Section 1770.10  Definitions

 

Terms defined in the Lottery Law have the same meanings when used in this Part.  The following words and terms when used in this Part shall have the following meanings, unless the context clearly indicates otherwise:

 

"Agent" means a person permitted by a license issued by the Director under the authority of Sections 9.d, 10 and 10.1 of the Lottery Law to sell Illinois Lottery game tickets to the public.

 

"Administrative Hearing" means a proceeding at which parties present legal arguments and evidence about a case to an Administrative Law Judge or the Board, pursuant to the Lottery Law and 11 Ill. Adm. Code 1700.

 

"Administrative Law Judge" or "ALJ" means an attorney admitted to practice law by, and in good standing before, the Illinois Supreme Court who is duly authorized and designated in writing by the Director of the Illinois Lottery to convene and conduct hearings on matters under the jurisdiction of the Department.  An ALJ is specifically empowered to administer oaths and affirmations; rule on matters of proof and evidence; regulate the schedule and course of the hearing and pre-hearing process; hear and dispose of procedural and other similar matters; sign and issue orders and subpoenas; and exercise any other powers relating to the proceeding which are legally proper and reasonably necessary to carry out an ALJ's responsibilities.  The authority of any person to act as an ALJ shall not be a matter of proof in any hearing before the Department unless an appropriate motion is made pursuant to 11 Ill. Adm. Code 1700.200.

 

"Annuity" or "Annual Payout Option" means the payment of the grand prize in 30 consecutive graduated annual installments for Mega Millions, Powerball and Lotto games and 20 consecutive straight line annual installments for instant games as per game rules.

 

"Applicant" means a person who has applied to the Director for a license to sell Lottery game tickets to the public.

 

"Assignment" means a change of ownership for an annuity.

 

"Automated Clearing House" or "ACH" means a computer-based electronic network for processing payments and automated money transfers between banks across the United States without using paper checks, wire transfers, credit card networks, or cash.

 

"Bearer Instrument" means a designation of a Lottery game ticket under which the winnings from the ticket are payable to the person or business organization possessing the ticket or to the order of the person who has demonstrated bearer status by signing the ticket as the owner.

 

"Board" means the Lottery Control Board as established by Section 6 of the Lottery Law.

 

"Business Organization" means a partnership; incorporated or unincorporated association or group; corporation; limited liability company; partnerships for shares; trust; sole proprietorship; or other business enterprise.

 

"Cash-for-Life Game" means a Lottery game that offers a set prize payment to be made in installments to that winner for the duration of the winner's life or lump sum cash equivalent.

 

"Cash Option" has the same meaning as "Lump Sum".

 

"Chairperson" means the Chairperson of the Lottery Control Board.

 

"Change of Business Organization" means a change from one form of organization and ownership of a business organization to another. 

 

"Change of Name" means a change in the corporation or doing business as name shown on the records of the Secretary of State, County Clerk, or both, in the license granted to the Agent and in the Agent's application for a license.

 

"Claim Process" means the process of completing an Illinois Lottery claim form and providing proper identification involved in awarding a prize to a Claimant. iLottery claims up to $599 or less submitted through this process will be treated the same as if they were presented to a retailer with no formal claim submission and automatically credited to an account.

 

"Claimant" means a person, as defined in this Section, who presents a valid winning Lottery game ticket to an Agent or a Lottery prize center or administrative office for the purpose of receiving a prize. iLottery claims up to $599 or less that are presented in this manner will be treated the same as if they were presented to a retailer with no formal claim submission and automatically credited to an account.

 

"Department" means the Illinois Department of the Lottery.

 

"Director" means the individual responsible for the executive oversight of the Department.

 

"Draw-Based Game" or "DBG" means a game wherein its winning lottery numbers, symbols, characters, or outcomes are randomly selected by a manual or digital process. Each DBG approved for sale by the Department is played in accordance with its game rules. DBGs may be sold by licensed retailers and via the Department.

 

"Drawing" means the procedure by which the Department (or in the case of a multi-jurisdiction game the managing organization) randomly selects winning numbers, symbols, characters, or outcomes in accordance with the rules of the specific game being played and its drawing procedures.

 

"Electronic Funds Transfer" or "EFT" means an electronic financial transaction from one account to another. 

 

"Game" means any individual or particular type of Lottery authorized by the Department.

 

"Game Closed" means the time when tickets for an instant game can no longer be ordered or distributed by the Lottery or a retailer.

 

"Game End" means the official date, determined by the Lottery, an instant game has ended. Prizes must then be redeemed within the time period required by the Lottery.

 

"Game Expiration" means the time after an instant game has been closed and the game prize redemption date has passed, when tickets from the game can no longer be redeemed.

 

"High-Frequency Prize Winner" means a person who submits at least 20 claims for Lottery prizes, each with a value of $1,000 or more, within any period of 365 days.

 

"iLottery" or "Internet Lottery" means the ability to place wagers via the internet on Lottery games.

 

"Instant Game" or "Scratcher" means an instant lottery ticket on which a player scratches the covering from one or more play areas to determine if a prize was won, as indicated by the symbols and words that are revealed. Instant games are Lottery games that can be played, won and redeemed at the time of purchase.

 

"Internet Lottery Player Account" means a secure electronic account associated with a registered internet Lottery player that allows the internet player to access information about the player's Lottery internet account, including, but not limited to the transaction history of purchases, winnings and prize redemptions.  The player account also maintains a bank account established for the purpose of purchasing Lottery game tickets or subscriptions via the internet and receiving payment for any prizes won in connection with an internet Lottery purchase. Prizes up to $599 are paid back into the account, unless the player's winnings exceed the maximum wallet threshold of $2000 at which point the player's winnings will automatically by mailed to them by check.  For prizes in excess of $600, a claim must be submitted to the Department for processing.

 

"Jackpot" means the top prize in a pari-mutuel or progressive draw-based Game. Jackpots are paid in accordance with the game rules and can be either in annuity payments or in one lump sum.

 

"License" means an Agent license, issued by the Director pursuant to Section 9 of the Lottery Law for an Agent to sell Lottery tickets to the public.

 

"Lottery" means the Lottery established and operated pursuant to the Lottery Law.

 

"Lottery Beneficiaries" means the designated recipients of lottery prizes.

 

"Lottery Game Ticket" or "Ticket" means:

 

A scratch-off ticket;

 

A paper ticket produced from a kiosk or electronic record generated and maintained by the Department's central gaming system, on official paper stock approved by the Department, by a Lottery retailer; or

 

A virtual ticket purchased via the internet and recorded in the Department's central gaming system.

 

"Lottery Law" means the Illinois Lottery Law [20 ILCS 1605].

 

"Lottery Retailer" means a location licensed by the Department to sell Lottery game tickets or shares.  [230 ILCS 45/25-70]

 

"Lottery Sales Representative" means a lottery employee responsible for servicing lottery retailers' needs in a particular geographical region or territory, or by a specific classification of retailer.

 

"Lump Sum" or "Cash Equivalent Option" means a single prize payment, as opposed to an annuitized payment.

 

"Lottery Vendor" or "Vendor" means any person or company who submits a bid, proposal or offer and is awarded a contract to provide goods or services to the Lottery.

 

"Multi-Jurisdiction Lottery" means lottery games that are offered in more than one jurisdiction, including Powerball and Mega Millions, allowing lotteries to generate larger jackpots than they could individually. Jackpots may be paid in lump sums or annuities.

 

"Multi-State Lottery Association" or "MUSL" means a non-profit, government-benefit association that assists its member lotteries in multi-jurisdictional game development. Each MUSL member, and non-members who sell MUSL games via a cross-sell agreement, offers one or more of the games administered by the association, but retains its independent statutory duties regarding ticket sales, retailer authorization, prize payments, income offsets, and other responsibilities.

 

"Multiplier" means an extra number drawn to increase the payout if the wager is a winner. The drawn number (Y) will multiply the player's prize (X) by that drawn (Y) value. A multiplier option usually requires an additional wager amount.

 

"Net Proceeds" means all revenue derived from the sale of Lottery game tickets or shares, all other monies derived from the Lottery games, and all other monies derived in the operations of the Lottery, less the amounts expended for prizes, retailer fees, and other operating costs as determined by Generally Accepted Accounting Principles issued by the Government Accounting Standards Board and the Financial Accounting Standards Board.

 

"North American Association of State and Provincial Lotteries" or "NASPL" means the non-profit professional association formed to assemble and disseminate information and benefits of state and provincial lottery organizations through education and communications and where appropriate publicly advocate the positions of the Association on matters of general policy.  NASPL represents government-sanctioned lotteries in the United States, Canada, Virgin Islands and Puerto Rico.

 

"On-line Status" means the ability of an Agent to sell computer-generated Lottery game tickets or shares for the Lottery's draw-based games through a terminal connected to the Department's central gaming system.

 

"Operating Expenses" means all costs of doing business including, but not limited to, prizes, commissions, bonuses, and other compensation paid to an agent; advertising and marketing costs; rental fees; personnel costs; capital costs; depreciation of property and equipment; funds for compulsive gambling education and treatments; amounts held in or paid from a fidelity fund; and other operating costs.

 

"Payout" means the money or cash prize that a player wins for matching a certain combination of numbers.

 

"Person", when used in reference to an Agent's license, shall be construed to mean and include an individual, association, partnership, corporation, limited liability company or partnership, club, trust, estate, society, company, joint stock company, receiver, trustee, referee, or any other person acting in a fiduciary or representative capacity, who is appointed by a court, or any other combination of individuals.  "Person" includes any department, commission, agency or instrumentality of the State, including the Department, and also including any county, city, village, or township and any agency and instrumentality of this State.

 

"Player", when used in the context of a purchase of a Lottery game ticket or of a prize claim, means:

 

an individual;

 

a group of individuals;

 

a partnership or club;

 

a revocable living trust;

 

an irrevocable trust, if the trust agreement was executed prior to the date the prize was won;

 

an irrevocable trust, if the trust agreement was executed prior to the date the prize was won, and provided all beneficiaries are named in the trust;

 

an estate;

 

a governmental entity other than the Department; or

 

the following additional types of entities:

 

a limited partnership;

 

a corporation;

 

a limited liability company; or

 

a charitable organization.  

 

Prize claims by any such "players" are subject to eligibility requirements set forth in the Lottery Law, this Part, or game rules.

 

"Point of Sale" means the physical location where an Agent is licensed to conduct the sale of Lottery game tickets to the public.

 

"Private Manager" means the company, and any permitted successor company, awarded a contract to provide business management services, including but not limited to the operation of sales, advertising, marketing, retail agent services and system support functions to the Illinois Lottery in accordance with the Lottery Law.

