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TITLE 29

State Government

State Agencies and Offices Not Created by Constitution

CHAPTER 48. LOTTERIES

Subchapter I. State Lottery

§ 4801. Statement of purpose.

(a) It is the purpose of this subchapter to establish a state-operated lottery under the supervision of a Director who shall be appointed by the Secretary of Finance with the written approval of the Governor and hold broad authority to administer the system in a manner which will produce the greatest income for the State.

(b) In authorizing a video lottery, it is the further purpose of the General Assembly to:

(1) Provide nonstate supported assistance in the form of increased economic activity and vitality for Delaware's harness and thoroughbred horse racing industries, which activity and vitality will enable the industry to improve its facilities and breeding stock, and cause increased employment; and

(2) Restrict the location of such lottery to locations where wagering is already permitted and/or such immediately adjacent property or properties that are owned by, or immediately adjacent properties that may be acquired by, the video lottery licensee as defined in § 4805(b)(13) of this title, and where controls exist.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 539, § 1; 61 Del. Laws, c. 189, § 1; 69 Del. Laws, c. 446, § 2; 76 Del. Laws, c. 156, § 1.;

§ 4802. State Lottery Office.

A State Lottery Office shall exist as part of the Department of Finance and shall be administered by a Director responsible for the operation of a state lottery. The net proceeds of the state lottery shall be placed in the General Fund of the State.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 539, § 2.;

§ 4803. Definitions.

(a) "Credit slip" shall mean the receipt generated by a video lottery terminal when a player is playing that particular video lottery terminal, or the ticket resulting from a sports lottery game.

(b) "Director," as used in this subchapter, shall mean the Director of the State Lottery Office.

(c) "Employee organization" shall mean any organization that admits or seeks to admit to membership employees of a Delaware video lottery agent and that has as a purpose the representation of such employees in collective bargaining, grievance representation, labor disputes, salaries, wages, rates of pay, hours of employment, or conditions of work.

(d) "Gaming area" shall mean a location in a video lottery facility where gaming activity is conducted at video lottery machines or table games.

(e) "Gaming employee" shall mean a person employed in the operation of a video lottery facility and determined by the Director to have employment duties and responsibilities involving the security, maintenance, servicing, repair, or operation of video lottery machines and table game equipment, or is employed in a position that allows direct access to the internal workings of video lottery machines or table game equipment. Such employees shall include, without limitation: dealers; floorpersons; video lottery machine personnel; video lottery machine technicians; count room and cage personnel; security and surveillance employees; employees responsible for handling assets and proceeds associated with the operation of gaming activity; and employees with responsibility for policies concerning complimentaries or allowed to grant variances to policies concerning complimentaries.

(f) "Gaming excursion" shall mean an arrangement the purpose of which is to induce any person, selected or approved for participation therein on the basis of said person's ability to satisfy a financial qualification obligation related to said person's ability or willingness to gamble or on any other basis related to said person's propensity to gamble, to come to a video lottery facility for the purpose of gaming and pursuant to which, and as consideration for which, any or all of the cost of transportation, food, lodging, and entertainment for said person is directly or indirectly paid by a video lottery agent or employee thereof.

(g) "Gaming room service employee" shall mean a person employed to perform services or duties in a video lottery facility, who has access to the gaming area or restricted gaming area, but who is not included within the definition of "key employee" or "gaming employee".

(h) "Gross table game revenue" shall mean the total of all table game win or loss and poker revenue, including checks received whether collected or not, received by a video lottery agent from table game operations; provided that if the value of gross table game revenue at any video lottery facility in a given fiscal year is less than zero, any liabilities to winners in such year shall be the responsibility of the video lottery agent. Gross table game revenue shall include entry fees charged in a tournament in excess of cash prizes awarded. For purposes of this section, any check which is invalid and unenforceable shall be treated as cash and included within gross table game revenue.

(i) "Key employee" shall mean a person employed in the operation of a video lottery facility and determined by the Director to be acting in a supervisory capacity or empowered to make discretionary decisions with respect to video lottery machine or table game operations, including, without limitation, the chief executive, financial and operation managers, video lottery department managers, cashier and cage supervisors, credit executives, pit bosses or managers, gaming employee shift managers or any other employee so designated by the Director for reasons consistent with the public policies of this subchapter, and shall include any officer or any employee of an employee organization who has direct involvement with or who exercises authority, discretion or influence in the representation of employees of a Delaware video lottery agent in collective bargaining, grievance representation, labor disputes, salaries, wages, rates of pay, hours of employment or conditions of work.

(j) "Lottery" or "state lottery" or "system" shall mean the public gaming systems or games established and operated pursuant to this subchapter and including all types of lotteries.

(k) "Net moneys" shall mean all moneys received from the sale of lottery tickets after first deducting sales agent commissions and payment of prizes under $600.

(l) "Office" shall mean the State Lottery Office established by this subchapter.

(m) "Poker revenue" shall mean the total value of rake charged to players at all poker tables. The poker revenue is determined by adding the value of cash, coupons, the amount recorded on the closer, the totals of amounts recorded on the credits and markers removed from a drop box, and subtracting the amount on the opener and the total of amounts recorded on fills removed from a drop box.

(n) "Restricted gaming area" shall mean the cashier's cage, the count room, the cage booths and runway areas, the interior of table game pits, the surveillance room and catwalk areas, the video lottery machine repair room and any other area designated by the Director as a restricted gaming area.

(o) "Sports lottery" shall mean a lottery in which the winners are determined based on the outcome of any professional or collegiate sporting event, including racing, held within or without the State, but excluding collegiate sporting events that involve a Delaware college or university and amateur or professional sporting events that involve a Delaware team.

