Chapter 3770:1-8 Claiming and Payment of Prizes

3770:1-8-01 Persons entitled to receive prizes.

(A) Valid tickets. Every ticket which is duly sold or is deemed to be duly sold in accordance with these rules and regulations will be valid unless otherwise made void in accordance with the rules. Tickets are bearer instruments and only the holder of a valid winning ticket will be entitled to the lottery prize award if such winning ticket is fully validated and the prize is claimed and presented for payment within the established redemption period as specified in rule 3770:1-8-04 of the Administrative Code. Tickets which are stolen from the state lottery, its employees, agents or representatives, or are otherwise acquired without ever having been lawfully sold, or deemed to be sold, in accordance with the rules of the commission and the regulations of the director, and tickets which are torn, altered, mutilated, or that do not comply with the applicable game rules may be declared void by the director.

(B) Claimant eligible to receive payment.

(1) A lottery prize award shall be claimed by the holder of a winning ticket, or by the executor or administrator of the estate or the trustee of a trust, of a deceased holder of a winning ticket, in the manner prescribed in rule 3770:1-8-02 of the Administrative Code.

(2) No right of any prize winner to a lottery prize award shall be the subject of a security interest or used as collateral.

(3)

(a) Pursuant to the provisions of paragraphs (B)(3)(a) to (B)(3)(e) of this rule, upon the death of a deferred prize winner, the executor or administrator of the deceased deferred prize winner's estate, or the trustee of the trust benefiting a deceased deferred prize winner, may elect to receive the remainder of the lottery prize award in the form of a discounted lump sum cash settlement, provided that the lottery prize award is not subject to a transfer agreement pursuant to sections 3770.10 to 3770.14 of Revised Code and the provisions contained in this rule. The amount of the discounted lump sum cash settlement shall be determined by calculating, as of the valuation date, the discounted value of the remaining future payments under the lottery prize award in accordance with generally accepted accounting principles using the discount rate formula hereinafter provided and then withholding the appropriate amount of state and federal income taxes as required by law. The valuation date shall be the first business day of the month immediately subsequent to the month in which the commission receives notification of the executor's, administrator's or trustee's election in accordance with paragraph (B)(3)(d) of this rule. The director shall disclose in writing to the executor, administrator or trustee the amount of the lump sum cash settlement, the discount rate used and the state and federal income taxes to be withheld. However, if the deferred lottery prize award was won in a statewide joint lottery game, the executor, administrator or trustee may elect to receive the present cash value for the remainder of such prize award calculated in accordance with the applicable section of the statewide joint lottery game rule under which prize winners may elect to receive a cash option prize.

(b) The discount rate to be used in determining the discounted lump sum cash settlement in paragraphs (B)(3)(a) to (B)(3)(e) of this rule shall be the cash option discount rate available at the time the prize was won based on the formula established by the director pursuant to authority granted under paragraph (C)(4) of rule 3770:1-8-04 of the Administrative Code. If no cash option discount rate was available at the time the original lottery prize award was won, the discount rate shall be the cash option discount rate that would have existed based on the formula established by the director pursuant to authority granted under paragraph (C)(4) of rule 3770:1-8-04 of the Administrative Code for determining the cash option discount rate formula. If the deferred prize award is a lifetime prize paid in an annual or monthly installment, the executor, administrator or trustee may elect to receive the present cash value for the remainder of such prize award as set forth in paragraph (B)(3)(c) of this rule with the present cash value based on the discount rate used by the lottery commission to fund deferred prize awards as of the date the prize was claimed. If the deferred lottery prize award was won in a statewide joint lottery game, the executor, administrator or trustee may elect to receive the present cash value for the remainder of that lottery prize award calculated in accordance with the applicable section of the statewide joint lottery game rule under which prize winners may elect to receive a cash option prize.

(c) In the case of a lifetime annual or a monthly installment deferred prize winner, the payments to be valued shall be the future payments to be made to the executor or administrator of the deceased prize winner's estate, or the trustee of the trust benefiting a deceased deferred prize winner, which, when added to the payments previously paid to such person and/or the prize winner, total the minimum guaranteed lottery prize award required under the game for which such award was granted as subject to the valuation requirements of paragraph (B)(3)(b) of this rule. If the minimum guaranteed lottery prize award was reached and paid during the life of the deceased prize winner, no discounted lump sum will be available to the deceased prize winner's estate or trust.

