Chapter 3770:2-3 Video Lottery Licenses

3770:2-3-01 Video lottery licenses; application.

(A) Application for a video lottery license shall be submitted in accordance with procedures and conditions set by the director and shall be made on a form approved by the director. At a minimum, and without limitation, an application for a video lottery license shall require compliance with licensing requirements for a lottery sales agent under section 3770.05 of the Revised Code and Chapter 3770-2 of the Administrative Code, and shall include the following requirements which a video lottery applicant must provide at the time of submission of the application or agree to comply with should a video lottery license be issued.

(1) A video lottery applicant must submit the video lottery applicant's legal name, form of entity, the names, addresses, employer identification numbers or social security numbers (if applicable) and dates of birth (as applicable) of its video lottery principals. Disclosure of any criminal charges or convictions of all individuals or entities whose names must be provided must also be included in the application;

(2) A video lottery applicant must submit to the commission an application fee in the amount set forth in rules promulgated by the commission under division 3770:2 of the Administrative Code;

(3) A video lottery applicant must submit proof, in a form required by the director, that the video lottery applicant is a permit holder or has applied to be a permit holder. If more than one permit holder conducted horseracing meetings at a track during the previous year, the permit holders shall designate, by a written agreement, to be submitted prior to issuance of a video lottery license, one permit holder to be the actual video lottery sales agent in the event a video lottery license is issued;

(4) A video lottery applicant must submit, in a form acceptable to the director, its proposed business plan for video lottery at its facility, which may require the inclusion of documents relating to an applicant's borrowing or financing of video lottery operations including but not limited to the payment of licensing fees. A business plan may be deemed a trade secret under division (D) of section 1333.61 of the Revised Code and therefore may not be subject to disclosure under section 149.43 of the Revised Code;

(5) A video lottery applicant must agree to provide, in a form and by a date acceptable to the director, its proposed security and surveillance plan for approval by the director or director's designee. A security and surveillance plan may be deemed an infrastructure record and/or security record as set forth in section 149.433 of the Revised Code and therefore may not subject to disclosure under section 149.43 of the Revised Code;

(6) For the period of time established or required by the director, a video lottery applicant must provide a listing of any and all gaming licenses, registrations or certifications obtained by the video lottery applicant, including the type of license, registration, or certification, date of issuance, date of suspension, termination, expiration or cancellation, if suspended, terminated, expired or cancelled, and the reason for suspension, termination, expiration or cancellation, and the date of assessment, imposition or payment of any penalties or fines;

(7) If and as required by the director, a video lottery applicant must agree to submit to background checks and reviews of the video lottery applicant or its video lottery principals, or any other persons affiliated with the video lottery applicant or video lottery sales agent who the director determines should be required to submit to a criminal or financial background check. Background checks and reviews for institutional investors who are video lottery principals may be required as deemed necessary by the director;

(a) The director may determine that an institutional investor having an ownership interest in a video lottery applicant or licensee, directly or indirectly, of five per cent to fifteen per cent is not a video lottery principal as defined in paragraph (GG) of rule 3770:2-2-01 of the Administrative Code if the institutional investor submits to the director documentation sufficient to establish qualifications as an institutional investor and certifies in writing, all of the following:

(i) The institutional investor owns, holds, or controls publicly traded securities issued by an applicant or licensee or holding, intermediate, or parent company of an applicant or licensee in the ordinary course of business for investment purposes only.

(ii) The institutional investor does not exercise influence over the affairs of the issuer of such securities nor over an licensed subsidiary of the issuer of such securities.

(iii) The institutional investor does not intend to exercise influence over the affairs of the issuer of such securities, nor over any licensed subsidiary of the issuer of such securities, in the future, and that it agrees to notify the director in writing within thirty days if such intent changes. The exercise of voting privileges with regard to publicly traded securities shall not be deemed to constitute the exercise of influence over the affairs of a licensee.

(b) The director may rescind the determination that an institutional investor is not a video lottery principal under this paragraph at any time if the institutional investor exercises or intends to exercise influence or control over the affairs of the applicant or licensee.