(p) "Sports lottery machine" shall mean any machine in which bills, coins or tokens are deposited in order to play a sports lottery game. A machine shall be considered a sports lottery machine notwithstanding the use of an electronic credit system making the deposit of bills, coins or tokens unnecessary.

(q) "Sports lottery operations employee" shall mean an individual employee, person or agent of an applicant or licensee who is responsible for the security of sports lottery operations or proceeds.

(r) "State Lottery Fund" shall mean those moneys derived from the sale of state lottery tickets and deposited in the state account of that name and those funds appropriated for the start-up costs of the system.

(s) "Table game" shall mean any game played with cards, dice or any mechanical, electromechanical or electronic device or machine (excluding video lottery machines) for money, credit or any representative of value, including, but not limited to, baccarat, blackjack, twenty-one, poker, craps, roulette, bingo, wheel of fortune or any variation of these games, whether or not similar in design or operation, provided that the game is expressly authorized by rule of the Director.

(t) "Table game equipment" shall mean gaming tables, cards, dice, chips, tiles, shufflers, drop boxes or any other mechanical, electronic or other device, mechanism or equipment or related supplies used or consumed in the operation of any table games.

(u) "Table game win or loss" shall mean the value of gaming chips and cash won from patrons at gaming tables less the value of gaming chips and cash won by patrons at gaming tables other than poker tables. The table game win or loss is determined by adding the value of cash, total value of coupons, the amount recorded on the closer, the totals of amounts recorded on the credits and the issuance copies of markers removed from a drop box, subtracting the amount recorded on the opener and the total of amounts recorded on fills removed from a drop box. Match play coupons shall not be included, subject to limitations imposed by the Director.

(v) "Video lottery" shall mean any lottery conducted with a video lottery machine or a network of linked video lottery machines with an aggregate progression prize or prizes.

(w) "Video lottery facility" shall mean a building containing a gaming area.

(x) "Video lottery machine" shall mean any machine in which bills, coins or tokens are deposited in order to play in a game of chance in which the results, including options available to the player, are randomly determined by the machine. A machine may use spinning reels or video displays or both, and may or may not dispense coins or tokens directly to winning players. A machine shall be considered a video lottery machine notwithstanding the use of an electronic credit system making the deposit of bills, coins or tokens unnecessary.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 9, § 1; 61 Del. Laws, c. 169, § 1; 61 Del. Laws, c. 189, § 1; 69 Del. Laws, c. 446, § 3; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 184, § 1; 71 Del. Laws, c. 253, §§ 1, 2; 75 Del. Laws, c. 89, § 154; 75 Del. Laws, c. 229, § 1; 77 Del. Laws, c. 28, § 2; 77 Del. Laws, c. 219, §§ 2, 3, 4; 77 Del. Laws, c. 329, § 65.;

§ 4804. Director -- Appointment; qualifications; salary.

(a) The State Lottery Office shall be administered and supervised by a Director who shall be a person qualified by business experience and training to supervise the operation of a public gaming system in a manner which will produce the greatest income for the State. The Director shall be appointed by the Secretary of Finance with the written approval of the Governor.

(b) The qualifications of the person appointed as Director shall be as follows:

(1) Five or more years experience as the head of an autonomous business, division or independent segment of a large company or governmental agency having to do with public gaming. The position or positions held should have broad authority and carry major responsibility; except that experience in a public utility or other monopolistic enterprise does not meet this requirement. There shall be positive evidence that the company, division or independent segment of a large company or government agency was well managed during the tenure of the prospective Director;

(2) Shall be in good health, shall have a good reputation, particularly as a person of honesty and integrity, and shall be able to pass a thorough background investigation prior to appointment;

(3) Shall not hold political office in the government of the State either by election or appointment while serving as Director, nor shall anyone who holds elected or appointed office in the government of the State be appointed as Director until the person has completed serving the full term to which the person was elected or appointed. The Director shall be a citizen of the United States, and must become a resident of the State within 90 days of appointment.

(c) The Director shall serve on a full-time basis and shall not be engaged in any other profession or occupation. The Director shall receive such salary as provided by law.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 93, § 1; 60 Del. Laws, c. 539, § 3; 70 Del. Laws, c. 186, § 1.;

§ 4805. Director -- Powers and duties.

(a) The Director shall have the power and the duty to operate and administer the state lottery and to promulgate such rules and regulations governing the establishment and operation of the lottery as the Director deems necessary and desirable in order that the lottery be initiated at the earliest feasible time and in order that the system shall produce the maximum amount of net revenues consonant with the dignity of the State and the general welfare of the people. The rules shall provide for all matters necessary or desirable for the efficient and economical operation and administration of the system and for the convenience of the purchasers of lottery tickets and the holders of winning tickets, and the players of the the video lottery, the sports lottery and table games including, but not limited to, the following:

(1) Type and number of games to be conducted;

(2) Price or prices of tickets for any game;

(3) Numbers and sizes of the prizes on the winning tickets;

(4) Manner of selecting the winning tickets;

(5) Manner of payment of prizes to the holders of winning tickets;

(6) Frequency of the drawings or selections of winning tickets;

(7) Number and types of locations at which tickets may be sold;

(8) Method to be used in selling tickets;

(9) Licensing of agents to sell tickets; provided, that, no person under the age of 18 shall be licensed as an agent;

(10) Manner and amount of compensation, if any, to be paid to licensed ticket sales agents necessary to provide for the adequate availability of tickets to prospective buyers and for the convenience of the public;

(11) Apportionment of the total revenues accruing from the sale of tickets among:

a. Payment of prizes to the holders of winning tickets;

b. Payment of costs incurred in the operation and administration of the state lottery system, including the expenses of the office and the costs resulting from any contract or contracts entered into for promotional, advertising or operational services or for the purchase or lease of gaming equipment and materials;

c. Repayment of the moneys appropriated to the State Lottery Fund pursuant to § 3 of 59 Del. Laws, c. 348; and

d. Payment of earnings to the General Fund of the State;

