Chapter 3770: STATE LOTTERY

3770.01 State lottery commission - appointment - term - bond - removal of member.

(A) There is hereby created the state lottery commission consisting of nine members appointed by the governor with the advice and consent of the senate. No more than five members of the commission shall be members of the same political party. Of the additional and new appointments made to the commission pursuant to the amendment of August 1, 1980, three shall be for terms ending August 1, 1981, three shall be for terms ending August 1, 1982, and three shall be for terms ending August 1, 1983. Thereafter, terms of office shall be for three years, each term ending on the same day of the same month of the year as did the term which it succeeds.

(B) Each member shall hold office from the date of appointment until the end of the term for which the member was appointed. Any member appointed to fill a vacancy occurring prior to the expiration of the term for which the member's predecessor was appointed shall hold office for the remainder of that term. Any member shall continue in office subsequent to the expiration date of the member's term until the member's successor takes office, or until a period of sixty days has elapsed, whichever occurs first.

(C) All members of the commission shall be citizens of the United States and residents of this state. The members of the commission shall represent the various geographic regions of the state. No member of the commission shall have any pecuniary interest in any contract or license awarded by the commission. One person appointed as a member of the commission shall represent an organization that deals with problem gambling and assists recovering gambling addicts. Each person appointed as a member of the commission, except the member appointed as a representative of an organization that deals with problem gambling and assists recovering gambling addicts, shall have prior experience or education in business administration, management, sales, marketing, or advertising.

(D) The commission shall elect annually one of its members to serve as chairperson for a term of one year. Election as chairperson shall not extend a member's appointive term. Each member of the commission shall receive an annual salary of five thousand dollars, payable in monthly installments. Each member of the commission also shall receive the member's actual and necessary expenses incurred in the discharge of the member's official duties.

(E) Each member of the commission, before entering upon the discharge of the member's official duties, shall give a bond, payable to the treasurer of state, in the sum of ten thousand dollars with sufficient sureties to be approved by the treasurer of state, which bond shall be filed with the secretary of state.

(F) The governor may remove any member of the commission for malfeasance, misfeasance, or nonfeasance in office, giving the member a copy of the charges against the member and affording the member an opportunity to be publicly heard in person or by counsel in the member's own defense upon not less than ten days' notice. If the member is removed, the governor shall file in the office of the secretary of state a complete statement of all charges made against the member and the governor's finding on the charges, together with a complete report of the proceedings, and the governor's decision on the charges is final.

(G) The commission shall maintain offices at locations in the state as it may consider necessary for the efficient performance of its functions. The director shall maintain an office in Columbus to coordinate the activities of the state lottery commission with other state departments.

Effective Date: 09-29-1999

3770.02 Director of commission - powers and duties - statewide joint lottery games.

(A) Subject to the advice and consent of the senate, the governor shall appoint a director of the state lottery commission who shall serve at the pleasure of the governor. The director shall devote full time to the duties of the office and shall hold no other office or employment. The director shall meet all requirements for appointment as a member of the commission and shall, by experience and training, possess management skills that equip the director to administer an enterprise of the nature of a state lottery. The director shall receive an annual salary in accordance with pay range 48 of section 124.152 of the Revised Code.

(B)

(1) The director shall attend all meetings of the commission and shall act as its secretary. The director shall keep a record of all commission proceedings and shall keep the commission's records, files, and documents at the commission's principal office. All records of the commission's meetings shall be available for inspection by any member of the public, upon a showing of good cause and prior notification to the director.

(2) The director shall be the commission's executive officer and shall be responsible for keeping all commission records and supervising and administering the state lottery in accordance with this chapter, and carrying out all commission rules adopted under section 3770.03 of the Revised Code.

(C)

(1) The director shall appoint an assistant director, deputy directors of marketing, operations, sales, finance, public relations, security, and administration, and as many regional managers as are required. The director may also appoint necessary professional, technical, and clerical assistants. All such officers and employees shall be appointed and compensated pursuant to Chapter 124. of the Revised Code. Regional and assistant regional managers, sales representatives, and any lottery executive account representatives shall remain in the unclassified service.

(2) The director, in consultation with the director of administrative services, may establish standards of proficiency and productivity for commission field representatives.

(D) The director shall request the bureau of criminal identification and investigation, the department of public safety, or any other state, local, or federal agency to supply the director with the criminal records of any job applicant and may periodically request the criminal records of commission employees. At or prior to the time of making such a request, the director shall require a job applicant or commission employee to obtain fingerprint cards prescribed by the superintendent of the bureau of criminal identification and investigation at a qualified law enforcement agency, and the director shall cause these fingerprint cards to be forwarded to the bureau of criminal identification and investigation and the federal bureau of investigation. The commission shall assume the cost of obtaining the fingerprint cards and shall pay to each agency supplying criminal records for each investigation under this division a reasonable fee, as determined by the agency.

(E) The director shall license lottery sales agents pursuant to section 3770.05 of the Revised Code and, when it is considered necessary, may revoke or suspend the license of any lottery sales agent. The director may license video lottery technology providers, independent testing laboratories, and gaming employees, and promulgate rules relating thereto. When the director considers it necessary, the director may suspend or revoke the license of a video lottery technology provider, independent testing laboratory, or gaming employee, including suspension or revocation without affording an opportunity for a prior hearing under section 119.07 of the Revised Code when the public safety, convenience, or trust requires immediate action.

(F) The director shall confer at least once each month with the commission, at which time the director shall advise it regarding the operation and administration of the lottery. The director shall make available at the request of the commission all documents, files, and other records pertaining to the operation and administration of the lottery. The director shall prepare and make available to the commission each month a complete and accurate accounting of lottery revenues, prize money disbursements and the cost of goods and services awarded as prizes, operating expenses, and all other relevant financial information, including an accounting of all transfers made from any lottery funds in the custody of the treasurer of state to benefit education.

(G) The director may enter into contracts for the operation or promotion of the lottery pursuant to Chapter 125. of the Revised Code.

(H)

(1) Pursuant to rules adopted by the commission under section 3770.03 of the Revised Code, the director shall require any lottery sales agents to deposit to the credit of the state lottery fund, in banking institutions designated by the treasurer of state, net proceeds due the commission as determined by the director.

(2) Pursuant to rules adopted by the commission under Chapter 119. of the Revised Code, the director may impose penalties for the failure of a sales agent to transfer funds to the commission in a timely manner. Penalties may include monetary penalties, immediate suspension or revocation of a license, or any other penalty the commission adopts by rule.

(I) The director may arrange for any person, or any banking institution, to perform functions and services in connection with the operation of the lottery as the director may consider necessary to carry out this chapter.

(J)

(1) As used in this chapter, "statewide joint lottery game" means a lottery game that the commission sells solely within this state under an agreement with other lottery jurisdictions to sell the same lottery game solely within their statewide or other jurisdictional boundaries.

(2) If the governor directs the director to do so, the director shall enter into an agreement with other lottery jurisdictions to conduct statewide joint lottery games. If the governor signs the agreement personally or by means of an authenticating officer pursuant to section 107.15 of the Revised Code, the director then may conduct statewide joint lottery games under the agreement.

(3) The entire net proceeds from any statewide joint lottery games shall be used to fund elementary, secondary, vocational, and special education programs in this state.

(4) The commission shall conduct any statewide joint lottery games in accordance with rules it adopts under division (B)(5) of section 3770.03 of the Revised Code.

(K)

(1) The director shall enter into an agreement with the department of mental health and addiction services under which the department shall provide a program of gambling addiction services on behalf of the commission. The commission shall pay the costs of the program provided pursuant to the agreement.

(2) As used in this section, "gambling addiction services" has the same meaning as in section 5119.01 of the Revised Code.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Effective Date: 03-14-2002; 03-23-2005

3770.021 Employment by commission - prohibitions - internal rules.

Except as otherwise provided in this section, no person shall be employed by or continue employment with the state lottery commission who has been convicted in any jurisdiction of a felony, or of a misdemeanor of the first, second, or third degree, involving gambling, fraud or misrepresentation, theft, or any crime of moral turpitude, as long as the record of the conviction has not been sealed pursuant to Chapter 2953. of the Revised Code or pursuant to a statute of another jurisdiction that governs the sealing of criminal records. The director of the commission may adopt internal management rules designating vehicular offenses, conviction of which will disqualify persons from employment with the commission; specifying time periods after which persons who have been convicted of the offenses described in this section may be employed by the commission; and establishing requirements for an applicant or employee to seek a court order to have the records sealed in accordance with law relating to the sealing of criminal records.

