As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 250

Representatives Book, Blessing 

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A BILL

To amend sections 3770.02, 3770.03, 3770.05,

1

3770.06, 3770.07, 3770.08, and 4301.03 and to

2

enact sections 3770.21 to 3770.26, 3770.261,

3

3770.262, 3770.263, and 3770.27 to 3770.31 of the

4

Revised Code to require the State Lottery

5

Commission to establish licensing procedures

6

for video lottery sales agents that are

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horseracing permit holders and authorizes those

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agents to conduct lotteries that provide

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immediate prize determinations for participants

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through the use of video lottery terminals at

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not more than seven licensed commercial

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horseracing tracks.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 3770.02, 3770.03, 3770.05, 3770.06,	14
3770.07, 3770.08, and 4301.03 be amended and sections 3770.21,	15
3770.22, 3770.23, 3770.24, 3770.25, 3770.26, 3770.261, 3770.262,	16
3770.263, 3770.27, 3770.28, 3770.29, 3770.30, and 3770.31 of the	17
Revised Code be enacted to read as follows:	18

Sec. 3770.02.  (A) Subject to the advice and consent of the	19
senate, the governor shall appoint a director of the state lottery	20
commission who shall serve at the pleasure of the governor. The	21
director shall devote full time to the duties of the office and	22
shall hold no other office or employment. The director shall meet	23
all requirements for appointment as a member of the commission and	24
shall, by experience and training, possess management skills that	25
equip the director to administer an enterprise of the nature of a	26
state lottery. The director shall receive an annual salary in	27
accordance with pay range 48 of section 124.152 of the Revised	28
Code.	29

(B)(1) The director shall attend all meetings of the	30
commission and shall act as its secretary. The director shall keep	31
a record of all commission proceedings and shall keep the	32
commission's records, files, and documents at the commission's	33
principal office. All records of the commission's meetings shall	34
be available for inspection by any member of the public, upon a	35
showing of good cause and prior notification to the director.	36

(2) The director shall be the commission's executive officer	37
and shall be responsible for keeping all commission records and	38
supervising and administering the state lottery in accordance with	39
this chapter, and carrying out all commission rules adopted under	40
section 3770.03 of the Revised Code.	41

(C)(1) The director shall appoint an assistant director,	42
deputy directors of marketing, operations, video lottery	43
terminals, sales, finance, public relations, security, and	44
administration, and as many regional managers as are required.	45
The director may also appoint necessary professional, technical,	46
and clerical assistants. All such officers and employees shall be	47
appointed and compensated pursuant to Chapter 124. of the Revised	48
Code. Regional and assistant regional managers, sales	49
representatives, and any lottery executive account representatives	50
shall remain in the unclassified service.	51

There is hereby created a division of video lottery terminals	52
within the commission that the deputy director of video lottery	53
terminals shall supervise.	54

(2) The director, in consultation with the director of	55
administrative services, may establish standards of proficiency	56
and productivity for commission field representatives.	57

(D) The director shall request the bureau of criminal	58
identification and investigation, the department of public safety,	59
or any other state, local, or federal agency to supply the	60
director with the criminal records of any job applicant and may	61
periodically request the criminal records of commission employees.	62
At or prior to the time of making such a request, the director	63
shall require a job applicant or commission employee to obtain	64
fingerprint cards prescribed by the superintendent of the bureau	65
of criminal identification and investigation at a qualified law	66
enforcement agency, and the director shall cause these fingerprint	67
cards to be forwarded to the bureau of criminal identification and	68
investigation and the federal bureau of investigation. The	69
commission shall assume the cost of obtaining the fingerprint	70
cards and shall pay to each agency supplying criminal records for	71
each investigation under this division a reasonable fee, as	72
determined by the agency.	73

(E) The director shall license lottery sales agents pursuant	74
to section 3770.05 of the Revised Code and video lottery sales	75
agents pursuant to section 3770.24 of the Revised Code and, when	76
it is considered necessary, may revoke or suspend the license of	77
any lottery salessuch agent under this chapter.	78

(F) The director shall confer at least once each month with	79
the commission, at which time the director shall advise it	80
regarding the operation and administration of the lottery. The	81
director shall make available at the request of the commission all	82
documents, files, and other records pertaining to the operation	83
and administration of the lottery. The director shall prepare and	84
make available to the commission each month a complete and	85
accurate accounting of lottery revenues, prize money disbursements	86
and the cost of goods and services awarded as prizes, operating	87
expenses, and all other relevant financial information, including	88
an accounting of all transfers made from any lottery funds in the	89
custody of the treasurer of state to benefit education.	90

(G) The director may enter into contracts for the operation	91
or promotion of the lottery pursuant to Chapter 125. of the	92
Revised Code.	93

(H)(1) Pursuant to rules adopted by the commission under	94
section 3770.03 of the Revised Code, the director shall require	95
any lottery sales agents licensed under section 3770.05 of the	96
Revised Code to either mail directly to the commission or deposit	97
to the credit of the state lottery fund, in banking institutions	98
designated by the treasurer of state, net proceeds due the	99
commission as determined by the director, and to file with the	100
director or the director's designee reports of their receipts and	101
transactions in the sale of lottery ticketsproducts in the form	102
required by the director.	103

(2) Pursuant to rules adopted by the commission under Chapter	104
119. of the Revised Code, the director may impose penalties for	105
the failure of a sales agent to transfer funds to the commission	106
in a timely manner. Penalties may include monetary penalties,	107
immediate suspension or revocation of a license, or any other	108
penalty the commission adopts by rule.	109

(I) The director may arrange for any person, or any banking	110
institution, to perform functions and services in connection with	111
the operation of the lottery as the director may consider	112
necessary to carry out this chapter.	113

(J)(1) As used in this chapter, "statewide joint lottery	114
game" means a lottery game that the commission sells solely within	115
this state under an agreement with other lottery jurisdictions to	116
sell the same lottery game solely within their statewide or other	117
jurisdictional boundaries.	118

(2) If the governor directs the director to do so, the	119
director shall enter into an agreement with other lottery	120
jurisdictions to conduct statewide joint lottery games. If the	121
governor signs the agreement personally or by means of an	122
authenticating officer pursuant to section 107.15 of the Revised	123
Code, the director then may conduct statewide joint lottery games	124
under the agreement.	125

(3) The entire net proceeds from any statewide joint lottery	126
games shall be used to fund elementary, secondary, vocational, and	127
special education programs in this state.	128

(4) The commission shall conduct any statewide joint lottery	129
games in accordance with rules it adopts under division (B)(5) of	130
section 3770.03 of the Revised Code.	131

(K)(1) The director shall enter into an agreement with the	132
department of alcohol and drug addiction services under which the	133
department shall provide a program of gambling addiction services	134
on behalf of the commission for persons who participate in the	135
lottery under this chapter, including lotteries authorized by	136
section 3770.22 of the Revised Code. The commission shall pay the	137
costs of the program provided pursuant to the agreement.	138

(2) As used in this section, "gambling addiction services"	139
has the same meaning as in section 3793.01 of the Revised Code.	140

Sec. 3770.03.  (A) The state lottery commission shall	141
promulgate rules under which a statewide lottery may, including	142
games providing immediate prize determinations for participants	143
through the use of video lottery terminals, shall be conducted.	144
The rules shall be promulgated pursuant to Chapter 119. of the	145
Revised Code, except that instant game rules shall be	146
promulgated pursuant to section 111.15 of the Revised Code but	147
are not subject to division (D) of that section. Subjects covered	148
in these rules shall include, but need not be limited to, the	149
following:	150

(1) The type of lottery to be conducted;

151

(2) The prices of tickets in the lottery.products;

152

(3) The number, nature, and value of prize awards, the manner	153
and frequency of prize drawings and determinations, and the	154
manner in which prizes shall be awarded to holders of winning	155
tickets.	156

