Criteria for selecting retailers. Tax 61.04(1)
In addition to the criteria under s. 565.10 (1)
, Stats., the administrator shall determine if the applicant meets all of the following conditions:
The applicant or the applicant's business shall satisfactorily pass a credit check by the administrator.
The applicant shall affirm, in the contract application, that the applicant's business is physically secure and that the premise has a secure place to store lottery tickets.
The applicant is expected to sell a minimum monthly average of $400 worth of instant scratch tickets or instant break-open tickets or the sum of both each fiscal quarter, under s. 565.01 (6m) (a) 1.
, Stats., which shall be represented in any retailer contract or addenda. The administrator may deny a contract or a renewal to an applicant whose anticipated sales will not meet the stated minimum monthly average of sales per fiscal quarter or whose historical sales have not met the stated minimum monthly average of sales per fiscal quarter.
The applicant may not be an employee of the department of revenue Wisconsin lottery division, or the executive assistant, the secretary or the deputy secretary of revenue, per s. 565.05 (1) (b)
If the applicant is a state agency or a local unit of government, the criteria under s. 565.10 (2)
and (3) (a)
, Stats., and sub. (1) (e)
shall apply to the entity's officers and directors.
If the administrator finds that there are so many qualified applicants in a given geographic area of the state that, if all those applicants would be granted contracts to sell lottery tickets, there would be an undue concentration of retailers selling lottery tickets in that area, the administrator shall perform market evaluations on the retail establishments seeking a contract. Contracts shall only be granted to those retailers achieving the highest marketing evaluation score until the undue concentration is eliminated. The administrator shall, however, grant a sufficient number of contracts in a given area to serve public convenience.
Any applicant who has a physical or mental disability that constitutes or results in a substantial handicap to the applicant's employment may be awarded a contract exclusively to sell lottery tickets if the applicant meets all of the following conditions:
Each applicant includes with the retailer application a letter from the Wisconsin division of vocational rehabilitation verifying that the applicant's disability is a substantial handicap to employment.
Each applicant's contract is approved by the administrator.
Tax 61.04 History
Cr. Register, March, 1989, No. 399
, eff. 4-1-89; corrections made under s. 13.93 (2m) (b) 6., Stats., Register, March, 1995, No. 471
; am. (1) (d), Register, October, 2000, No. 538
, eff. 11-1-00; CR 01-088
: am. (1) (intro.), (a), (e), (3), and (4) Register February 2002 No. 554
, eff. 3-1-02; CR 04-083
: r. and recr. (1) (b), r. (c), am. (d) Register April 2005 No. 592
, eff. 5-1-05.
The Wisconsin lottery may require from each retailer a fidelity bond or an irrevocable letter of credit, or both, in the amount determined by the administrator and based upon the applicant's projected lottery ticket sales. The administrator may also require from each retailer the payment of interest for any outstanding unpaid balance that results from a dishonored retailer's check or electronic funds transfer, under s. Tax 61.08 (14) (d)
The bond shall be payable upon the order of the Wisconsin lottery and may be obtained through an insurance agency or a bond and surety company. No individual bond may be less than $500.00. The letter of credit shall be drawn upon a financial institution with offices within the borders of the state of Wisconsin, and shall be drafted in a manner that allows the lottery to draw upon it without additional action taken by the retailer. No letter of credit may be accepted for which the lottery must pay a sum before it can draw upon the letter of credit.
Certificate of authority. Tax 61.06(1)
When a retailer is awarded a contract or a contract renewal, the retailer shall pay $25.00 to the Wisconsin lottery for a nonassignable and nontransferable certificate of authority. A certificate of authority is required for each location from which the retailer will sell lottery tickets.
The retailer shall be issued a year-round certificate of authority if the retailer intends to sell lottery tickets all 12 months of the year. If the retailer intends to sell lottery tickets less than 12 months a year, the retailer may be issued a seasonal certificate of authority. If the retailer intends to sell lottery tickets throughout the year but only at selected times and places, such as at weekly events or at fairs and festivals, the retailer may be issued a temporary certificate of authority.
If the certificate is lost, mutilated or destroyed, the retailer shall within 15 calendar days request in writing and submit a completed application for a duplicate certificate. The retailer shall pay $25.00 to the Wisconsin lottery for a duplicate certificate of authority.
A mutilated certificate shall be surrendered to the administrator upon issuance of a duplicate. A lost certificate, when found, shall be surrendered to the administrator within 15 calendar days of its recovery.
Payment under subs. (1)
shall be by check or electronic fund transfer.