(c) This paragraph shall not be construed to preclude the director from requiring background checks and conducting reviews if the director becomes aware of facts or information that may result in the institutional investor being considered a video lottery principal.

(8) Within the time specified by the director, a video lottery applicant must, in a form acceptable to the director, obtain a dedicated non-revocable letter of credit, a surety bond, financial guarantee or other alternative form of credit approved by the director in an amount determined by the director. In addition, the director may require a video lottery applicant to submit evidence of the ability to obtain general liability insurance, workers compensation coverage, property insurance in amounts required by the director, and any other insurance or bonds deemed necessary by the director;

(9) If required by the director, a video lottery applicant must submit a signed indemnification agreement in a form approved by the director;

(10) An applicant must agree to provide, at times requested by the lottery, a written schedule that lists the installed cost of all fixtures and equipment supplied or to be supplied in connection with video lottery conducted at the video lottery sales agent's facility approved for video lottery sales;

(11) A video lottery applicant must agree that video lottery terminals shall be located at the premises of the permit holder licensed by the racing commission to conduct live horse racing for profit at a racing meeting;

(12) A video lottery applicant must agree to purchase or lease, maintain and timely repair video lottery terminals, and a video lottery applicant must agree that video lottery terminals will only be purchased or leased from a technology provider licensed by the director;

(13) A video lottery applicant must agree to provide for a clearly identifiable separation between the video lottery area and the racing wagering area;

(14) An applicant must agree to make, maintain and repair necessary capital improvements for facilities at which video lottery terminals are located in accordance with standards and timetables set forth by the director;

(15) A video lottery applicant must agree that any hardware or software installed to facilitate redemption of credit vouchers shall be the video lottery sales agent's responsibility;

(16) A video lottery applicant must agree to be responsible for the costs associated with providing technology providers and other personnel designated by the director, sufficient space, as determined by the director, at the facility, where video lottery terminals are located, to allow technology providers and other personnel designated by the director to store equipment and conduct service, repairs and maintenance of video lottery terminals, video lottery central monitoring system and peripherals associated therewith necessary to ensure continued operation of the video lottery central monitoring system and video lottery terminals;

(17) A video lottery applicant must agree to timely report to the director, or the director's designee, any malfunction of the video lottery terminals or associated equipment, or failures of the technology providers to promptly service, repair or deliver video lottery terminals when such malfunctions or failures are reported to, made known to or observed by a video lottery sales agent;

(18) A video lottery applicant must agree to allow the lottery and its designated agents access to the video lottery facility and records for audits authorized under section 3770.06 of the Revised Code and for any other purposes deemed necessary by the director;

(19) A video lottery applicant must agree that all funds due to the lottery shall be transferred to the lottery by electronic fund transfer, or other method as approved by the director on the days and times set forth in the schedule or schedules issued by the director; and

(20) A video lottery applicant must agree that payments of video lottery winnings to video lottery participants, and required withholdings, if applicable, will be handled in accordance with procedures as approved by the director.

(B) As deemed necessary by the director, the director may amend the application and require video lottery applicants and/or video lottery sales agents to supplement or complete an amended application. Further, all information required to be submitted as part of an application for a video lottery license pursuant to division 3770:2 of the Administrative Code must be updated or supplemented if updates or changes occur following the submission of an application. In the event that updated or supplemental information is required by or received by the lottery, the director maintains discretion to suspend, revoke or reconsider an application or otherwise modify the conditions of the issuance of a license. In the event that the director takes action in connection with any updated or supplemental information received by the lottery, the director will adhere to required notices and procedures regarding any suspensions, revocation, reconsideration or modification of an application or the issuance of a license.

Effective: 10/25/2012
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21
Prior Effective Dates: 8/18/09 (Emer), 10/28/10, 12/29/2011

3770:2-3-02 Video lottery licenses; application review process.