Effective Date: 09-26-1996

3770.03 Commission - powers and duties.

(A) The state lottery commission shall promulgate rules under which a statewide lottery may be conducted, which includes, and since the original enactment of this section has included, the authority for the commission to operate video lottery terminal games. Any reference in this chapter to tickets shall not be construed to in any way limit the authority of the commission to operate video lottery terminal games. Nothing in this chapter shall restrict the authority of the commission to promulgate rules related to the operation of games utilizing video lottery terminals as described in section 3770.21 of the Revised Code. The rules shall be promulgated pursuant to Chapter 119. of the Revised Code, except that instant game rules shall be promulgated pursuant to section 111.15 of the Revised Code but are not subject to division (D) of that section. Subjects covered in these rules shall include, but need not be limited to, the following:

(1) The type of lottery to be conducted;

(2) The prices of tickets in the lottery;

(3) The number, nature, and value of prize awards, the manner and frequency of prize drawings, and the manner in which prizes shall be awarded to holders of winning tickets.

(B) The commission shall promulgate rules, in addition to those described in division (A) of this section, pursuant to Chapter 119. of the Revised Code under which a statewide lottery and statewide joint lottery games may be conducted. Subjects covered in these rules shall include, but not be limited to, the following:

(1) The locations at which lottery tickets may be sold and the manner in which they are to be sold. These rules may authorize the sale of lottery tickets by commission personnel or other licensed individuals from traveling show wagons at the state fair, and at any other expositions the director of the commission considers acceptable. These rules shall prohibit commission personnel or other licensed individuals from soliciting from an exposition the right to sell lottery tickets at that exposition, but shall allow commission personnel or other licensed individuals to sell lottery tickets at an exposition if the exposition requests commission personnel or licensed individuals to do so. These rules may also address the accessibility of sales agent locations to commission products in accordance with the "Americans with Disabilities Act of 1990," 104 Stat. 327, 42 U.S.C.A. 12101 et seq.

(2) The manner in which lottery sales revenues are to be collected, including authorization for the director to impose penalties for failure by lottery sales agents to transfer revenues to the commission in a timely manner;

(3) The amount of compensation to be paid licensed lottery sales agents;

(4) The substantive criteria for the licensing of lottery sales agents consistent with section 3770.05 of the Revised Code, and procedures for revoking or suspending their licenses consistent with Chapter 119. of the Revised Code. If circumstances, such as the nonpayment of funds owed by a lottery sales agent, or other circumstances related to the public safety, convenience, or trust, require immediate action, the director may suspend a license without affording an opportunity for a prior hearing under section 119.07 of the Revised Code.

(5) Special game rules to implement any agreements signed by the governor that the director enters into with other lottery jurisdictions under division (J) of section 3770.02 of the Revised Code to conduct statewide joint lottery games. The rules shall require that the entire net proceeds of those games that remain, after associated operating expenses, prize disbursements, lottery sales agent bonuses, commissions, and reimbursements, and any other expenses necessary to comply with the agreements or the rules are deducted from the gross proceeds of those games, be transferred to the lottery profits education fund under division (B) of section 3770.06 of the Revised Code.

(6) Any other subjects the commission determines are necessary for the operation of video lottery terminal games, including the establishment of any fees, fines, or payment schedules.

(C) Chapter 2915. of the Revised Code does not apply to, affect, or prohibit lotteries conducted pursuant to this chapter.

(D) The commission may promulgate rules, in addition to those described in divisions (A) and (B) of this section, that establish standards governing the display of advertising and celebrity images on lottery tickets and on other items that are used in the conduct of, or to promote, the statewide lottery and statewide joint lottery games. Any revenue derived from the sale of advertising displayed on lottery tickets and on those other items shall be considered, for purposes of section 3770.06 of the Revised Code, to be related proceeds in connection with the statewide lottery or gross proceeds from statewide joint lottery games, as applicable.

(E)

(1) The commission shall meet with the director at least once each month and shall convene other meetings at the request of the chairperson or any five of the members. No action taken by the commission shall be binding unless at least five of the members present vote in favor of the action. A written record shall be made of the proceedings of each meeting and shall be transmitted forthwith to the governor, the president of the senate, the senate minority leader, the speaker of the house of representatives, and the house minority leader.

(2) The director shall present to the commission a report each month, showing the total revenues, prize disbursements, and operating expenses of the state lottery for the preceding month. As soon as practicable after the end of each fiscal year, the commission shall prepare and transmit to the governor and the general assembly a report of lottery revenues, prize disbursements, and operating expenses for the preceding fiscal year and any recommendations for legislation considered necessary by the commission.

Amended by 129th General Assembly File No. 28, HB 153, (Vetoed) § 101.01 , eff. 9/29/2011.

Amended by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 7/17/2009.

Effective Date: 03-14-2002; 2007 HB119 09-29-2007

3770.04 Commission may hold public hearings.

For the purpose of conducting any study or investigation, the state lottery commission may direct that public hearings be held at a time and place, prescribed by the commission, in accordance with section 121.22 of the Revised Code. Hearings shall be held in Columbus, except that if the commission determines that another location is more convenient for those concerned, it may move the hearing to another location within the state. The commission shall give notice of all public hearings in such manner as will give actual or constructive notice to all interested parties.

In the discharge of any duties imposed by this chapter, the state lottery commission may require that testimony be given under oath and administer such oath, issue subpoenas compelling the attendance of witnesses and the production of any papers, books, and accounts, and cause the deposition of any witness residing within the state. In the event of the refusal of any person to comply with the terms of a subpoena issued by the commission or refusal to testify on matters about which he may lawfully be questioned, the prosecutor of the county in which such person resides, upon the petition of the commission, shall bring a proceeding for contempt against such person in the court of common pleas of that county.

Effective Date: 08-01-1980

3770.05 Lottery sales agent license.

(A) As used in this section, "person" means any person, association, corporation, partnership, club, trust, estate, society, receiver, trustee, person acting in a fiduciary or representative capacity, instrumentality of the state or any of its political subdivisions, or any other combination of individuals meeting the requirements set forth in this section or established by rule or order of the state lottery commission.

(B) The director of the state lottery commission may license any person as a lottery sales agent. No license shall be issued to any person or group of persons to engage in the sale of lottery tickets as the person's or group's sole occupation or business.

Before issuing any license to a lottery sales agent, the director shall consider all of the following:

(1) The financial responsibility and security of the applicant and the applicant's business or activity;

(2) The accessibility of the applicant's place of business or activity to the public;

(3) The sufficiency of existing licensed agents to serve the public interest;

(4) The volume of expected sales by the applicant;

(5) Any other factors pertaining to the public interest, convenience, or trust.

(C) Except as otherwise provided in division (F) of this section, the director of the state lottery commission shall refuse to grant, or shall suspend or revoke, a license if the applicant or licensee:

(1) Has been convicted of a felony or has been convicted of a crime involving moral turpitude;

(2) Has been convicted of an offense that involves illegal gambling;

(3) Has been found guilty of fraud or misrepresentation in any connection;

(4) Has been found to have violated any rule or order of the commission; or

(5) Has been convicted of illegal trafficking in supplemental nutrition assistance program benefits.

(D) Except as otherwise provided in division (F) of this section, the director of the state lottery commission shall refuse to grant, or shall suspend or revoke, a license if the applicant or licensee is a corporation and any of the following applies:

(1) Any of the corporation's directors, officers, or controlling shareholders has been found guilty of any of the activities specified in divisions (C)(1) to (5) of this section;

(2) It appears to the director of the state lottery commission that, due to the experience, character, or general fitness of any director, officer, or controlling shareholder of the corporation, the granting of a license as a lottery sales agent would be inconsistent with the public interest, convenience, or trust;

(3) The corporation is not the owner or lessee of the business at which it would conduct a lottery sales agency pursuant to the license applied for;

(4) Any person, firm, association, or corporation other than the applicant or licensee shares or will share in the profits of the applicant or licensee, other than receiving dividends or distributions as a shareholder, or participates or will participate in the management of the affairs of the applicant or licensee.