Tax 61.06 History
Cr. Register, March, 1989, No. 399
, eff. 4-1-89; CR 01-088
: am. (2) and (4) Register February 2002 No. 554
, eff. 3-1-02.
Contract denial appeal procedure. Tax 61.07(1)
If the applicant was denied a contract, the administrator shall notify the applicant, in writing, of the denial along with a brief statement why the applicant was denied a contract. The applicant shall also be notified that a request for reconsideration must be made by the applicant within 30 calendar days of the denial and that the request shall contain the information in sub. (2)
Within 30 calendar days of the mailing of the denial, the applicant may request a reconsideration by filing with the administrator a written statement setting forth the applicant's legal, factual or equitable arguments and submitting any supporting documents. The request for reconsideration shall be deemed filed on the date it is received by the administrator.
Within 20 calendar days of receipt of the request for reconsideration, the administrator may, in writing, request the applicant to submit any additional facts, legal and equitable arguments or documents that the administrator deems necessary to make a determination.
The Wisconsin lottery's legal counsel shall compile a file containing all the material submitted by the applicant and any relevant material the administrator may have, including but not limited to, the completed application and credit check report. Legal counsel shall then review the file, research, if necessary, the applicable laws and rules and prepare an analysis and recommendation for the administrator's consideration.
The administrator, after considering all the facts and arguments submitted by the applicant, and legal counsel's recommendation, shall independently evaluate whether to grant or deny the applicant a contract. Within 45 calendar days of the administrator's receipt of the request for reconsideration or any supplemental information and documentation requested, the administrator shall notify the applicant, in writing, of the determination. If the applicant is denied a contract, the notice shall include a written statement setting forth the reasons for the denial and notifying the applicant of the right to a hearing on the denial under s. 227.42
, Stats. The applicant shall be notified that a request for a hearing must be made by the applicant within 20 calendar days and that the request must contain the information in sub. (6)
Within 20 calendar days of the administrator's mailing of the final determination, the applicant may request, in writing, a hearing under s. 227.42
, Stats. A request for a hearing shall be deemed filed on the date it is received by the administrator. A request shall contain all of the following:
The facts that the applicant intends to prove at the hearing.
A description of the mistake the applicant believes was made, if the applicant claims that the denial of contract is based on a mistake in fact or in law.
Any supporting documents not previously submitted to the administrator.
Within 20 calendar days of receipt of a request for hearing, the administrator shall grant or deny the request for a hearing, in writing. A hearing shall be granted if the criteria in s. 227.42 (1)
, Stats., are met, and the administrator shall reasonably notify the applicant of the time and place of the hearing. A hearing shall be denied if criteria under s. 227.42 (1)
, Stats., are not met, and the administrator shall inform the applicant, in writing, of the reason for denial.
In the event that neither the applicant nor the applicant's representative appears at the time and place designated for the hearing, the administrator may take action based upon the record as submitted. By failing to appear, an applicant waives any further right to appeal before the Wisconsin lottery.
Retailer contract terms and conditions.
The retailer's contract shall include all of the following terms and conditions:
(1) Contract period and sales authorization.
The retailer's contract shall remain in effect for at least one year and shall expire on the date shown on the certificate of authority. The administrator may renew the contract. However, the retailer does not have a substantial interest in, or a vested legal or equitable right to, a contract renewal.
(2) Contract not assignable or transferable.
The retailer's contract may not be assigned or transferred from one person or location to another.
(3) Retailer is not an employee or agent of the state.
The retailer is not an employee or agent of the state of Wisconsin and is not entitled to any right, privilege or benefit that would accrue to an employee or agent of the state of Wisconsin.
The retailer shall indemnify and hold harmless the state of Wisconsin, the Wisconsin lottery, and the Wisconsin lottery's employees and agents from and against all claims, suits, or actions arising from any willful or negligent act or omission of the retailer or its agents while performing under the terms of the retailer contract.
(5) Compliance with state law and rules.
During the term of the retailer contract, the retailer shall comply with ch. 565, Stats.
, the Wisconsin lottery's administrative rules and any other applicable state law and administrative rules.
(6) Compliance with retailer's handbook.
During the term of the retailer contract, the retailer shall comply with instructions and procedures for each game as set forth in the retailer handbook.
(7) Certificate of authority.
The certificate of authority is not assignable or transferable and shall be conspicuously displayed at the point of sale.
(8) Notification of changes in the retailer's application. Tax 61.08(8)(a)(a)
The retailer shall notify the administrator, in writing, within 15 calendar days of every change of its organizational structure, including but not limited to changes from a sole proprietorship to a partnership or to a corporation.