Provided, that no less than 30 percent of the total revenues accruing from the sale of tickets or shares shall be dedicated to subparagraph d. of this paragraph;

(12) Such other matters necessary or desirable for the efficient and economical operation and administration of the game and for the convenience of the purchasers of tickets and the holders of winning tickets and the players of the video lottery, the sports lottery and table games;

(13) Value of bills, coins or tokens needed to play the video lottery machines, sports lottery machines and table games;

(14) Licensing of agents for video lotteries;

(15) Payout from video lottery machines, provided that such payouts shall not be less than 87% on an average annual basis, and further provided that video lottery agents may return a payout greater than 87% but not greater than 95% upon 10 days written notice to the Director, and further provided that video lottery agents may, with the approval of the Lottery Director, return a greater payout percentage than 95%;

(16) A licensure requirement and enforcement procedure for officers, directors, key employees, gaming employees, gaming room service employees, sport lottery operations employees, and persons who own directly or indirectly 10% or more of such agent, in accordance with § 4828 of this title;

(17) A licensure requirement and enforcement procedure for service companies in accordance with § 4829 of this title;

(18) Standards for advertising, marketing and promotional materials used by video lottery agents;

(19) Regulations and procedures for the accounting and reporting of the payments required under §§ 4815 and 4819 of this title;

(20) The registration, kind, type, number and location of video lottery machines, sports lottery machines and table games on the licensee's premises, subject to the Director's obligations set forth in § 4820(b) of this title;

(21) The on-site security arrangements for video lottery agents;

(22) Requiring the reporting of information about the video lottery agent, its employees, vendors and finances necessary or desirable to ensure the security of the video lottery system. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, §§ 10001-10005 of this title;

(23) The reporting and auditing of financial information of licensees including, but not limited to, the reporting of profits or losses incurred by licensees and the reporting by licensees of such employment and payroll information as is necessary for the Director to determine compliance with § 10148(1) of Title 3 or § 100048 of Title 3 as the case may be. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, §§ 10001-10005 of this title;

(24)a. A registration requirement and enforcement procedure for any employee organization representing or seeking to represent employees who are employed by a Delaware video lottery agent. Any employee organization may at any time file with the office an application for registration as an employee organization. However, an employee organization shall be required to file such registration application within 10 business days after it secures a signed authorization card from any employee who is employed by a Delaware video lottery agent.

Any registration statement filed by an employee organization after the signature of an authorization card but prior to the employee organization's petition for election shall not be subject to disclosure by the Lottery Office to any video lottery agent;

b. Every key employee of an employee organization shall be required to register with the office at the same time as the application for registration is filed under subparagraph a. of this paragraph or within 30 days after the date on which such individual is elected, appointed or hired, whichever is later;

c. The application for registration by an employee organization or key employee of such employee organization may be denied or registration revoked under the following circumstances:

1. If such employee organization or key employee of such employee organization is in violation of standards established under the Labor-Management Reporting and Disclosure Procedure Prohibition Against Certain Persons Holding Office, 29 U.S.C 504(a);

2. The applicant's competence, honesty or integrity pose a threat to the public interest of the State or to the reputation of or effective regulation and control of the lottery based on the applicant's associations or by virtue of the fact that the applicant has been convicted of a felony crime of moral turpitude or has been arrested for an act constituting racketeering under § 1502(9)a., b.2. or b.4. through 10. of Title 11 within 10 years prior to applying for registration hereunder or at any time thereafter. Any employee or employee organization denied registration based on an arrest for an act constituting racketeering under § 1502(9)a., b.2. or b.4. through 10. of Title 11 may apply for reconsideration of registration if subsequently acquitted or a nolle prosequi is entered or the charge is otherwise dismissed. In such instances, the Lottery Office shall reconsider the applicant's registration based on the criteria previously set forth in this subsection;

3. The organization or individual has knowingly made or caused to be made any written statement to any representative of the office or the Delaware State Police or any oral response to an official inquiry by the office, its employees or agents which was at the time and in light of circumstances under which it was made false or misleading;

4. The organization or key employee thereof holds or obtains a direct financial interest in any video lottery agent, provided the employee organization is provided a 30-day period to divest of any such direct financial interest.

The Delaware State Police shall conduct the background checks required by this paragraph. The failure of any key employee to satisfy the requirements of paragraph (a)(24)c.1. through 4. of this section may constitute grounds for suspension of the registration of the employee organization if the organization does not remove the key employee from the key employee's duties as defined in § 4803(i) of this title. The employee organization will be given a reasonable opportunity to remove or replace any key employee found to be in violation of paragraph (a)(24)c.1. through 4. of this section;

d. All registration statements filed under this paragraph shall be valid for a 1-year period and a renewed registration form or an updated supplemental registration form must be filed annually. The entity or individual filing such form is under a continuing duty to promptly notify the Director of any changes in disclosed information;

e. The Secretary of Finance shall, within a reasonable time, if requested by the Director, appoint a hearing officer to determine whether the application for registration shall be denied or the registration suspended or revoked. The hearing officer shall be required to hold a hearing in conformance with the requirements of § 10131 of this title. In any hearing, the Delaware Uniform Rules of Evidence shall be in effect. The denial of an application of registration or the suspension or revocation of a registration shall be bound by the provisions of §§ 10133 and 10134 of this title. The hearing officer's decision to deny an application of registration or to suspend or revoke a registration shall be appealable to the Superior Court under the Delaware Administrative Procedures Act. All applications for registration shall be deemed approved unless the Director notifies the applicant within 60 days of his or her decision not to approve and to appoint a hearing officer under this paragraph, or unless extenuating circumstances require a longer period, in which case the Director shall act with all deliberate speed to complete the process. Any employee organization may continue to provide services to employees of a Delaware video lottery agent during the review of the application process and the appeal process, except where the employee organization is found in violation of paragraph (a)(24)c.4. of this section or there has been a previous violation of paragraph (a)(24)c.1. through 3. of this section by the employee organization within the previous 10 years;

f. Information requested in the application of registration provided for under this paragraph shall be adopted as part of the office's official rules and regulations upon notice and opportunity for a hearing under the Delaware Administrative Procedures Act [Chapter 101 of this title];