 

"Prize" means any award, financial or otherwise, awarded to a Lottery game ticket holder pursuant to the rules of the Lottery. In determining whether a winning Lottery Game Ticket may be redeemed for cash through a Lottery retailer or at a prize center, or must be presented to a Department office for payment, and whether a prize may be claimed in a group name or must be claimed by an individual group member, the Department will adhere to 26 U.S.C. 165(d) and deduct the amount of the wager from the face value of the prize.

 

"Prize Center" means a Lottery office or other authorized location where:

 

Winning Lottery game tickets with a face value up to $25,000 may be redeemed pursuant to Section 20.1 of the Lottery Law; or

 

Larger prizes, or those subject to withholding or investigation, may be claimed.

 

"Redeem" (and its variants) means to surrender a valid winning Illinois Lottery game ticket to a Lottery retailer for immediate cash payment of the prize, or to a Lottery prize center for payment by check, prepaid debit card, electronic funds transfer, automated clearing house, or other means in accordance with Section 1770.190.

 

"Registered Internet Lottery Player" means an individual who has successfully established an internet Lottery player account after registering through the Lottery's web portal establishing the requisite age, location and other eligibility requirements.

 

"Related Terminal" means any player activated machine or any Agent operated terminal in which another Agent has an interest.

 

"Requests for Proposals" or "RFP" means a formal, public notice by an organization inviting vendors to submit ideas, concepts and costs related to a specific end.

 

"Secretary" means the Secretary of the Lottery Control Board.

 

"Service" means the mailing of any notice required by the Lottery Law or this Part by certified mail or electronic means, return receipt requested.  Service by mail shall be deemed complete four days after mailing of the document, properly addressed and posted for delivery, to the person to be served.  Service shall be deemed complete if the notice is returned undelivered or unclaimed when mailed, postage prepaid, to the intended recipient's last known address as disclosed in the Department's records, or if 30 days have elapsed from the date of mailing, to that address with no return of the item.  Service by electronic means is complete on the day of transmission or, if after 5:00 p.m., the next business day. If service is by email, the Department shall maintain a copy of the sent email and shall verify, within one business day, that the transmission of the email has not been rejected or has failed. In the event of rejection or failure, absent correction of an erroneous email address, service shall be made by mail.

 

"Special License" means a license issued by the Director limited in geographic scope and/or duration of validity (see Section 1770.30).

 

"State Lottery Fund" means the special fund, created in the State Treasury by Section 20 of the Lottery Law, in which all revenues received by the Lottery, as defined and limited by Section 20 of the Lottery Law, are deposited.

 

"Subscription" means a paid-in-advance program in which a player purchases a specified number of Lottery tickets to be drawn over a specified time period. Subscriptions may be offered to players in several ways, including via the internet where allowed by the Lottery Law.

 

"Surety Bond" means a promise to be liable for the debt, default, or failure of another. It is a three-party agreement that legally binds the agent or vendor who needs a bond; the Lottery, which requires the bond as proof of financial responsibility; and a surety company that guarantees the performance or obligations of the agent or vendor to the Lottery.

 

"Sweep Account" means a banking account which allows the Lottery to credit or debit funds to a retailer through EFT.

 

"Sweepstakes" means a game in which prizes are awarded to a specified number of entrants drawn from a pool.

 

"Ticket Discounting" means reselling or having a person other than the prize winner claim a winning Lottery game ticket or buying or claiming a winning Lottery game ticket for the purpose of assisting the original prize winner with concealing the winner's identity as a prize winner.

 

"Ticket Symbol" means the printed data in the play area on the front of an instant game ticket that is used, among other things, to determine eligibility for prizes pursuant to the working papers/games specifications for each game.

 

"Transfer" means the change, in the aggregate, directly or indirectly, of the equity, management control, legal ownership, or shares of stock of the Agent.

 

"Trust Account" means a bank account designated and dedicated by an Agent for the receipt of Lottery proceeds.

 

"Tradestyle" means a Lottery retailer category based on similarities in operation, organization, or business model, as determined by the Director.

 

"Validation Number" means a unique set of identification numbers on draw-based and instant game tickets that is matched with internal databases in order to determine the winning or non-winning status of the ticket, as well as the prize amount.

 

"Withholding" means the amounts required by law to be subtracted from a winner's prize to recover money owed by the winner to others for obligations that include but are not limited to State, federal, and in some cases local taxes; judgment creditors; or child support obligations.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.20  Selection of Lottery Sales Agents; License Application and Fee

 

a)         The Director shall license Agents as authorized persons engaged in business activity dealing with the public, provided that the sole proprietors, partners, corporate officers or principals of an applicant must be 18 years of age or older to be eligible to apply for a license.  The total number of Agents shall be sufficient to assure that Lottery products are conveniently available to the public throughout the State, consistent with the constraints of the Department's budget.  To obtain a license, any interested person must first complete application forms provided by the Department.  Information to be included on application forms will include, but is not limited to: type of business; tax identification numbers; retailer agreement for the sale of Lottery tickets; retailer contract for the sale of Lottery tickets; and acknowledgement of the requirement for a Lottery trust fund account.  Upon receipt of the completed application, the Department will have a representative meet with the applicant to discuss the responsibilities of selling Lottery products and to gather information concerning the applicant and the applicant's business establishment considering the factors listed in this subsection (a).  The Director shall give careful consideration to the following factors in selecting as Agents those persons that one may expect to provide a high level of sales volume of Lottery products, proper security for the Lottery equipment, Lottery game tickets and money, and a good public image for the State's Lottery products:

 

1)         The credit worthiness and financial responsibility of the applicant as disclosed by standard credit reporting services, the records of the State, and other credible information bearing upon the credit worthiness of the applicant as may be brought to the attention of the Director;

 

2)         The criminal history and tax status of the applicant as disclosed in the application or in records of federal, State or local governments;

 

3)         The physical security of the applicant's establishment in terms of the physical structure and design of the applicant's facilities as it would relate to the placement of Lottery equipment, the sale of Lottery products and the storage of Lottery receipts;

 

4)         The public accessibility of the applicant's place of business or activity, including accessibility from roads, major highways, parking facilities and public transit routes, accessibility by the disabled, proximity of pedestrian traffic, hours of operation of applicant's business, and the cleanliness, attractiveness and physical security of the premises;

 

5)         The number of existing Lottery sales licenses in the vicinity that are of similar tradestyle and overall type of operation to the extent that entering into a retailer agreement might jeopardize the Lottery's integrity, security, honesty, or fairness of the operation and administration of the Lottery games or undermine the public's confidence relevant to a positive perception of the Lottery, including but not limited to pawn shops, gun shops, adult entertainment establishments (18 years or older), payday loan services, or currency exchanges;

 

6)         The nature of the applicant's business and the volume of in store sales from the applicant's regular business in order to assure that the sale of Lottery products will be ancillary to the applicant's regular business;

 

7)         The level of anticipated or projected sales from the general area in which the applicant's business is located, taking into consideration the demographics of the neighborhood or locality, the proximity of the location to population centers and the average sales for other comparable Lottery retailers;

 

8)         The character of the applicant and the applicant's reputation for honesty and integrity in the community;

 

9)         The veracity of the information supplied in the license application;

 

10)         The merchandising skills and business experience of the applicant, including the tenure of applicant's business at the proposed location;

 

11)         Any information relating to these listed factors that the applicant provides to the Department's representative at the time of the site visit or at the time of submission of the application.

 

b)         The Director will make available application forms for application for licensing as an Agent.  Each license application shall be accompanied by a non-refundable $100 application fee. Each application for renewal of a Lottery license shall be accompanied by a renewal fee of $50. The application and fee shall be mailed or delivered to the address provided on the license application.

 

c)         The license fee described in subsection (b) may be waived by the Department if the period of the license does not exceed 30 days and no new background checks are required for the applicants.

 

d)        Each Lottery Agent granted a license under this Section must pay a fee of $12 per week as partial reimbursement for communications charges incurred by the Department in providing access to the Department's central gaming system. [20 ILCS 1605/10.2]

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.30  Special Licenses

 

a)         The Director may issue special licenses from time to time for the sale of Lottery products at public events of short-term duration and limited geographic scope. Examples of these events include, but are not limited to, State and county fairs, ethnic festivals and street fairs.  The Director may also issue special licenses to undertake pilot Lottery game ticket sales in order to evaluate the desirability and long term viability of the location and nature of Lottery game ticket sales or the person being granted the special license before that person is granted a traditional license.  Subject to the provisions of subsection (c), a special license shall entitle the holder to conduct sales of instant tickets only for the term of the special license and on the licensed premises.  The term of the special license shall be determined by the duration of the event or a pilot program.

 

b)         Factors that shall be considered by the Director in determining whether to license the sale of Lottery products during the course of a public event, or otherwise under a special license, shall include, but are not limited to:

 

1)         The anticipated public perception of the event or licensee as an appropriate vehicle for marketing of Lottery products;

 

2)         The term and expected attendance at the event, or traffic at the licensee's location, as a measure of anticipated sales; and

 

3)         Sensitivity of the licensee to the preservation of the integrity of the Lottery and its products, including the licensee's conduct of similar activities or events, if any, in a responsible manner.

 

c)         Any person may apply for a special license.  Applications for special licenses will be subject to the discretionary review of the Director as provided in subsections (a) and (b).  In granting on-line status, the Director shall additionally consider the cost of installation and availability of equipment balanced against the anticipated volume of sales of Lottery products.

 

d)         Agents holding special licenses are subject to the same responsibilities and restrictions as regular Agents as set forth in this Part.  However, the Director may, in the Director's discretion, temporarily waive a particular condition of licensing in order to carry out the purposes of this Section.  Factors the Director will consider include, but is not limited to: the length of the special license; necessity for additional background checks; and type of event.

 

e)         If the Director determines Lottery game tickets should be sold at a public event, and no application for special license is received for that event, the Director may assign personnel of the Department or of the Private Manager, as may be appropriate, to sell tickets to the public at the event.

 

f)         The Director may issue special licenses to veterans' service organizations permitting the organizations to sell the specialty tickets authorized by Section 21.6 of the Lottery Law on a year-round basis and with no requirement to sell other Lottery products.  No application or renewal fee shall be charged for this special class of license, and the licensees shall not be required to redeem winning tickets.  Bonuses and commissions earned by the veterans' service organizations shall be as specified in Section 10.8 of the Act. 

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.40  License Revocation Without Prior Notice

 

a)         Pursuant to Section 10.1 of the Lottery Law, the Director must act to assure that no person whom the Lottery Law declares to be ineligible for a license is granted a license, and that no Agent who becomes ineligible under the Lottery Law is allowed to remain as an Agent. 

