53ER09-15: Retailer Accountability.
SUMMARY: This emergency rule sets forth the provisions relating to lottery ticket accountability and financial accountability by retailers.
THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Faith L. Schneider, Legal Analyst, Department of the Lottery, 250 Marriott Drive, Tallahassee, Florida 32399-4011
THE FULL TEXT OF THE EMERGENCY RULE IS:
53ER09-15 Retailer Accountability.
(1) Ticket Accountability.
(a) Each retailer shall be accountable for all instant tickets received, all on-line tickets generated and all funds received by the retailer.
(b) Retailers shall receive books of tickets for sale on a consignment basis in accordance with the Lottery’s inventory management system.
(c) Each retailer is liable to the Lottery for any and all tickets accepted or generated by any employee or representative of that retailer, less cancelled on‑line tickets and tickets returned for adjustment credit in accordance with subsection (1)(d) or (e) below. Scratch-off tickets shall be deemed to have been purchased by the retailer unless returned to the Lottery by the official end of game date.
(d) On-line tickets may be returned to the Lottery for adjustment credit under the following circumstances:
1. The ticket did not print and the transaction is marked with an asterisk (*) on the Transaction History Report; or
2. The ticket misprints or is miscut and the dollar amount is visible, provided the Transaction History Report or ticket is mailed to the Lottery within thirty (30) days of the transaction date.
(e) To receive adjustment credit under the following circumstances, the retailer must contact the Lottery within two (2) hours of the sale, before the game closes for the next available draw or before the end of the gaming day, whichever occurs first:
1. The ticket did not print and the transaction is NOT marked with an asterisk (*) on the Transaction History Report;
2. The ticket misprints or is miscut and the dollar amount is NOT visible; or
3. The ticket cannot be canceled by the terminal but nothing appears to be wrong with the ticket.
The retailer also must mail the Transaction History Report or ticket to the Lottery within thirty (30) days of the transaction date.
(f) The Lottery will approve adjustment credit requests submitted outside the reporting window for ticket transactions that occur during a documented system failure that impacts network communications and that is outside the retailer’s control.
(g) Tickets submitted to the Florida Lottery for adjustment credit shall become the property of the Florida Lottery and shall not be returned to the retailer.
(h) Books of tickets received by a retailer on consignment shall be settled for payment by one of the following three methods:
1. Settlement by the retailer;
2. Automatic settlement by the Lottery ninety (90) days after a book has been activated for sale or after 90 percent (90%)of low-tier prizes have been redeemed, whichever occurs first, except as set forth in paragraph (2)(g) below; or
3. Settlement of books no longer in the retailer’s onsite inventory by a Lottery representative during inventory management.
(i) A complete inventory of scratch-off ticket stock will be conducted by a Lottery representative at least once per quarter. During such inventory, books in “received” status that are not physically present at the retail location will be reported as missing and the retailer will be charged fifty percent (50%) of the value of the book, less sales commission. Books in “active” status that are not physically present at the location will be settled.
(2) Financial Accountability.
(a) Each retailer shall maintain a commercial checking bank account for all amounts collected from ticket sales until such amounts have been collected by the Lottery. All amounts received by each retailer from the operation of the Lottery, less the amount retained as compensation for the sale of tickets and the amount paid out as prizes, shall be held in a bank account prior to collection by the Lottery on the designated day of collection.
(b) The amount owed by a retailer to the Lottery will be electronically transferred from the retailer’s bank account to the Lottery on a designated day each week. If the transfer is unsuccessful due to insufficient funds, a second attempt will automatically be made.
(c) A retailer is authorized to use its business commercial operating bank account or a separate commercial bank account for lottery purposes.
(d) A retailer shall notify the Lottery of a change in its bank account at least fifteen (15) days in advance of such change becoming effective.
(e) A retailer shall maintain its bank account for thirty (30) days after the termination date of its retailer contract.
(f) Each retailer shall complete and return to the Lottery at the time of application or in advance of a bank account change form DOL-103, Electronic Fund Transfer Authorization, revised 6/08. Form DOL-103 is incorporated herein by reference and may be obtained by writing to the Florida Lottery, Retailer Contracting, 250 Marriott Drive, Tallahassee, Florida 32399‑4001. The form authorizes the Lottery to debit or credit the retailer’s bank account through electronic funds transfers.
(g) The following procedures apply to Electronic Funds Transfer (EFT) delinquencies:
1. For purposes of this rule, an Electronic Funds Transfer delinquency is defined as an unsuccessful attempt to electronically transfer funds from a retailer’s bank account to the Lottery in payment of the retailer’s weekly settlement activity. If both the first and second weekly attempts to transfer funds fail, the failures together shall count as only one delinquency.
