance drawing of entry forms or tickets to promote<br>the sale of a ticket at that site provided that a person is not required to purchase a<br>ticket to participate.5.No ticket may be sold or given to a minor. A retailer, employee of a retailer, or any<br>other person who knowingly violates this subsection is guilty of a class B<br>misdemeanor on the first offense and a class A misdemeanor on a subsequent<br>offense.6.The prize to be paid or awarded for a winning ticket must be paid to the person who<br>the director determines is the owner of the ticket. However, the prize of a deceased<br>winning player must be paid to the lawful representative of the estate. No prize may<br>be paid on a winning ticket that has been purchased by use of a stolen lottery gift<br>certificate or acquired illegally.7.If an individual steals a ticket or lottery gift certificate from a retailer, the individual is<br>guilty of a class A misdemeanor. However, if the total value of the tickets or gift<br>certificates stolen exceeds five hundred dollars, the offense is a class C felony.8.A prize awarded is subject to state and federal income tax laws and rules.9.A person who, with intent to defraud, falsely makes, alters, forges, passes, or<br>counterfeits a ticket or gift certificate issued by the lottery, regardless of the amount<br>gained, is guilty of a class C felony.10.The state, members of the lottery advisory commission, and employees of the lottery<br>are discharged of all further liability upon payment of a prize.53-12.1-09.Operating fund - Continuing appropriation - Authorization ofdisbursements - Report - Net proceeds. There is established within the state treasury the<br>lottery operating fund into which must be deposited all revenue from the sale of tickets, interest<br>received on money in the fund, and all other fees and moneys collected, less a prize on a lottery<br>promotion, prize on a winning ticket paid by a retailer, and a retailer's commission. Except forPage No. 5moneys in the lottery operating fund appropriated by the legislative assembly for administrative<br>and operating costs of the lottery under section 53-12.1-10, all other money in the fund is<br>continuously appropriated for the purposes specified in this section. During each regular session,<br>the attorney general shall present a report to the appropriations committee of each house of the<br>legislative assembly on the actual and estimated operating revenue and expenditures for the<br>current biennium and projected operating revenue and expenditures for the subsequent biennium<br>authorized by this section. A payment of a prize or expense or transfer of net proceeds by the<br>lottery may be made only against the fund or money collected from a retailer on the sale of a<br>ticket. A disbursement from the fund must be for the following purposes:1.Payment of a prize as the director deems appropriate to the owner of a valid,<br>winning ticket;2.Notwithstanding section 53-12.1-10, payment of a marketing expense that is directly<br>offset by cosponsorship funds collected;3.Payment of a gaming system or related service expense, retailer record and credit<br>check fees, game group dues, and retailer commissions; and4.Transfer of net proceeds:a.Fifty thousand dollars must be transferred to the state treasurer each quarter<br>for deposit in the compulsive gambling prevention and treatment fund;b.An amount for the lottery's share of a game's prize reserve pool must be<br>transferred to the multistate lottery association;c.Starting July 1, 2007, one hundred five thousand six hundred twenty-five dollars<br>must be transferred to the state treasurer each quarter for deposit in the<br>attorney general multijurisdictional drug task force grant fund; andd.The balance of the net proceeds, less holdback of any reserve funds the<br>director may need for continuing operations, must be transferred to the state<br>treasurer on at least an annual basis for deposit in the state general fund.53-12.1-10.Administrative and other operating costs of the lottery - Lotteryoperating fund.Money in the lottery operating fund may be spent pursuant to legislativeappropriation for costs of administering and operating the lottery, including costs relating to<br>employees, supplies, surveys, advertising and marketing, printing, promotion, premium incentive<br>items, a facility, and services provided by another state agency.53-12.1-11. Confidentiality of records.1.The following information and records of the lottery are confidential:a.Sales and income tax information, financial statements, and a credit report of a<br>retailer applicant or person seeking or doing business with the lottery, and<br>retailer application information other than the applicant's name and location;b.Information related to a person owing a debt to the state or having a debt<br>collected through a state agency that is made confidential by another state law<br>or rule;c.Internal control and security procedures, security information on a winning<br>ticket, and information on a bid or contractual data, the disclosure of which is<br>harmful to the efforts of the lottery to contract for goods and services on<br>favorable terms;Page No. 6d.Personal information on a player who purchases a subscription or a player who<br>wins a prize on a winning ticket unless the player authorizes, in writing, release<br>of the information; ande.Lottery sales data, the disclosure of which is harmful to the competitive position<br>of the lottery, retailer, or person seeking or doing business with the lottery.