(E)

(1) The director of the state lottery commission shall refuse to grant a license to an applicant for a lottery sales agent license and shall revoke a lottery sales agent license if the applicant or licensee is or has been convicted of a violation of division (A) or (C)(1) of section 2913.46 of the Revised Code.

(2) The director shall refuse to grant a license to an applicant for a lottery sales agent license that is a corporation and shall revoke the lottery sales agent license of a corporation if the corporation is or has been convicted of a violation of division (A) or (C)(1) of section 2913.46 of the Revised Code.

(F) The director of the state lottery commission shall request the bureau of criminal identification and investigation, the department of public safety, or any other state, local, or federal agency to supply the director with the criminal records of any applicant for a lottery sales agent license, and may periodically request the criminal records of any person to whom a lottery sales agent license has been issued. At or prior to the time of making such a request, the director shall require an applicant or licensee to obtain fingerprint impressions on fingerprint cards prescribed by the superintendent of the bureau of criminal identification and investigation at a qualified law enforcement agency, and the director shall cause those fingerprint cards to be forwarded to the bureau of criminal identification and investigation, to the federal bureau of investigation, or to both bureaus. The commission shall assume the cost of obtaining the fingerprint cards.

The director shall pay to each agency supplying criminal records for each investigation a reasonable fee, as determined by the agency.

The commission may adopt uniform rules specifying time periods after which the persons described in divisions (C)(1) to (5) and (D)(1) to (4) of this section may be issued a license and establishing requirements for those persons to seek a court order to have records sealed in accordance with law.

(G)

(1) Each applicant for a lottery sales agent license shall do both of the following:

(a) Pay fees to the state lottery commission, if required by rule adopted by the director under Chapter 119. of the Revised Code and the controlling board approves the fees;

(b) Prior to approval of the application, obtain a surety bond in an amount the director determines by rule adopted under Chapter 119. of the Revised Code or, alternatively, with the director's approval, deposit the same amount into a dedicated account for the benefit of the state lottery. The director also may approve the obtaining of a surety bond to cover part of the amount required, together with a dedicated account deposit to cover the remainder of the amount required. The director also may establish an alternative program or policy, with the approval of the commission by rule adopted under Chapter 119. of the Revised Code, that otherwise ensures the lottery's financial interests are adequately protected. If such an alternative program or policy is established, an applicant or lottery sales agent, subject to the director's approval, may be permitted to participate in the program or proceed under that policy in lieu of providing a surety bond or dedicated amount.

A surety bond may be with any company that complies with the bonding and surety laws of this state and the requirements established by rules of the commission pursuant to this chapter. A dedicated account deposit shall be conducted in accordance with policies and procedures the director establishes.

A surety bond, dedicated account, other established program or policy, or any combination of these resources, as applicable, may be used to pay for the lottery sales agent's failure to make prompt and accurate payments for lottery ticket sales, for missing or stolen lottery tickets, for damage to equipment or materials issued to the lottery sales agent, or to pay for expenses the commission incurs in connection with the lottery sales agent's license.

(2) A lottery sales agent license is effective for at least one year, but not more than three years.

A licensed lottery sales agent, on or before the date established by the director, shall renew the agent's license and provide at that time evidence to the director that the surety bond, dedicated account deposit, or both, required under division (G)(1)(b) of this section has been renewed or is active, whichever applies.

Before the commission renews a lottery sales agent license, the lottery sales agent shall submit a renewal fee to the commission, if one is required by rule adopted by the director under Chapter 119. of the Revised Code and the controlling board approves the renewal fee. The renewal fee shall not exceed the actual cost of administering the license renewal and processing changes reflected in the renewal application. The renewal of the license is effective for at least one year, but not more than three years.

(3) A lottery sales agent license shall be complete, accurate, and current at all times during the term of the license. Any changes to an original license application or a renewal application may subject the applicant or lottery sales agent, as applicable, to paying an administrative fee that shall be in an amount that the director determines by rule adopted under Chapter 119. of the Revised Code, that the controlling board approves, and that shall not exceed the actual cost of administering and processing the changes to an application.

(4) The relationship between the commission and a lottery sales agent is one of trust. A lottery sales agent collects funds on behalf of the commission through the sale of lottery tickets for which the agent receives a compensation.

(H) Pending a final resolution of any question arising under this section, the director of the state lottery commission may issue a temporary lottery sales agent license, subject to the terms and conditions the director considers appropriate.

(I) If a lottery sales agent's rental payments for the lottery sales agent's premises are determined, in whole or in part, by the amount of retail sales the lottery sales agent makes, and if the rental agreement does not expressly provide that the amount of those retail sales includes the amounts the lottery sales agent receives from lottery ticket sales, only the amounts the lottery sales agent receives as compensation from the state lottery commission for selling lottery tickets shall be considered to be amounts the lottery sales agent receives from the retail sales the lottery sales agent makes, for the purpose of computing the lottery sales agent's rental payments.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Amended by 129th General AssemblyFile No.28, HB 153, §101.01, eff. 9/29/2011.

Amended by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 10/16/2009.

Effective Date: 09-26-1996; 2006 HB699 03-29-2007

3770.051 Disqualification from contracting with commission.

(A) The director of the state lottery commission may refuse to enter into any contracts or agreements with vendors whose activities on behalf of the commission could potentially affect the integrity of the state lottery's on-line gaming system or instant ticket gaming system, if any principal of the vendor has been convicted of a crime involving moral turpitude or an offense involving illegal gambling or has been found guilty of fraud or misrepresentation in any manner.

(B) The director shall request the bureau of criminal identification and investigation, the department of public safety, or any other state, local, or federal agency to supply the director with the criminal records of any vendor with whom the commission is considering entering into a contract or agreement, and may periodically request such records of any vendor with whom the commission has entered into a contract or agreement. At or prior to the time of making such a request, the director shall require a vendor to obtain fingerprint cards prescribed by the superintendent of the bureau of criminal identification and investigation at a qualified law enforcement agency and the director shall cause these fingerprint cards to be forwarded to the bureau of criminal identification and investigation and the federal bureau of investigation. The commission shall assume the cost of obtaining the fingerprint cards. The director shall pay to each agency supplying such records for each investigation a reasonable fee, as determined by the agency. The commission may adopt uniform rules specifying time periods after which the director may enter into contracts or agreements with vendors described in division (A) of this section and establishing requirements for a vendor to seek a court order to have records sealed in accordance with law.

Effective Date: 09-26-1996

3770.06 State lottery gross revenue fund - state lottery fund - lottery profits education fund - deferred prizes trust fund - audit program.

(A) There is hereby created the state lottery gross revenue fund, which shall be in the custody of the treasurer of state but shall not be part of the state treasury. All gross revenues received from sales of lottery tickets, fines, fees, and related proceeds in connection with the statewide lottery and all gross proceeds from statewide joint lottery games shall be deposited into the fund. The treasurer of state shall invest any portion of the fund not needed for immediate use in the same manner as, and subject to all provisions of law with respect to the investment of, state funds. The treasurer of state shall disburse money from the fund on order of the director of the state lottery commission or the director's designee.

Except for gross proceeds from statewide joint lottery games, all revenues of the state lottery gross revenue fund that are not paid to holders of winning lottery tickets, that are not required to meet short-term prize liabilities, that are not credited to lottery sales agents in the form of bonuses, commissions, or reimbursements, that are not paid to financial institutions to reimburse those institutions for sales agent nonsufficient funds, and that are collected from sales agents for remittance to insurers under contract to provide sales agent bonding services shall be transferred to the state lottery fund, which is hereby created in the state treasury. In addition, all revenues of the state lottery gross revenue fund that represent the gross proceeds from the statewide joint lottery games and that are not paid to holders of winning lottery tickets, that are not required to meet short-term prize liabilities, that are not credited to lottery sales agents in the form of bonuses, commissions, or reimbursements, and that are not necessary to cover operating expenses associated with those games or to otherwise comply with the agreements signed by the governor that the director enters into under division (J) of section 3770.02 of the Revised Code or the rules the commission adopts under division (B)(5) of section 3770.03 of the Revised Code shall be transferred to the state lottery fund. All investment earnings of the fund shall be credited to the fund. Moneys shall be disbursed from the fund pursuant to vouchers approved by the director. Total disbursements for monetary prize awards to holders of winning lottery tickets in connection with the statewide lottery and purchases of goods and services awarded as prizes to holders of winning lottery tickets shall be of an amount equal to at least fifty per cent of the total revenue accruing from the sale of lottery tickets.