(25) The Director shall adopt procedures under the Delaware Administrative Procedures Act for employment investigations of the honesty, integrity, reputation and associations of office employees in order to determine that the employee's employment does not pose a threat to the public interest of the State or the integrity of the office. The procedures and any rules and regulations shall require any person seeking employment for compensation with the office for a position which has direct access to lottery ticket sales agents, video lottery agents or vendors to submit his or her fingerprints and other relevant information in order to obtain the individual's entire federal and state criminal history record. The Delaware State Police shall conduct the investigations required under such rules and regulations. The rules and regulations shall require new employees to submit fingerprints for purposes of the state and federal criminal history checks;

(26) Type and number of sports lottery games to be conducted, the price or prices for any sports lottery games, the rules for any sports lottery games, and the payout and manner of compensation to be paid to winners of sports lottery games;

(27) Type and number of table games to be conducted, the price or prices for any table games, the rules for any table games, the payout and manner of compensation to be paid to winners of table games, and the minimum and maximum wagers for any table games;

(28) The regulations and procedures for the display and presentation of messages concerning responsible gaming and the regulations, procedures and training for identification of and assistance to compulsive gamblers;

(29) The provision of complimentary services, gifts, transportation, cash, food, nonalcoholic beverages, entertainment or any other thing of value by a video lottery agent to a guest;

(30) The procedures for the review and evaluation of licensing applications, including the forms of applications, procedures for fingerprinting and other means of identification, procedures for hearings, and grounds and procedures for the approval, denial, revocation or suspension of a license;

(31) Procedures relating to internal management controls of video lottery agents, including accounting controls and employee and supervisory organizational charts and responsibilities; and

(32) Standards for the manufacture, sale, distribution, maintenance, repair, and servicing of video lottery machines and table game equipment.

(b) The Director shall also have the power and it shall be the Director's duty to:

(1) Appoint such deputy directors as may be required to carry out the functions and duties of the office. Each deputy director shall have had 3 years management experience in areas pertinent to the prospective responsibilities and an additional 3 years of experience in the same field.

(2) Within the limit of the funds made available in § 3 of 59 Del. Laws, c. 348, and proceeding from the sale of lottery tickets and generated by the operations of video lottery agents, appoint such professional, technical, and clerical assistants and employees as may be necessary to perform the duties imposed upon the office by this subchapter.

(3) In accordance with this subchapter, license as agents to sell lottery tickets persons who will best serve, by location or accessibility, the public convenience and promote the sale of lottery tickets. The Director may require a bond from every agent so licensed in such amount as the Director deems necessary. Every licensed agent shall prominently display the agent's license or a copy thereof.

(4) Enter into contracts for the operation of any game or part thereof and into contracts for the promotion of the game or games. This authorization is to be construed to include, but not be limited to, contracting with any racing or other sporting association to conduct sporting events within any racetrack or sports field in the State, the outcome of which shall determine the winners of a state game or, as an alternative, to affiliate the determination of the winners of a game with any racing or sporting event held within or without the State, and, including agreements with other state, provincial or international lotteries for participation in lottery games. All contracts for other than professional services in an amount greater than $2,000 shall be awarded to the lowest responsible bidder in the manner prescribed by state bidding laws. No contract awarded or entered into by the Director may be assigned by the holder thereof except by specific approval of the Director.

(5) Make arrangements for any person or organization, including banks, to perform such functions, activities or services in connection with the operation of the system as the Director may deem advisable.

(6) Suspend or revoke any license issued pursuant to this subchapter or the rules and regulations promulgated hereunder.

(7) Certify and report monthly to the State Treasurer the total lottery revenues, prize disbursements and other expenses for the preceding month, and to make an annual report to the Governor and the General Assembly, which report shall include a full and complete statement of revenues, prize disbursements and other expenses and recommendations for such changes in this subchapter as the Director deems necessary or desirable.

(8) Report immediately to the Governor and members of the General Assembly any matters which shall require immediate changes in the laws of the State in order to prevent abuses and evasions of this subchapter or the rules and regulations promulgated hereunder or to rectify undesirable conditions in connection with the administration or operation of the gaming system. Such a report shall be disclosed to the public immediately upon issuance.

(9) Carry on a continuous study and investigation of the system:

a. For the purpose of ascertaining any defects in this subchapter or in the rules and regulations issued hereunder by reason whereof any abuses in the administration and operation of the lottery or any evasion of this subchapter or the rules and regulations may arise or be practiced;

b. For the purpose of formulating recommendations for changes in this subchapter and the rules and regulations promulgated hereunder to prevent such abuses and evasions;

c. To guard against the use of this subchapter to benefit organized gambling and crime or criminals in any manner whatsoever; and

d. To insure that this law and the rules and regulations shall be in such form and be so administered as to serve the true purpose of this subchapter.

(10) Make a continuous study and investigation of:

a. The operation and administration of similar laws which may be in effect in other states and countries;

b. Any literature on the subject which from time to time may be published or available;

c. Any federal laws which may affect the operation of the lottery; and

d. The reaction of Delaware citizens to existing and potential features of the games with a view to recommending or effecting changes that will tend to serve the purposes of this subchapter.

(11) Make available to the State Auditor or the State Auditor's representative such information as may be required to perform an annual audit as prescribed in Chapter 29 of this title.