(d) To elect the option described in paragraphs (B)(3)(a) to (B)(3)(e) of this rule, the executor or administrator of the estate of a deceased, deferred prize winner or the trustee of a trust benefiting a deceased deferred prize winner shall:

(i) In the case of an annual installment deferred prize winner, provide the commission written notice of election within sixty days following the later of:

(a) The first annual payment following the prize winner's death; or

(b) The appointment of a legal representative for the deceased prize winner's estate; or

(ii) In the case of a lifetime installment deferred prize winner, provide the commission written notice of election within sixty days following the later of:

(a) The first payment following the prize winner's death; or

(b) The appointment of a legal representative for the deceased prize winner's estate.

(e) Upon receiving a notice of election, the commission shall cease making any further payments on the lottery prize award, and shall process the discounted lump sum cash settlement within a reasonable period of time, but in no event any longer than ninety days following the commission's receipt of the notice of election.

(f) Any estate or trust that receives a discounted lump sum cash settlement pursuant to this rule shall be responsible for payment of any fee which may be levied by the treasurer of state for early withdrawal of funds from the deferred prizes trust fund.

(i) The director may refuse to pay a discounted lump sum cash settlement to the executor or administrator of a deceased prize winner's estate, or the trustee of a trust benefiting a deceased prize winner if the director learns that any beneficiary who will subsequently receive the discounted lump sum cash settlement is in default on or is under a continuing child support or spousal support order as defined in sections 3119.01 , 3105.18 , and 3770.071 of the Revised Code or indebted to the state under section 3770.073 of the Revised Code.

(ii) The director may agree to pay a portion of the remainder of a deferred lottery prize award to the executor or administrator of a deceased prize winner's estate, or the trustee of a trust benefiting a deceased prize winner if the director learns that any beneficiary who will subsequently receive the discounted lump sum cash settlement is in default of or subject to a continuing child and/or spousal support order or is indebted to the state, provided that the discounted lump sum cash settlement does not include amounts owing on a child or spousal support arrearage, or amounts subject to a valid and continuing child or spousal support order, or amounts subject to state debt withholding, and that the appropriate state and federal income taxes are withheld on such amounts. The provisions of this paragraph apply only to the extent of the obligor/beneficiary's share of the discounted lump sum cash settlement payable to the estate or trust.

(iii) An election under this subsection may not be made by the executor or administrator of a deceased prize winner's estate, or the trustee of a trust benefiting a deceased prize winner, when there are fewer than two annual deferred payments remaining; or in the case of a lifetime deferred lottery prize award, when there are fewer than twelve monthly or four quarterly payments remaining; or at any time within the last year during which payments were to be made to the deferred prize winner.

(4) Assignments and/or transfers of lottery prize awards are governed by sections 3770.07 , and 3770.10 to 3770.14 of the Revised Code.

(a) If the lottery prize award is a lifetime or a monthly installment deferred prize and the prize winner desires to transfer that prize award, the prize winner may only transfer the minimum guaranteed prize to which the prize winner is entitled pursuant to the applicable game rule. The prize winner shall then forfeit any right they would have to amounts beyond the guaranteed minimum associated with a lifetime lottery prize award should they live beyond the number of months or years associated with that guaranteed minimum amount.

(5) Partial assignments and/or transfers of lottery prize awards are governed by section 3770.121 of the Revised Code.

(6)

(a) Upon receipt of a court order issued under section 3770.13 of the Revised Code, the transferee shall provide a certified copy of the court order to the director of the commission. Not later than ten calendar days after receipt of the certified copy of the court order, the director shall acknowledge to the transferee in writing the commission's intent to comply with the court order in making future payments.

(b) The director shall make payments of the lottery prize award to the transferee designated in the certified copy of the court order and in accordance with the prize payment schedule established when the prize was claimed. A processing fee in the amount of two hundred fifty dollars shall be remitted by the transferee via money order made payable to the Ohio lottery commission subsequent to court approval of the lottery prize award transfer, to cover any direct or indirect costs associated with adjusting the prize award payments for the transferee in accordance with that prize payment schedule.