2. For all delinquencies that occur in a twelve-month period, the retailer’s ability to sell on-line lottery tickets and order instant tickets shall be suspended.
3. For a first or second delinquency in a twelve-month period, the retailer shall be required to pay the delinquency in full plus applicable service charges prior to reactivation of its ability to sell on-line lottery tickets and order instant tickets. Upon the occurrence of a second delinquency, the automatic book settlement period established in paragraph (1)(h) above will be shortened to sixty (60) days for a minimum of six (6) months. The retailer’s collection activity will be reviewed during the first January or July occurring after the expiration of six months from the date of delinquency. If the retailer has incurred no additional delinquencies during that time, the automatic book settlement period will be returned to ninety (90) days. If the retailer incurs additional delinquencies while in the 60 day settlement period and the retailer’s contract is not terminated, the 60-day book settlement period will remain in effect, and the retailer’s account will be reviewed at the next scheduled review period.
4. For a third delinquency in a twelve-month period, the retailer shall be required to pay the delinquency in full plus applicable service charges and post a certificate of deposit or performance bond with the Florida Lottery prior to reactivation of its ability to sell on-line lottery tickets and order instant tickets. The amount of the security shall not exceed twice the retailer’s average weekly ticket sales as determined by the Lottery.
5. For a fourth delinquency in a twelve-month period, a review of the retailer account will be performed by the Lottery to determine if the retailer’s contract will be terminated. In making its determination, the Lottery will review factors such as the retailer’s Lottery accounts receivable transactions and Lottery sales history. If the retailer contract is not terminated and the amount of the retailer’s posted security is less than the statutorily authorized maximum of twice the retailer’s average weekly ticket sales, the Lottery will increase the amount of the required security to the maximum amount.
6. The Lottery is authorized to terminate a retailer’s contract prior to a fourth delinquency in a twelve-month period if the Lottery determines that such action is necessary in order to protect the state’s financial interests.
7. For purposes of calculating the number of delinquencies occurring in a twelve-month period, an unsuccessful transfer on the first weekly attempt will not be counted as a separate delinquency if the transfer on the second weekly attempt is successful.
8. For each delinquency, the retailer shall be assessed a non-refundable service charge of fifteen dollars per incident or five percent of the amount due per incident, whichever is greater, up to a maximum of one hundred-fifty dollars. The Lottery will assess only one service fee to retailer chain accounts that use the same bank account for all stores. The assessed fee shall be five percent of the total amount due for all locations up to a maximum of one hundred-fifty dollars. Payment of the delinquent settlement amount and any applicable service charges is due immediately from the retailer and prior to on-line sales and the ability to order instant tickets being reinstated.
9. An unsuccessful transfer on the first weekly attempt will not result in assessment of a service charge if the second weekly attempt is successful. Only one service charge will be assessed if both the first and second attempts are unsuccessful.
10. If the Lottery determines that it is in its best financial interest, taking into consideration factors such as the amount of the delinquency and the length of time the delinquency and/or service charges are outstanding, the Lottery district office will be instructed to settle the sold instant tickets and pick up any remaining instant ticket inventory. A retailer’s access to computerized Lottery transactions will be limited to redeeming winning tickets and printing reports until Lottery Headquarters has received notification of payment in full.
11. To satisfy an EFT delinquency, the retailer may:
a. Deposit a Cashier’s check or money order made payable to the Florida Lottery into a specified Lottery bank account;
b. Wire transfer the funds into a specified Lottery bank account; or
c. Deliver a Cashier’s check or money order to a Lottery office.
12. The Lottery will accept a prepayment for the settlement amount if the prepayment is received by the Lottery prior to 5:00 p.m., Eastern Time, on the day before the EFT would normally occur. A service charge will not be applied to the first three (3) prepayments made by a retailer in a twelve-month period, nor will the first three (3) prepayments be counted as a delinquency against the retailer; however, retailers who make more than three (3) prepayments in a twelve-month period will be assessed a service charge as described in subparagraph (2)(g)8. above for each additional prepayment. The Lottery will waive the service charge upon a showing of good cause by a retailer, e.g., the circumstances necessitating prepayment are attributable to the retailer’s bank or to the Lottery. Failure by the Lottery to impose a service charge does not constitute a waiver of its right to impose a service charge for any subsequent prepayment.
13. The Lottery will actively pursue collection of all delinquencies that are not paid through the process described above.
(3) This emergency rule shall become effective on April 1, 2009.
Rulemaking Authority 24.109(1), 24.112(1) FS. Law Implemented 24.112(1), (11), 24.114 FS. History–New 4-1-09, Replaces 53ER08-78.