(12) Establish state-operated sales offices, without limit as to number or location, as the Director shall deem suitable and economical in order to make lottery tickets more available to the public, which offices shall be operated solely from funds generated by the lotteries permitted by this subchapter.

(13) License as video lottery agents each person, corporation or association which, in 1993, held either a horse racing meet pursuant to Title 3 or Title 28 or a harness horse racing meet pursuant to Title 3 and who satisfies such fitness and background standards as the Director may promulgate pursuant to subsection (a)(16) of this section. In the event that there shall have been or shall be a change of ownership or such person, corporation or association after the close of the 1993 racing meet then the issuance by the Director of a license to serve as a video lottery agent shall be conditioned upon the Director's determination that such person, corporation or association shall have met the requirements of § 4806(a)(1)-(4) and (b) of this title and satisfies such fitness and background standards as the Director may promulgate pursuant to subsection (a)(16) of this section. Change of ownership occurring after the Director has issued a license shall automatically terminate the license 90 days thereafter unless the Director has determined after application to issue a license to the new owner(s) because the new owner(s) have met the requirements of § 4806(a)(1)-(4) and (b) of this title and satisfied such fitness and background standards as the Director may promulgate pursuant to subsection (a)(16) of this section. Any license granted pursuant to this subsection is a privilege personal to the video lottery agent and is not a legal right. A license granted or renewed pursuant to this subsection may not be transferred or assigned to another person, nor may a license be pledged as collateral. For purposes of this subsection, "a change of ownership" shall have occurred if more than 20 percent of the legal or beneficial interests in such person, corporation or association shall be transferred, whether by direct or indirect means.

(14) Whenever the Director deems necessary, examine all accounts, bank accounts, financial statements and records of the licensee in a licensee's possession or under its control in which it has an interest and the licensee must authorize all 3rd parties, including parents, subsidiaries or related entities, in possession or control of the accounts or records of the licensee to allow examination of any of those accounts or records by the Director. None of the information disclosed pursuant to this subsection shall be subject to disclosure under the Freedom of Information Act, §§ 10001-10005 of this title.

(15) Subpoena witnesses and compel the production of books, papers and documents of a licensee in connection with any hearings of the Director and may administer oaths or affirmations to the witnesses whenever, in the judgment of the Director, it may be necessary for the effectual discharge of duties.

If any person refuses to obey any subpoena or to testify or to produce any books, papers or documents, then the Director may apply to the Superior Court of the county in which the Director may be sitting and, thereupon, the Court shall issue its subpoena requiring the person to appear and testify or to produce the books, papers and documents before the Director. Whoever fails to obey or refuses to obey a subpoena of the Superior Court shall be guilty of contempt of court and shall be punished accordingly. False swearing on the part of any witness shall be deemed perjury and shall be punished as such.

(16) Bar, pursuant to §§ 4834 and 4835 of this title, any person from entering the premises of a video lottery agent or from participating in any capacity in the play of any table game, sports lottery game or video lottery game, and procure such assistance from video lottery agents as is appropriate to enforce any such bar.

(17) Impose reasonable fees, as set by the Director and payable to the Office, upon applicants for licenses pursuant to §§ 4828 and 4829 of this title for the conduct of the review and investigation of the applicant, such fees to approximate and reasonably reflect all costs necessary to defray the expenses of the lottery and Division of Gaming Enforcement.

(18) Require video lottery agents to submit regular internal control submissions, which shall contain a narrative description of the internal control system to be utilized by the video lottery facility, including, but not limited to:

a. Accounting controls, including the standardization of forms and definition of terms to be utilized in the gaming;

b. Procedures, forms and, where appropriate, formulas covering the calculation of hold percentages; revenue drop; expense and overhead schedules; complimentary services;

c. Job descriptions and the system of personnel and chain-of-command, establishing a diversity of responsibility among employees engaged in gaming operations and identifying primary and secondary supervisory oversight responsibilities; and personnel practices;

d. Procedures within the cashier's cage for the receipt, storage and disbursal of chips, cash, and other cash equivalents used in wagering; the cashing of checks; the redemption of chips and other cash equivalents used in gaming;

e. Procedures for the collection and security of moneys at the gaming tables;

f. Procedures for the transfer and recordation of chips between the gaming tables and the cashier's cage and the transfer and recordation of moneys within the facility;

g. Procedures for the transfer of moneys from the gaming tables to the counting process and the transfer of moneys within the facility for the counting process;

h. Procedures and security for the counting and recordation of table game revenue;

i. Procedures and security standards for the handling and storage of gaming apparatus, including cards, dice, machines, wheels and all other gaming equipment;

j. Procedures and rules governing the conduct of particular games and the responsibility of casino personnel in respect thereto;

k. Procedures for the security, storage and recording of cash, chips, and cash equivalents utilized in gaming operations.

(c) The license granted pursuant to subsection (b)(13) of this section may be revoked or suspended for cause upon 30 days' written notice to the licensee or due to a change in ownership as set forth in subsection (b)(13) of this section, but shall otherwise not be subject to expiration or termination. "Cause" shall by way of example and not by limitation include falsifying any application for license or report required by the rules and regulations, the failure to report any information required by the rules and regulations, the material violation of any rules and regulations promulgated by the Director or any conduct by the licensee which undermines the public confidence in the video lottery system or serves the interest of organized gambling or crime and criminals in any manner. A license may be revoked for an unintentional violation of any federal, state or local law, rule or regulation provided that the violation is not cured within a reasonable time as determined by the Director; or a longer period where the video lottery agent has made diligent efforts to cure. The Secretary of Finance shall within a reasonable time, if requested, appoint a hearing officer to hold a hearing to determine whether the license should be revoked or suspended. The hearing officer's decision revoking or suspending the license shall be appealable to the Superior Court under the provisions of the Administrative Procedures Act. Any decision of the Director relating to the business plan or the number of video lottery machines to be awarded to licensees under § 4820(b) of this title shall be appealable under the Administrative Procedures Act in the manner of a case decision. Notwithstanding the foregoing, nothing in this subsection shall otherwise prohibit the termination or revocation of a license in accordance with the rules and regulations adopted hereunder.