(c) Upon payment of any lottery prize award pursuant to paragraph (B)(6)(b) of this rule, the director and the commission are discharged from all further liability therefor.

(7) Garnishment, attachment, execution, withholding, or deduction of a lottery prize award is authorized by division (D) of section 3770.07 of the Revised Code and is subject to the following rules:

(a) Any creditor with a court order judgment against a lottery prize winner who has an unpaid balance prize award of one hundred thousand dollars or more, shall apply with the same court for a hearing to determine whether a garnishment, attachment, execution, withholding, or deduction should be issued against the prize winner's lottery prize award.

(b) The creditor shall duly notify all interested parties, by certified mail, return receipt requested, including the prize winner and the lottery commission at least thirty days prior to the hearing date.

(c) Upon the court's final determination whereby a garnishment, attachment, execution, withholding, or deduction should be issued, the creditor shall provide a certified copy of such order to the lottery commission.

(d) Any withholdings pursuant to such order shall be in accordance with the prize payment schedule established when the prize was claimed. The lottery commission shall not accelerate any future annual payments to fulfill the judgment amount in the order. The lottery commission shall not pay the entire judgment amount if such amount is beyond the total net prize award payable to the prize winner.

(e) Upon payment of any lottery prize award pursuant to paragraph (B)(7) of this rule, the director and the commission are discharged from all further liability therefor.

Effective: 06/27/2014
R.C. 119.032 review dates: 03/24/2014 and 12/05/2017
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 7/15/74, 8/12/74, 5/27/93, 12/27/96, 8/2/97, 12/26/97, 5/30/99, 7/19/02, 11/17/02, 8/24/03, 6/2/05, 4/27/06, 6/8/07

3770:1-8-02 Manner of claiming prize awards.

(A) Manner of making claims. To receive a prize award, the person holding a winning ticket must claim the prize in accordance with these rules and with procedures to be adopted by the director.

(B) Claims in special lottery drawings. Notwithstanding anything to the contrary in these rules, the director may require that a prize award in a special lottery drawing conducted pursuant to rule 3770:1-6-06 of the Administrative Code be claimed at a particular place, and within a time less than one hundred eighty days, including without limitation, the actual time and place of the drawing at which the winner of the prize award is determined.

(C) Claims by mail. Any prize claimed by mail should be sent to lottery commission headquarters via certified or registered mail to:

Claims Bureau

Ohio Lottery Commission

615 W. Superior Avenue

Cleveland, Ohio 44113-1879"

The lottery shall not be responsible for the loss of any claim sent by mail, nor shall a winning ticket be considered received until the valid winning ticket is actually logged in as received by the lottery Claims Bureau at the address noted in this paragraph.

(D) Claims made at the regional offices. Claims sent by mail to the regional offices shall be considered received by the lottery if the ticket and claiming information are photocopied and immediately forwarded to the Claims Bureau at lottery commission headquarters via electronic mail and the original ticket and claiming document sent via overnight courier service. Claims made in person by ticket holders at the regional offices shall be considered received by the lottery once photocopies are made of the original ticket, a claim form is completed, and after an initial validation of the ticket by the regional staff through the lottery Claims Bureau.

R.C. 119.032 review dates: 05/15/2012 and 05/14/2017
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 6/8/07

3770:1-8-03 Validation of winning tickets.

The director shall adopt detailed procedures for the validation of tickets for which a claim is made. Such procedures may include computerized validation as well as other validation tests to insure that the ticket is valid, and is, in fact, a winning ticket. These procedures shall be followed in each case before payment of a prize award is authorized. If a ticket is presented but cannot be validated due to an improper cancellation by a sales agent, and the ticket is otherwise demonstrated to be a valid winning ticket, the lottery may pay the claim. Any sales agent that improperly cancels a winning ticket may be required to reimburse the lottery for all prize monies paid on such a ticket. Any ticket cancellations by a sales agent must be made pursuant to the director's ticket cancellation policy. Sales agents are responsible for enforcing the director's ticket cancellation policy at their respective locations.

R.C. 119.032 review dates: 02/16/2012 and 02/15/2017
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 7/15/74, 8/12/74, 5/27/93, 12/27/96, 7/19/02, 3/19/07

3770:1-8-04 Payment of prize awards.