(A) Upon receiving a video lottery application, the director or the director's designees shall evaluate the video lottery applicant to determine if the video lottery applicant meets the requirements of the Lottery Act and the commission's rules and regulations pertaining to video lottery. In addition to consideration of factors set forth in section 3770.05 of the Revised Code and division 3770:2 of the Administrative Code pertaining to lottery sales agents the following factors may be considered during the application review process for determining whether an application for video lottery license shall be granted or denied.

(1) The financial responsibility and security of the video lottery applicant, including the extent to which a video lottery applicant has demonstrated its ability to financially sustain video lottery at its facility, as well as the source of such financing;

(2) The accessibility of the video lottery applicant's place of business to the public;

(3) The volume of expected sales by the video lottery applicant;

(4) The results of any background checks;

(5) Whether a video lottery applicant has failed to comply with a commission rule, regulation, policy, directive or order;

(6) Whether a video lottery applicant has failed to comply with another jurisdiction's lottery or gaming laws, rules, regulations, policies, directives or orders;

(7) Whether the video lottery applicant or persons who will be involved in video lottery at the video lottery applicant's facility is affiliated with a technology provider to be engaged in the operation of video lottery in the state, and if so affiliated, the nature of the affiliation;

(8) The extent to which a video lottery applicant has cooperated with the commission in the application process including but not limited to cooperation with criminal and financial background checks and reviews;

(9) The completeness and adequacy of a video lottery applicant's business plan and security and surveillance plan(s), including but not limited to, the manner in which the plans reflect on a video lottery applicant's ability to offer video lottery games for sale in accordance with the Lottery Act, rules, regulations, policies, directives and orders pertaining to video lottery; and

(10) Any other information that the director deems relevant to a determination regarding a video lottery applicant's ability to offer video lottery games for sale in accordance with the Lottery Act, rules, regulations, policies, directives and orders pertaining to video lottery gaming operations.

(B) If an applicant has been licensed by another United States gaming jurisdiction for the operation of video lottery, the director may, but is not required to, consider and rely upon any certifications obtained in connection with an application submitted to another United States gaming jurisdiction in connection with the operation of video lottery.

Effective: 01/16/2012
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21
Prior Effective Dates: 8/18/09 (Emer),10/28/2010

3770:2-3-03 Video lottery licenses; issuance of license.

(A) If after a review of an application and consideration of factors deemed relevant to the efficient and proper administration of video lottery, and provided that the director determines that a video lottery applicant has met the requirements for issuance of a video lottery license, the director may license a video lottery applicant as a video lottery sales agent on such terms and conditions, and for such length of time, deemed appropriate, including issuance of a temporary license.

(B) No video lottery license shall be issued until licensing fees are paid in accordance with and in the amount set forth in rules promulgated by the commission under Chapter 3770:2-11 of the Administrative Code.

(C) No video lottery license shall be issued to an entity that is not a permit holder.

(D) Video lottery licenses are subject to suspension, modification, revocation or fines as authorized by the Lottery Act, rule, regulation, policy order or directive of the commission or director. Further, as necessary for reasons related to public safety, convenience or trust which require immediate action, the director may order the immediate and indefinite disabling of all or a portion of the video lottery operations and/or removal of video lottery equipment at a video lottery sales agent's video lottery facility. In the event of such action, the director must continue to comply with the requirements of the Administrative Procedure Act in affording the video lottery sales agent a subsequent opportunity for an adjudication hearing.

(E) License transfer.

(1) A video lottery license is not transferable for five years after the initial issuance of an operating license. Any person or entity holding an ownership interest in the video lottery applicant or holding, directly of indirectly, an ownership interest through a holding company of the video lottery applicant, as of the date of issuance of an operating license to the video lottery sales agent, may increase such ownership interest thereafter and any such increase or increases shall not be considered a transfer of license under this rule.

(2) Any ownership interest in the video lottery sales agent or ownership, directly or indirectly, through a holding company of a video lottery sales agent, that is acquired after the date of issuance of an operating license to the video lottery sales agent by a person or entity not previously holding an ownership interest, which would result in such person or entity obtaining control of the video lottery applicant shall be considered a prohibited transfer under paragraph (E)(1) of this rule during the five year period set forth in that paragraph.