59 Del. Laws, c. 348, § 1; 61 Del. Laws, c. 189, § 1; 69 Del. Laws, c. 446, §§ 4-8, 10-13; 70 Del. Laws, c. 167, § 1; 70 Del. Laws, c. 186, § 1; 71 Del. Laws, c. 184, § 2; 71 Del. Laws, c. 253, §§ 3-5; 74 Del. Laws, c. 53, § 1; 77 Del. Laws, c. 28, §§ 3-9; 77 Del. Laws, c. 219, §§ 5-11.;

§ 4806. Lottery sales agents -- Qualifications; prohibitions.

(a) No license as an agent to sell lottery tickets shall be issued to any person to engage in business exclusively as a lottery ticket sales agent except those persons hired to staff the State Lottery Office or a state-operated sales office. Before issuing a license to an agent, the Director shall consider such factors as:

(1) Financial responsibility and security of the person and the person's business or activity;

(2) Accessibility of the person's place of business or activity to the public;

(3) Sufficiency of existing licenses to serve the public convenience; and

(4) Volume of expected sales.

(b) If the Director shall find that the experience, character and general fitness of the applicant are such that the participation of such a person as a lottery ticket sales agent will be consistent with the public interest, convenience and the purposes of this subchapter, the Director shall thereupon grant a license.

For the purposes of this section, the term "person" shall be construed to mean and shall include an individual, association, corporation, club, trust, estate, society, company, joint stock company, receiver, trustee, assignee, referee or any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of individuals. "Person" shall also be construed to mean and include all departments, commissions, agencies and instrumentalities of the State, including counties and municipalities and agencies and instrumentalities thereof.

59 Del. Laws, c. 348, § 1; 61 Del. Laws, c. 189, § 1; 70 Del. Laws, c. 186, § 1.;

§ 4807. Lottery sales agents -- Authorization of agents.

Notwithstanding any other provision of law, any person licensed as provided in this subchapter is hereby authorized and empowered to act as a lottery ticket sales agent or a video lottery agent as the case may be.

59 Del. Laws, c. 348, § 1; 61 Del. Laws, c. 189, § 1; 69 Del. Laws, c. 446, § 14.;

§ 4807A. Fingerprinting procedure required.

(a) Any person seeking a license from the State Lottery Office shall be required to submit fingerprints and other necessary information in order to obtain the following:

(1) A report of the individual's entire criminal history record from the State Bureau of Identification or a statement from the State Bureau of Identification that the State Bureau of Identification Central Repository contains no such information relating to that person; and

(2) A report of the individual's entire federal criminal history record pursuant to the Federal Bureau of Investigation appropriation of Title II of Public Law 92-544. The State Bureau of Identification shall be the intermediary for the purposes of this section and the State Lottery Office shall be the screening point for the receipt of said federal criminal history records.

(b) All information obtained pursuant to subsection (a) of this section shall be forwarded to the State Lottery Office, which shall access the information and make a determination of suitability for licensure. The person seeking licensure shall be provided with a copy of all information forwarded to the State Lottery Office pursuant to this subsection. Information obtained under this subsection is confidential and may only be disclosed to the Director and Deputy Director of the State Lottery Office. The State Bureau of Identification may release any subsequent criminal history to the State Lottery Office.

(d) A person seeking licensure shall have an opportunity to respond to the State Lottery Office regarding any information obtained pursuant to subsection (b) of this section prior to a determination of suitability for licensure. The grounds upon which a person seeking licensure may be denied consideration for a license include, but are not limited to:

(1) A conviction of a felony in this State or any other jurisdiction; or

(2) A conviction of any crime involving gambling or a crime of moral turpitude within 10 years prior to applying for a license or at any time subsequent to the granting of a license.

(e) Upon making its determination of suitability for licensure, the State Lottery Office shall forward the determination to the person seeking a license.

(f) Any person seeking a license with the State Lottery Office who has submitted to a criminal background check in this or any other state within the previous 12 months shall not be required to submit to another criminal background check; provided, however, that the person submits (1) the results of such previous criminal background check, including any previous federal criminal background check, and (2) a reference from the person's most recent employer, if any, covering the previous 12 months.

(g) The State Lottery Office shall, in the manner provided by law, promulgate regulations necessary to implement this subchapter. These regulations shall include, but are not limited to:

(1) Establishment, in conjunction with the State Bureau of Identification, of a procedure for fingerprinting persons seeking licensure with the State Lottery Office and providing the reports obtained pursuant to subsection (a) of this section;

(2) Establishment of a procedure to provide confidentiality of information obtained pursuant to subsection (a) of this section and of the determination of suitability for licensure.

70 Del. Laws, c. 167, § 2; 70 Del. Laws, c. 186, § 1.;

§ 4808. Nonassignability of prizes.

No right of any person to a prize or a portion of a prize shall be assignable; except that payment of any prize shall be made to the estate of a deceased prize winner; and except that any person pursuant to an appropriate judicial order may be paid the prize, or portion thereof, to which the winner is entitled. The Director shall be discharged of all further liability upon payment of a prize pursuant to this section.

59 Del. Laws, c. 348, § 1; 64 Del. Laws, c. 383, § 1.;

§ 4809. Restrictions on ticket sales; penalties.

(a) No person shall sell a ticket at a price greater than that fixed by rule or regulation of the Director. No person other than a licensed lottery sales agent shall sell lottery tickets or shares, except that nothing in this section shall be construed to prevent any person from giving lottery tickets to another as a gift or bonus.