(B) The commission shall promulgate rules, in addition to	157
those described in division (A) of this section, pursuant to	158
Chapter 119. of the Revised Code under which a statewide lottery	159
and statewide joint lottery games may, and lotteries, including	160
games providing immediate prize determinations through the use of	161
video lottery terminals shall, be conducted. Subjects covered in	162
these rules shall include, but not be limited to, the following:	163

(1) The locations at which lottery ticketsproducts may be	164
sold and the manner in which they are to be sold. These rules may	165
authorize the sale of lottery ticketsproducts by commission	166
personnel or other licensed individuals from traveling show	167
wagons at the state fair, and at any other expositions the	168
director of the commission considers acceptable. These rules shall	169
prohibit commission personnel or other licensed individuals from	170
soliciting from an exposition the right to sell lottery tickets at	171
that exposition, but shall allow commission personnel or other	172
licensed individuals to sell lottery tickets at an exposition if	173
the exposition requests commission personnel or licensed	174
individuals to do so. These rules may also address the	175
accessibility of sales agent locations to commission products in	176
accordance with the "Americans with Disabilities Act of 1990," 104	177
Stat. 327, 42 U.S.C.A. 12101 et seq.	178

(2) The manner in which lottery sales revenues are to be	179
collected, including authorization for the director to impose	180
penalties for failure by lottery sales agents or, under section	181
3770.28 of the Revised Code, video lottery sales agents to	182
transfer revenues to the commission in a timely manner;	183

(3) TheExcept as provided in section 3770.26 of the Revised	184
Code, the amount of compensation to be paid licensed lottery sales	185
agents;	186

(4) The substantive criteria for the licensing of lottery	187
sales agents consistent with section 3770.05 of the Revised Code,	188
and procedures for revoking or suspending their licenses, or the	189
licenses of video lottery sales agents issued under section	190
3770.24 of the Revised Code, consistent with Chapter 119. of the	191
Revised Code. If circumstances, such as the nonpayment of funds	192
owed by a lottery sales agent or video lottery sales agent, or	193
other circumstances related to the public safety, convenience, or	194
trust, require immediate action, the director may suspend a	195
license without affording an opportunity for a prior hearing under	196
section 119.07 of the Revised Code.	197

(5) Special game rules to implement any agreements signed by	198
the governor that the director enters into with other lottery	199
jurisdictions under division (J) of section 3770.02 of the Revised	200
Code to conduct statewide joint lottery games. The rules shall	201
require that the entire net proceeds of those games that remain,	202
after associated operating expenses, prize disbursements, lottery	203
sales agent bonuses, commissions, and reimbursements, and any	204
other expenses necessary to comply with the agreements or the	205
rules are deducted from the gross proceeds of those games, be	206
transferred to the lottery profits education fund under division	207
(B) of section 3770.06 of the Revised Code.	208

(C)(6) The manner in which lotteries that use video lottery	209
terminals under section 3770.22 of the Revised Code must be	210
conducted and the security, licensing, and enforcement procedures	211
necessary to ensure the integrity of those lotteries;	212

(7) Licensing requirements and fees for key gaming employees	213
of video lottery sales agents, as defined in section 3770.21 of	214
the Revised Code, or agents' contractors that employ key gaming	215
employees; provided that the maximum initial or yearly fee for a	216
license issued by the commission and fees associated therewith	217
shall be set by rule by the commission;	218

(8) Any other subjects the commission determines are	219
necessary for the conduct of lotteries under section 3770.22 of	220
the Revised Code.	221

(C) Chapter 2915. of the Revised Code does not apply to,	222
affect, or prohibit lotteries conducted pursuant to this chapter.	223

(D) The commission may conduct lotteries simulating card	224
games, spinning-wheel games, or cast object games by video lottery	225
terminals pursuant to section 3770.22 of the Revised Code.	226

(E) The commission may promulgate rules, in addition to those	227
described in divisions (A) and (B) of this section, that establish	228
standards governing the display of advertising and celebrity	229
images on lottery tickets and on other items that are used in the	230
conduct of, or to promote, the statewide lottery and statewide	231
joint lottery games. Any revenue derived from the sale of	232
advertising displayed on lottery tickets and on those other items	233
shall be considered, for purposes of section 3770.06 of the	234
Revised Code, to be related proceeds in connection with the	235
statewide lottery or gross proceeds from statewide joint lottery	236
games, as applicable.	237

(D)(F)(1) The commission shall meet with the director at	238
least once each month and shall convene other meetings at the	239
request of the chairperson or any five of the members. No action	240
taken by the commission shall be binding unless at least five of	241
the members present vote in favor of the action. A written record	242
shall be made of the proceedings of each meeting and shall be	243
transmitted forthwith to the governor, the president of the	244
senate, the senate minority leader, the speaker of the house of	245
representatives, and the house minority leader.	246

(2) The director shall present to the commission a report	247
each month, showing the total revenues, prize disbursements, and	248
operating expenses of the state lottery for the preceding month.	249
As soon as practicable after the end of each fiscal year, the	250
commission shall prepare and transmit to the governor and the	251
general assembly a report of lottery revenues, prize	252
disbursements, and operating expenses for the preceding fiscal	253
year and any recommendations for legislation considered necessary	254
by the commission.	255

Sec. 3770.05.  (A) As used in this section, "person" means	256
any person, association, corporation, partnership, club, trust,	257
estate, society, receiver, trustee, person acting in a fiduciary	258
or representative capacity, instrumentality of the state or any of	259
its political subdivisions, or any other combination of	260
individuals meeting the requirements set forth in this section or	261
established by rule or order of the state lottery commission.	262

(B) The director of the state lottery commission may license	263
any person as a lottery sales agent for the sale of lottery	264
products. No license shall be issued to any person or group of	265
persons to engage in the sale of lottery ticketsproducts as the	266
person's or group's sole occupation or business.	267

Before issuing any license to a lottery sales agent for the	268
sale of lottery products, the director shall consider all of the	269
following:	270

(1) The financial responsibility and security of the	271
applicant and the applicant's business or activity;	272

(2) The accessibility of the applicant's place of business or	273
activity to the public;	274

(3) The sufficiency of existing licensed agents to serve the	275
public interest;	276

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

277

(5) Any other factors pertaining to the public interest,	278
convenience, or trust.	279

(C) Except as otherwise provided in division (F) of this	280
section, the director of the state lottery commission shall refuse	281
to grant, or shall suspend or revoke, a license issued under this	282
section if the applicant or licensee:	283

(1) Has been convicted of a felony or has been convicted of a	284
crime involving moral turpitude;	285

(2) Has been convicted of an offense that involves illegal	286
gambling;	287

(3) Has been found guilty of fraud or misrepresentation in	288
any connection;	289

(4) Has been found to have violated any rule or order of the	290
commission; or	291

(5) Has been convicted of illegal trafficking in food stamps.