 

1)         The Director may revoke or suspend a license without notice or prior hearing when the Agent has:

 

A)        violated any of the provisions of the Lottery Law or this Part;

 

B)        failed to meet or maintain the eligibility requirements for licensing as provided in the Lottery Law and this Part, and the conditions of licensing set forth in Section 1770.60;

 

C)        been found guilty of fraud, deceit, misrepresentation or other conduct prejudicial to public confidence in the Lottery, including misrepresentation or failure to disclose a material fact on its application for the sale of Lottery game tickets;

 

D)        been convicted of a felony, reasonably related to the responsibilities of selling Lottery products, in any jurisdiction, unless the requirements of Section 10.1 of the Act have been met;

 

E)        in contravention of the agent's fiduciary duty:

 

i)          commingled and has failed to segregate Lottery funds as a "trust fund" as required by the Lottery Law;

 

ii)         failed to surrender Lottery funds and/or unsold instant tickets upon demand by the Department or its authorized agent;

 

iii)        carried an accounts receivable balance in excess of $500 for more than 90 days; or

 

iv)        failed to post a bond or security deposit as required by the Director;

 

F)         failed to take reasonable security precautions with regard to the handling of Lottery game tickets and related materials;

 

G)        untimely offered new Lottery products for sale, altogether ceased to offer Lottery products for sale, or changed business ownership, (see Section 1770.80(d)), with no prior notice to the Department by the seller or buyer;

 

H)        demonstrated, based on information made available to the Director after the Agent was licensed, that the Agent's character and general fitness are such that participation as an Agent is inconsistent with the public interest, convenience and necessity;

 

I)         demonstrated, based on information made available to the Director after the Agent was licensed, that the Agent or an employee has engaged in discrimination and harassment inconsistent with the public interest and State and federal law;

 

J)         demonstrated insufficient financial stability, integrity and responsibility to conduct Lottery activities;

 

K)        demonstrated insufficient business ability and experience to create and maintain successful Lottery activities;

 

L)        filed, or had filed against it, a proceeding for bankruptcy or has ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the payment of any debt;

 

M)       been served with a complaint or other notice filed with any public body regarding a payment of any tax or child support required under any law in any jurisdiction, when the Agent has been in breach for one or more years; or

 

N)        currently or previously been a defendant in litigation involving business practices that would call into question suitability to be licensed.

 

2)         The Director may revoke or suspend a license without notice or prior hearing when the Agent, or an employee of the Agent responsible for Lottery game ticket sales, has:

 

A)        engaged in bookmaking or other forms of illegal gambling, theft or fraud in any jurisdiction; or

 

B)        sold a Lottery ticket to a person under the age of 18 or permitted any person under the age of 18 years to use a Lottery terminal or application.

 

3)         The Director will assess a fine of no more than $5,000 if a licensee has violated any provision established under this subsection (a).

 

b)         In the event the Director revokes or suspends a license without notice and an opportunity for a prior hearing, the Director shall, by service of appropriate notice pursuant to 11 Ill. Adm. Code 1700.30 and this Part, afford the person whose license has been revoked an opportunity for a hearing within 30 days after the revocation order has been issued.  As a result of any such hearing, the Director may confirm the action revoking the license or may order the restoration of the license.  In determining whether to confirm the action revoking the license or order the restoration of the license, the Director shall take the following factors into consideration, if applicable:

 

1)         The Agent's history of past offenses;

 

2)         Whether the Agent's course of conduct constituted a threat to the safety of the Agent, Department officials, or others;

 

3)         Any evidence of the Agent's ignorance of a material fact that led to his or her improper or unlawful conduct;

 

4)         The degree of cooperation with Department officials exhibited by the Agent;

 

5)         The degree to which the Agent profited economically as a result of the Agent's conduct;

 

6)         Any other evidence offered and noted by the Administrative Law Judge as demonstrating factors in mitigation or factors in aggravation of the relief sought in the complaint.

 

c)         Upon revocation of the Agent's license, the Department will arrange, and the Agent shall participate in, a meeting with the Department's representative for the purpose of rendering the Agent's final Lottery accounting. At that meeting, the Agent shall surrender the license, unsold Lottery game tickets and other Lottery equipment and materials supplied to the Agent by the Department or its vendors.

 

d)         Nothing in this Section shall be construed to prevent the immediate revocation of the Agent's license upon the Agent's request and the Department's approval, or upon the effective date of a transfer for which the Department has received written documentation (see Section 1770.80).  The right to a hearing shall not apply in these circumstances.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.50  License Revocation, Suspension, Non-Renewal or Denial With Prior Notice

 

The Director may deny, suspend, not renew or revoke an Agent's license with prior notice and opportunity for hearing for one or more of the following causes:

 

a)         Violation of any of the provisions of the Lottery Law or this Part;

 

b)         Failure to meet or maintain the eligibility requirements for licensing as provided in the Lottery Law and this Part, and the Conditions of Licensing set forth in Section 1770.60;

 

c)         Fraud, deceit, misrepresentation or other conduct prejudicial to public confidence in the Lottery;

 

d)         The misrepresentation of, or failure to disclose, a material fact to the Board or the Director on any report, record, application, form or questionnaire required to be submitted to the Board or the Director, including, but not limited to, the misrepresentation of or failure to disclose a criminal record, taxpayer status with the State of Illinois, or relevant information bearing on the financial status of the applicant;

 

e)         Failure to promptly produce for inspection, by a member of the Board, the Director, or their authorized representatives, including law enforcement personnel, any book, record, account, document or item required by the Lottery Law or this Part;

 

f)         Refusal to permit access to members of the Board, the Director, or their authorized representatives, including law enforcement personnel, to any place where a licensed Lottery activity is conducted;

 

g)         Failure to file any returns or reports or to keep any records or reports required by the Director under the Lottery Law or this Part;

 

h)         Failure to account for Lottery game tickets received or the proceeds from the sale of Lottery game tickets, and to post a bond or a letter of credit or security deposit as required by the Director;

 

i)          Failure to maintain sales levels established by Department directive;

 

j)          Failure to comply with the instructions or directives of the Director as to security procedures for the handling of Lottery game tickets or the conduct of any Lottery game;

 

k)         Knowingly causing, aiding, abetting or conspiring with any other person to violate the Lottery Law or this Part;

 

l)          Making a misrepresentation of fact to the purchaser, or prospective purchaser, of a Lottery game ticket, or to the general public, with respect to the conduct of any Lottery game;

 

m)        Upon a determination by the Director that the number of Lottery retailers in the Agent's area of operation exceeds the number that can be efficiently supported by the Department's budget or personnel, or the public convenience in obtaining Lottery products is sufficiently served by other Lottery retailers, considering the total volume of sales in that area;

 

n)         Failure to pay the Department any obligation when the obligation becomes due;

 

o)         Upon a determination by the Director that the Agent has become insolvent or unable or unwilling to pay debts;

 

p)         Failure to display Lottery point-of-sale material in a manner that can be readily seen by the public, or make hand-out materials readily available to the public;

 

q)         Upon any change of name, change of ownership, change of business organization, or change of business location;

 

r)          Selling a Lottery game ticket to, or giving a ticket or paying a prize to, a person under the age of 18. (Section 15 of the Lottery Law)  For the purposes of this Section, an action by an employee of the Agent shall constitute an action by the sales Agent.

 

s)         The person's place of business caters to or is frequented predominantly by persons under 18 years of age, but excluding family-oriented businesses;

 

t)          The nature of the person's business constitutes a threat to the health or safety of prospective lottery players;

 

u)         The nature of the person's business is not consonant with the probity of the Department;

 

v)         The person has an unsatisfactory prior history, record, or performance with the Lottery;

 

w)        The person's place of business represents a substantial risk for the collection, deposit, preservation, accounting, or safeguarding of the Department’s trust accounts, irrespective of the bond or surety provided by the person;

 

x)         The person has been suspended permanently from a federal or state licensing or authorization program and that person has exhausted all administrative remedies pursuant to the respective agency's regulations or procedures; or

 

y)         The proposed retailer's licensed location or locations do not comply with the requirements of the Americans with Disabilities Act of 1990 (42 U.S.C. 12101) Accessibility Guidelines.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.60  Conditions of Licensing

 

An Agent has a continuing duty to maintain suitability for licensure.  A license does not create a property right but is a revocable privilege contingent upon continuing suitability for licensure.  Licensees are subject to the following conditions of licensing:

 

a)         Licenses issued by the Department shall be issued to a person, as defined by Section 1770.10, for a specified point of sale, as defined by Section 1770.10, on the condition that the Agent maintains eligibility under the applicable criteria under which the license was granted by the Director (see Section 1770.20);

 

b)         Agents shall, at all times during the term of their license, comply with the Lottery Law and any rules or instructions of the Director concerning the security of Lottery equipment, Lottery game tickets or money and the proper conduct of Lottery promotions;

 

c)         Each Agent shall make available for sale to the public, during its normal business hours, the Lottery products that the Agent has been licensed to sell;

 

d)         No license issued pursuant to the Lottery Law shall be changed, assigned or pledged as collateral.  A transfer that occurs after the Director has issued a license shall automatically terminate the license;

 

e)         Lottery licenses or other point of sale materials shall be displayed in a conspicuous place on the business premises where the Lottery game tickets are licensed to be sold.  The Department will make the odds and written play instructions available to players by publishing in the Illinois Register and on its public website (https://www.illinoislottery.com) or on request from the Department;

 

f)         Agents shall actively promote the sale of Lottery game tickets;

 

g)         Agents shall maintain authorized displays, drop boxes, equipment and properly display other promotional materials used in conjunction with sales in accordance with instructions issued by the Department; 

 

h)         Each Agent will be held responsible for all instant game tickets accepted from the Department or its vendors and Lottery game tickets generated by the Agent from the Department's central gaming system.  All receipts from sales, less commissions earned and prizes properly paid to winners, shall be paid to the Department by the 90-day settlement deadlines.  Any and all Lottery game tickets not returned by the 90-day settlement deadlines, absent any fault on the part of the Lottery sales representative, shall be considered to have been purchased by the Agent;

 

i)          Each Agent shall maintain current and accurate records of all operations in conjunction with the sale of Lottery game tickets and make these records available to representatives of the Department and the Auditor General of Illinois upon request, during normal business hours;

 

j)          No Lottery game ticket may be sold or shared at a price greater or less than that established by the Department's game rules, provided, the Department may authorize free ticket or discounted ticket promotions in support of marketing activities.  No Agent may add a service charge, handling fee or other cost to the established price of a Lottery game ticket.  No fee may be charged to redeem valid winning Lottery game tickets;