The retailer shall notify the administrator, in writing, at least 30 calendar days in advance of any change of the retailer's business address.
The retailer shall notify the administrator, in writing, within 15 calendar days if the retailer, or any of the retailer's partners, officers, directors or owners, as described under s. 565.10 (3)
, Stats., have been convicted of or pleaded guilty or no contest to a felony, a gambling related offense, or fraud or misrepresentation in any connection.
During the term of the retailer's contract and until the retailer gives a final accounting at the end of the contract term, the retailer shall maintain current, complete and accurate lottery accounting records and correspondence including but not limited to, the receipt, sale, handling, and returns for credit of all lottery tickets received by the retailer.
During the term of the retailer's contract the retailer shall do all of the following:
Maintain worker's compensation insurance, if required to do so under ch. 102, Stats.
Maintain public liability and property damage insurance against any claim that may occur in carrying out the retailer's contract. Minimum coverages are $300,000 single limit liability or $100,000 bodily injury per person and $300,000 per occurrence and $100,000 property damage.
The insurance requirements under par. (a) 1.
do not apply to a state agency or a local unit of government.
The retailer, by signing and executing the contract, warrants and represents to the Wisconsin lottery that the retailer has in place and will maintain during the contract period the insurance set forth under par. (a) 1.
and at the minimum levels set forth under par. (a) 2.
During the term of the retailer's contract, the administrator reserves the right to request from the retailer verification that the retailer has complied with the insurance requirements under par. (a) 1.
The retailer may not intentionally sell a lottery ticket to a person under 18 years of age.
The retailer shall sell a minimum monthly average of $400 worth of instant scratch tickets or instant break-open tickets or the sum of both each fiscal quarter, under s. Tax 61.04 (1) (d)
The retailer may not exchange lottery tickets with any other person including other retailers.
The retailer may not sell any lottery tickets at a price different from the price authorized by the Wisconsin lottery, condition the sale of a lottery ticket upon purchase of any other item or service or impose any restriction upon the sale of a lottery ticket unless specifically authorized by the administrator.
The retailer may not play the lottery games by using any method other than random, fair chance, or by any method contrary to the principle that every lottery ticket has an equal and random chance of winning.
The retailer shall make player brochures available to potential lottery ticket customers and explain the game rules when requested.
The retailer may not add any service fee, handling fee or other expense to the purchase of a ticket or share without the written permission of the administrator.
The retailer may not charge any service fee, handling fee or other cost when validating a ticket regardless of whether the ticket or share is a winning or non-winning ticket or share, without the written permission of the administrator.
The retailer may not conduct sales of lottery tickets or shares to off-premises customers by telephone, email, instant messaging or similar electronic means, or by mail, parcel, delivery service or similar service, without the written permission of the administrator.
The retailer shall be responsible for the condition and security of lottery tickets received. If the retailer's lottery tickets are lost, stolen, mutilated, damaged, unaccountable or otherwise unsalable, the retailer shall be solely responsible for those tickets. The administrator may not reimburse the retailer for those losses other than unsalable tickets under par. (c)
The retailer shall report by telephone within 24 hours any stolen tickets to the Wisconsin lottery, consistent with the instructions for reporting stolen tickets as indicated in the retailer contract.
The administrator may credit the retailer's account for the value that the retailer paid for instant scratch tickets that are unsalable after all the following conditions are met:
The tickets became unsalable due to any malfunction of lottery equipment used in the sale of the tickets or if the tickets are deemed to be misprinted or void, consistent with the features and procedures document of the game to which the ticket or share belongs.
The unsalable tickets are returned to the lottery before the settlement date of the game to which the pack belongs. Tickets returned after the settlement date may not be credited for value by the administrator.
There is no validation of any ticket that is returned for credit, and the latex or other protective measures on each returned ticket show no signs of tampering.
At the discretion of the administrator, the lottery may assess a service charge against the retailer account to recover the cost of returning the tickets.
Credit shall be the retailer's purchase price, and any credit or service charge shall be made to the retailer's electronic fund transfer account.
In the event that the lottery administrator announces a settlement date for a game, a retailer may return tickets for credit on or before that announced settlement provided that conditions under par. (c) 2.
The administrator may charge a retailer for shipments delivered on a date different than the retailer's scheduled order delivery date or shipped on a date other than the retailer's shipment date. If a retailer is charged, the expense shall be limited to the cost of the delivery.
All lottery tickets received by the retailer shall be deemed to have been purchased by the retailer.
The retailer's accounting records and correspondence under par. (a)
shall be available to the administrator for examination and copying during the retailer's regular business hours. All of those records and correspondence are subject to seizure and audit without prior notice.