292

(D) Except as otherwise provided in division (F) of this	293
section, the director of the state lottery commission shall refuse	294
to grant, or shall suspend or revoke, a license issued under this	295
section if the applicant or licensee is a corporation and any of	296
the following applies:	297

(1) Any of the corporation's directors, officers, or	298
controlling shareholders has been found guilty of any of the	299
activities specified in divisions (C)(1) to (5) of this section;	300

(2) It appears to the director of the state lottery	301
commission that, due to the experience, character, or general	302
fitness of any director, officer, or controlling shareholder of	303
the corporation, the granting of a license as a lottery sales	304
agent would be inconsistent with the public interest, convenience,	305
or trust;	306

(3) The corporation is not the owner or lessee of the	307
business at which it would conduct a lottery sales agency pursuant	308
to the license applied for;	309

(4) Any person, firm, association, or corporation other than	310
the applicant or licensee shares or will share in the profits of	311
the applicant or licensee, other than receiving dividends or	312
distributions as a shareholder, or participates or will	313
participate in the management of the affairs of the applicant or	314
licensee.	315

(E)(1) The director of the state lottery commission shall	316
refuse to grant a license to an applicant for a lottery sales	317
agent license issued under this section and shall revoke a lottery	318
sales agent license if the applicant or licensee is or has been	319
convicted of a violation of division (A) or (C)(1) of section	320
2913.46 of the Revised Code.	321

(2) The director shall refuse to grant a license issued under	322
this section to an applicant for a lottery sales agent license	323
that is a corporation and shall revoke the lottery sales agent	324
license issued under this section of a corporation if the	325
corporation is or has been convicted of a violation of division	326
(A) or (C)(1) of section 2913.46 of the Revised Code.	327

(F) The director of the state lottery commission shall	328
request the bureau of criminal identification and investigation,	329
the department of public safety, or any other state, local, or	330
federal agency to supply the director with the criminal records of	331
any applicant for a lottery sales agent license, and may	332
periodically request the criminal records of any person to whom a	333
lottery sales agent license has been issued. At or prior to the	334
time of making such a request, the director shall require an	335
applicant or licensee to obtain fingerprint impressions on	336
fingerprint cards prescribed by the superintendent of the bureau	337
of criminal identification and investigation at a qualified law	338
enforcement agency, and the director shall cause those	339
fingerprint cards to be forwarded to the bureau of criminal	340
identification and investigation, to the federal bureau of	341
investigation, or to both bureaus. The commission shall assume the	342
cost of obtaining the fingerprint cards.	343

The director shall pay to each agency supplying criminal	344
records for each investigation a reasonable fee, as determined by	345
the agency.	346

The commission may adopt uniform rules specifying time	347
periods after which the persons described in divisions (C)(1) to	348
(5) and (D)(1) to (4) of this section may be issued a license and	349
establishing requirements for those persons to seek a court order	350
to have records sealed in accordance with law.	351

(G)(1) Each applicant for a lottery sales agent license for	352
the sale of lottery products shall do both of the following:	353

(a) Pay to the state lottery commission, at the time the	354
application is submitted, a fee in an amount that the director of	355
the state lottery commission determines by rule adopted under	356
Chapter 119. of the Revised Code and that the controlling board	357
approves;	358

(b) Prior to approval of the application, obtain a surety	359
bond in an amount the director determines by rule adopted under	360
Chapter 119. of the Revised Code or, alternatively, with the	361
director's approval, deposit the same amount into a dedicated	362
account for the benefit of the state lottery. The director also	363
may approve the obtaining of a surety bond to cover part of the	364
amount required, together with a dedicated account deposit to	365
cover the remainder of the amount required.	366

A surety bond may be with any company that complies with the	367
bonding and surety laws of this state and the requirements	368
established by rules of the commission pursuant to this chapter. A	369
dedicated account deposit shall be conducted in accordance with	370
policies and procedures the director establishes.	371

A surety bond, dedicated account, or both, as applicable, may	372
be used to pay for the lottery sales agent's failure to make	373
prompt and accurate payments for lottery ticketproduct sales, for	374
missing or stolen lottery ticketsproducts, or for damage to	375
equipment or materials issued to the lottery sales agent, or to	376
pay for expenses the commission incurs in connection with the	377
lottery sales agent's license.	378

(2) A lottery sales agent license for the sale of lottery	379
products is effective for one year, except as otherwise provided	380
in division (B) of section 3770.24 of the Revised Code.	381

A licensed lottery sales agent, on or before the date	382
established by the director, shall renew the agent's license and	383
provide at that time evidence to the director that the surety	384
bond, dedicated account deposit, or both, required under division	385
(G)(1)(b) of this section has been renewed or is active, whichever	386
applies.	387

Before the commission renews a lottery sales agent license,	388
the lottery sales agent shall submit a renewal fee to the	389
commission in an amount that the director determines by rule	390
adopted under Chapter 119. of the Revised Code and that the	391
controlling board approves. The renewal fee shall not exceed the	392
actual cost of administering the license renewal and processing	393
changes reflected in the renewal application. The renewal of the	394
license is effective for up to one year.	395

(3) A lottery sales agent license shall be complete,	396
accurate, and current at all times during the term of the license.	397
Any changes to an original license application or a renewal	398
application may subject the applicant or lottery sales agent, as	399
applicable, to paying an administrative fee that shall be in an	400
amount that the director determines by rule adopted under Chapter	401
119. of the Revised Code, that the controlling board approves, and	402
that shall not exceed the actual cost of administering and	403
processing the changes to an application.	404

(4) The relationship between the commission and a lottery	405
sales agent is one of trust. A lottery sales agent collects funds	406
on behalf of the commission through the sale of lottery tickets	407
products for which the agent receives a compensation.	408

(H) Pending a final resolution of any question arising under	409
this section, the director of the state lottery commission may	410
issue a temporary lottery sales agent license for the sale of	411
lottery products, subject to the terms and conditions the director	412
considers appropriate.	413

(I) If a lottery sales agent's rental payments for the	414
lottery sales agent's premises are determined, in whole or in	415
part, by the amount of retail sales the lottery sales agent makes,	416
and if the rental agreement does not expressly provide that the	417
amount of those retail sales includes the amounts the lottery	418
sales agent receives from lottery ticketproduct sales, only the	419
amounts the lottery sales agent receives as compensation from the	420
state lottery commission for selling lottery ticketsproducts	421
shall be considered to be amounts the lottery sales agent receives	422
from the retail sales the lottery sales agent makes, for the	423
purpose of computing the lottery sales agent's rental payments.	424

Sec. 3770.06.  (A)(1) There is hereby created the state	425
lottery gross revenue fund, which shall be in the custody of the	426
treasurer of state, but shall not be part of the state treasury.	427
All gross revenues received from sales of lottery tickets	428
products, fines, fees, and related proceeds in connection with	429
the statewide lottery and all gross proceeds from statewide joint	430
lottery games shall be deposited into the fund. The treasurer of	431
state shall invest any portion of the fund not needed for	432
immediate use in the same manner as, and subject to all	433
provisions of law with respect to the investment of, state funds.	434
The treasurer of state shall disburse money from the fund on order	435
of the director of the state lottery commission or the director's	436
designee.	437

(2) Except for gross proceeds from statewide joint lottery	438
games, all revenues of the state lottery gross revenue fund that	439
are not paid to holders of winning lottery ticketsparticipants,	440
that are not required to meet short-term prize liabilities, that	441
are not credited to lottery sales agents or video lottery sales	442
agents in the form of bonuses, commissions, or reimbursements,	443
that are not necessary for operating the video lottery terminals	444
under Chapter 3770. of the Revised Code, that are not paid to	445
financial institutions to reimburse those institutions for sales	446
agent nonsufficient funds, and that are not collected from sales	447
agents for remittance to insurers under contract to provide	448
sales agent bonding services shall be transferred to the state	449
lottery fund, which is hereby created in the state treasury. In	450
addition, all revenues of the state lottery gross revenue fund	451
that represent the gross proceeds from the statewide joint	452
lottery games and that are not paid to holders of winning lottery	453
tickets, that are not required to meet short-term prize	454
liabilities, that are not credited to lottery sales agents in	455
the form of bonuses, commissions, or reimbursements, and that are	456
not necessary to cover operating expenses associated with those	457
games or to otherwise comply with the agreements signed by the	458
governor that the director enters into under division (J) of	459
section 3770.02 of the Revised Code or the rules the commission	460
adopts under division (B)(5) of section 3770.03 of the Revised	461
Code shall be transferred to the state lottery fund. All	462

All investment earnings of the state lottery fund shall be	463
credited to the fund. Moneys shall be disbursed from the fund	464
pursuant to vouchers approved by the director. Total disbursements	465
for monetary prize awards to holders of winning lottery tickets in	466
connection with the statewide lottery and purchases of goods and	467
services awarded as prizes to holders of winning lottery tickets	468
shall be of an amount equal to at least fifty per cent of the	469
total revenue accruing from the sale of lottery ticketsproducts.	470