 

k)         No Lottery Agent license shall be issued to any person to engage in business exclusively as a Lottery Agent;

 

l)          No person other than a licensed Agent shall sell Lottery game tickets;

 

m)        Agents shall sell Lottery game tickets on a face-to-face or authorized dispensing machine basis only at the point of sale designated in the license, and shall not conduct sales to off-premises customers by telephone, mail, parcel delivery service, or through an agent-sponsored vehicle such as a club, players' association, or similar entity;

 

n)         No Lottery game tickets shall be sold or given to a person under the age of 18 years, or any prize paid to a person under the age of 18 (Section 15 of the Act);

 

o)         Each Agent shall hold the Department and the State of Illinois harmless with respect to any liability arising in connection with the Agent's Lottery game ticket sales activities;

 

p)         Each Agent shall immediately report to the Department the loss or theft of any Lottery game tickets consigned to the Agent, with the ticket identification numbers;

 

q)         Each Agent shall redeem all winning Lottery game tickets with a face value up to $599 or less, so long as the Agent has adequate ticket sales funds on hand.  No Agent shall redeem a winning ticket with a face value equal to or greater than $600, but shall instead follow established prize claim procedures (see Section 1770.190);

 

r)          No license shall be granted to any applicant whose prior Lottery license has been revoked less than two years prior to the date of the current application;

 

s)         No Agent shall sell Lottery game tickets or shares issued by any governmental entity, foreign or domestic, other than tickets and shares for games operated by the Department.  No Agent shall sell any other type of gambling or gaming tickets or chances other than those for which the retailer is specifically licensed by a department, board or commission of the State of Illinois or a unit of local government;

 

t)          All Lottery proceeds are funds of the State of Illinois, must be segregated from other business or personal funds, must be held in trust on behalf of the Illinois Lottery, and the agent's fiduciary duty, under penalty of law, must maintain a separate bank account exclusively for deposit and transfer of weekly Lottery fund settlements by means of an Electronic Fund Transfer system.  The account must be designated on the bank's records as "Lottery Trust Fund Account";

 

u)         Agents are responsible for resolving net proceed discrepancies on a billing statement (i.e., differences between actual money collected and the amount shown on the billing statement);

 

v)         Agents shall comply with all prescribed State and federal requirements for tax withholding, recording and reporting, including, without limitation, those requirements relating to the transfer, from the Agents to the tax authorities, of funds withheld from player winnings;

 

w)        Notwithstanding subsection (u), any discrepancy regarding settlement of accounts will be resolved by the Director as deemed appropriate;

 

x)         No person shall engage in Lottery game ticket discounting.  Any person found to have engaged in the practice of discounting shall be fined, as determined by the Director:

 

1)         For prizes of less than $1,000, not more than $250;

 

2)         For prizes of $1,000 or more, but less than $5,000, more than $250 but not more than $500; and

 

3)         For prizes of $5,000 or more, no less than $1,000; and

 

y)         An Agent shall immediately notify the Department of any proposed or effective change regarding the makeup of the owners, directors, officers, partners, or key employees of the Agent.

 

z)         An Agent must maintain with the Department certified copies of the applicant's charter, articles or certificate of incorporation, certificate of formation, certificate of statutory (or business) trust, certificate of limited partnership, statement of partnership, and any other documents which constitute or explain the legal organization of the applicant plus a certificate of good standing that has been issued by the Secretary of State for the state in which the applicant was created and that is dated within 30 days after the date of the licensing application.

 

aa)       A Lottery retailer shall not extend credit or any public assistance benefits on the sales of lottery tickets.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.70  License to be Displayed

 

a)         Every Agent shall prominently display the Agent's license or a copy of the license in an area visible to the general public.

 

b)         Each Agent shall maintain and display all promotional material in a prominent location, conveniently visible to the public.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.80  Change of Name, Transfer, or Form of Business Organization

 

a)         Notification of Change

 

1)         An Agent shall report to the Director, at least 30 days prior to the effective date of the change, any:

 

A)        Change of name;

 

B)        Change of business organization; or

 

C)        Transfer, except to the extent the change occurs as a result of the transfer of interest in publicly traded securities, in which case the reporting must occur within 30 days after the transfer or at the time that any reporting of the ownership interest must be made to the federal Securities and Exchange Commission, whichever is earlier. 

 

2)         Reporting may be accomplished by completing a departmental form provided for that purpose or by mailing notice of the proposed change by certified mail, return receipt requested, postmarked on or before the 30^th day prior to the effective date of the change and addressed to the Department as follows:

 

Illinois Lottery

P.O. Box 19081

Springfield, Illinois  62794-9081

 

b)         Each notification of change of name, ownership or form of business organization of a licensee communicated to the Director shall include the following information:

 

1)         The name, address and Agent identification number of the Agent;

 

2)         The name of the business as it appears on the license application;

 

3)         The proposed new name of the business, if applicable;

 

4)         The current form of business organization;

 

5)         The proposed form of business organization, if applicable;

 

6)         The current owners, managers or shareholders of the business, as is indicated on the license application;

 

7)         The proposed transfer, including the names and addresses of the proposed new owners, managers or shareholders, the percentage of proposed transfer of equity, management control, legal ownership, shares or stock; and

 

8)         The anticipated date of the proposed change in name, business organization or ownership.

 

c)         The Director shall review the changes, considering current licensing standards, as provided in the Lottery Law and this Part.

 

d)         The Director, upon approval of a change in name or a change of business organization that does not also involve a transfer, shall issue a replacement license reflecting the new name or business structure.  The replacement license shall have an expiration date no later than the expiration date provided in the previous license.

 

e)         Except as provided in this subsection (e), any change of business ownership shall necessitate termination of the existing licensing agreement, as of the effective date of the change of ownership.  The new owner must submit an application and fee as provided in Section 1770.20.  If the existing Agent has not provided the Department with required written notification of the change, the applicant may be required to furnish documentation evidencing the change in ownership, such as a sales contract.  The current license number may be assigned to the new owner of a location in the following circumstances:

 

1)         If a chain account location previously operated by a franchisee continues operation under the franchisor or chain corporate management, and upon corporate guarantee and assumption of the financial obligations of the licensee;

 

2)         If transfer of the location is assumed by an immediate family member of the original Agent (parent, sibling, child or grandparent) and the following conditions are met:

 

A)        The location is in good standing with the Lottery;

 

B)        The family member assuming ownership was involved in the day-to-day operation of the business prior to transfer; and

 

C)        The family member assuming transfer is qualified to hold a Lottery license.

 

f)         Incapacity, Death, Receivership, Bankruptcy or Assignment

 

1)         In the event of the proven incapacity, death, receivership, bankruptcy or assignment for the benefit of creditors of any licensed Agent, and upon approval of the Director, the license may continue under a court-approved or court-confirmed guardian, executor or administrator, receiver or trustee for the benefit of creditors, who may continue to operate the business designated under the license, subject to the provisions of the Lottery Law and this Part, if the person to whom the license is transferred is otherwise qualified to hold a license.

 

2)         The license, following the transfer, shall be void in the event the license transferee ceases to hold the court-appointed or court-confirmed position.

 

3)         The Director may condition the transfer of any license under this subsection (f)(3) upon the posting of a bond, or a guaranteed payment in the form of a cashier's check or money order, on such terms and under such conditions as the Director may deem necessary to protect the financial interests of the State, provided that any such bond shall reflect the reasonably anticipated risk of transfer.

 

g)         Every change in the point of sale designated in the license shall be reported to the Director no less than 30 days prior to the effective date of the change.  If the change results from severe damage to or destruction of the point of sale specified in the license, as a result of fire, natural disaster or other cause beyond the control of the Agent, the Agent shall promptly notify the Director of that destruction or damage to the business premises and the consequent change of location, but in no case shall the notification be made later than 3 days after the damage to or destruction of the premises or change of location. Upon notification, the Director shall consider the factors set forth in Section 1770.20 to determine whether the Agent should be licensed to sell Lottery game tickets at the new location.  Upon the Director's approval, a replacement license will be issued, with an expiration date no later than that of the Agent's original license.

 

h)         If an Agent fails to notify the Director, in writing, of a transfer before the change occurs, all owners, officers or other responsible persons named in the application for an Agent's license shall remain liable to the Director for all Lottery game tickets and proceeds held by the Agent.  This liability extends to:

 

1)         Tickets issued to, or generated by, the Agent; and

 

2)         All proceeds from the sale of the tickets (less prizes paid and/or commissions retained) to the date written notice is received by the Director and a final settlement is conducted, or the date the Agent's license is revoked or otherwise terminated by the Director, whichever occurs first.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.90  Delinquent Financial Obligations

 

a)         It is the obligation of each Agent to remain current on the Agent's financial obligations to the Department.  Lottery accounts are due and owing, in full, each Wednesday, unless the Agent has been notified by the Department of an alternate settlement day due to a bank holiday or other business disruption.  Accounts not settled on the designated settlement day shall be deemed delinquent. 

 

b)         The Department will apply sanctions with respect to delinquent Agent accounts, according to the following schedule of sanctions:

 

1)         First delinquency:  In the event an Agent is delinquent in settlement of that Agent's Lottery account, and the delinquency is the first within the past 30 days, including the month of delinquency, the Agent will transfer the funds to the Department's account by 4:00 p.m. the next business day, if the delinquency was reported before noon (12:00 p.m.), or by 10:00 a.m. the second business day if the delinquency was reported after noon. If the delinquent settlement amount is paid by the extended settlement deadline, the Agent will be charged with one delinquency but will receive no further sanction.  However, if the settlement amount is not paid by the extended settlement deadline, the delinquent Agent's terminal and any related terminals will be immediately deactivated and the account will be referred to the Lottery's accounts receivable staff.  The terminal or related terminals will not be reactivated until the follow-up report is received and reviewed by the Department's Chief Financial Officer or designee;

 

2)         Second delinquency:  In the event an Agent is delinquent in settlement of that Agent's Lottery account, and the delinquency is the second one in the past 90 days, including the month of the delinquency, the delinquent Agent's terminal or related terminals will be immediately deactivated and the Agent will be charged with a second delinquency.  When the delinquent settlement amount is deposited to an account at a branch of the Department's chosen bank or wire transferred to the Department's account, the terminal or related terminals will be reactivated unless the second incident is within one month after the first, or the payment was made after the extended payment deadline.  If this occurs, the terminal and any related terminals will be reactivated only after review and approval by the Department's Chief Financial Officer or designee.  In determining whether to reactivate a terminal or related terminals, Department staff may consider the Agent's prior history, general financial status as disclosed by a current credit report, ability to provide a security deposit, letter of credit or bond to protect against future delinquencies, and other relevant financial and administrative information as may be available to or requested by the Department;

 

3)         Third delinquency:  In the event an Agent is delinquent in settlement of that Agent's Lottery account or any extended payment deadline, and the delinquency is the third one in the past 12 months, including the month of the delinquency, the delinquent Agent's terminal and any related terminals will be immediately deactivated and the Agent will be charged with a third and final delinquency, at which point the Department will revoke an Agent's license.