(B) Pursuant to Section 6 of Article XV, Ohio Constitution, there is hereby established in the state treasury the lottery profits education fund. Whenever, in the judgment of the director of the state lottery commission, the amount to the credit of the state lottery fund that does not represent proceeds from statewide joint lottery games is in excess of that needed to meet the maturing obligations of the commission and as working capital for its further operations, the director of the state lottery commission shall recommend the amount of the excess to be transferred to the lottery profits education fund, and the director of budget and management may transfer the excess to the lottery profits education fund in connection with the statewide lottery. In addition, whenever, in the judgment of the director of the state lottery commission, the amount to the credit of the state lottery fund that represents proceeds from statewide joint lottery games equals the entire net proceeds of those games as described in division (B)(5) of section 3770.03 of the Revised Code and the rules adopted under that division, the director of the state lottery commission shall recommend the amount of the proceeds to be transferred to the lottery profits education fund, and the director of budget and management may transfer those proceeds to the lottery profits education fund. Investment earnings of the lottery profits education fund shall be credited to the fund.

The lottery profits education fund shall be used solely for the support of elementary, secondary, vocational, and special education programs as determined in appropriations made by the general assembly, or as provided in applicable bond proceedings for the payment of debt service on obligations issued to pay costs of capital facilities, including those for a system of common schools throughout the state pursuant to section 2n of Article VIII, Ohio Constitution. When determining the availability of money in the lottery profits education fund, the director of budget and management may consider all balances and estimated revenues of the fund.

(C) There is hereby established in the state treasury the deferred prizes trust fund. With the approval of the director of budget and management, an amount sufficient to fund annuity prizes shall be transferred from the state lottery fund and credited to the trust fund. The treasurer of state shall credit all earnings arising from investments purchased under this division to the trust fund. Within sixty days after the end of each fiscal year, the treasurer of state shall certify to the director of budget and management whether the actuarial amount of the trust fund is sufficient over the fund's life for continued funding of all remaining deferred prize liabilities as of the last day of the fiscal year just ended. Also, within that sixty days, the director of budget and management shall certify the amount of investment earnings necessary to have been credited to the trust fund during the fiscal year just ending to provide for such continued funding of deferred prizes. Any earnings credited in excess of the latter certified amount shall be transferred to the lottery profits education fund.

To provide all or a part of the amounts necessary to fund deferred prizes awarded by the commission in connection with the statewide lottery, the treasurer of state, in consultation with the commission, may invest moneys contained in the deferred prizes trust fund which represents proceeds from the statewide lottery in obligations of the type permitted for the investment of state funds but whose maturities are thirty years or less. Notwithstanding the requirements of any other section of the Revised Code, to provide all or part of the amounts necessary to fund deferred prizes awarded by the commission in connection with statewide joint lottery games, the treasurer of state, in consultation with the commission, may invest moneys in the trust fund which represent proceeds derived from the statewide joint lottery games in accordance with the rules the commission adopts under division (B)(5) of section 3770.03 of the Revised Code. Investments of the trust fund are not subject to the provisions of division (A)(10) of section 135.143 of the Revised Code limiting to twenty-five per cent the amount of the state's total average portfolio that may be invested in debt interests other than commercial paper and limiting to five per cent the amount that may be invested in debt interests, including commercial paper, of a single issuer.

All purchases made under this division shall be effected on a delivery versus payment method and shall be in the custody of the treasurer of state.

The treasurer of state may retain an investment advisor, if necessary. The commission shall pay any costs incurred by the treasurer of state in retaining an investment advisor.

(D) The auditor of state shall conduct annual audits of all funds and any other audits as the auditor of state or the general assembly considers necessary. The auditor of state may examine all records, files, and other documents of the commission, and records of lottery sales agents that pertain to their activities as agents, for purposes of conducting authorized audits.

(E) The state lottery commission shall establish an internal audit plan before the beginning of each fiscal year, subject to the approval of the office of internal audit in the office of budget and management. At the end of each fiscal year, the commission shall prepare and submit an annual report to the office of internal audit for the office's review and approval, specifying the internal audit work completed by the end of that fiscal year and reporting on compliance with the annual internal audit plan.

(F) Whenever, in the judgment of the director of budget and management, an amount of net state lottery proceeds is necessary to be applied to the payment of debt service on obligations, all as defined in sections 151.01 and 151.03 of the Revised Code, the director shall transfer that amount directly from the state lottery fund or from the lottery profits education fund to the bond service fund defined in those sections. The provisions of this division are subject to any prior pledges or obligation of those amounts to the payment of bond service charges as defined in division (C) of section 3318.21 of the Revised Code, as referred to in division (B) of this section.

Amended by 130th General Assembly File No. TBD, SB 287, §1, eff. 9/4/2014.

Amended by 130th General Assembly File No. 25, HB 59, §101.01, eff. 9/29/2013.

Amended by 129th General AssemblyFile No.127, HB 487, §101.01, eff. 9/10/2012.

Effective Date: 06-13-2002; 2007 HB119 09-29-2007

3770.061 Charitable gaming oversight fund.

There is hereby created in the state treasury the charitable gaming oversight fund. The state lottery commission shall credit to the fund any money it receives from the office of the attorney general under any agreement the commission and the office have entered into under division (I) of section 2915.08 of the Revised Code. The commission shall use money in the fund to provide oversight, licensing, and monitoring of charitable gaming activities in this state in accordance with the agreement and Chapter 2915. of the Revised Code. Not later than the first day of July of each fiscal year, or as soon as possible thereafter, the commission may certify to the office of budget and management any unobligated fund balances not necessary to be used under this section. The commission may request the office of budget and management to transfer these balances to the lottery profits education fund for use in accordance with section 3770.06 of the Revised Code.

Effective Date: 06-30-2005

3770.07 Claiming of prizes - unclaimed lottery prizes fund.

(A)

(1) Except as provided in division (A)(2) of this section, lottery prize awards shall be claimed by the holder of the winning lottery product, or by the executor or administrator, or the trustee of a trust, of the estate of a deceased holder of a winning lottery product, in a manner to be determined by the state lottery commission, within one hundred eighty days after the date on which the prize award was announced if the lottery game is an online game, and within one hundred eighty days after the close of the game if the lottery game is an instant game.

Any lottery prize award with a value that meets or exceeds the reportable winnings amounts set by 26 U.S.C. 6041 , or a subsequent analogous section of the Internal Revenue Code, shall not be claimed by or paid to any person, as defined in section 1.59 of the Revised Code or as defined by rule or order of the state lottery commission, until the name, address, and social security number of each beneficial owner of the prize award are documented for the commission. Except when a beneficial owner otherwise consents in writing, in the case of a claim for a lottery prize award made by one or more beneficial owners using a trust, the name, address, and social security number of each such beneficial owner in the commission's records as a result of such a disclosure are confidential and shall not be subject to inspection or copying under section 149.43 of the Revised Code as a public record.

Except as otherwise provided in division (A)(1) of this section or as otherwise provided by law, the name and address of any individual claiming a lottery prize award are subject to inspection or copying under section 149.43 of the Revised Code as a public record.

(2) An eligible person serving on active military duty in any branch of the United States armed forces during a war or national emergency declared in accordance with federal law may submit a delayed claim for a lottery prize award. The eligible person shall do so by notifying the state lottery commission about the claim not later than the five hundred fortieth day after the date on which the prize award was announced if the lottery game is an online game or after the date on which the lottery game closed if the lottery game is an instant game.

(3) If no valid claim to a lottery prize award is made within the prescribed period, the prize money, the cost of goods and services awarded as prizes, or, if goods or services awarded as prizes are resold by the state lottery commission, the proceeds from their sale shall be returned to the state lottery fund and distributed in accordance with section 3770.06 of the Revised Code.

(4) The state lottery commission may share with other governmental agencies the name, address, and social security number of a beneficial owner disclosed to the commission under division (A)(1) of this section, as authorized under sections 3770.071 and 3770.073 of the Revised Code. Any shared information as disclosed pursuant to those sections that is made confidential by division (A)(1) of this section remains confidential and shall not be subject to inspection or copying under section 149.43 of the Revised Code as a public record unless the applicable beneficial owner otherwise provides written consent.