(B) Pursuant to Section 6 of Article XV, Ohio Constitution,	471
there is hereby established in the state treasury the lottery	472
profits education fund. Whenever, in the judgment of the director	473
of budget and management, the amount to the credit of the state	474
lottery fund that does not represent proceeds from statewide joint	475
lottery games is in excess of that needed to meet the maturing	476
obligations of the commission and as working capital for its	477
further operations, the director shall transfer the excess to the	478
lottery profits education fund in connection with the statewide	479
lottery. In addition, whenever, in the judgment of the director of	480
budget and management, the amount to the credit of the state	481
lottery fund that represents proceeds from statewide joint lottery	482
games equals the entire net proceeds of those games as described	483
in division (B)(5) of section 3770.03 of the Revised Code and the	484
rules adopted under that division, the director shall transfer	485
those proceeds to the lottery profits education fund. There shall	486
also be credited to the fund any repayments of moneys loaned from	487
the educational excellence investment fund. Investment earnings of	488
the lottery profits education fund shall be credited to the fund.	489

The lottery profits education fund shall be used solely for	490
the support of elementary, secondary, vocational, and special	491
education programs as determined in appropriations made by the	492
general assembly, or as provided in applicable bond proceedings	493
for the payment of debt service on obligations issued to pay costs	494
of capital facilities, including those for a system of common	495
schools throughout the state pursuant to section 2n of Article	496
VIII, Ohio Constitution. When determining the availability of	497
money in the lottery profits education fund, the director of	498
budget and management may consider all balances and estimated	499
revenues of the fund.	500

(C) There is hereby established in the state treasury the	501
deferred prizes trust fund. With the approval of the director of	502
budget and management, an amount sufficient to fund annuity prizes	503
shall be transferred from the state lottery fund and credited to	504
the trust fund. The treasurer of state shall credit all earnings	505
arising from investments purchased under this division to the	506
trust fund. Within sixty days after the end of each fiscal year,	507
the treasurer of state shall certify to the director of budget and	508
management whether the actuarial amount of the trust fund is	509
sufficient over the fund's life for continued funding of all	510
remaining deferred prize liabilities as of the last day of the	511
fiscal year just ended. Also, within that sixty days, the director	512
of budget and management shall certify the amount of investment	513
earnings necessary to have been credited to the trust fund during	514
the fiscal year just ending to provide for such continued funding	515
of deferred prizes. Any earnings credited in excess of the latter	516
certified amount shall be transferred to the lottery profits	517
education fund.	518

To provide all or a part of the amounts necessary to fund	519
deferred prizes awarded by the commission in connection with the	520
statewide lottery, the treasurer of state, in consultation with	521
the commission, may invest moneys contained in the deferred prizes	522
trust fund which representsthat represent proceeds from the	523
statewide lottery in obligations of the type permitted for the	524
investment of state funds but whose maturities are thirty years or	525
less. Notwithstanding the requirements of any other section of the	526
Revised Code, to provide all or part of the amounts necessary to	527
fund deferred prizes awarded by the commission in connection with	528
statewide joint lottery games, the treasurer of state, in	529
consultation with the commission, may invest moneys in the trust	530
fund which represent proceeds derived from the statewide joint	531
lottery games in accordance with the rules the commission adopts	532
under division (B)(5) of section 3770.03 of the Revised Code.	533
Investments of the trust fund are not subject to the provisions of	534
division (A)(10) of section 135.143 of the Revised Code limiting	535
to twenty-five per cent the amount of the state's total average	536
portfolio that may be invested in debt interests and limiting to	537
one-half of one per cent the amount that may be invested in debt	538
interests of a single issuer.	539

All purchases made under this division shall be effected on a	540
delivery versus payment method and shall be in the custody of the	541
treasurer of state.	542

The treasurer of state may retain an investment advisor, if	543
necessary. The commission shall pay any costs incurred by the	544
treasurer of state in retaining an investment advisor.	545

(D) The auditor of state shall conduct annual audits of all	546
funds and any other audits as the auditor of state or the general	547
assembly considers necessary. The auditor of state may examine all	548
records, files, and other documents of the commission, and records	549
of lottery sales agents and of video lottery sales agents that	550
pertain to their activities as agents, for purposes of conducting	551
authorized audits.	552

The state lottery commission shall establish an internal	553
audit program before the beginning of each fiscal year, subject to	554
the approval of the auditor of state. At the end of each fiscal	555
year, the commission shall prepare and submit an annual report to	556
the auditor of state for the auditor of state's review and	557
approval, specifying the internal audit work completed by the end	558
of that fiscal year and reporting on compliance with the annual	559
internal audit program. The form and content of the report shall	560
be prescribed by the auditor of state under division (C) of	561
section 117.20 of the Revised Code.	562

(E) Whenever, in the judgment of the director of budget and	563
management, an amount of net state lottery proceeds is necessary	564
to be applied to the payment of debt service on obligations, all	565
as defined in sections 151.01 and 151.03 of the Revised Code, the	566
director shall transfer that amount directly from the state	567
lottery fund or from the lottery profits education fund to the	568
bond service fund defined in those sections. The provisions of	569
this division are subject to any prior pledges or obligation of	570
those amounts to the payment of bond service charges as defined in	571
division (C) of section 3318.21 of the Revised Code, as referred	572
to in division (B) of this section.	573

Sec. 3770.07.  (A)(1) Except as provided in division (A)(2)	574
of this section, lottery prize awards shall be claimed by the	575
holder of the winning lottery ticketproduct, or by the executor	576
or administrator, or the trustee of a trust, of the estate of a	577
deceased holder of a winning lottery ticketproduct, in a manner	578
to be determined by the state lottery commission, within one	579
hundred eighty days after the date on which the prize award was	580
announced if the lottery game is an online game, and within one	581
hundred eighty days after the close of the game if the lottery	582
game is an instant game.	583

No lottery prize award with a value that exceeds fiveeleven	584
hundred ninety-nine dollars shall be claimed by or paid to any	585
person, as defined in section 1.59 of the Revised Code or as	586
defined by rule or order of the state lottery commission, until	587
the name, address, and social security number of each beneficial	588
owner of the prize award are disclosed todocumented for the	589
commission. Except when a beneficial owner otherwise consents in	590
writing, in the case of a claim for a lottery prize award made	591
by one or more beneficial owners using a trust, the name,	592
address, and social security number of each such beneficial	593
owner in the commission's records as a result of such a	594
disclosure are confidential and shall not be subject to	595
inspection or copying under section 149.43 of the Revised Code	596
as a public record.	597

Except as otherwise provided in division (A)(1) of this	598
section or as otherwise provided by law, the name and address of	599
any individual claiming a lottery prize award are subject to	600
inspection or copying under section 149.43 of the Revised Code as	601
a public record.	602

(2) An eligible person serving on active military duty in any	603
branch of the United States armed forces during a war or national	604
emergency declared in accordance with federal law may submit a	605
delayed claim for a lottery prize award. The eligible person shall	606
do so by notifying the state lottery commission about the claim	607
not later than the five hundred fortieth day after the date on	608
which the prize award was announced if the lottery game is an	609
online game or after the date on which the lottery game closed if	610
the lottery game is an instant game.	611

(3) If no valid claim to a lottery prize award is made within	612
the prescribed period, the prize money, the cost of goods and	613
services awarded as prizes, or, if goods or services awarded as	614
prizes are resold by the state lottery commission, the proceeds	615
from their sale shall be returned to the state lottery fund and	616
distributed in accordance with section 3770.06 of the Revised	617
Code.	618