 

c)         The Department may suspend or revoke an Agent's license after review of a delinquency, at any stage, if the Director determines that suspension or termination is in the best interest of the Lottery.  Prior to making a determination to suspend or revoke, the Department will conduct an evaluation of the circumstances surrounding delinquency, including a review of a delinquent agent's past delinquency record, in order to differentiate between incidental agent management error and lack of financial stability or responsibility.

 

d)         It is the responsibility of the Agent to ensure that all payments due to the Department are properly prepared.  Failure to properly prepare and tender any payment due to the Department shall not be an excuse for failure to fulfill obligations due to the Department.

 

e)         The deactivation or removal of an on-line terminal, or the suspension or revocation of the license of an Agent, shall not relieve the Agent of liability for any obligation due to the Department.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.100  Bonding of Agents

 

The Department may require a surety bond, letter of credit, or security deposit in the form of a cashier's check or money order from any Agent, at the Agent's expense, to avoid any monetary loss to the State because of the Agent's activities in the sale of Lottery game tickets.  The surety bond, letter of credit or security deposit shall not exceed twice the average lottery ticket sales of the retailer for the period within which the Agent is required to remit lottery funds to the Department. For the first 90 days of sales of a new lottery retailer, the amount of the bond may not exceed twice the average estimated lottery ticket sales for the period within which the Agent is required to remit lottery funds to the Department. Most lottery bonds range between $5,000 and $15,000. Standard market rates range between 1%-4% of the total amount or otherwise between $100 and $400.  The Department may require a financial statement revealing the financial condition of any person or organization seeking to become, or continue as, an Agent.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.110  License Expiration and Renewal

 

All Agent licenses issued by the Department pursuant to the Lottery Law shall be valid for a period not to exceed 2 years after issuance unless sooner revoked, cancelled or suspended.  The license may be terminated before the expiration date by the Director in accordance with this Part.  To be eligible for license renewal, an Agent must submit an updated application package or renewal form, as prescribed by the Department, along with a check or money order in the amount of $50.  If no check or money order is included with a renewing Agent's or licensee's application, the Department reserves the right to withdraw the sum of $50 from the Agent's or licensee's account.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.120  Agent Financial Adjustments

 

a)         Whenever instant tickets are lost, stolen or destroyed while in the possession of an Agent, the Department may provide for full or partial credit against the settlement due the Department from an Agent for lost or destroyed non-winning tickets, mid-tier tickets authorized prior to the loss, and mid-tier tickets properly reported as lost or destroyed and therefore unable to be claimed or redeemed.  Each claim for credit shall be accompanied by an affidavit, an incident report, and a police or fire report, as appropriate, and/or other supplementary documentation as the Director may deem necessary to properly validate the loss.

 

b)         Whenever an Agent pays a prize with a claimed value in excess of the amount permitted by Section 1770.190(b) and seeks reimbursement for the full amount paid, the Agent must submit:

 

1)         A written explanation of the circumstances surrounding the prize payment;

 

2)         The winning ticket or, if the Lottery game ticket has been destroyed, a written explanation of the circumstances surrounding the ticket's destruction;

 

3)         A claim form completed in the Agent's name and taxpayer identification number; and

 

4)         Any other documentation requested by the Department's Chief Financial Officer and General Counsel, or their designees.

 

c)         The Department's Chief Financial Officer and General Counsel, or their designees, will review the documentation provided in conjunction with Department records and, if satisfied that an honest error occurred, such an error is not likely to occur again, and that the original holder of the winning ticket was paid the full amount due for the winning ticket, may jointly recommend that the Agent be reimbursed up to the full prize amount paid.  If necessary to ensure that no other person has legal claim to the prize, the Department's Chief Financial Officer and General Counsel, or their designees, may withhold reimbursement to the Agent until the pertinent prize claim period has expired.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.130  Lost, Stolen, Altered, and Damaged Winning Tickets and other Discrepancies

 

a)         Except as otherwise provided in subsections (b) and (c), or Section 1770.145 or 1770.160(d), no claim for a game prize with respect to any Lottery game shall be honored, and no prize shall be paid with respect to any such claim, unless the claim is accompanied by a valid winning ticket.  Each winning ticket must pass validation and security tests as described in the rules for the game being played.

 

b)         Whenever a physical winning ticket is stolen, lost or destroyed after the ticket has been placed in the hands of an Agent or the Department, the Department may provide for payment of the prize to the winner.

 

1)         If the purported winner furnishes a copy of the claim form and computer-generated claim ticket, and the claim ticket information matches the Department's validation records, the Chief Financial Officer and General Counsel of the Department, or their designees, may jointly authorize payment of the prize. A written statement from the Agent or the Department's prize center confirming that the winning ticket was received may be required prior to payment authorization. 

 

2)         In the event a claim has been entered into the computer system but the claimant is unable to produce a claim receipt or, when appropriate, claim ticket, no action will be taken with respect to the claim until the claim period for the game has expired. If the ticket and original claim form and claimant's copy of the claim form remain lost at the conclusion of the claim period for the game in question and no other person has made a claim to the prize, the Department's Chief Financial Officer and General Counsel, or their designees, may jointly authorize payment to the person who originally made the claim.

 

c)         If multiple claims are filed with respect to the same prize, any claimant to the prize may request an administrative hearing as provided in the Department's hearing rules (11 Ill. Adm. Code 1700) and the claims shall be heard in a consolidated hearing during which each claimant shall be permitted, in turn, to present evidence in support of the claim.  No discovery of Department records relating to ticket procurement or ticket claims shall be allowed.  At the conclusion of the offering of all proofs by all claimants for a prize, the Department shall offer evidence as may be available from Department records that will tend to establish the Lottery retailer at which the actual winning ticket was sold, together with the ticket identification numbers, and the date and time of sale.  The Department's motion for dismissal prior to offering of proofs, accompanied by the Department's certification that no computer claim record exists with respect to a purported claim, shall constitute an absolute defense to any claim for a prize.

 

d)         Lost or Stolen Mail-in Claims

 

1)         Whenever a player submits a claim during the valid claim period for a game alleging that a properly purchased Lottery game ticket was lost or stolen after being deposited in the U.S. Mail, if one year has elapsed since the date of the on-line drawing for which the ticket was purchased or one year has elapsed since the announced end of game for the instant game in question, and no prize has been paid to or claimed by another person, the Director may declare the ticket to be a valid winning ticket and authorize payment of the associated prize to the claimant provided that the following conditions are met:

 

A)        The claimant furnishes a copy of the ticket or other satisfactory evidence as to the date, time and location of the ticket purchase for on-line games; the game, location of purchase, and approximate date of purchase for instant tickets; or other relevant information as could only be known by the original purchaser of the ticket;

 

B)        The claimant establishes to the satisfaction of the Director that the claimant took reasonable steps with respect to the security of the ticket and actually deposited the ticket in the U.S. Mail properly addressed to the Illinois Lottery, and that the ticket was not lost or stolen due to the player's negligence or carelessness;

 

C)        Only one claimant meets the criteria outlined in subsections (d)(1)(A) and (B); and

 

D)        The prize claimed is not a Lotto game grand prize, Lucky Day Lotto game first prize, Mega Millions or Powerball grand prize or second prize, or instant game prize in excess of $10,000.

 

2)         Evidence regarding the date, time and place of purchase will not be considered satisfactory evidence of ticket purchase if that information has been generally released to the public by the Department.

 

e)         Erroneous or Cancelled Tickets

 

1)         The Department is not responsible for paying any winning Lottery game tickets resulting from any system or terminal malfunction or from human error.  Lottery game tickets misprinted or miscut due to machine error or any malfunction or other type of error must be returned to the Department prior to the draw, and the Lottery Agent's account will be credited. To receive credit, the Agent must notify the Department and send a copy of the ticket if unable to get the physical ticket sent timely in the mail.

 

2)         If a ticket that has been sold to the public is determined by the Director to be misprinted or miscut due to machine or software error (as determined by the Department's internal procedures), the Department will reimburse the ticket holder for the cost of the ticket.  However, if it is determined to be erroneously issued due to a malfunction or cancellation or other type of human error, the Agent shall reimburse the ticket holder for the cost of the ticket.  Players have the sole responsibility for checking the data printed on their tickets, including numbers played and drawings entered.  Misprinted, miscut, and erroneous Lottery game tickets will not be eligible for any prize.

 

3)         For erroneous misprinted tickets received by an Agent, the Director may require Agents to comply with any directives the Director deems necessary.

 

f)         Tickets Altered, Mutilated, Changed, Effaced, Defaced, or Tampered With.  Tickets that are altered, mutilated, changed, effaced, defaced or tampered with in any manner, and/or that fail to pass the validation tests and security requirements of the Lottery Law and this Part are void.  These tickets will not be eligible for any prize.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.140  Sales by Department Directly

 

a)         The Department may engage in direct sales of tickets at any selling points it establishes within the State.  The Department may also sell its products by means of telephone, electronic transmission, parcel delivery services and, to the extent permitted by federal statutes, through the U.S. Mail and, subject to the provisions of Section 1770.145, via the internet.

 

b)         In any case in which the Department is engaged in the selling of tickets as a general promotion, nothing in this Part shall be construed to prohibit the Department from compensating Agents who may be economically adversely affected by that promotion.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.145  Internet Program (iLottery)

 

a)         The Department shall offer for sale via the internet only those games authorized by the Lottery Law. 

 

b)         Players who wish to purchase Lottery game tickets or subscriptions via the internet must register for an internet Lottery player account to ensure that they are eligible to purchase Lottery game tickets or subscriptions, claim prizes or otherwise receive winnings. 

 

1)         Players will be required to provide to the Department, the Private Manager, or any other third parties responsible for administering internet Lottery player accounts information including, but not limited to, the following:

 

A)        Legal name;

 

B)        Valid street address (not a P.O. Box), which must be the internet player's legal residence in the State of Illinois;

 

C)        Date of birth;

 

D)        Social Security Number;

 

E)        Debit card, credit card or bank account information; and

 

F)         Email address.