(3) Any changes in ownership under paragraph (E)(1)or (E)(2) of this rule shall be subject to supplemental requirements set forth in paragraph (B) of rule 3770:2-3-01 of the Administrative Code.

(4) As used in this paragraph, "control" means either of the following:

(a) Holding fifty per cent of more of the outstanding voting securities of an applicant; or having the right in the event of dissolution to fifty per cent or more of the assets of the applicant; or, for an unincorporated applicant, having the right to fifty per cent or more of the profits of the applicant; or

(b) Having the contractual power presently to designate fifty per cent or more of the directors of a for-profit or not-for-profit corporation, or in the case of trusts described in paragraphs (c)(3) to (5) of 16 C.F.R. 801.1(2011) , the trustees of such a trust.

(5) Notwithstanding any other provision of this rule, the director shall have authority to permit a transfer otherwise prohibited by this rule if the director determines that due to the financial, operational or security integrity of the licensed agent, such transfer is needed to protect the public interest or trust. If the director permits a transfer under this subsection, the director may also reduce, but shall not be required to reduce, any fee otherwise payable under division 3770:2 of the Administrative Code.

(F) The relationship between the lottery and a video lottery sales agent is one of trust and a video lottery sales agent collects funds as a fiduciary on behalf of and in trust for the lottery through the sale of video lottery tickets for which a video lottery sales agent receives compensation.

(G) Video lottery games sold and video lottery terminals operated by a licensed video lottery sales agent must be approved by the director, commission or commissioners, as applicable.

(H) A video lottery license shall authorize a video lottery sales agent to offer video lottery games for sale and engage in authorized video lottery activity.

(I) Upon issuance of a video lottery license, a video lottery sales agent shall be obligated to comply with the applicable provisions of the Lottery Act, all rules, regulations, policies and directives of the commission or director and all terms and conditions of the license as set forth in the application, or any amendments or modifications thereto. Failure to comply with any and all obligations required of a video lottery sales agent may subject the video lottery sales agent's video lottery license to suspension or revocation as set forth in rule 3770:2-3-05 of the Administrative Code, or to imposition of monetary penalties as set forth in rule 3770:2-3-06 of the Administrative Code. A temporary video lottery license, if issued, does not guarantee the issuance of a video lottery license.

(J) In addition to selling video lottery games, a video lottery sales agent shall be required to sell other lottery games authorized by the commission and allocated to the video lottery sales agent by the director.

(K) There shall not be more than seven video lottery sales agent licenses issued to permit holders at any one time during the ten year period following the issuance of the first video lottery sales agent license.

Effective: 06/27/2013
R.C. 119.032 review dates: 03/01/2018
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21
Prior Effective Dates: 8/18/09(Emer), 10/28/10, 01/16/2012

3770:2-3-04 Video lottery licenses; denial of license.

(A) If after a review of a video lottery application and consideration of any other factors deemed relevant to the efficient and proper operation of video lottery, the director determines that a video lottery applicant has not met the requirements for issuance of a video lottery license, the director may deny the application, or may request that the video lottery application be revised and reviewed for further consideration.

(B) In addition to the mandatory grounds for refusal in divisions (C)(1) to (C)(5), (D)(1) to (D)(3) and (E)(1) to (E)(1) to (E)(2) of Section 3770.05 of the Revised Code, and except as provided in paragraph (C) of this rule, in the event any of the following are determined by the director, an application for a video lottery license shall be denied:

(1) A determination that an applicant or persons who will be involved in video lottery operations at the video lottery applicant's facility is known to be affiliated with a technology provider engaged in the operation of video lottery in the state which has been determined by the director to be an unacceptable affiliation and a video lottery applicant or a person who will be involved in video lottery at the video lottery applicant's facility has refused to divest itself of the affiliation with the technology provider.

(2) A determination that a video lottery applicant has made a misrepresentation regarding a fact material to an application or has failed to disclose information regarding a fact material to an application.