(b) Any person convicted of violating this section shall pay a fine not exceeding $500.

59 Del. Laws, c. 348, § 1.;

§ 4810. Sales to certain persons prohibited; penalties.

(a) No person who is under the age of 18 shall purchase a lottery ticket. No person who is under the age of 21 shall wager on the video lottery, sports lottery or table games in a video lottery facility. Whoever has not reached the specified age and has violated this subsection shall be guilty of a misdemeanor.

(b) No ticket shall be sold to any person under the age of 18 years, but this shall not be deemed to prohibit the purchase of a ticket for the purpose of making a gift by a person 18 years of age or older to a person less than that age.

(c) No licensed video lottery agent or employee of a video lottery agent shall allow a person under the age of 21 to wager on the video lottery, table games or the sports lottery.

(d) A violation of subsection (b) or (c) of this section shall be a misdemeanor, except that the establishment of the following facts shall constitute a defense to any prosecution therefor:

(1) That the underage person presented proof of age or photographic identification that would lead a reasonable person to believe that the underage person was over the minimum age required in this section.

(2) That the appearance of the underage person was such that an ordinary prudent person would believe that the person was over the minimum age required in this section.

(e) No ticket shall be purchased by and no prizes received by or awarded to any officers or employees of the State Lottery Office or any member of their immediate households. Any person convicted of violating this section shall forfeit any prize money so obtained and shall be sentenced to not less than 1 year in jail and pay a fine of no less than $5,000.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 539, § 4; 66 Del. Laws, c. 367, § 2; 69 Del. Laws, c. 446, § 15; 70 Del. Laws, c. 186, § 1; 77 Del. Laws, c. 221, § 10.;

§ 4811. Jurisdiction in Superior Court.

The Superior Court shall have exclusive jurisdiction of offenses under this subchapter, except for offenses under § 4810 of this title.

59 Del. Laws, c. 348, § 1; 61 Del. Laws, c. 189, § 1; 70 Del. Laws, c. 186, § 1; 77 Del. Laws, c. 221, § 11.;

§ 4812. Disposition of unclaimed prize money.

Unclaimed prize money for the prize on a winning ticket shall be retained by the Director for the person entitled thereto for 1 year after the drawing or event in which the prize was won. If no claim is made for said money within such year, the prize money shall be reverted to the State Lottery Fund.

59 Del. Laws, c. 348, § 1; 60 Del. Laws, c. 539, § 5; 66 Del. Laws, c. 303, § 152.;

§ 4813. Prizes to minors.

If the person entitled to a prize or any winning ticket is under the age of 14 years, the Director may direct payment of the prize by delivery to an adult member of the minor's family or a guardian of the minor a check or a draft payable to the order of the minor. The Director shall be discharged of all liability upon payment of a prize to a minor pursuant to this section.

59 Del. Laws, c. 348, § 1.;

§ 4814. Transfer of funds and transaction records between agents and the State.

The Director may, at the Director's discretion, require any or all lottery ticket sales agents to deposit to the credit of the State Lottery Fund in banks designated by the Director all or part of the moneys received by such agents from the sale of lottery tickets and to file with the Director or the Director's designated agents reports of their receipts and transactions in the sale of lottery tickets in such form and containing such information as the Director may require. The Director or a representative shall make such arrangements with any licensed sales agent.

59 Del. Laws, c. 348, § 1; 70 Del. Laws, c. 186, § 1.;

§ 4815. State Lottery Fund.

(a) All moneys received from the sale of lottery tickets shall be accounted for to the State Treasurer and all net moneys shall be placed into a special account known as the State Lottery Fund. From the Fund, the Director shall first pay for the operation and administration of the lottery as authorized in this subchapter and thereafter shall pay as prizes not less than 45% on the average of the total amount of tickets which have been sold and are scheduled for sale throughout the games, which percentage shall include prizes already awarded or to be awarded. The total of payments for operations and administration of the lottery shall not exceed 20% of the gross amount received from the sale of tickets. The remaining moneys shall accumulate in the State Lottery Fund for the payments of operations and administration costs and on a monthly basis, or more frequently if required by the Director, there shall be placed into the General Fund of the State a payment of earnings provided that no less than 30% of the total revenues accruing from the sale of tickets or shares shall be so dedicated. In the event that the percentage allocated for operations (including prize payments) generates a surplus, said surplus shall be allowed to accumulate to an amount not to exceed $ 1,000,000. On a quarterly basis, the Director shall report to the Secretary of Finance any surplus in excess of $ 1,000,000 and remit to the General Fund of the State the entire amount of those surplus funds in excess of $ 1,000,000.

(b) All proceeds, net of proceeds returned to players pursuant to paragraph (b)(1) of this section, from the operation of the video lottery shall be electronically transferred daily or weekly at the discretion of the Lottery Director into a designated State Lottery account by the agent, and transferred to the State Lottery Fund by the Lottery on a daily or weekly basis and shall be applied as follows:

(1) Proceeds returned to players. -- A portion of such proceeds, but not less than 87% of the total proceeds on an average annual basis received from the operation of a video lottery, shall be retained by and returned to the players under rules prescribed by the Director. Proceeds returned to players in excess of the payout authorized pursuant to § 4805(a)(15) of this title shall be the sole responsibility of the video lottery agent and the State Lottery's proceeds shall not be reduced on account of such excess payment. Subject to the recommendations of the Lottery Director, and approval of the Secretary of Finance, a video lottery agent may chose to offer free promotional play to players. The amount of free promotional play permitted shall be recommended by the Lottery Director and approved by the Secretary of Finance. The amount of money given away as free promotional play and used by players shall not be included in the amounts remaining after all payments to players. If the amount of money given away as free promotional play by a video lottery agent and used by players exceeds the amount authorized by the Lottery Director and the Secretary of Finance authorized during a fiscal year, the video lottery agent shall reimburse net proceeds the amount of the overage which will be distributed as outlined in paragraphs (b)(2) and (b)(3) of this section.