 

2)         The Department, the Private Manager or any third parties engaged by the Lottery or the Private Manager may request additional information from internet players to verify eligibility to establish a Lottery internet account, make purchases of Lottery game tickets or subscriptions, claim prizes or otherwise receive winnings.

 

c)         The Department's central gaming system shall capture the internet protocol (IP) address of the computer used for any internet purchase of Illinois Lottery game tickets or shares and verify the internet player's internet service provider (ISP) in order to determine with reasonable certainty that the starting point for the purchase transaction is within the geographical boundaries of the State of Illinois. 

 

d)         The Department, the Private Manager and any third parties engaged by the Lottery or the Private Manager may utilize any combination of commercially available or custom identity verification software, geolocation software, geofiltering software, public databases, Department databases, and financial entity "know your customer" (KYC) processes to confirm the accuracy of the information provided by internet players, as required by subsections (b) and (c), in order to verify information, including but not limited to the following:

 

1)         The player is at least 18 years old for all Lottery games;

 

2)         The player is not an employee of the Department or the Private Manager of the Illinois Lottery, or any other person prohibited from claiming prizes or otherwise receiving winnings pursuant to the Lottery Law or this Part;

 

3)         The internet player has a valid street address (not a P.O. Box), which must be the internet's player's legal residence in the State of Illinois;

 

4)         The computer being utilized for the purchase of Lottery game tickets or subscription plans via the internet is located within the State of Illinois to adhere to the statutory requirement that the sale of Lottery game tickets on the internet is limited to transactions that are initiated and received or otherwise made exclusively within the State of Illinois [20 ILCS 1605/7.15].  If the Department is unable to confirm with reasonable certainty the location of the computer initiating an internet purchase transaction for any reason, including, without limitation, the use of certain ISPs, dial-up connections, cellular gateways, regional and international proxies and other internet communication methodologies that do not allow computer location confirmation, the transaction will not be processed;

 

5)         The internet player is an authorized user of the financial instrument identified for payment of internet purchases; and

 

6)         The confirming email address is valid and associated with the registered internet Lottery player.

 

e)         Upon verification of the player's age, identity, eligibility and location, the Private Manager will establish an internet Lottery player account protected by a password of the internet player's choosing.  All future purchases of Lottery game tickets or subscription plans via the internet will be processed through this account.  Ticket purchases made through the account will be limited to its currently available fund balance and will be monitored against maximum transaction limits established by the Department or lower limits established by the internet player, if any.  The Department reserves the right to suspend an account when the maximum transaction limit is reached.  The Department may reactivate a suspended account at the start of the next periodic monitoring cycle.

 

f)         Validated prizes up to $599 won by an internet player as a result of an internet purchase will be posted automatically to the player's Lottery internet account, with no further action required by the internet player.  Prize claims in excess of $599 must be submitted to the Department and paid in accordance with the game's claim process. 

 

g)         An internet player may access funds in that player's Lottery internet account by transferring funds between the account and a personal bank account or by utilizing the debit card the player received upon establishing an internet account.  Players may also request that their Lottery internet account balance be paid to them by check.

 

h)         The Department shall market the internet program to infrequent Lottery players through its Private Manager. [20 ILCS 1605/7.12]  Marketing will follow, but is not limited to, the following conditions:

 

1)         not be directed at any gender, race, religion, sexual orientation, or socioeconomic group;

 

2)         inform the public of the age restrictions to purchase Lottery products where reasonable and appropriate;

 

3)         clearly state the odds of winning; and

 

4)         include a "play responsibly" message.

 

i)          The voluntary self-exclusion program described in Section 1770.240 shall also apply to purchases of Illinois Lottery game tickets via the internet.

 

j)          The terms and conditions of use for the internet Lottery player account shall include a statement to the effect that access to and use of the account is limited to the registered internet Lottery player and that user names and passwords should not be shared.  Internet players shall certify that they are the registered and authorized user of the applicable internet Lottery player account, are 18 years of age or older, and are completing a purchase from a location within the geographical boundaries of the State of Illinois.  In the event a purchase is determined to have been placed by an individual under the age of 18, by someone other than the registered internet Lottery player, from a location outside the State of Illinois, or through any fraudulent or unlawful means, the prize will be forfeited and the funds deposited into the Common School Fund.  If an investigation by Lottery security personnel reveals that the registered internet Lottery player actively participated in the fraudulent or unlawful activity, the internet Lottery player account may be canceled.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.150  Sales, Inspection, Compensation, and Ticket Purchases

 

a)         Except as provided in Sections 1770.140 and 1770.145 or pursuant to special license, Lottery game tickets shall be sold only to purchasers physically present on the premises at the specific location named in the license.

 

b)         All ticket sales shall be final, and no Agent is authorized to accept Lottery game ticket returns except as otherwise provided in this Part or with the specific approval of the Director.

 

c)         Authorized inspectors of the Department may inspect the business premises of any Agent at any time during normal business hours.  The inspections may be made without prior notice to the Agent.

 

d)         An Agent is entitled to a commission for Lottery game tickets the Agent sold, as well as a bonus for winning tickets sold or redeemed by the Agent, at the rate or rates established and approved by the Director.  Agents receive a commission of 5% on ticket sales. Additionally, agents are paid commissions through a 1% cashing bonus on redemption of tickets (including free tickets) and winning ticket sold as provided in this Part.  These rates are subject to policies or the retailer agreement as approved by the Director.

 

e)         The Private Manager, with approval of the Director, may award additional cash bonuses or other incentives from time to time to Agents.  Agents shall be notified of any bonuses or incentives by means of an Agent newsletter or other similar Agent circular distributed by the Private Manager or via electronic messaging through the Agent's Lottery sales terminal.

 

f)         Each Agent shall deposit proceeds from Lottery game ticket sales, minus the commissions and bonuses earned and money paid to winners of prizes (Lottery proceeds), to a Lottery Trust Fund Account in a bank or other financial institution, as required by Section 10.3 of the Lottery Law. 

 

g)         All Lottery game tickets accepted by an Agent remain the property of the Department until the tickets are sold and the proceeds remitted to the Department.  Any unsold tickets not returned to the Department upon demand shall be considered purchased by the Agent and the purchase price of the tickets, less appropriate deductions, shall be immediately due and payable to the Department.  The Agent is responsible for lost, stolen or missing Lottery game tickets not returned, except as provided in Section 1770.120(a).

 

h)         Agents must have with minimum sales volume requirements established by the Department based upon geographic location, economic conditions and other factors that may have an impact on an Agent's ability to increase sales. Agents failing to meet minimum sales volume requirements will be notified and their sales volume monitored. Continued failure to meet minimum sales volume requirements shall result in contract suspension or termination.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.160  Lottery Tickets

 

a)         The Director is authorized to prepare for sale to the public such Lottery game tickets as may be appropriate for implementation of the Lottery games offered, from time to time, by the Department, or to offer Lottery game tickets at no charge to consumers 18 years of age or older as a promotional tool.

 

b)         Each Lottery game ticket shall contain the price of the ticket, the drawing date if appropriate, unique identification validation numbers or ticket symbols, barcode and other information the Director may deem appropriate for security and marketing purposes.  If a Lottery game ticket is being offered at no charge in connection with promotional activities of the Department, the ticket may be stamped with the words "not for sale" or words of similar import.

 

c)         Any unsigned Lottery game tickets issued by the Director is a bearer instrument and shall be treated as such until a name is imprinted or placed upon the rear portion of the ticket in an area designated for "Name".  Once a name is placed on the rear of the ticket in the place designated for that purpose, the person whose name appears in that area shall be the owner of the ticket and shall be entitled to any prize attributable to that ticket, subject to the provisions of subsection (d) and Section 1770.130(f).

 

d)         In the event an otherwise valid Lottery game ticket is submitted as a claim for payment, and the Department is put on notice prior to payment of the claim that ownership of the ticket is disputed by an adverse claimant alleging fraud, theft, loss, conversion or any other misappropriation of the ticket by the claimant of record, the Department may withhold payment of the claim for a period of 10 working days after the day the adverse claim was first communicated to the Department.  If a civil action is initiated on behalf of the claimant or adverse claimant in a circuit court of the State of Illinois, or equivalent court of any sister state within 10 working days after the Department has received the notice of adverse claim, the Department shall continue to withhold payment of the prize, or any part of the prize, to the claimant or adverse claimant until an adjudication of the ownership has been rendered by the court, all statutory appeals have been exhausted and, in the case of a judgment entered by the courts of a sister state, the final order has been registered as a foreign judgment in an Illinois court, and all statutory appeals have been exhausted, whereupon the Department shall honor the claim of the prevailing party.  During the course of any such litigation conducted in the courts of the State of Illinois, the Department may interplead and pay into court the prize or, in the case of an installment prize, such installment or installments as may fall due during the course of litigation.  In the event the Department is not notified by written confirmation received by the Department before close of business on the 10^th working day after receipt of the initial adverse claim by the Department, that a civil lawsuit has been filed as provided in this Section, the Department shall honor the claim as filed by the claimant who has presented the winning ticket, and will proceed to process the claim for payment without further reference to the adverse claim.  If a violation of Illinois criminal law is indicated, the matter shall be referred by the Director to the appropriate law enforcement authorities, and nothing in this Section will be construed to require the Department to take any action or pay any claim pending final disposition of any criminal investigation or proceedings.  No interest shall be payable with respect to prize payments made by the Department, its contractor or other agencies authorized to make these payments by direction of the Department.

 

e)         No claim shall be deemed complete, and no prize shall be awarded with respect to a claim, unless the claimant can and does produce a valid winning Lottery game ticket for the game and prize claimed.  Except as otherwise provided in subsection (d) or Section 1770.130 or, for tickets purchased through a subscription or via the internet, claims not accompanied by a winning ticket will be rejected.  Any claim received by an Agent and unaccompanied by a ticket will be forwarded to the Department.  Upon receipt of any claim, the Department will notify the claimant of the rejection, by certified mail, with notification to be deemed completed if returned undelivered when mailed to the party's last known address with proper postage prepaid.  Notice of rejected claims will be mailed within 10 working days after receipt of the claim by the Department, at its Lottery claims validation unit in the Department offices at 404 North 5^th Street Springfield, Illinois 62702.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.170  Lottery Games

 

a)         The Director may authorize instant ticket games in which winners are determined by matching certain of the numbers, letters, characters, words or symbols as provided by the rules of the game.  Instant game rules may also provide for preliminary and grand prize drawings.  Preliminary drawings will be from those tickets eligible for entry into the preliminary drawing and submitted to the Department in the manner and by the deadline provided by the rules for the game. Grand prize drawings shall be conducted pursuant to the rules of the game, and copies of written procedures to be followed at grand prize drawings will be furnished to each finalist prior to a drawing.