(3) A determination that an applicant or person who will be involved in video lottery operations at the video lottery applicant's facility has been convicted of any other criminal violation which as determined by the director may negatively impact the integrity of the lottery.

(C) The director may require a video lottery applicant, or any of its video lottery principals or any person who the director has determined should be subjected to a criminal background check that have been convicted of any of the offenses set forth in divisions (C)(1) to (C)(5) and (E)(1) to (E)(2) of section 3770.05 of the Revised Code to obtain an order from a court of competent jurisdiction to have the record of such offense sealed. If such an order is not obtained during the time specified by the director, the director may deny the video lottery application. If the record of an applicant, or any of its video lottery principals or any person who the director has determined should be subjected to a criminal background check reveals an offense listed in divisions (C)(1) to (C)(5) and (E)(1) to (E)(2) of section 3770.05 of the Revised Code which is at least ten years old, the director may disregard the offense and may license the video lottery applicant.

(D) When required to do so by the Administrative Procedure Act, the director shall afford a hearing to a video lottery applicant affected by a decision to deny an application for a video lottery license. Such hearings shall be conducted by the director or a hearing examiner designated by the director and shall comply with the requirements for adjudication hearings established in the Administrative Procedure Act.

(E) If a video lottery application is denied, an applicant may reapply, but any subsequent application shall require submission of a new application and payment of a separate application fee and licensing fee, as applicable, and shall only be submitted after any waiting period for reapplication, if any established by the director, has expired.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21

3770:2-3-05 Video lottery licenses; suspension or revocation.

(A) A video lottery license may be suspended or revoked as set forth in this rule:

(1) Non-compliance with Lottery Act, rules, regulations, policies, or directives. The director may suspend or revoke a video lottery license of a video lottery sales agent who does not comply with the Lottery act, all rules, terms and conditions, policies, orders and directives adopted, promulgated or issued by the commission or the director including but not limited to the following:

(a) Failure to pay any required licensing fee;

(b) Failure to maintain any required surety bond, dedicated non-revocable letter of credit, or other form of credit authorized or required by the director;

(c) Failure to maintain any insurance, coverage and/or bonds required by the director;

(d) Making a fraudulent representation in connection with a video lottery application or the video lottery sales agent's conduct;

(e) Failure to promptly and accurately settle the accounts of lottery transactions and/or pay to the commission the amounts due the commission from video lottery sales, unclaimed credit vouchers or other amounts due the commission in accordance with the procedures established by the director;

(f) Failure to credit or pay a winning video lottery participant as required by commission rule, regulation, policy, order or directive;

(g) Allowing an individual under the age of twenty-one to play video lottery games or to be paid a video lottery prize payment;

(h) Failure to maintain adequate and sufficient security at the video lottery sales agent's licensed facility;

(i) Offering a video lottery game that has not been approved by the director or commission, as applicable;

(j) Maintaining, installing or operating devices for the sale of video lottery at the facility approved for a video lottery license other than video lottery terminals authorized and approved by the director for use in connection with video lottery;

(k) Failing to purchase, lease, maintain or timely repair the minimum number of video lottery terminals as required by the director or purchasing, leasing or maintaining an amount of video lottery terminals in excess of a maximum number authorized by the lottery act, all rules, terms and conditions, policies, orders and directives adopted, promulgated or issued by the commission or the director;

(l) Failure to comply with the terms and conditions of "The Americans with Disabilities Act of 1990," 104. stat. 327, 42 U.S.C.A. 12101 to 12213 ;

(m) Failure to provide any required notice or failure to obtain any required approval prior to relocation or transportation of a video lottery terminal;

(n) Failure to make capital improvements as required by commission rule, regulation, policy, order or directive, and/or fail to meet financial obligations necessary for the continued operation of video lottery;

(o) Acting in a manner that impacts or has the likelihood of impacting the efficient operation or integrity of video lottery;

(p) Failure to adhere to all the terms and conditions as set forth in the licensing agreement, including any amendments or modifications thereto.