(5) As used in this division:

(a) "Eligible person" means a person who is entitled to a lottery prize award and who falls into either of the following categories:

(i) While on active military duty in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is transferred out of this state before the one hundred eightieth day after the date on which the winner of the lottery prize award is selected.

(ii) While serving in the reserve forces in this state, the person, as the result of a war or national emergency declared in accordance with federal law, is placed on active military duty and is transferred out of this state before the expiration of the one hundred eightieth day after the date on which the prize drawing occurs for an online game or before the expiration of the one hundred eightieth day following the close of an instant game as determined by the commission.

(b) "Active military duty" means that a person is covered by the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50 U.S.C. 501 et seq., as amended, or the "Uniformed Services Employment and Reemployment Rights Act of 1994," 108 Stat. 3149, 38 U.S.C. 4301 et seq., as amended.

(c) "Each beneficial owner" means the ultimate recipient or, if there is more than one, each ultimate recipient of a lottery prize award.

(B) If a prize winner, as defined in section 3770.10 of the Revised Code, is under eighteen years of age, or is under some other legal disability, and the prize money or the cost of goods or services awarded as a prize exceeds one thousand dollars, the director of the state lottery commission shall order that payment be made to the order of the legal guardian of that prize winner. If the amount of the prize money or the cost of goods or services awarded as a prize is one thousand dollars or less, the director may order that payment be made to the order of the adult member, if any, of that prize winner's family legally responsible for the care of that prize winner.

(C) No right of any prize winner, as defined in section 3770.10 of the Revised Code, to a prize award shall be the subject of a security interest or used as collateral.

(D)

(1) No right of any prize winner, as defined in section 3770.10 of the Revised Code, to a prize award shall be assignable except as follows: when the payment is to be made to the executor or administrator, or the trustee of a trust, of the estate of a prize winner; when the award of a prize is disputed, any person may be awarded a prize award to which another has claimed title, pursuant to the order of a court of competent jurisdiction; when a person is awarded a prize award to which another has claimed title, pursuant to the order of a federal bankruptcy court under Title 11 of the United States Code; or as provided in sections 3770.10 to 3770.14 of the Revised Code.

(2)

(a) No right of any prize winner, as defined in section 3770.10 of the Revised Code, to a prize award with a remaining unpaid balance of less than one hundred thousand dollars shall be subject to garnishment, attachment, execution, withholding, or deduction except as provided in sections 3119.80 , 3119.81 , 3121.02 , 3121.03 , and 3123.06 of the Revised Code or when the director is to make a payment pursuant to section 3770.071 or 3770.073 of the Revised Code.

(b) No right of any prize winner, as defined in section 3770.10 of the Revised Code, to a prize award with an unpaid balance of one hundred thousand dollars or more shall be subject to garnishment, attachment, execution, withholding, or deduction except as follows: as provided in sections 3119.80 , 3119.81 , 3121.02 , 3121.03 , and 3123.06 of the Revised Code; when the director is to make a payment pursuant to section 3770.071 or 3770.073 of the Revised Code; or pursuant to the order of a court of competent jurisdiction located in this state in a proceeding in which the state lottery commission is a named party, in which case the garnishment, attachment, execution, withholding, or deduction pursuant to the order shall be subordinate to any payments to be made pursuant to section 3119.80 , 3119.81 , 3121.02 , 3121.03 , 3123.06 , 3770.071 , or 3770.073 of the Revised Code.

(3) The state lottery commission may adopt and amend rules pursuant to Chapter 119. of the Revised Code as necessary to implement division (D) of this section, to provide for payments from prize awards subject to garnishment, attachment, execution, withholding, or deduction, and to comply with any applicable requirements of federal law.

(4) Upon making payments from a prize award as required by division (D) of this section, the director and the state lottery commission are discharged from all further liability for those payments, whether they are made to an executor, administrator, trustee, judgment creditor, or another person, or to the prize winner, as defined in section 3770.10 of the Revised Code.

(5) The state lottery commission shall adopt rules pursuant to section 3770.03 of the Revised Code concerning the payment of prize awards upon the death of a prize winner, as defined in section 3770.10 of the Revised Code. Upon the death of a prize winner, the remainder of the prize winner's prize award, to the extent it is not subject to a transfer agreement under sections 3770.10 to 3770.14 of the Revised Code, may be paid to the executor, administrator, or trustee in the form of a discounted lump sum cash settlement.

(E) No lottery prize award shall be awarded to or for any officer or employee of the state lottery commission, any officer or employee of the auditor of state actively auditing, coordinating , or certifying commission drawings, or any blood relative or spouse of such an officer or employee of the commission or auditor of state living as a member of the officer's or employee's household, nor shall any such officer, employee, blood relative, or spouse attempt to claim a lottery prize award.

(F) The director may prohibit vendors to the state lottery commission and their employees from being awarded a lottery prize award.

(G) Upon the payment of prize awards pursuant to a provision of this section, other than a provision of division (D) of this section, the director and the state lottery commission are discharged from all further liability for their payment. Installment payments of lottery prize awards shall be paid by official check or warrant, and they shall be sent by mail delivery to the prize winner's address within the United States or by electronic funds transfer to an established bank account located within the United States, or the prize winner may pick them up at an office of the commission.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Effective Date: 06-29-2004; 03-31-2005; 04-14-2006

3770.071 Deducting child support or spousal support arrearage from award.

(A)

(1) If the amount of the prize money or the cost of goods or services awarded as a lottery prize award meets or exceeds the reportable winnings amounts set by 26 U.S.C. 6041 , or a subsequent analogous section of the Internal Revenue Code, the director of the state lottery commission or the director's designee shall require the person entitled to the prize award to affirm in writing, under oath, or by electronic means, whether or not the person is in default under a support order. The director or the director's designee also may take any additional appropriate steps to determine if the person entitled to the prize award is in default under a support order. If the person entitled to the prize award affirms that the person is in default under a support order, or if the director or the director's designee determines that the person is in default under a support order, the director or the director's designee shall temporarily withhold payment of the prize award and notify the child support enforcement agency that administers the support order that the person is entitled to a prize award, of the amount of the prize award, and, if the prize award is to be paid in annual installments, of the number of installments.

(2) Upon receipt of the notice from the director or the director's designee, the child support enforcement agency shall conduct an investigation to determine whether the person entitled to the lottery prize award is subject to a final and enforceable determination of default made under sections 3123.01 to 3123.07 of the Revised Code. If the agency determines that the person is so subject, it shall issue an intercept directive as described in section 3123.89 of the Revised Code to the director at lottery commission headquarters requiring the director or the director's designee to deduct from any unpaid prize award or any annual installment payment of an unpaid prize award, a specified amount for support in satisfaction of the support order under which the person is in default. To the extent possible, the amount specified to be deducted under the intercept directive shall satisfy the amount ordered for support in the support order under which the person is in default.

A child support enforcement agency shall issue an intercept directive within thirty days from the date the director or the director's designee notifies the agency under division (A)(1) of this section. Within thirty days after the date on which the agency issues the intercept directive, the director or the director's designee shall pay the amount specified in the intercept directive to the office of child support in the department of job and family services. But, if the prize award is to be paid in annual installments, the director or the director's designee, on the date the next installment payment is due, shall deduct the amount specified in the intercept directive from that installment and, if necessary, any subsequent annual installments, at the time those installments become due and owing to the prize winner, and pay the amount to the office of child support.

(B) As used in this section:

(1) "Support order" has the same meaning as in section 3119.01 of the Revised Code.

(2) "Default" has the same meaning as in section 3121.01 of the Revised Code.

(C) No person shall knowingly make a false affirmation or oath required by division (A) of this section.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Effective Date: 03-22-2001; 04-14-2006

3770.072 State income tax withholding and filing of report.

(A) As used in this section, "prize winner," "transferee," and "transferor" have the same meanings as in section 3770.10 of the Revised Code.

(B) The state lottery commission shall deduct amounts from lottery prize awards and file returns in accordance with sections 5747.062 and 5747.064 of the Revised Code and any rules adopted by the tax commissioner pursuant to those sections. This division also applies to lottery prize award payments the commission remits to transferees.