(2)a. Proceeds returned to the State. -- Except as otherwise provided by this paragraph, of amounts remaining after all payments to players under paragraph (b)(1) of this section, there shall be returned to the State 431/2%. For licensees which conducted 40 or fewer (but at least 1) days of live harness horse races during 1992, should such licensees' video lottery proceeds, net of proceeds returned to players, at the end of any fiscal year fall below $107,500,000, then, in the subsequent fiscal year, there shall be returned to the State 421/2% of amounts remaining after all payments to players under paragraph (b)(1) of this section.

b. The State shall also receive the funds on each credit slip that has not been presented for redemption within 1 year from the date the slip is issued.

c. Application of funds retained by the state lottery. -- The funds retained by the state lottery shall be applied as follows: first, to the administrative costs and expenses in respect of the video lottery including, but not limited to, administrative expenses including payroll and other employment costs attributable to the operation of the video lottery by the State Lottery Office, law-enforcement and security expenses, including payroll and other employment costs of the state lottery, the Office of the Attorney General and the Delaware State Police, attributable to the operation by the state lottery of a video lottery; second, $1,000,000 or 1%, whichever is greater, of the proceeds returned to the State under this paragraph (b)(2), to the Division of Substance Abuse and Mental Health of the Department of Health and Social Services for funding programs for the treatment, education and assistance of compulsive gamblers and their families; third, costs of the Administrator of Racing and racing inspectors referenced in Chapters 100 and 101 of Title 3; fourth, the State's contribution to the Delaware Standardbred Breeder's Program and Delaware Certified Thoroughbred Program (DCTP); and fifth, the remainder shall be paid into the State's General Fund.

d. The State's contribution to the Delaware Standardbred Breeder's Program pursuant to this subsection shall be $750,000, and said amount is to be allocated equally as of January 1 of the calendar year among existing licensees which conduct live harness horse racing, but moneys shall not be expended for the program until such time as a plan has been approved pursuant to paragraph (b)(3)b.2. of this section. The State's contribution to the Delaware Certified Thoroughbred Program (DCTP) pursuant to this subsection shall be $250,000, and said amount shall be allocated as of January 1 of each calendar year to the existing licensee which conducts live thoroughbred horse racing, but moneys shall not be expended for the program until such time as a plan has been approved pursuant to paragraph (b)(3)b.1. of this section.

(3) Application of remaining proceeds. -- The proceeds remaining after payments as set forth in paragraphs (b)(1) and (2) of this section shall be applied as follows:

a. Administrative and vendor costs. -- The State shall receive an amount equal to all costs of equipment (both video lottery machines and related equipment), whether leased or owned by the State, used or under the control of such agent, the cost of the central computer used to monitor the equipment used by the agent, and related vendor fees, and from these proceeds the State shall pay for these costs, provided that the video lottery agents shall pay all equipment costs consisting of video lottery machine license or proprietary fees.

b. Purses. --

1. For video lottery agents licensed only to conduct horse racing meets under Chapter 101 of Title 3 or Chapter 4 of Title 28, such agents shall be paid and shall pay additional purses (and related administrative expenses of the horse racing association) to be applied under the direction of the Delaware Thoroughbred Racing Commission, for races conducted at such agent's racetrack in accordance with § 10148 of Title 3 or § 427 of Title 28 as appropriate, in an amount calculated as follows: 9% of the proceeds remaining after payments made under paragraph (b)(1) of this section. Five hundred thousand dollars of those proceeds, which would otherwise fund purses, on an annual basis, shall fund a Delaware Certified Thoroughbred Program (DCTP) to enhance the quantity of thoroughbred foals and/or yearlings stabled within Delaware for a period meeting the Delaware minimum residency requirement. The DCTP shall be administered by a Board comprised of the following:

A. Four members of the Delaware Thoroughbred Horseman's Association;

B. One member designated by the video lottery agent licensed to conduct live thoroughbred horse racing meets under Chapter 101 of Title 3;

C. One member appointed by the Speaker of the House of the General Assembly;

D. One member appointed by the President Pro Tempore of the Senate of the General Assembly;

E. The Secretary of Agriculture or the Secretary's designee; and

F. The Secretary of Finance or the Secretary's designee.

Members shall be chosen by the organizations they represent, and shall serve 4-year terms, except the 4 initial Board members selected by the Delaware Thoroughbred Horseman's Association shall serve an initial term of 2 years, and 4 years thereafter. The Board created hereunder must develop and present a plan for the administration of the DCTP no later than December 31, 2005. This plan and all subsequent plans amending the DCTP shall be subject to the written approval of the Secretary of Agriculture or the Secretary's designee, the Secretary of Finance or the Secretary's designee, and the Chairperson of the Thoroughbred Racing Commission or the Chairperson's designee. The Board shall transmit minutes and actions from all meetings to the Chairperson of the Delaware Thoroughbred Racing Commission within 10 days of the meeting. The Board shall submit an annual report detailing the allocation of such funds of the DCTP to the Commission and make available to the State Auditor such information as may be required to perform an annual audit of funds allocated from the DCTP. The Board may also, at its discretion, use funds from the DCTP for advertising, promotion, education and administrative purposes directly related to the program, however, the total amount for these purposes cannot exceed 5% of the total allocation. Funds dedicated to the DCTP shall not be subject to a 1-year payout requirement, but payouts may be dispersed throughout the year.

2. For video lottery agents licensed only to conduct harness racing meets under Chapter 100 of Title 3, such agents shall be paid and shall pay additional purses (and related administrat