(2) The director may suspend or revoke a video lottery license if a video lottery sales agent, or any of its video lottery principals or any person who the director has determined should be subjected to a criminal background check are convicted of any of the offenses set forth in divisions(C)(1) to (C)(5) and (E)(1) to (E)(2) of section 3770.05 of the Revised Code, or any other criminal violation which as determined by the director may negatively impact the integrity of the lottery.

(3) The director may suspend or revoke a video lottery license if, at any time after issuance of a video lottery license, the director determines that a video lottery sales agent no longer meets the requirements and standards for issuance of a video lottery license as set forth in the Lottery Act, commission rules, regulations, policies, orders and directives adopted, promulgated or issued by the commission or the director.

(B) Any suspension or revocation under this section may be in addition to or in lieu of the imposition of a fine under rule 3770:2-3-06 of the Administrative Code.

(C) When required to do so by the Administrative Procedure Act, the director shall afford a hearing to a video lottery sales agent affected by an order to suspend or revoke a video lottery license. Such hearings shall be conducted by the director or a hearing examiner designated by the director and shall comply with the requirements for adjudication hearings set out in the Administrative Procedure Act. The requirement of the Administrative Procedure Act that adjudication hearings be afforded prior to a final decision by the director to suspend or revoke a video lottery license may be waived under circumstances such as non-payment of funds owed by a video sales lottery agent, or for reasons related to the public safety, convenience or trust which require immediate action. Further, as necessary for reasons related to public safety, convenience or trust which require immediate action, the director may order the immediate and indefinite disabling of all or a portion of the video lottery operations and/or removal of video lottery equipment at a video lottery sales agent's video lottery facility. The director, however, must continue to comply with the requirements of the Administrative Procedure Act in affording the video lottery agent a subsequent opportunity for an adjudication hearing.

(D) If a video lottery sales agent's video lottery license is revoked, a video lottery agent may reapply, but any subsequent application shall require submission of a new application and payment of a separate application fee and licensing fee, as applicable, and shall only be submitted after any waiting period for reapplication, if any, established by the director, has expired.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21

3770:2-3-06 Video lottery licenses; fines.

(A) As determined by the director, monetary fines may be imposed upon a video lottery sales agent who does not comply with the Lottery Act, all rules, regulations, terms and conditions, policies, orders and directives adopted, promulgated or issued by the commission or the director which may include but may not be limited to a determination that a video lottery sales agent has failed to comply with or violated any provisions set forth in paragraphs (A)(1) to (A)(3) of rule 3770:2-3-05 of the Administrative Code.

(B) Any fines under this section may be in addition to or in lieu of a suspension or revocation under rule 3770:2-3-05 of the Administrative Code.

(C) The director may establish a schedule of fines that may be imposed pursuant to the authority set forth herein. Said schedule, and any amendments or revisions thereto, shall be approved by the director and made available to video lottery sales agents prior to imposition of monetary fines thereunder. Nothing contained on a fine schedule established by the director for video lottery sales agents shall mandate imposition of a fine, but in the event that fines are imposed, the video lottery sales agent fine schedule in effect at the time of the event leading to a determination that a fine shall be imposed, shall be applicable.

(D) When required to do so by the Administrative Procedure Act, the director shall afford a hearing to a video lottery sales agent affected by an order imposing a fine. Such hearings shall be conducted by the director or a hearing examiner designated by the director and shall comply with requirements for adjudication hearings set out in the Administrative Procedure Act. The requirement of the Administrative Procedure Act that adjudication hearings be afforded prior to a final decision by the director to suspend or revoke a video lottery license may be waived under circumstances such as non-payment of funds owed by a video lottery sales agent, or for reasons related to the public safety, convenience or trust which require immediate action. Further, as necessary for reasons related to public safety, convenience or trust which require immediate action, the director may order the immediate and indefinite disabling of all or a portion of the video lottery operations and/or removal of video lottery equipment at a video lottery sales agent's video lottery facility. The director, however, must continue to comply with the requirements of the Administrative Procedure Act in affording the video lottery sales agent a subsequent opportunity for an adjudication hearing.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21

3770:2-3-07 Video lottery licenses; renewal.