(C)

(1)

(a) Each transferee shall deduct and withhold from each gross amount payable to each prize winner four per cent of the gross amount payable prior to making any other reduction required by this chapter.

(b) Subject to division (C)(1)(c) of this section, each transferee, including any transferee that is a related member, as defined in section 5733.042 of the Revised Code, to the transferor, shall deduct and withhold from each amount payable to a transferor that is not a prize winner four per cent of the portion of the payment representing gain or income the transferor will recognize in connection with the payment.

(c) For purposes of division (C)(1)(b) of this section, the portion of any payment representing gain or income recognized by the transferor shall be computed in accordance with the Internal Revenue Code. The transferor shall prepare a written statement setting forth that amount and sign the statement under penalty of perjury. Within five days before the date on which the payment is to be made, the transferor shall deliver the written statement to the transferee and deliver a copy of the written statement to the tax commissioner. If the transferee does not receive the written statement by the time the payment is made, the transferee shall withhold four per cent of the entire amount of the payment. If the tax commissioner notifies the transferee that the transferor has erroneously computed the amount of gain or income recognized, the transferee shall withhold four per cent of the entire amount of each payment to be made after the transferee receives the notice.

(d) The tax commissioner may impose a penalty of up to one thousand dollars for any person failing to timely deliver to the tax commissioner the copy of the written statement as required by division (C)(1)(c) of this section. Proceeds from the imposition of the penalty shall be considered as revenue arising from the tax imposed under section 5733.06 or 5747.02 of the Revised Code, as applicable.

(2) With respect to amounts deducted and withheld pursuant to division (C)(1) of this section, each transferee shall comply with divisions (A)(2) to (4) of section 5747.062 of the Revised Code.

(3) An employee of a corporation, limited liability company, or business trust having control or supervision of or charged with the responsibility of filing the report and making the payment required by division (C) of this section and section 5747.062 of the Revised Code, or an officer, member, manager, or trustee of a corporation, limited liability company, or business trust who is responsible for the execution of the corporation's, limited liability company's, or business trust's fiscal responsibilities, shall be personally liable for failure to file the report or pay the amount due as required by division (C) of this section and section 5747.062 of the Revised Code. The dissolution, termination, or bankruptcy of a corporation, limited liability company, or business trust does not discharge a responsible officer's, member's, manager's, employee's, or trustee's liability for a failure of the corporation, limited liability company, or business trust to file returns or pay the amount due.

(4)

(a) The tax commissioner may make an assessment against any person listed in division (C)(1) or (3) of this section for any deficiency for any period. Section 5747.13 of the Revised Code shall apply with respect to issuing assessments, filing petitions for reassessments, conducting hearings, issuing final determinations, making the assessment final, and filing the entry that makes the assessment final. Section 5717.02 of the Revised Code shall apply to appeals of the commissioner's final decision in connection with assessments issued pursuant to division (C)(4) of this section.

(b) An assessment issued against any person listed in division (C)(1) or (3) of this section shall not be considered an election of remedies or a bar to an assessment against any other person for the failure to comply with division (C)(1) of this section. No assessment shall be issued against any person who is so listed if the amount required to be withheld has been paid by another.

(c) The assessment shall include interest at the rate per annum prescribed by section 5703.47 of the Revised Code on liability from the time the payment is due until the date of assessment. Interest shall continue to accrue from the date of assessment until the date the assessment is paid in full. Any interest accruing subsequent to the date of the issuance of the assessment shall be considered to be an additional deficiency for which the tax commissioner may issue subsequent assessments. The initial assessment and any subsequent assessments may include a penalty in an amount not to exceed twice the applicable interest charged under this division.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Effective Date: 09-17-2002; 04-14-2006

3770.073 Satisfying debts to state from lottery prize awards.

(A) If a person is entitled to a lottery prize award and is indebted to the state for the payment of any tax, workers' compensation premium, unemployment contribution, payment in lieu of unemployment contribution, certified claim under section 131.02 or 131.021 of the Revised Code, or is indebted to a political subdivision that has a certified claim under section 131.02 of the Revised Code, lottery sales receipts held in trust on behalf of the state lottery commission as described in division (G)(4) of section 3770.05 of the Revised Code, or charge, penalty, or interest arising from these debts and if the amount of the prize money or the cost of goods or services awarded as a lottery prize award is five thousand dollars or more, the director of the state lottery commission, or the director's designee, shall do either of the following:

(1) If the prize award will be paid in a lump sum, deduct from the prize award and pay to the attorney general an amount in satisfaction of the debt and pay any remainder to that person. If the amount of the prize award is less than the amount of the debt, the entire amount of the prize award shall be deducted and paid in partial satisfaction of the debt.

(2) If the prize award will be paid in annual installments, on the date the initial installment payment is due, deduct from that installment and pay to the attorney general an amount in satisfaction of the debt and, if necessary to collect the full amount of the debt, do the same for any subsequent annual installments, at the time the installments become due and owing to the person, until the debt is fully satisfied.

(B) If a person entitled to a lottery prize award owes more than one debt, any debt owed to the state shall be satisfied first, subject to both section 5739.33 and division (G) of section 5747.07 of the Revised Code having first priority, and subject to division (C) of this section.

(C) Any debt owed under section 3770.071 of the Revised Code shall be satisfied with first priority over debts owed under this section.

(D) Except as provided in section 131.021 of the Revised Code, this section applies only to debts that have become final.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Effective Date: 09-26-2003; 05-06-2005; 04-14-2006; 2006 HB699 03-29-2007

3770.08 Prohibited acts.

(A) No person shall sell a lottery ticket at a price greater than that fixed by rule of the state lottery commission.

(B) No person other than a licensed lottery sales agent shall sell lottery tickets, but nothing in this section shall be construed to prevent any person from giving lottery tickets to another as a gift. A transfer of lottery tickets by any person which is made in connection with a marketing, promotional, or advertising program shall be deemed to be a gift for the purposes of this chapter.

(C) No person shall sell a lottery ticket to any person under eighteen years of age, and no person under eighteen years of age shall attempt to purchase a lottery ticket.

(D) No person, directly or indirectly, on behalf of self, or another, nor any organization, shall invite, solicit, demand, offer, or accept any payment, contribution, favor, or other consideration to influence the award, renewal, or retention of a lottery sales agent license.

(E) Except as otherwise provided in this division, no person shall sell lottery tickets on any fairgrounds during any annual exhibition conducted in accordance with Chapter 991. or 1711. of the Revised Code. "Fairgrounds" includes any land or property under the control or management of any agricultural society or of the Ohio expositions commission. This division does not apply to the sale of lottery tickets by the commission at the state fairground during the state fair.

Effective Date: 09-26-1996

3770.10 Transfer of prize award definitions.

As used in sections 3770.07 and 3770.10 to 3770.14 of the Revised Code:

(A) "Court of competent jurisdiction" means either the general division or the probate division of the court of common pleas of the county in which the prize winner or transferor resides, or, if the prize winner or transferor is not a resident of this state, either the general division or the probate division of the court of common pleas of Franklin county or a federal court having jurisdiction over the lottery prize award.

(B) "Discounted present value" means the present value of the future payments of a lottery prize award that is determined by discounting those payments to the present, using the most recently published applicable federal rate for determining the present value of an annuity as issued by the United States internal revenue service and assuming daily compounding.

(C) "Independent professional advice" means the advice of an attorney, a certified public accountant, an actuary, or any other licensed professional adviser if all of the following apply:

(1) The prize winner has engaged the services of the licensed professional adviser to render advice concerning the legal and other implications of a transfer of the lottery prize award.

(2) The licensed professional adviser is not affiliated in any manner with or compensated in any manner by the transferee of the lottery prize award.

(3) The compensation of the licensed professional adviser is not affected by whether or not a transfer of a lottery prize award occurs.

(D) "Prize winner" means any person that holds the right to receive all or any part of a lottery prize award as a result of being any of the following:

(1) A person who is a claimant under division (A) of section 3770.07 of the Revised Code;

(2) A person who is entitled to a prize award and who is under a legal disability as described in division (B) of section 3770.07 of the Revised Code;

(3) A person who was awarded a prize award to which another has claimed title by a federal bankruptcy court order or other court order referred to in division (D) of section 3770.07 of the Revised Code;

(4) A person who is receiving payments upon the death of a prize winner as provided in division (D) of section 3770.07 of the Revised Code.