(A) Payment to be made to claimant. Prizes shall be claimed in the name of the holder or holders of the ticket. After validation and proper submission for payment within the established redemption period as specified in this rule, payment of prize awards shall be made promptly to the person in whose name the claim is made. Validation of any ticket does not complete the claiming process and will be subject to the redemption period as specified in this rule.

(B) Method of payment. As permitted by applicable law, the director may order that prizes up to and including five hundred ninety-nine dollars will be paid by sales agents out of the proceeds of their ticket sales. All valid tickets for prizes up to and including five hundred ninety-nine dollars must be validated and cashed by the sales agent within one hundred eighty days of the drawing date of the winning ticket if the lottery game is an on-line game, or one hundred eighty days after the close of the game if the lottery game is an instant game. All other prizes will be paid by official check or warrant. After issuance of a pay-to-bearer by a sales agent to a prize winner, prizes from six hundred dollars up to and including five thousand dollars may be redeemed by a prize winner presenting proper identification as determined by the director at any authorized branch office of a banking institution participating in the lottery's bank cashing program or at any authorized sales agent participating in the lottery's licensed retailer cashing program for prizes from six hundred dollars up to and including five thousand dollars. The lottery's licensed retailer cashing program for prizes from six hundred dollars up to and including five thousand dollars shall hereafter be referred to as the "LRC program." The LRC program shall be conducted in accordance with lottery rules, regulations, policies and procedures and the director shall have the authority to determine which sales agents may participate in the program and the director shall have the discretion to terminate the LRC program or remove a sales agent from the LRC program at any time and for any reason. All valid tickets for prizes from six hundred dollars up to and including five thousand dollars must either be redeemed at an authorized banking institution or at an authorized sales agent participating in the LRC program, or all tickets along with a completed claim form must be received by a lottery office, within one hundred eighty days of the drawing date of the winning ticket if the lottery game is an on-line game, or one hundred eighty days after the close of the game if the lottery game is an instant game. After validation by the banking institution or a sales agent authorized to participate in the LRC program in conjunction with the lottery, the banking institution or a sales agent authorized to participate in the LRC program may pay the winner in cash, by official check or by deposit to an account. The participating banking institution may charge the prize winner a fee agreed to by the director. All valid claims exceeding five thousand dollars shall have the applicable state and federal withholding taxes withheld along with any other deductions required by law, and must be received by a lottery office within one hundred eighty days of the drawing date of the winning ticket if the lottery game is an on-line game, or one hundred eighty days after the close of the game if the lottery game is an instant game in accordance with the procedures set forth in rule 3770:1-8-02 of the Administrative Code. All valid claims must be filed and redeemed for payment within one hundred eighty days of the drawing date of the winning ticket if the lottery game is an on-line game, or one hundred eighty days after the close of the game if the lottery game is an instant game.

(C) Payment of prizes

(1) When there is more than one winning ticket for any prize subject to pari-mutuel distribution, each winning ticket shall entitle its holder to receive a pro rata share of the prize in accordance with the number of winning selections validated by the on-line computer system and the game rule governing that particular game.

(2) Prizes shall be paid in a lump sum unless otherwise provided or required in the game rule.

(3) If applicable, installment payments may be made by official check or warrant sent to the prize winner's address by mail delivery within the United States, or, all but the initial installment payment, may be sent to the prize winner via electronic funds transfer to an established bank account located anywhere within the United States. Requests by a prize winner to have installment payments sent to addresses outside the United States, or to have payments sent via electronic funds transfer to any off-shore accounts, may be considered by the director. However, such requests may be denied. Prize winners may also request to pick up their installment payments at a designated lottery office.

(4) The In the event that prizes may be paid as an annuity, the director may adopt an order that gives winners the option to receive a discounted cash value of a prize less the appropriately withheld state and federal income taxes and any other amounts required by law . The formula for setting the discounted cash value shall be determined by the director in accordance with the game rule governing the game in which the prize is won. The prize winner(s) shall have sixty calendar days from the date of the redemption for payment of their valid claim to the lottery, as prescribed by paragraph (B) of this rule, to opt for the discounted cash value of the prize award, and such option shall not be revoked. At the time the valid claim is presented to the lottery, the discounted cash value of the prize, the formula used to compute that amount and the amount of appropriately withheld state and federal income taxes shall be disclosed in writing to the prize winner. A single winning ticket may be paid pursuant to these rules in either annual installments or in a lump sum equaling the discounted cash value. Prize winners who claim a joint prize from a single winning ticket will all receive prize payments in either annual installments or in a single, lump sum equaling the discounted cash value of their portion of the joint prize award. Prize winners who claim a joint prize from a single winning ticket may not opt to receive different forms of payment. Notice of such selection must be received by the lottery or post office stamped by the sixty calendar day deadline, or the prize winner shall be paid in annual installments as set forth in the applicable game rule in which the prize was won .