 

b)         The Department may offer passive Lottery games with pre-printed Lottery game tickets bearing pre-assigned numbers, letters, characters, words or symbols.  Winners in these games shall be determined either by the results of future events or by the random selection of numbers, words or symbols at publicly held drawings. Tickets matching the numbers, words or symbols drawn shall entitle the ticket holder to the prize indicated on the ticket, in accordance with the prize structure established by the game rules.

 

c)         The Department may offer computer operated games in which players are permitted to purchase Lottery game tickets bearing player-selected numbers, letters, characters, words or symbols or computer selected numbers, letters, characters, words or symbols, as provided by the rules of the game, for drawings that are regularly scheduled in accordance with game rules.  With respect to these games, the Director shall conduct drawings utilizing a computerized random selection program.  In the case of drawings conducted using air-driven or gravity selection equipment and by random number generator, drawings shall be by random selection in the presence of a certified public accountant or other independent party who will monitor the integrity of the drawing procedure. For any game utilizing computerized random selection, the selection program will be subject to a software acceptance test by the Department prior to implementation.

 

d)         Players holding Lottery game tickets with numbers, letters, characters, words, symbols or barcode corresponding to those drawn in a game, or that, in combination with those drawn, meet the criteria for prize award set forth in game rules, shall be entitled to prizes in the amounts set forth in game rules established by the Director.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.180  Drawings

 

The Department may award prizes of cash or merchandise as incidental or participation prizes at drawings, at special events and in connection with promotions.  Merchandise prizes of nominal value (e.g., water bottles, t-shirts, coffee mugs) may be distributed to all participants at a drawing, special event or promotional activity.  However, cash prizes or merchandise prizes having a value in excess of $150 per prize shall be awarded pursuant to a random selection process, in accordance with written procedures.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.185  Account Requirements

 

a)         Electronic Player Files. The Department will establish internet lottery player accounts for each player, upon request, as follows:

 

1)         Create an electronic player file, which shall include, at a minimum, the following information for each player:

 

A)        legal name;

 

B)        date of birth;

 

C)        Social Security number, or the last 4 digits thereof, or an equivalent identification number for a noncitizen player, such as a passport or taxpayer identification number;

 

D)        residential address (a post office box is not acceptable);

 

E)        email address;

 

F)         telephone number;

 

G)        any other information collected from the player used to verify the player's identity;

 

H)        the method used to verify the player's identity; and

 

I)         the date of verification. 

 

2)         Encrypt all of the following information contained in an electronic player file:

 

A)        any portion of the player's Social Security number or equivalent identification number for a noncitizen player, such as a passport or taxpayer identification number.

 

B)        the player's passwords and PINs.

 

C)        the player's personal financial information.

 

3)         Verify the player's identity in accordance with:

 

A)        reliable forms of personal identification specified in internal controls; or

 

B)        other methodology for remote multisource authentication, which may include third-party and governmental databases, as approved by the Director.

 

4)         Record the document number of the government issued identification credential examined, if applicable. If a government issued identification credential is not required for registration, the electronic record that details the process used to confirm player identity must be recorded.

 

5)         Require the player to establish a password or other access security feature as approved by the commission and advise the player of the ability to utilize strong authentication log in protection.

 

6)         Record the player's acceptance of the Department's terms and conditions to participate in wagering through the mobile application or any authorized digital platform accepting wagers online.

 

7)         Record the player's certification that the information provided to the Department is accurate.

 

8)         Notify the player of the establishment of the account via email or regular mail.

 

b)         Account funding. A player's lottery account may be funded through the use of:

 

1)         a player's credit or debit card;

 

2)         a player's reloadable prepaid card, which has been verified as being issued to the player and is nontransferable;

 

3)         promotional credit;

 

4)         winnings;

 

5)         adjustments made by the Department with documented notification to the player;

 

6)         ACH transfer, provided that the technical providers have security measures and controls to prevent ACH fraud regarding failed ACH deposits;

 

7)         wire transfer; or

 

8)         any other means approved by the Director. Transfer of funds from a patron account to another player account is prohibited.

 

c)         Failed ACH Deposits. A failed ACH deposit attempt shall not be considered fraudulent if the player has successfully deposited funds via an ACH transfer on a previous occasion with no outstanding chargebacks. Otherwise, the Department will:

 

1)         temporarily block the player's account for investigation of fraud after 5 consecutive failed ACH deposit attempts within a 10 minute period; if there is no evidence of fraud, the block may be vacated; and

 

2)         suspend the player's account after 5 additional consecutive failed ACH deposit attempts within a 10 minute period.

 

d)         Withdrawals; Account Closure; Dormant Accounts 

 

1)         The Department will provide an account statement with account details to a player on demand, which shall include detailed account activity for at least 6 months. In addition, an online lottery system shall, upon request, be capable of providing a summary statement of all player activity during the past 2 years.

 

2)         The Department will periodically re-verify a player's identification upon reasonable suspicion that the player's identification has been compromised.

 

3)         A player must be allowed to withdraw the funds maintained in their account, whether that account is open or closed.

 

4)         The Department must honor a player request to withdraw funds within 5 business days of the request, unless the conditions set forth in subsection (c) are met.

 

5)         The Department may decline to honor a player request to withdraw funds only if the Department believes in good faith that the player engaged in either fraudulent conduct or other conduct that would put the Department in violation of the Lottery Law. In these cases, the Department will:

 

A)        provide notice to the player of the nature of the investigation of the account; and

 

B)        conduct its investigation in a reasonable and expedient fashion, providing the player additional written notice of the status of the investigation every tenth business day starting from the day the original notice was provided to the player.

 

C)        For purposes of this subsection (d), a request for withdrawal will be considered honored if it is processed by the Department notwithstanding a delay by a payment processor, credit card issuer, or the custodian of a financial account.

 

6)         The Department will consider a player account to be dormant if the patron has not logged into the account for at least 3 years, then a dormant account shall be closed by the Department.

 

A)        Funds of players that remain in a dormant player account shall be presumed abandoned.

 

B)        The Department will report and deliver all funds of players that are presumed abandoned to the office of the Illinois Comptroller as provided in the Lottery Law.

 

C)        At least 60 days prior to reporting any funds of the player to the Comptroller, the Department shall provide notice to the player's last known address and conduct due diligence to locate the player.

 

(Source:  Added at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.190  Prize Payment, Claiming or Redeeming of Prizes and Transfers to Common School Fund

 

a)         The prize structure may vary with each game and will be established at the beginning of the game by the Private Manager, subject to the approval of the Department.  The prize structure, odds of winning, the manner in which winners are determined, the claim period for the game and various procedural matters will be set forth in game rules and play instructions.

 

b)         A winning Lottery game ticket with a face value of $599 or less may be redeemed by submitting the winning ticket to a Lottery retailer that sells the type of game won, and may be paid by the Agent directly from ticket sales funds on hand after the Agent follows verification procedures that establish that the ticket is a winning ticket, examines the ticket for alteration, verifies that the prize claim period has not expired, and requests proof of age from the claimant if appropriate. iLottery claims up to $599 or less are posted automatically to the player's Lottery internet account, with no further action required by the internet player, unless the player's winning exceed the maximum wallet threshold of $2000 at which point the player's winnings will automatically by mailed to them via a check. However, when a winning ticket is presented for payment at a Lottery retailer after the expiration of any Agent claim period established in game rules, and the winning ticket has a face value in excess of $600, or as the Department's verification procedures require, the Agent shall follow the claim procedures set forth in subsection (c).

 

c)         Winning Lottery Game Tickets with a face value of up to $25,000 may be redeemed at Lottery prize centers, provided that the claimant is an individual or is a partnership or other legal entity receiving payment under a Federal Employer Identification Number and is not subject to offset of the prize due to amounts owed the State of Illinois.  Payment of prizes at prize centers is subject to established claim periods, procedures and validation tests. 

 

d)         All claims for prizes of more than $25,000, as well as claims for lesser prizes not paid by the Department at a prize center or by an Agent pursuant to subsection (b), must be paid centrally by the Department.  Claimants may obtain claim forms from any Lottery office, by mail or from the Lottery's website. When initiating a claim in person, a claimant shall complete the name and address area on the reverse of the Lottery game ticket and present proof of identification and the winning ticket.  The Department employee will assist the claimant in filling out the claim form, which will be signed by the employee and by the claimant or his or her authorized representative.  The claimant or authorized representative will receive a copy of the claim form as a receipt.  The winning Lottery game ticket and a copy of the claim form will be sent to the Department's offices in Springfield, Illinois, for verification.  When the ticket is verified as a winning ticket, the prize will be mailed to the claimant. 

 

e)         Prizes in the amount of $1,000,000 or more may be claimed only at the Department's prize centers or administrative offices in Springfield and Chicago, or an alternate site mutually agreed to by the Department and the claimant, and, absent extenuating circumstances, only by appointment so that appropriate Department personnel are available to assist in the claim process. The Director may require claimants, or the claimant's authorized representative if the Department determines it necessary (e.g., claimant is physically unable, fear for the safety of the claimant) to participate in a press conference as part of the claim process, in order to assure the public that prizes are being awarded and maintain public trust in the Lottery.  For purposes of press conference requirements, the claimants are the ultimate recipients of the prize, such as the beneficiaries of a trust, the partners in a partnership, or the members of a club or group.

 

f)         Prizes with a face value of up to $599 not redeemed at a Lottery retailer but instead claimed by multiple winners playing as partners or as a group, with common ownership of a winning Lottery game ticket at the time of the prize drawing, shall be claimed in the individual name of one of the partners or members of the group.  Payment of any claim filed on behalf of an individual group member shall be in the same manner as if filed on behalf of a single claimant.

 

g)         Prizes of over $600 but less than $1,000,000 claimed by multiple winners playing as partners or as a group, with common ownership of a winning Lottery game ticket at the time of the prize drawing, may be claimed in the individual name of one of the partners or members of the group, but must be accompanied by a form 5754 setting forth the names, addresses, social security numbers (SSNs) and prize shares of all other persons entitled to a share of the prize. The Department will process a voucher payable to each individual listed on the form 5754, dividing the winnings as designated on the form 5754.  The Department will then process payment vouchers to the Office of the Comptroller for preparation of warrants and end of year income tax withholding documents.  Claim and payment may be made in a partnership name only if the partnership furnishes a Federal Employer's Identification Number (FEIN).