(A) An application to renew a video lottery license must be filed on a form approved by the director and shall be subject to review and approval by the director in accordance with the Lottery Act, rules, regulations, policies, orders and directives adopted, promulgated or issued by the commission or the director.

(B) Annually the license renewal process shall consist of a certification by the video lottery sales agent that there have been no changes determined by the director to be material to any information provided in connection with the video lottery sales agent's application, renewal applications or any other supplements thereto. Every three years, a video lottery sales agent shall be required to resubmit a complete video lottery sales agent application in the manner and form as required by the director.

(C) An application to renew a video lottery license must be filed on or before the date established by the director for renewal, unless submission of a late renewal application is approved by the director.

(D) At the time of submission of an application to renew a video lottery license, a video lottery agent shall submit any fees as required in rules promulgated by the commission under division 3770:2 of the Administrative Code.

(E) Any renewal license shall be subject to suspension, modification, revocation or fine as required by the Lottery Act, rule, regulation, policy order or directives adopted, promulgated or issued by the commission or the director.

Effective: 12/29/2011
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21
Prior Effective Dates: 8/18/09 (Emer),10/28/2010

3770:2-3-08 Video lottery licenses; compensation, credits and reimbursement of expense.

(A) Commission. Each video lottery sales agent shall receive a commission of sixty-six and one-half per cent which shall be calculated as a percentage of video lottery terminal income. The director shall establish procedures for the payment of commissions due to video lottery sales agents. The procedures established by the director pursuant to this rule shall include but not be limited to procedures for calculation of financial adjustments. In connection with the sale of lottery tickets by a video lottery sales agent, other than video lottery tickets, a video lottery sales agent shall be paid commissions pursuant to rule 3770-4-09 of the Administrative Code.

(B) Unclaimed credit vouchers. Funds available as unclaimed credit vouchers, as determined by the director, shall be owed to the commission in accordance with procedures established by the director.

(C) Video lottery terminal promotional gaming credit. As authorized by the director, a video lottery sales agent, may offer video lottery terminal promotional gaming credit to video lottery participants in amounts approved by the director. In the event that a video lottery sales agent offers video lottery terminal promotional gaming credit in excess of the amount approved by the director to be offered, the video lottery sales agent shall be financially responsible for payment to the commission for the value of the credits.

(D) Reimbursement of expense. The director may establish procedures for reimbursement of expenses properly incurred by a video lottery sales agent as authorized by the director.

(E) Gambling addiction funding support. Beginning July 1, 2013, each video lottery sales agent shall disperse to the Ohio lottery one-half of one per cent of the video lottery sales agent's commission (.3325 per cent) to provide funding support for programs that provide for gambling addiction and other related addiction services as required by division (C) of section 3769.087 of the Revised Code.

Effective: 08/29/2013
R.C. 119.032 review dates: 05/13/2013 and 08/29/2018
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21
Prior Effective Dates: 08/18/09 (Emer), 10/28/10, 12/29/11

3770:2-3-09 Video lottery licenses; records and audits and inspection of video lottery agent premises.

(A) The lottery and the auditor of the state may at any time examine, inspect, test or access for any purposes all records, files, equipment and other documents, including but not limited to electronic, paper and computer records, files and other documents, video lottery terminals, and hardware and software used in connection with video lottery of the video lottery sales agent whether kept or maintained by the video lottery sales agent, its management company, employees, representatives and/or other entity assisting in the operation of video lottery at the video lottery sales agent's video lottery facility. Video lottery sales agents shall ensure that such equipment, records, files and other documents are regularly maintained and up to date.

(B) A video lottery sales agent shall allow inspections of the licensed premises at any time as authorized by the director. The inspection may be made without prior notice to the video lottery sales agent.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21

3770:2-3-10 Video lottery licenses; settlement of video lottery ticket sales, control of video lottery and collection of revenues due the lottery.