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Effective: 05/28/2010
R.C. 119.032 review dates: 02/24/2010 and 05/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 3/30/84, 1/10/86 (Emer.), 4/4/86, 12/30/87 (Emer.), 4/11/88, 10/4/90 (Emer.), 12/28/90, 2/21/93, 12/27/96, 5/30/99, 7/30/00, 1/20/02, 5/3/02, 11/14/08

3770:1-8-05 Discharge of payment obligation.

Upon the payment of prize awards pursuant to the Lottery Act, these rules, and the procedures adopted by the director pursuant to these rules, the director and the commission shall be discharged from all further liability for such awards.

R.C. 119.032 review dates: 02/16/2012 and 02/15/2017
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 7/15/74, 8/12/74, 5/27/93, 3/19/07

3770:1-8-06 Director to adopt procedures.

The director shall adopt orders, regulations or directives providing detailed procedures, including appropriate forms, to implement the purposes of this chapter. These shall provide for prompt validation of winning tickets and payment of prize awards, in accordance with any applicable provisions of law. The director shall publish the procedures for cashing and claiming prize awards.

R.C. 119.032 review dates: 02/16/2012 and 02/15/2017
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08
Prior Effective Dates: 7/15/74, 8/12/74, 5/27/93, 7/19/02, 3/19/07

3770:1-8-07 Pay vouchers.

(A) For purposes of this rule only, the term "pay voucher" means a document that meets the requirements of this rule, is generated by a multi-purpose terminal approved for use in connection with lottery games and reflects the player's credit balance for a complete or partial terminal session, or an individual prize award in the amount of six hundred dollars or greater. The term "multi-purpose terminal" as used in this rule shall include the "Coronis Multi-Purpose" and "Coronis Multi-Purpose Next Generation" terminal.

(B) A pay voucher shall be redeemed within one hundred eighty calendar days from the date of printing as shown on the pay voucher. A pay voucher may be redeemed for cash in the same manner as authorized for the redemption of winning tickets. A player may also redeem a pay voucher by using the pay voucher in a multi-purpose terminal to receive a credit on the terminal for purchases.

(C) If a pay voucher is not redeemed within the period of time set forth in paragraph (B) of this rule, the amount of the prize money and/or funds deposited as reflected in the pay voucher amount shall be returned to the state lottery fund and distributed in accordance with section 3770.06 of the Revised Code.

(D) A pay voucher shall be valid if all of the following apply:

(1) It has been generated by a multi-purpose terminal approved for use in connection with lottery games;

(2) It is not damaged, mutilated, miscut, or altered, to the extent that any of the information set forth in paragraphs (E)(1) to (E)(5) of this rule is missing, illegible or unreadable;

(3) It has not previously been paid; and

(4) It meets all requirements of this rule.

(E) Each pay voucher shall, at a minimum, contain the following information:

(1) The date and time of issuance;

(2) The amount of the pay voucher, except that no amount shall be required on a pay voucher generated as the result of a terminal communications loss;

(3) A unique serial number automatically generated by the voucher system;

(4) The identification number of the machine dispensing the pay voucher; and

(5) A unique identifier printed on the pay voucher as a bar code to enable the voucher system to identify the numeric information on the pay voucher when it is presented for redemption.

(F) No individual pay voucher shall exceed the amount of five hundred ninety-nine dollars and ninety-nine cents, except for a pay voucher generated as a result of a terminal communications loss, or except as an individual prize award in an amount of six hundred dollars or greater.

Effective: 07/31/2014
R.C. 119.032 review dates: 07/31/2019
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.04 , 3770.05 , 3770.06 , 3770.07 , 3770.08