 

h)         Prizes in the amount of $1,000,000 or more claimed by multiple winners with common ownership of a winning Lottery game ticket at the time of the prize drawing must be claimed in the name of a partnership, group or other entity, subject to the limitations set forth in this subsection (h). 

 

1)         If the prize claim is made in the name of a partnership, the claim must be supported by a copy of the partnership agreement signed by all partners, confirming that the partners had agreed to share any prize prior to purchasing the winning Lottery game ticket and specifying each partner's share of the prize.  Payment will be made out to the partnership as a single payee under the partnership's FEIN, or to each of the individual partners under their SSNs, as requested in writing by the partnership's authorized representative.  The ticket and claim form must be signed by one of the general partners on behalf of the partnership, and the claim form must be accompanied by a form 5754 setting forth the names, addresses, and SSNs of each partner.  The partnership agreement shall be subject to review by the Department's legal staff and may not contain provisions contrary to law.  When separate checks have been requested, the partnership must additionally furnish payment instructions for each partner. 

 

2)         If the prize claim is made in the name of a group, the claim must be supported by a written document signed by all group members confirming that the members had agreed to share any prize prior to purchasing the winning ticket. Group claims shall include a group name and the address and SSN of the representative signing the ticket and claim form and shall be accompanied by a form 5754 setting forth the names, addresses, SSNs and prize shares of all group members. 

 

3)         Claims by other entities such as corporations or trusts must be in the name of the entity as established according to applicable law, provide the taxpayer identification number of the entity and be signed by an authorized representative.  Payment will be in the name and under the taxpayer identification number of the claiming entity.

 

i)          Lottery clubs, charitable organizations, corporations, partnerships and other "artificial" persons shall be eligible to purchase Lottery game tickets.  However, with respect to awards of prizes for life, those artificial persons shall be entitled to the minimum guaranteed prize.

 

j)          Prizes claimed but unpaid at the time of a prize winner's death shall be treated as follows:

 

1)         Any prize, or portion of a prize, remaining unpaid at the death of a winner, may be paid to the estate of the deceased prize winner, or to the designated trustee under a revocable living trust established by the deceased prize winner, as settlor, provided that a copy of the trust has been filed with the Department, along with a notarized letter of direction from the settlor, and no written notice of revocation has been received by the Department prior to the settlor's death.  Following a settlor's death and prior to any payment to a successor trustee, the Director will obtain from the trustee and each trust beneficiary a written agreement to indemnify and hold the Department harmless with respect to any claims that may be asserted against the Department arising from payment to, or through, the trust.

 

2)         At the election of the estate or successor trustee of an individual prize claimant, the estate or trustee may have the option to request, within six months from the date of death, that the annuity or equivalent investment securities procured by the Department for purposes of generating annual installment prize payments be liquidated at current market value.  In the case of a prize claimed by a partnership or group, the right to request liquidation of the decedent's remaining prize may be available to the decedent's personal representative or successor trustee, but only if the decedent is entitled to receive one-third or more of the claimed prize. Upon receipt of a written request to liquidate the remaining prize, if the prize payment has been structured through purchase of an annuity and the annuity contract permits early liquidation, the Department will promptly notify the annuity company and request that the annuity be liquidated and the commuted (check) value be paid to the personal representative or successor trustee.  If the Department has procured investment securities to generate income for satisfaction of future prize installments, the Department, as soon as practical after receiving a request for prize liquidation, and without jeopardy to the common investment position of other winners of grand prizes from the same drawing date as the decedent, will offer the decedent's share of the securities for market sale and shall pay the personal representative or successor trustee the proceeds of sales attributable to the decedent's prize. Prior to payment, the Department will deduct from the proceeds of sales any amount that may be required to restore the investment position of securities purchased for other same-date winners to the position held prior to liquidation.  The balance of the proceeds of sale attributable to the decedent's prize shall be distributed to the personal representative of the estate or the successor trustee.  Prior to authorizing liquidation of any prize, the Department will obtain, from each personal representative or successor trustee requesting liquidation, a complete release of liability of the Department for further payment with respect to the decedent's prize, beyond the amount actually realized through liquidation.  Any election pursuant to this subsection (j)(2) must be in writing and shall be irrevocable.

 

3)         If a prize for life winner passes away prior to receiving the guaranteed minimum payment for the game and prize won, the personal representative of the winner's estate or the successor trustee under a properly filed revocable living trust shall have the option to request liquidation of the investment securities funding the remaining guaranteed prize, following the process outlined in subsection (j)(2). If the estate or trustee does not claim this option, any guaranteed remaining prize obligation will continue to be paid to the life winner's estate or successor trustee, annually. If the guaranteed minimum has, in fact, been paid prior to the date the life winner passed away, then no payment will be due.

 

k)         Unclaimed prize money will be retained by the Director for the person entitled to that prize money, for the duration of the claim period for the game won, as established by game rule.  Thereafter, the unclaimed prize funds will be managed as provided in the Lottery Law.

 

l)          Winning Lottery game tickets that provide entry into a preliminary grand prize drawing for any game must be received by the Department by the deadline established in the game rules.  Entry tickets received after the preliminary grand prize drawing deadline for the game with respect to which the tickets were sold will be disqualified unless the game rules specifically provide that the entries will be carried over to a future drawing.

 

m)        For prizes in excess of $10,000, a winner must identify the winner's place of employment, if any, to ensure the winner is not prohibited from Lottery play by the Lottery Law or this Part.  For partnership and group claims, each partner must furnish employment information.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.195  High-Frequency Prize Winners: Review, Penalties and Hearings

 

a)         The Department will conduct an investigation of a High-Frequency Prize Winner, as defined in this Part, to determine if the submission of at least 20 claims for Lottery prizes, each with a value of at least $1,000, within any period of 365 days, is factually or statistically improbable. If the Director makes a determination of factual or statistical improbability, the Director will impose a prize claim suspension in accordance with subsection (b).

 

b)         The Department will suspend High-Frequency Prize Winners from claiming any Lottery prizes with a value of more than $600 for the following time periods:

 

A)        up to 90 days for a first violation;

 

B)        up to 180 days for a second violation;

 

C)        up to 365 days for three or more violations.

 

c)         A High-Frequency Prize Winner shall be entitled to a hearing before any prize claim suspension goes into effect, provided that the hearing request is in writing and received by the Secretary at the location specified on the suspension notice before the 21^st calendar day from the date which appears on the suspension notice. If the High-Frequency Prize Winner is aggrieved by the decision of the Director, they may appeal to the Board for a hearing pursuant to the Lottery Law and 11 Ill. Adm. Code 1700. Any such appeal shall be in writing and made to the Secretary at the location specified on the suspension notice within 30 days of the Director's level decision.

 

(Source:  Added at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.200  Eligibility to Buy

 

a)         No ticket shall be purchased by, and no prize shall be paid to any of the following persons:

 

1)         Any member of the Board or any officer or other person employed by the Board or by the Department;

 

2)         Any employees of any TV station from which Lottery drawings originate who are directly involved in the production of drawing telecasts, including floor director, camera operators, stage hands, character generator operators, air control technicians, announcer and performer for each telecast;

 

3)         Employees of any firm overseeing the conduct of the Lottery's drawings, if those employees are directly involved in the drawing process, as well as the owners or principal officers of the firm;

 

4)         Employees of any advertising agency, public relations agency or any consultant employed by the Department, if the employees are directly involved in the Lottery engagement;

 

5)         Employees of audit firms who are actually performing on site contractual audit services with respect to the Department's operations;

 

6)         Any person residing as a member of the same household in the principal place of residence of any person designated in subsections (a)(1) through (a)(6);

 

7)         Any person under the age of 18. (Section 15 of the Act)

 

b)         If the Director determines that the purchase of Lottery game tickets by officers or employees of any other vendor of goods or services to the Department or Board may jeopardize the security or integrity of the Lottery, the Director will provide by contract with the vendor that no ticket shall be purchased by, and no prize shall be paid to, any officer or employee of the vendor, or certain officers or employees of the vendor, or persons residing as members of the same households as the prohibited officers or employees.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.210  Promotional Items

 

The Department may purchase and stock promotional items bearing the identifying marks of the Illinois Lottery or any of its games.  These products may be distributed at no charge to consumers for promotional purposes, to Agents as a sales incentive, or to Department personnel in connection with the performance of official duties.  The Department may additionally offer its promotional items for sale to individuals, not-for-profit organizations or government entities, and advertise its products for sale via catalog or other means, including, but not limited to, point of purchase displays at Lottery retailers, direct mail and print advertisements.  Purchase orders shall be on forms prescribed by the Department and shall include a certification that the purchaser is qualified under the Lottery Law and the items will not be resold for commercial gain.  The Department may establish reasonable charges for its promotional items, provided, however, that sales to other State agencies will be at cost.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.220  Priority of Rules

 

Official game rules and promotion rules identified each January in the Illinois Register as required by Section 7.1 of the Lottery Law shall be maintained on file in the Department's principal office in Springfield, Illinois or at the principal office of the Lottery's Private Manager, and shall be made available for public inspection and copying during normal business hours. [20 ILCS 1605/7.1]  In the event of any conflict, discrepancy, omission or apparent contradiction between the official rules on file and any summary, representation or other restatement of rules appearing in any advertisement, point of sale material, tickets or other media, the official rules on file at the Department's office shall govern.

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)

 

Section 1770.230  Assignment of Lottery Prizes

 

a)         The right of any person to receive payments under a prize that is paid in installments over time by the Department may be voluntarily assigned up to a total of two times, in whole or in part, if the assignment is made to a person or entity designated pursuant to an order of a court of competent jurisdiction located in the judicial circuit where the assigning prize winner resides or where the headquarters of the Department is located. All contracts of assignment submitted to the Department pursuant to Section 13.1 of the Lottery Law shall be accompanied by a sworn affidavit of the assignee in a form substantially similar to that set forth in Appendix A.

 

b)         At its sole discretion, the Department may waive the 30-day advance notice requirement for the initial assignment petition or the final assignment order.

 

c)         A court order obtained pursuant to this Section, together with all such prior orders, shall not require the Department to divide any single prize payment among more than 3 different persons, including the prize winner.  Assignees may be substituted; however, the substitution shall not result in more than the prize winner and two other assignees for any one prize payment.  [20 ILCS 1605/13.1(c)]

 

d)         All petitions for assignment of an Illinois Lottery prize shall be accompanied by a check or money order payable to the Department in the amount of $98, in order to defray the administrative expenses associated with assignments. [20 ILCS 1605/13.1(g)]

 

(Source:  Amended at 47 Ill. Reg. 13924, effective September 18, 2023)