(E) "Transfer" means any form of sale, assignment, or redirection of payment of all or any part of a lottery prize award for consideration.

(F) "Transfer agreement" means an agreement that is complete and valid, and that provides for the transfer of all or any part of a lottery prize award from a transferor to a transferee. A transfer agreement is incomplete and invalid unless the agreement contains both of the following:

(1) A statement, signed by the transferor under penalties of perjury, that the transferor irrevocably agrees that the transferor is subject to the tax imposed by Chapter 5733. or 5747. of the Revised Code with respect to gain or income which the transferor will recognize in connection with the transfer. If the transferor is a pass-through entity, as defined in section 5733.04 of the Revised Code, each investor in the pass-through entity shall also sign under penalties of perjury a statement that the investor irrevocably agrees that the investor is subject to the tax imposed by Chapter 5733. or 5747. of the Revised Code with respect to gain or income which the transferor and the investor will recognize in connection with the transfer.

(2) A statement, signed by the transferee, that the transferee irrevocably agrees that the transferee is subject to the withholding requirements imposed by division (C) of section 3770.072 of the Revised Code and that the transferee is subject to the tax imposed by Chapter 5733. or 5747. of the Revised Code with respect to gain or income which the transferee will recognize in connection with lottery prize awards to be received as a result of the transfer. If the transferee is a pass-through entity, as defined in section 5733.04 of the Revised Code, each investor in the pass-through entity shall also sign under penalties of perjury a statement setting forth that the investor irrevocably agrees that the investor is subject to the withholding requirements imposed by division (C) of section 3770.072 of the Revised Code and is subject to the tax imposed by Chapter 5733. or 5747. of the Revised Code with respect to gain or income which the transferee and the investor will recognize in connection with lottery prize awards to be received as a result of the transfer.

(G) "Transferee" means a party acquiring or proposing to acquire all or any part of a lottery prize award through a transfer.

(H) "Transferor" means either a prize winner or a transferee in an earlier transfer whose interest is acquired by or is sought to be acquired by a transferee or a new transferee through a transfer.

Effective Date: 09-26-2003; 03-31-2005; 04-14-2006

3770.11 Transferee to provide prize winner with disclosure statement.

Prior to the date on which a prize winner becomes obligated under a transfer agreement, the transferee shall provide to the prize winner a disclosure statement, in boldface type of the minimum size of fourteen points, setting forth all of the following:

(A) The amounts and due dates of the lottery prize award payments that would be transferred under the transfer agreement;

(B) The aggregate amount of the lottery prize award payments described in division (A) of this section;

(C) The discounted present value of the lottery prize award payments described in division (A) of this section, calculated as of the date the disclosure statement is provided to the prize winner, and the amount of the applicable federal rate used in determining the discounted present value;

(D) The gross amount payable to the prize winner in exchange for or as consideration for the transfer of the lottery prize award payments described in division (A) of this section, including the annual rate of discount to present value used to determine the gross amount payable to the prize winner, assuming daily compounding and funding on the date of the transfer agreement;

(E) An itemized listing of all brokers' commissions, service charges, application fees, processing fees, closing costs, filing fees, administrative fees, legal fees, notary fees, and other commissions, fees, costs, expenses, and charges payable by the prize winner or deductible from the gross amount otherwise payable to the prize winner as described in division (D) of this section;

(F) The net amount payable to the prize winner after deduction from the gross amount payable to the prize winner as described in division (D) of this section of all commissions, fees, costs, expenses, and charges described in division (E) of this section;

(G)

(1) The quotient, expressed as a percentage, obtained by dividing the net amount payable to the prize winner as described in division (F) of this section by the discounted present value of the payments described in division (C) of this section.

(2) Solely for purposes of division (G)(1) of this section, "net amount payable" does not include taxes required to be withheld under division (C)(1) of section 3770.072 of the Revised Code.

Effective Date: 09-17-2002

3770.12 Court order approving transfer - express findings necessary.

A court of competent jurisdiction shall approve a transfer of a lottery prize award only in a final order that is based on express findings of the court. The court shall approve the transfer if each of the following conditions that applies is met and is included in the court's express findings:

(A) If the transferor is a prize winner, the transferee has provided to the prize winner a disclosure statement that complies with section 3770.11 of the Revised Code, and the prize winner has confirmed the prize winner's receipt of the disclosure statement, as evidenced by the prize winner's notarized signature on a copy of the disclosure statement.

(B) If the transferor is a prize winner, the prize winner has received independent professional advice regarding the legal and other implications of the transfer.

(C) The transferee has given written notice of the transferee's name, address, and taxpayer identification number to the state lottery commission and has filed a copy of that notice with the court in which the application for approval of the transfer was filed.

(D) The transferee is a trust, limited partnership, general partnership, corporation, professional association, limited liability company, or other entity that is qualified to do business in this state and meets the registration requirements for that type of entity under Title XVII of the Revised Code.

(E) The transfer complies with all applicable requirements of the Revised Code and does not contravene any applicable statute or court order.

(F) The transfer does not include or cover the amounts of the lottery prize award that are required to be withheld or deducted pursuant to section 3119.80 , 3119.81 , 3121.02 , 3121.03 , 3123.06 , 3770.071 , or 3770.072 of the Revised Code.

(G) Any amounts described in division (F) of this section that are required to be withheld or deducted, as of the date of the court order, will be offset by the commission first against remaining payments due the transferor and then against payments due the transferee.

(H) Except as provided in divisions (F) and (G) of this section, that the transferor's interest in each and all of the future payments from a particular lottery prize award is to be paid to a single transferee, or, if the payments from the lottery prize award are to be directed from the state lottery commission to multiple transferees, the commission has promulgated rules under section 3770.03 of the Revised Code permitting transfers to multiple transferees, and the transfer is consistent with those rules.

(I) If the lottery prize award has been transferred within twelve months immediately preceding the effective date of the proposed transfer, the state lottery commission has not objected to the proposed transfer. The court shall presume that the requirements of this division are met unless the commission notifies the court in writing before the hearing on the application for transfer, or through counsel at that hearing, that a transfer of the same lottery prize award has been made within that twelve-month period and that the commission objects to a subsequent transfer within that twelve-month period. The court shall find that the requirements of this division are not met if the commission provides notice of a prior transfer of the same lottery prize award within that twelve-month period and its objection to the proposed transfer, unless the transferor or transferee shows by clear and convincing evidence that no previous transfer of the same lottery prize award occurred within that twelve-month period. For purposes of this division, any of a series of transfers of a lottery prize award that occur simultaneously as part of a single transaction shall not be considered to be a prior transfer of the lottery prize award within the twelve-month period immediately preceding the effective date of the proposed transfer, provided that the condition set forth in division (C) of this section is met.

If the court determines that all of the conditions in divisions (A) to (I) of this section that apply are met, the transfer of the lottery prize award shall be presumed to be fair and reasonable and in the best interests of the prize winner.

Effective Date: 09-26-2003; 03-31-2005

3770.121 Transfer of prize award paid in installments.

Any state lottery commission rules allowing lottery prize awards to be paid in installments also shall allow a prize winner who is being paid a prize award in that manner to transfer all or a portion of the remainder of the prize award, subject to each of the following conditions:

(A) If each transfer is for less than one hundred per cent of the remainder of the prize award, the remainder of the prize award for each transfer must be five hundred thousand dollars or greater at the time of the transfer. If the lottery prize award is a lifetime prize, for each transfer the remainder of the minimum guaranteed prize to which the prize winner is entitled must be five hundred thousand dollars or greater at the time of the transfer.

(B) Payments of the prize award transferred shall be subject to the withholding or deduction of any amounts that are required to be withheld or deducted under section 3119.80 , 3119.81 , 3121.02 , 3121.03 , 3123.06 , 3770.071 , or 5747.062 of the Revised Code.

(C) The maximum number of transfers under this section with respect to any single prize award shall not exceed three unless a greater number has been specified by the commission in the rules.

Effective Date: 03-31-2005

3770.13 Application for approval in advance of transfer.

(A) A transferee shall file an application under sections 3770.10 to 3770.14 of the Revised Code for the approval in advance of a transfer of a lottery prize award in a court of competent jurisdiction.