(4) The state lottery commission may share with other	619
governmental agencies the name, address, and social security	620
number of a beneficial owner disclosed to the commission under	621
division (A)(1) of this section, as authorized under sections	622
3770.071 and 3770.073 of the Revised Code. Any shared information	623
as disclosed pursuant to those sections that is made confidential	624
by division (A)(1) of this section remains confidential and shall	625
not be subject to inspection or copying under section 149.43 of	626
the Revised Code as a public record unless the applicable	627
beneficial owner otherwise provides written consent.	628

(5) As used in this division:

629

(a) "Eligible person" means a person who is entitled to a	630
lottery prize award and who falls into either of the following	631
categories:	632

(i) While on active military duty in this state, the person,	633
as the result of a war or national emergency declared in	634
accordance with federal law, is transferred out of this state	635
before the one hundred eightieth day after the date on which the	636
winner of the lottery prize award is selected.	637

(ii) While serving in the reserve forces in this state, the	638
person, as the result of a war or national emergency declared in	639
accordance with federal law, is placed on active military duty and	640
is transferred out of this state before the expiration of the one	641
hundred eightieth day after the date on which the prize drawing	642
occurs for an online game or before the expiration of the one	643
hundred eightieth day following the close of an instant game as	644
determined by the commission.	645

(b) "Active military duty" means that a person is covered by	646
the "Servicemembers Civil Relief Act," 117 Stat. 2835 (2003), 50	647
U.S.C. 501 et seq., as amended, or the "Uniformed Services	648
Employment and Reemployment Rights Act of 1994," 108 Stat. 3149,	649
38 U.S.C. 4301 et seq., as amended.	650

(c) "Each beneficial owner" means the ultimate recipient or,	651
if there is more than one, each ultimate recipient of a lottery	652
prize award.	653

(B) If a prize winner, as defined in section 3770.10 of the	654
Revised Code, is under eighteen years of age, or is under some	655
other legal disability, and the prize money or the cost of goods	656
or services awarded as a prize exceeds one thousand dollars, the	657
director of the state lottery commission shall order that payment	658
be made to the order of the legal guardian of that prize winner.	659
If the amount of the prize money or the cost of goods or services	660
awarded as a prize is one thousand dollars or less, the director	661
may order that payment be made to the order of the adult member,	662
if any, of that prize winner's family legally responsible for the	663
care of that prize winner.	664

(C) No right of any prize winner, as defined in section	665
3770.10 of the Revised Code, to a prize award shall be the subject	666
of a security interest or used as collateral.	667

(D)(1) No right of any prize winner, as defined in section	668
3770.10 of the Revised Code, to a prize award shall be assignable	669
except as follows: when the payment is to be made to the executor	670
or administrator, or the trustee of a trust, of the estate of a	671
winning ticket holderprize winner; when the award of a prize is	672
disputed, any person may be awarded a prize award to which another	673
has claimed title, pursuant to the order of a court of competent	674
jurisdiction; when a person is awarded a prize award to which	675
another has claimed title, pursuant to the order of a federal	676
bankruptcy court under Title 11 of the United States Code; or as	677
provided in sections 3770.10 to 3770.14 of the Revised Code.	678

(2)(a) No right of any prize winner, as defined in section	679
3770.10 of the Revised Code, to a prize award with a remaining	680
unpaid balance of less than one hundred thousand dollars shall be	681
subject to garnishment, attachment, execution, withholding, or	682
deduction except as provided in sections 3119.80, 3119.81,	683
3121.02, 3121.03, and 3123.06 of the Revised Code or when the	684
director is to make a payment pursuant to section 3770.071 or	685
3770.073 of the Revised Code.	686

(b) No right of any prize winner, as defined in section	687
3770.10 of the Revised Code, to a prize award with an unpaid	688
balance of one hundred thousand dollars or more shall be subject	689
to garnishment, attachment, execution, withholding, or deduction	690
except as follows: as provided in sections 3119.80, 3119.81,	691
3121.02, 3121.03, and 3123.06 of the Revised Code; when the	692
director is to make a payment pursuant to section 3770.071 or	693
3770.073 of the Revised Code; or pursuant to the order of a court	694
of competent jurisdiction located in this state in a proceeding in	695
which the state lottery commission is a named party, in which case	696
the garnishment, attachment, execution, withholding, or deduction	697
pursuant to the order shall be subordinate to any payments to be	698
made pursuant to section 3119.80, 3119.81, 3121.02, 3121.03,	699
3123.06, 3770.071, or 3770.073 of the Revised Code.	700

(3) The state lottery commission may adopt and amend rules	701
pursuant to Chapter 119. of the Revised Code as necessary to	702
implement division (D) of this section, to provide for payments	703
from prize awards subject to garnishment, attachment, execution,	704
withholding, or deduction, and to comply with any applicable	705
requirements of federal law.	706

(4) Upon making payments from a prize award as required by	707
division (D) of this section, the director and the state lottery	708
commission are discharged from all further liability for those	709
payments, whether they are made to an executor, administrator,	710
trustee, judgment creditor, or another person, or to the prize	711
winner, as defined in section 3770.10 of the Revised Code.	712

(5) The state lottery commission shall adopt rules pursuant	713
to section 3770.03 of the Revised Code concerning the payment of	714
prize awards upon the death of a prize winner, as defined in	715
section 3770.10 of the Revised Code. Upon the death of a prize	716
winner, the remainder of the prize winner's prize award, to the	717
extent it is not subject to a transfer agreement under sections	718
3770.10 to 3770.14 of the Revised Code, may be paid to the	719
executor, administrator, or trustee in the form of a discounted	720
lump sum cash settlement.	721

(E) No lottery prize award shall be awarded to or for any	722
officer or employee of the state lottery commission, any officer	723
or employee of the auditor of state actively auditing,	724
coordinating and, or certifying commission drawings, or any blood	725
relative or spouse of such an officer or employee of the	726
commission or auditor of state living as a member of the officer's	727
or employee's household, nor shall any such officer, employee,	728
blood relative, or spouse attempt to claim a lottery prize award.	729

(F) The director may prohibit vendors to the state lottery	730
commission and their employees from being awarded a lottery prize	731
award.	732

(G) Upon the payment of prize awards pursuant to a provision	733
of this section other than a provision of division (D) of this	734
section or section 3770.28 of the Revised Code, the director and	735
the state lottery commission are discharged from all further	736
liability for their payment. Installment payments of lottery prize	737
awards shall be paid by official check or warrant, and they shall	738
be sent by mail delivery to the prize winner's address within the	739
United States or by electronic funds transfer to an established	740
bank account located within the United States, or the prize winner	741
may pick them up at an office of the commission.	742

Sec. 3770.08.  (A) No person shall sell a lottery ticket at a	743
price greater than that fixedestablished by rule of the state	744
lottery commission.	745

(B) No person other than a licensed lottery sales agent or	746
video lottery sales agent shall sell lottery ticketsproducts, but	747
nothing in this section shall be construed to prevent any person	748
from giving lottery ticketsproducts to another as a gift. A	749
transfer of lottery ticketsproducts by any person whichthat is	750
made in connection with a marketing, promotional, or advertising	751
program shall be deemed to be a gift for the purposes of this	752
chapter.	753

(C) No person shall sell a lottery ticketproduct to any	754
person under eighteen years of age, and no person under eighteen	755
years of age shall attempt to purchase a lottery ticketproduct.	756
The commission shall adopt rules to establish a problem gamblers	757
list and create a voluntary exclusion program.	758

(D) No person, directly or indirectly, on behalf of self, or	759
another, nor any organization, shall invite, solicit, demand,	760
offer, or accept any payment, contribution, favor, or other	761
consideration to influence the award, renewal, or retention of a	762
lottery sales or video lottery sales agent license.	763

(E) Except as otherwise provided in this division, no person	764
shall sell lottery tickets on any fairgrounds during any annual	765
exhibition conducted in accordance with Chapter 991. or 1711. of	766
the Revised Code. "Fairgrounds" includes any land or property	767
under the control or management of any agricultural society or of	768
the Ohio expositions commission. This division does not apply to	769
the sale of lottery ticketsproducts by the commission at the	770
state fairground during the state fair.	771