<br>However, a retailer may authorize the lottery to release the retailer's lottery<br>sales data.2.To be confidential, information must relate to the security and integrity of the lottery.<br>Information and records may be disclosed within the attorney general's office or to<br>an authorized person in the proper administration of the lottery law and rules or in<br>accordance with a judicial order. Criminal history record check information on an<br>individual seeking or doing business with the lottery may be released only according<br>to chapter 12-60.53-12.1-12. Setoff of prize.1.A claimant agency and the director shall cooperate on the setoff of a winning lottery<br>ticket or promotional cash prize against a delinquent debt. A claimant agency is an<br>agency of the state of North Dakota that a person owes money to or that collects<br>money on behalf of another party to satisfy a debt.The claimant agency anddirector shall share necessary information, including the person's full name, social<br>security number, and amount and type of debt, through a mutually convenient<br>method to timely achieve a setoff of a prize.2.The director shall establish a debt setoff process in which a lottery prize claim of an<br>amount equal to or greater than six hundred dollars must be used to set off a<br>delinquent debt owed to or collected through a claimant agency.3.If the director determines that a winning player owes a delinquent debt to or has a<br>delinquent debt collected through a claimant agency, the director shall set off the<br>amount of the debt from the prize due and notify the player, in writing, of the setoff.<br>If the setoff accounts for only a portion of the prize due, the remainder of the prize<br>must be paid to the player. The director shall transfer the setoff amount to the<br>claimant agency unless the player notifies the director, in writing, within thirty days of<br>the date of the notice of the setoff, that the player disputes all or part of the debt<br>owed to or collected through the claimant agency.If the director receives anotification that the player disputes the setoff amount or claim upon which the setoff<br>is based, the director shall grant a hearing to the player to determine whether the<br>setoff is proper or the claim is valid, unless a review by a court is authorized under<br>section 50-09-14. At a hearing, no issue may be reconsidered that the player has or<br>could have previously litigated in a court or administrative proceeding.4.The lottery is discharged of all further liability for the amount of any debt setoff paid<br>to a claimant agency.5.If two or more claimant agencies have delinquent accounts for the same player, the<br>director shall apportion the prize equally among them. However, a setoff to the<br>department of human services for child support payments has priority over all other<br>setoffs.6.If the prize is insufficient to satisfy the entire debt, the remainder of the debt may be<br>collected by a claimant agency as provided by law or rule and resubmitted for setoff<br>against any other prize awarded.7.If two or more claimant agencies make adverse claims to all or a part of a prize<br>payment, upon receipt of written notice from the claimant agencies setting forth their<br>claims, the director may deposit, in accordance with section 32-11-02, the contestedPage No. 7amount of the prize payment with the clerk of court in the district in which an action<br>pertaining to the contested amount is pending or with a court-authorized depository.<br>If one of the claims is for child support, the director shall transfer the setoff amount to<br>the state disbursement unit before depositing any remaining prize payment or<br>award. Any review of this transfer to the state disbursement unit must be done<br>pursuant to section 50-09-14. Upon making the deposit or transfer, the state and its<br>officials and employees are discharged and relieved from further liability to any<br>person or claimant agency related to the prize payment.53-12.1-13. Rules. The attorney general shall adopt rules governing the operation of thelottery. The attorney general may adopt emergency rules as necessary without the grounds<br>otherwise required under section 28-32-03. The attorney general shall adopt rules to address<br>any matters necessary for the efficient operation of the lottery or convenience of the public,<br>including:1.Type of retailer where a ticket may be sold;2.Qualification for selecting a retailer and amount of application and license fees;3.Licensing procedure;4.Method used to sell a ticket, including a gift certificate and subscription;5.Financial responsibility of a retailer;6.Retailer promotions;7.Amount and method of commission to be paid to a retailer, including a special bonus<br>or incentive;8.Deadline for claiming a prize by the owner of a winning ticket, however, the deadline<br>may not exceed one year;9.Manner of paying a prize to the owner of a winning ticket; and10.Setoff of a prize.Page No. 8Document Outlinechapter 53-12.1 lottery