(B) The following procedures shall apply to an application for the approval in advance by a court of a transfer of a lottery prize award under division (A) of this section:

(1) Upon the filing of the application, the court shall set a date, time, and place for a hearing on the application and shall notify the transferee and transferor of the date, time, and place of the hearing.

(2) Not less than thirty days prior to the date set by the court for the hearing on an application filed pursuant to this section, the transferee shall file with the court and shall serve on the state lottery commission, in the manner prescribed in the Rules of Civil Procedure for the service of process, a notice of the proposed transfer and the application for its approval in advance. The notice shall include all of the following:

(a) A copy of the application;

(b) A copy of the transfer agreement or, if the transferor is not a prize winner, a redacted copy of the transfer agreement that discloses sufficient information to allow the commission and the court to determine the validity of the transfer agreement;

(c) If the transferor is a prize winner, a copy of the disclosure statement provided by the transferee pursuant to section 3770.11 of the Revised Code and signed by the prize winner pursuant to division (A) of section 3770.12 of the Revised Code;

(d) The amounts and due dates of the lottery prize award payments that will be transferred under the transfer agreement;

(e) Notification of the date, time, and place of the hearing on the application;

(f) The complete name, address, and taxpayer identification number of the transferee.

(3) The commission shall not be required to appear in or be named as a party to a hearing on the application, but may intervene as of right in the proceeding.

(4) At the conclusion of the hearing on an application under this section, the court may grant or deny the approval of the transfer. The court shall enter its order accordingly. If the court grants the approval of the transfer, it shall include in its order all of the express findings specified in section 3770.12 of the Revised Code. If the court denies the approval of the transfer, it shall include in its order the reasons for the denial.

(5) An order of the court made under division (B)(4) of this section is a final and appealable order.

Effective Date: 09-17-2002

3770.14 Payments to transferee - processing fee.

(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 state lottery commission. Not later than ten 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. The director may charge a processing fee, in an amount determined by the commission by rule pursuant to section 3770.03 of the Revised Code, to cover any direct or indirect costs associated with making the prize award payments in accordance with that prize payment schedule.

(C) Upon payment of the lottery prize award pursuant to this section, the director and the commission are discharged from all further liability therefor.

Effective Date: 09-17-2002

3770.21 Video lottery terminals.

(A) As used in this section:

(1) "Video lottery terminal" means any electronic device approved by the state lottery commission that provides immediate prize determinations for participants on an electronic display that is located at a facility owned by a holder of a permit as defined in rule 3769-1-05 of the Administrative Code.

(2) "Video lottery terminal promotional gaming credit" means a video lottery terminal game credit, discount, or other similar item issued to a patron to enable the placement of, or increase in, a wager at a video lottery terminal.

(3) "Video lottery terminal income" means credits played, minus approved video lottery terminal promotional gaming credits, minus video lottery prize awards.

(B) The state lottery commission shall include, in conjunction with the state racing commission, in any rules adopted concerning video lottery terminals, the level of minimum investments that must be made by video lottery terminal sales agents in the buildings, fixtures, equipment, facilities-related preparation, and grounds at the facilities, including temporary facilities, in which the terminals will be located, along with any standards and timetables for such investments.

(C) A licensed video lottery sales agent may provide video lottery terminal promotional gaming credits to patrons for video lottery terminal gaming. Video lottery terminal promotional gaming credits shall be subject to approval by the director of the state lottery commission.

(D) Video lottery terminal sales agents shall develop internal guidelines and controls for the purpose of giving minority business enterprises the ability to compete for the awarding of contracts to provide goods and services to those sales agents. As used in this division, "minority business enterprise" has the meaning defined in section 122.71 of the Revised Code.

(E) No license or excise tax or fee not in effect on the effective date of this section shall be assessed upon or collected from a video lottery terminal sales agent by any county, township, municipal corporation, school district, or other political subdivision of the state that has authority to assess or collect a tax or fee by reason of the video lottery terminal related conduct authorized by section 3770.03 of the Revised Code. This division does not prohibit the imposition of taxes under Chapter 718. or 3769. of the Revised Code.

(F)

(1) Any action asserting that this section or section 3770.03 of the Revised Code or any portion of those sections or any rule adopted under those sections violates any provision of the Ohio Constitution shall be brought in the court of common pleas of Franklin county within ninety days after the effective date of the amendment of this section by Am. Sub. H.B. 386 of the 129th general assembly or within ninety days after the effective day of any rule, as applicable.

(2) Any claim asserting that any action taken by the governor or the lottery commission pursuant to those sections violates any provision of the Ohio Constitution or any provision of the Revised Code shall be brought in the court of common pleas of Franklin county within sixty days after the action is taken.

(3) Divisions (F)(1) and (2) of this section do not apply to any claim within the original jurisdiction of the supreme court or a court of appeals under Article IV of the Ohio Constitution.

(G) The court of common pleas of Franklin county shall give any claim filed under division (F)(1) or (2) of this section priority over all other civil cases before the court, irrespective of position on the court's calendar, and shall make a determination on the claim expeditiously. A court of appeals shall give any appeal from a final order issued in a case brought pursuant to division (F) of this section priority over all other civil cases before the court, irrespective of position on the court's calendar, and shall make a determination on the appeal expeditiously.

Amended by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

Added by 128th General AssemblyFile No.9, HB 1, §101.01, eff. 7/17/2009.

3770.22 Confidential information.

(A) Any information concerning the following that is submitted, collected, or gathered as part of an application to the state lottery commission for a video lottery related license under this chapter is confidential and not subject to disclosure by a state agency or political subdivision as a public record under section 149.43 of the Revised Code:

(1) A dependent of an applicant;

(2) The social security number, passport number, or federal tax identification number of an applicant or the spouse of an applicant;

(3) The home address and telephone number of an applicant or the spouse or dependent of an applicant;

(4) An applicant's birth certificate;

(5) The driver's license number of an applicant or the applicant's spouse;

(6) The name or address of a previous spouse of the applicant;

(7) The date of birth of the applicant and the spouse of an applicant;

(8) The place of birth of the applicant and the spouse of an applicant;

(9) The personal financial information and records of an applicant or of an employee or the spouse or dependent of an applicant, including tax returns and information, and records of criminal proceedings;

(10) Any information concerning a victim of domestic violence, sexual assault, or stalking;

(11) The electronic mail address of the spouse or family member of the applicant;

(12) Any trade secret, medical records, and patents or exclusive licenses;

(13) Security information, including risk prevention plans, detection and countermeasures, location of count rooms or other money storage areas, emergency management plans, security and surveillance plans, equipment and usage protocols, and theft and fraud prevention plans and countermeasures;

(14) Information provided in a multijurisdictional personal history disclosure form, including the Ohio supplement, exhibits, attachments, and updates.

(B) The individual's name, the individual's place of employment, the individual's job title, and the individual's gaming experience that is provided for an individual who holds, held, or has applied for a video lottery related license under this chapter is not confidential. The reason for denial or revocation of a video lottery related license or for disciplinary action against the individual is not confidential.

(C) An individual who holds, held, or has applied for a video lottery related license under this chapter may waive the confidentiality requirements of division (A) of this section.

(D) Confidential information received by the commission from another jurisdiction relating to a person who holds, held, or has applied for a license under this chapter is confidential and not subject to disclosure as a public record under section 149.43 of the Revised Code. The commission may share the information referenced in this division with, or disclose the information to, the inspector general, any appropriate prosecuting authority, any law enforcement agency, or any other appropriate governmental or licensing agency, if the agency that receives the information complies with the same requirements regarding confidentiality as those with which the commission must comply.

The applicant shall complete a cover sheet for the application on which the applicant shall disclose the applicant's name, the business address of the lottery sales agent, management company, holding company, or gaming-related vendor employing the applicant, the business address and telephone number of such employer, and the county, state, and country in which the applicant's residence is located.

Added by 129th General AssemblyFile No.126, HB 386, §1, eff. 6/11/2012.

3770.99 Penalty.

(A) Whoever is prohibited from claiming a lottery prize award under division (E) of section 3770.07 of the Revised Code and attempts to claim or is paid a lottery prize award is guilty of a minor misdemeanor, and shall provide restitution to the state lottery commission of any moneys erroneously paid as a lottery prize award to that person.

(B) Whoever violates division (C) of section 3770.071 or section 3770.08 of the Revised Code is guilty of a misdemeanor of the third degree.

Effective Date: 09-26-2003