Sec. 3770.21.  As used in sections 3770.21 to 3770.30 of the	772
Revised Code:	773

(A) "Associated equipment" means any hardware or software	774
that is connected to video lottery terminal or the central	775
communications system for the purpose of performing communications	776
to, or validation, auditing, or data and information retrieval by,	777
the state lottery commission. "Associated equipment" does not	778
include telecommunications facilities and equipment of a public	779
utility or video lottery terminals.	780

(B) "Central communications system" means the computer system	781
that is operated and controlled under the authority of the state	782
lottery commission, to which video lottery terminals and their	783
associated equipment communicate for security, auditing, data	784
and information retrieval, and other purposes authorized under	785
this chapter and that has the ability to activate and deactivate	786
the operation of video lottery terminals.	787

(C) "EDGE business enterprises" has the same meaning as in	788
section 123.152 of the Revised Code.	789

(D) "Video lottery terminal" means a device approved by the	790
state lottery commission for the purpose of conducting at tracks	791
lotteries that provide immediate prize determinations for	792
participants.	793

(E) "Video lottery sales agent" means a person who is a	794
permit holder and holds a current license issued under section	795
3770.24 of the Revised Code to assist the state lottery commission	796
in conducting lotteries through the use of video lottery	797
terminals at a track.	798

(F) "Gross proceeds" means the amount of wagers by	799
participants in lotteries minus payments to winning participants	800
and minus value credits redeemed through a video lottery terminal.	801

(G) "Key gaming employee" means an individual determined to	802
be a key gaming employee under rules adopted by the state lottery	803
commission.	804

(H) "Ohio-based business" means a business that is subject to	805
a tax imposed by Chapter 5725., 5727., 5733., or 5751. of the	806
Revised Code and that has a physical presence in this state.	807

(I) "Permit holder" means a person, as defined in section	808
1701.01 of the Revised Code, that has been authorized by the state	809
racing commission to conduct one or more horse racing meetings	810
under Chapter 3769. of the Revised Code.	811

(J) "Value credit" means a credit that provides customers of	812
a video lottery sales agent with free plays on video lottery	813
terminal.	814

(K) "Track" means any place, track, or enclosure where a	815
permit holder conducts live horse racing for profit at a racing	816
meeting. "Track" includes facilities on premises contiguous or	817
adjacent to those places, tracks, or enclosures.	818

Sec. 3770.22. The state lottery commission shall conduct	819
lotteries that provide immediate prize determinations for	820
participants through the use of video lottery terminals. The	821
commission shall conduct these lotteries only through video	822
lottery sales agents that were permit holders that conducted live	823
horseracing meetings continuing since calendar year 2003, and	824
only at tracks operated by one or more video lottery sales	825
agents. If, on the effective date of this section, more than	826
one permit holder conducted horseracing meetings at a track	827
during the previous calendar year, the permit holders shall	828
designate, by a written agreement, one permit holder, or a	829
person or entity owning or owned by one or more permit	830
holders, as the video lottery sales agent for that track. The	831
agreement shall be filed with the commission prior to the	832
issuance of a video lottery sales agent license and shall not	833
be modified without the consent of the commission.	834

Sec. 3770.23.  A video lottery terminal shall be connected	835
to the central communications system. The state lottery	836
commission shall evaluate and approve both the hardware of a	837
video lottery terminal and the software that is used to	838
operate the video lottery terminal. The commission shall contract	839
with an independent testing laboratory to ensure that the video	840
lottery terminals operate in full compliance with all rules and	841
regulations. The commission shall not approve a video lottery	842
terminal unless the software that is used to operate the video	843
lottery terminal will provide to participants a projected	844
average return of more than eighty-five per cent during the	845
expected lifetime of the video lottery terminal using standard	846
methods of probability theory.	847

Except as provided in the agreement required by section	848
3770.26 of the Revised Code, the number, type, denomination, and	849
location of video lottery terminals at a track shall be agreed	850
upon between the agent and the commission. Not more than sixty per	851
cent of the video lottery terminals operated by the commission	852
at the track of a video lottery sales agent during the first	853
five years of operation shall be manufactured by the same	854
entity.	855

Sec. 3770.24.  (A) The director of the state lottery	856
commission shall license a permit holder as a video lottery sales	857
agent. Each applicant for a license as a video lottery sales	858
agent shall do all of the following:	859

(1) Pay to the commission a nonrefundable application fee of	860
one hundred thousand dollars;	861

(2) Present proof, in the form required by the director, that	862
the applicant is a permit holder;	863

(3) Prior to the approval of the application, obtain a letter	864
of credit, or a surety, or, if required by the director, a	865
fidelity bond, in an amount to be determined by the director, but	866
not more than two million dollars. The bond may be with any	867
company that complies with the bonding and surety laws of this	868
state and the requirements established by rules of the	869
commission under section 3770.03 of the Revised Code.	870

(B) A video lottery sales agent license is effective for	871
ten years. A video lottery sales agent, on or before the date	872
established by the director, shall renew the agent's license and	873
the agreement required by section 3770.26 of the Revised Code,	874
and provide evidence that the agent is a current permit holder	875
and has renewed the letter of credit, surety, or bond required	876
by this section.	877

A video lottery sales agent may only transfer the agent's	878
video lottery sales license with the consent of the commission.	879

(C) Any violation of this chapter, or of any rule adopted	880
under it, is sufficient reason for the commission to refuse to	881
issue a license, or for the commission to suspend or revoke any	882
license issued, under this section.	883

With respect to the issuance, refusal, suspension, or	884
revocation of a license under this section, the action of the	885
commission is subject to Chapter 119. of the Revised Code.	886

Sec. 3770.25.  The relationship between the state lottery	887
commission and a video lottery sales agent is one of trust. A	888
video lottery sales agent collects funds on behalf of the	889
commission through the sale of lottery products for which the	890
agent receives a commission.	891

A video lottery sales agent may provide value credits to	892
its customers as authorized by rule of the state lottery	893
commission to promote and advertise the use of video lottery	894
terminals.	895

Sec. 3770.26. (A) The state lottery commission shall execute	896
an agreement with each video lottery sales agent. Each agreement	897
and renewed agreement shall provide all of the following:	898

(1) That fifty per cent of the gross proceeds of the	899
lotteries conducted under section 3770.22 of the Revised Code	900
shall be paid as a commission to the agent for services and	901
personnel provided under section 3770.28 of the Revised Code by	902
the agent for the lotteries and for the provision, maintenance,	903
and repair of the buildings and grounds at the track where the	904
video lottery terminals are located and that the remaining fifty	905
per cent of the gross proceeds shall be retained by the state;	906

(2) That the agent shall give to the commission a written	907
schedule that lists the installed cost of all fixtures and	908
equipment supplied by the agent to assist the commission in	909
conducting lotteries under section 3770.22 of the Revised Code;	910

(3) That not more than two thousand five hundred video	911
lottery terminals shall be placed at each track, without a	912
determination by the director of the state lottery commission	913
that the number of devices is consistent with the purposes of	914
this chapter and has been requested by the agent;	915

(4) That the agent shall do all of the following:

916

(a) Set a goal to award not less than fifty per cent of the	917
contracts related to the provision, maintenance, and repair under	918
division (B) of section 3770.28 of the Revised Code of necessary	919
capital improvements for the facilities at the track at which	920
video lottery terminals are located to, and make a good faith	921
effort to see that not less than fifty per cent of the	922
subcontracts of those contracts are awarded to, Ohio-based	923
businesses;	924

(b) Make a good faith effort to see that not less than five	925
per cent of the subcontracts described in division (A)(5)(a) of	926
this section are awarded to Ohio-based businesses that are EDGE	927
business enterprises in accordance with executive order 2008-13S;	928