(A) Settlement cycles. The video lottery sales agent must account for all video lottery ticket sales and transfer the proceeds from their sale, less authorized deductions, to the lottery by means of procedures established by the director for the deposits of proceeds from video lottery game sales. The director may prohibit a video lottery sales agent from selling video lottery games if a video lottery sales agent has not fully accounted for video lottery tickets sold.

(B) Forms. The director will, in management regulations or directives, prescribe the forms for video lottery sales agents to use in connection with video lottery transactions.

(C) Control of video lottery. Any establishment of video lottery sales agent agreements pertaining to the provision of video lottery terminals is for the benefit of the lottery. The commission retains the right to maintain and exercise control of video lottery operations at all times by any means necessary to ensure the security and efficient operation of the lottery. Equipment or supplies that are provided to or placed on the premises of a video lottery sales agent by the lottery remain the property of the state of Ohio.

(D) Director's authority to collect video lottery sales revenues.

(1) The director shall collect the revenues received from the sale of video lottery games by video lottery sales agents at intervals established by the director. The director shall designate a day or days during any interval time period on which video lottery sales agents shall be required to deposit to the credit of the lottery fund, in accounts which shall be used exclusively for lottery-related transactions at lawfully designated banking institutions, all moneys due the lottery by such video lottery sales agents from the sale of video lottery games, less an amount retained as compensation for the sale of such video lottery games. The director may further order that video lottery sales agents deduct the amounts they pay in authorized video lottery prize payments and any commissions or bonuses to which video lottery sales agents are entitled from the amounts received in gross video lottery game sales prior to their deposit in accounts.

(2) The director may arrange for any banking institution to perform the functions and services necessary to collect the revenues received from the sale of video lottery games by video lottery sales agents, and may arrange the compensation for such performance as deemed necessary and advisable. The director may also rely on the treasurer of state to perform this function. The director shall establish detailed record keeping and operating procedures to be followed by such banking institutions to carry out the purposes of the Lottery Act and lottery rules.

(E) Penalties for non-transfer of funds. The director may impose penalties for the failure of a video lottery sales agent to transfer funds to the lottery in a timely manner. Penalties may include, but are not limited to, monetary penalties, modification of license, immediate suspension or revocation. The director may adopt internal management regulations elaborating on any terms regarding the collection of sales revenues due and owing from the video lottery sales agents.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21

3770:2-3-11 Video lottery licenses - stolen, destroyed and/or compromised video lottery tickets or games.

(A) A video lottery sales agent is financially responsible for all video lottery tickets consigned to that video lottery sales agent's location. If video lottery tickets are stolen or destroyed, the video lottery sales agent shall report that fact to the director within time periods established by the director. In the case of stolen or destroyed tickets, the video lottery sales agent is also required to file a report with the appropriate law enforcement agency. The video lottery sales agent shall thereafter submit a copy of any official police or file report for stolen or destroyed tickets with the director within time periods established by the director. The video lottery sales agent shall not be required to pay for the stolen or destroyed video lottery tickets until so notified by the director, but shall remain liable to pay the sale price less any authorized deductions for such video lottery tickets unless, upon investigation by the director, the director determines and notifies the video lottery sales agent that the video lottery sales agent shall be relieved of the obligation to pay for some or all of such video lottery tickets. The director may adopt further guidelines for video lottery sales agents concerning the reporting and handling of stolen or destroyed video lottery ticket, and the circumstances under which credit will be given, or under which the video lottery sales agent will be relieved of the obligation to pay for stolen or destroyed tickets.

(B) Incidents of tampering with or compromise of a video lottery terminal, video lottery ticket, video lottery game, credit voucher or other records, files, documents or equipment relating to video lottery require a video lottery sales agent to notify the director under the provisions of this rule pertaining to stolen and destroyed video lottery tickets.

Effective: 10/28/2010
R.C. 119.032 review dates: 10/28/2015
Promulgated Under: 119.03
Statutory Authority: 3770.03
Rule Amplifies: 3770.01 , 3770.02 , 3770.03 , 3770.06 , 3770.21