(c) Set a goal that not less than fifty per cent of the key	929
video lottery employees and other personnel employed under	930
division (C) of section 3770.28 of the Revised Code to perform	931
duties to implement sections 3770.21 to 3770.30 of the Revised	932
Code are residents of the county where the track is located or of	933
a county adjacent to that county.	934

(5) That, not later than one year after the initial	935
implementation of sections 3770.21 to 3770.30 of the Revised Code	936
and annually thereafter, the agent shall report to the commission	937
on its efforts to comply with divisions (A)(4)(a) and (d) of this	938
section;	939

(6) That within five years after commencing operation of the	940
lotteries conducted under section 3770.22 of the Revised Code,	941
the agent shall make not less than eighty million dollars in	942
improvements to the buildings and grounds at the track where the	943
video lottery terminals are located, including temporary	944
facilities, with not less than twenty million dollars in	945
improvements to the buildings and grounds at the track being made	946
within the first year. All improvements are subject to review by	947
the commission.	948

(B) The term of the agreement shall not exceed ten years and	949
shall not be terminated by the parties during its term, except for	950
breach of a provision of the agreement, or suspension or	951
revocation of a video lottery sales agent's license issued under	952
section 3770.24 of the Revised Code or of a permit issued under	953
Chapter 3769. of the Revised Code. The video lottery sales agent	954
shall have exclusive rights to conduct lotteries through the use	955
of video lottery terminals during the term of the agreement. If	956
the commission intends to terminate or not renew an agreement,	957
it shall provide the agent with an opportunity for an	958
adjudication under Chapter 119. of the Revised Code.	959

Sec. 3770.261. (A) The agreement between the state lottery	960
commission and each video lottery sales agent shall provide that	961
a one-time licensing fee equal to sixty-five million dollars	962
shall be paid by the agent to the commission, with thirteen	963
million dollars to be paid on September 15, 2009, thirteen	964
million dollars to be paid on December 15, 2009, thirteen	965
million dollars to be paid on March 15, 2010, thirteen million	966
dollars to be paid on June 15, 2010, and thirteen million	967
dollars to be paid on September 15, 2010.	968

(B) Video lottery sales agents shall file with the	969
commission all documents relating to their borrowing or financing	970
of video lottery terminal licensing fees stating the date at	971
which the borrowing or financing is retired.	972

Sec. 3770.262. (A) The state lottery commission may charge	973
fees to persons applying for a contract as a vendor, retailer, or	974
lessor of video lottery terminals. The fees shall be reasonably	975
calculated to cover the costs of processing applications.	976

(B) If the state lottery commission determines the	977
certification standards of another state are comprehensive,	978
thorough, and provide adequate safeguards, the commission may	979
certify an applicant without the necessity of a full	980
investigation.	981

Sec. 3770.263.  (A) There is hereby created the video lottery	982
study council consisting of five members. The speaker of the house	983
of representatives shall appoint to the council two members of the	984
house of representatives, the president of the senate shall	985
appoint to the council two members of the senate, and the governor	986
shall appoint to the council one member. Members of the council	987
shall serve at the pleasure of their appointing authority, and	988
shall serve without compensation, but shall be reimbursed for	989
actual and necessary expenses incurred in the performance of their	990
duties.	991

(B) The council shall do all of the following:

992

(1) Make an impartial review of all laws governing the	993
operation and administration of video lottery gaming and recommend	994
to the general assembly any changes it may find desirable with	995
respect to the language, structure, and organization of those	996
laws;	997

(2) Make an annual report to the governor and the general	998
assembly with respect to the operation and administration of video	999
lottery gaming; and	1000

(3) Study all proposed changes in the laws governing the	1001
operation and administration of video lottery gaming and report to	1002
the general assembly on their desirability as a matter of public	1003
policy.	1004

Sec. 3770.27.  In conducting lotteries under section 3770.22	1005
of the Revised Code, the director of the state lottery commission	1006
shall do all of the following:	1007

(A) Approve, qualify, certify, purchase or lease, install,	1008
maintain, repair, replace, and operate all video lottery	1009
terminals, associated equipment, and intellectual property	1010
necessary for the conduct of the lotteries. At the commencement	1011
of operations the video lottery terminals shall be new,	1012
state-of-the-art video lottery terminals. Thereafter, the video	1013
lottery sales agent has the right to request that	1014
underperforming video lottery terminals be removed and replaced	1015
with better performing video lottery terminals.	1016

(B) Procure, install, establish, maintain, repair, replace,	1017
and operate the central communications system that provides	1018
security, auditing, and data and information retrieval as	1019
determined necessary by the commission, that is compatible with	1020
all video lottery terminal manufacturers, distributors,	1021
suppliers, and providers, and that uses a gaming standards	1022
association communications protocol. The central communications	1023
system provider shall upgrade the protocol to the latest standards	1024
at the request of the commission. The central communications	1025
system shall be online and in communication with computers,	1026
video lottery terminals, and associated equipment located at the	1027
tracks of video lottery sales agents.	1028

(C) Select, qualify, certify, retain, pay, and terminate all	1029
contractors, suppliers, service companies, and vendors of the	1030
commission necessary for the conduct of lotteries under section	1031
3770.22 of the Revised Code, including those persons that provide	1032
video lottery terminals, associated equipment, and the central	1033
communications system;	1034

(D) Establish standards for the daily payment on business	1035
days, by a video lottery sales agent through electronic transfer	1036
or other system mandated by the director, of the gross proceeds	1037
of lotteries conducted under section 3770.22 of the Revised	1038
Code, less the commission paid to the video lottery sales agent	1039
under division (A)(1) of section 3770.26 of the Revised Code;	1040

(E) Review advertising and promotion of the lottery and	1041
levels thereof. The commission may approve or disapprove of any	1042
advertising and promotion, but approval shall not be unreasonably	1043
withheld.	1044

Sec. 3770.28.  In assisting the state lottery commission with	1045
the conduct of lottery games under section 3770.22 of the Revised	1046
Code, a video lottery sales agent shall do all of the following:	1047

(A) Promptly report to the video lottery terminal	1048
manufacturer and the commission any malfunctions of the	1049
devices, or failures of the manufacturers or service	1050
technicians to promptly service and repair the devices or	1051
associated equipment;	1052

(B) Provide, maintain, and repair necessary capital	1053
improvements for the facilities at the track at which video	1054
lottery terminals are located;	1055

(C) Hire and compensate adequate personnel to ensure	1056
compliance with the provisions of this chapter relating to the	1057
operation of video lottery terminals, including sufficient	1058
security personnel to protect and secure the video lottery	1059
terminals and associated equipment, and the track at which the	1060
video lottery terminals are located;	1061

(D) By electronic transfer or other system mandated by the	1062
director of the state lottery commission, transfer or deliver	1063
daily on business days to the commission the gross proceeds of	1064
lotteries conducted under section 3770.22 of the Revised Code,	1065
less the commission paid to the agent under division (A)(1) of	1066
section 3770.26 of the Revised Code;	1067

(E) Deliver payment to winning participants of prizes	1068
awarded by lotteries conducted by the commission through video	1069
lottery terminals at the track.	1070

Sec. 3770.29. (A) The conduct of lotteries and the operation	1071
of video lottery terminals at tracks under section 3770.22 of the	1072
Revised Code shall not be deemed to change the character of the	1073
use of the tracks under any county, municipal, or township land	1074
use regulation, ordinance, or agreement.	1075

(B) No license or excise tax or fee shall be assessed upon or	1076
collected from a video lottery sales agent by any county,	1077
township, municipal corporation, school district, or other	1078
political subdivision of the state that has the authority to	1079
assess or collect a tax or fee, by reason of the conduct of	1080
lotteries at tracks under section 3770.22 of the Revised Code.	1081
This division does not prohibit the imposition of taxes under	1082
Chapter 718. or 3769. of the Revised Code.	1083

Sec. 3770.30. Sections 3770.21 to 3770.30 of the Revised Code	1084
do not modify the authority of the state racing commission to	1085
regulate horse racing in accordance with Chapter 3769. of the	1086
Revised Code or, except as provided in sections 3770.21 to 3770.30	1087
of the Revised Code, the rights and responsibilities of permit	1088
holders under that chapter.	1089

Sec. 3770.31. (A) The supreme court shall have exclusive,	1090
original jurisdiction in all cases that challenge the	1091
constitutionality of sections 3770.21 to 3770.31 of the Revised	1092
Code or the relevant portions of any related sections.	1093

(B) Any action challenging the constitutionality of sections	1094
3770.21 to 3770.31 of the Revised Code or the relevant portions of	1095
any related section shall be commenced within ninety days after	1096
the effective date of those sections.	1097

Sec. 4301.03.  The liquor control commission may adopt and	1098
promulgate, repeal, rescind, and amend, in the manner required by	1099
this section, rules, standards, requirements, and orders necessary	1100
to carry out this chapter and Chapter 4303. of the Revised Code,	1101
but all rules of the board of liquor control that were in effect	1102
immediately prior to April 17, 1963, shall remain in full force	1103
and effect as rules of the liquor control commission until and	1104
unless amended or repealed by the liquor control commission. The	1105
rules of the commission may include the following:	1106

(A) Rules with reference to applications for and the issuance	1107
of permits for the manufacture, distribution, transportation, and	1108
sale of beer and intoxicating liquor, and the sale of alcohol; and	1109
rules governing the procedure of the division of liquor control in	1110
the suspension, revocation, and cancellation of those permits;	1111

(B) Rules and orders providing in detail for the conduct of	1112
any retail business authorized under permits issued pursuant to	1113
this chapter and Chapter 4303. of the Revised Code, with a view to	1114
ensuring compliance with those chapters and laws relative to them,	1115
and the maintenance of public decency, sobriety, and good order in	1116
any place licensed under the permits. No rule or order shall	1117
prohibit the sale of lottery ticketsproducts issued pursuant to	1118
Chapter 3770. of the Revised Code by any retail business	1119
authorized under permits issued pursuant to that chapter.	1120

No rule or order shall prohibit pari-mutuel wagering on	1121
simulcast horse races at a satellite facility that has been issued	1122
a D liquor permit under Chapter 4303. of the Revised Code. No rule	1123
or order shall prohibit a charitable organization that holds a D-4	1124
permit from selling or serving beer or intoxicating liquor under	1125
its permit in a portion of its premises merely because that	1126
portion of its premises is used at other times for the conduct of	1127
a bingo game, as described in division (S) of section 2915.01 of	1128
the Revised Code. However, such an organization shall not sell or	1129
serve beer or intoxicating liquor or permit beer or intoxicating	1130
liquor to be consumed or seen in the same location in its premises	1131
where a bingo game, as described in division (S)(1) of section	1132
2915.01 of the Revised Code, is being conducted while the game is	1133
being conducted. As used in this division, "charitable	1134
organization" has the same meaning as in division (H) of section	1135
2915.01 of the Revised Code. No rule or order pertaining to	1136
visibility into the premises of a permit holder after the legal	1137
hours of sale shall be adopted or maintained by the commission.	1138

(C) Standards, not in conflict with those prescribed by any	1139
law of this state or the United States, to secure the use of	1140
proper ingredients and methods in the manufacture of beer, mixed	1141
beverages, and wine to be sold within this state;	1142

(D) Rules determining the nature, form, and capacity of all	1143
packages and bottles to be used for containing beer or	1144
intoxicating liquor, except for spirituous liquor to be kept or	1145
sold, governing the form of all seals and labels to be used on	1146
those packages and bottles, and requiring the label on every	1147
package, bottle, and container to state the ingredients in the	1148
contents and, except on beer, the terms of weight, volume, or	1149
proof spirits, and whether the same is beer, wine, alcohol, or any	1150
intoxicating liquor except for spirituous liquor;	1151

(E) Uniform rules governing all advertising with reference to	1152
the sale of beer and intoxicating liquor throughout the state and	1153
advertising upon and in the premises licensed for the sale of beer	1154
or intoxicating liquor;	1155

(F) Rules restricting and placing conditions upon the	1156
transfer of permits;	1157

(G) Rules and orders limiting the number of permits of any	1158
class within the state or within any political subdivision of the	1159
state; and, for that purpose, adopting reasonable classifications	1160
of persons or establishments to which any authorized class of	1161
permits may be issued within any political subdivision;	1162

(H) Rules and orders with reference to sales of beer and	1163
intoxicating liquor on Sundays and holidays and with reference to	1164
the hours of the day during which and the persons to whom	1165
intoxicating liquor of any class may be sold, and rules with	1166
reference to the manner of sale;	1167

(I) Rules requiring permit holders buying beer to pay and	1168
permit holders selling beer to collect minimum cash deposits for	1169
kegs, cases, bottles, or other returnable containers of the beer;	1170
requiring the repayment, or credit, of the minimum cash deposit	1171
charges upon the return of the empty containers; and requiring the	1172
posting of such form of indemnity or such other conditions with	1173
respect to the charging, collection, and repayment of minimum cash	1174
deposit charges for returnable containers of beer as are necessary	1175
to ensure the return of the empty containers or the repayment upon	1176
that return of the minimum cash deposits paid;	1177

(J) Rules establishing the method by which alcohol products	1178
may be imported for sale by wholesale distributors and the method	1179
by which manufacturers and suppliers may sell alcohol products to	1180
wholesale distributors.	1181

Every rule, standard, requirement, or order of the commission	1182
and every repeal, amendment, or rescission of them shall be posted	1183
for public inspection in the principal office of the commission	1184
and the principal office of the division of liquor control, and a	1185
certified copy of them shall be filed in the office of the	1186
secretary of state. An order applying only to persons named in it	1187
shall be served on the persons affected by personal delivery of a	1188
certified copy, or by mailing a certified copy to each person	1189
affected by it or, in the case of a corporation, to any officer or	1190
agent of the corporation upon whom a service of summons may be	1191
served in a civil action. The posting and filing required by this	1192
section constitutes sufficient notice to all persons affected by	1193
such rule or order which is not required to be served. General	1194
rules of the commission promulgated pursuant to this section shall	1195
be published in the manner the commission determines.	1196

Section 2. That existing sections 3770.02, 3770.03, 3770.05,	1197
3770.06, 3770.07, 3770.08, and 4301.03 of the Revised Code are	1198
hereby repealed.	1199

Section 3. A video lottery sales agent shall set a goal to	1200
award not less than ten per cent of the contracts described in	1201
division (A)(5)(a) of section 3770.26 of the Revised Code to	1202
Ohio-based businesses that are minority business enterprises in	1203
accordance with Executive Order 2008-13S.	1204

Section 4. Notwithstanding sections 3769.04 and 3769.13 of	1205
the Revised Code, for a period of two years after the effective	1206
date of this section, a permit holder who is located on property	1207
owned by a political subdivision and who is eligible to become an	1208
electronic lottery sales agent may move its track to another	1209
location in a contiguous county that is within fifty miles of its	1210
current location for any reason and without the application or	1211
petition otherwise required by those sections. That permit holder	1212
may operate as an electronic lottery sales agent at a temporary	1213
facility at its new location while constructing or otherwise	1214
preparing its new track at that location. However, that permit	1215
holder may not move its track into a contiguous county in which a	1216
permit holder who is eligible to become an electronic lottery	1217
sales agent already is located on the effective date of this	1218
section.	1219

As used in this section, "permit holder," "electronic lottery	1220
sales agent," and "track" have the same meanings as in section	1221
3770.21 of the Revised Code.	1222