Subject: The Oregon State Lottery initiated permanent
rulemaking to amend the above referenced administrative rules. The amendments
streamline the retailer contract application process by amending certain document
and personal disclosure requirements and removing the requirement that the
Wheelchair Accessibility Affidavit be notarized. Other amendments included
Rules Coordinator: Mark W. Hohlt—(503) 540-1417
For purposes of OAR chapter 177 division 40, the
following definitions apply except as otherwise specifically provided in OAR
Chapter 177 or unless the context requires otherwise:
(1) “Age-controlled area” means an area where a
natural person who is under 21 years of age is prohibited from entering or
remaining as posted by either the Lottery or the Oregon Liquor Control
(2) “Applicant” means a person applying for a
contract with the Lottery for the purpose of selling Lottery tickets or shares
to the public, and any key person.
(3) “Application” means the forms, documents, or
other information that the Lottery requires an applicant to submit to the
Lottery in order to apply for or maintain a retailer contract.
(4) “Business” includes:
(a) A commercial activity engaged in for profit or
(b) The activity engaged in by a nonprofit
(c) The activity engaged in by a private club as
described in ORS 471.175(8).
(5) “Complete application” means an application
that is completely filled out, and when required, is signed by the applicant,
and includes all the documentation and information requested by the Lottery.
(6) “Premises” means the building and grounds
occupied by a business (including those areas not normally open to the public),
where traditional Lottery game tickets and shares, Video LotterySM game shares, or both, are sold.
Premises includes an area designated by the Lottery at any single location
identified in an application as a proposed site for Oregon Video LotterySM terminals.
(7) “Key person” means:
(a) Corporations: For any corporation, including a
subsidiary of a parent corporation:
(A) Stockholders: Any stockholder of a corporation who
owns 10% or more of the outstanding stock in such corporation.
(B) Directors: Any director of a corporation who owns
or controls 3% or more of the voting stock in such corporation.
(C) Officers: Any officer of a corporation.
(b) Private Clubs: For a private club as described in
(A) The treasurer.
(B) Any officers, directors, or trustees who oversee or
direct the operation of the food, beverage, Lottery, or other gambling-related
activities of the private club, and
(C) Each manager in charge of the food, beverage,
Lottery, or other gambling-related activities of the private club.
The provisions of paragraphs (7)(a)(A), (B), and (C) of
this rule do not apply to private clubs.
(c) Trusts: The trustee and all persons entitled to
receive income or benefit from the trust.
(d) Associations: The members, officers, and directors.
(e) Partnerships and Joint Ventures: All of the general
partners, limited partners, or joint venturers.
(f) Limited Liability Companies: Any manager of the
limited liability company, and any members of the limited liability company
whose investment commitment or membership interest is 10% or more in the
limited liability company.
(g) Layered Ownership: If the parent company, general
partner, limited partner, joint venturer, stockholder, member or manager of a
limited liability company is itself a corporation, trust, association,
subsidiary, partnership, joint venture or limited liability company, then the
Director may require that the applicant provide disclosure for such entity as
if such entity were a key person itself.
(h) Family Members: Immediate family members as
required in ORS 461.300(2)(b)(G) and (H).
(i) Sole Proprietors: The sole proprietor, if the
retailer is a sole proprietor.
(A) General: A person, regardless of title, who acts or
who has real or apparent authority to act on behalf of the owner in most
matters concerning the operation of the owner’s business during all business
hours, or who routinely performs all of the following duties:
(i) The hiring and firing of employees;
(ii) Making purchasing decisions relating to the buying
of supplies and inventory; and
(iii) Conducting banking functions for the business.
(B) Exception: This definition does not include a
“shift manager” or a “convenience store manager” unless otherwise qualified
under this rule.
(C) Examples: The following are examples of managers
who are key persons under this definition:
(i) General Manager: A person who operates the business
for a corporate or absentee owner.
(ii) Area Manager: A person who operates multiple
locations or supervises multiple store managers.
(k) Landlord: A landlord who receives 40% or more of
the retailer’s Lottery commissions as a part of lease payments or rent, or any
landlord who the Director finds, based on reasonably reliable information,
exerts influence over the operation of the retailer’s business.
(l) Contractual Relationship: Any person who has a
lease, contract, or other agreement with the applicant or retailer or anyone
else, to provide food service or to manage or operate any part of the business
in a Video LotterySM retailer’s premises other than as an employee.
(m) Control Person: Any reference to a “control person”
of a retailer in OAR Chapter 177, a Lottery retailer contract, or Lottery form
in effect or in use on or after the effective date of this rule shall be deemed
to refer to a “key person” as defined in this section.
(8) “Personal disclosure” means those documents
and information that are part of the application which relate to a natural
person’s personal, criminal, and financial background, and associations with
(9) “Mediation” has the meaning as defined in
(10) “Mediator” means a person who performs
(11) “Multi-State Retail Chain” means a
retailer, including an applicant, who:
(a) Operates five or more retailer locations within the
State of Oregon and one or more retail locations outside of the State of
Oregon, all of which engage in similar business activities;
(b) Has common ownership and control over each
(c) Sells no Oregon Lottery® games except traditional
lottery games within the State of Oregon.
(12) “Public Company” means a retailer,
including an applicant, who is a business entity that offers securities
registered for sale by the federal Securities and Exchange Commission to the
general public and sells no Oregon Lottery® games except traditional lottery
games within the State of Oregon.
Stat. Auth.: OR Const. Art. XV,
Stats. Implemented: ORS 461.300
Hist.: SLC 3-1985(Temp), f. &
ef. 1-15-85; SLC 8-1985, f. & ef. 6-21-85; LC 11-1987, f. 6-22-87, ef.
7-1-87; LOTT 2-1998, f. & cert. ef. 5-28-98; LOTT 6-2000, f. 7-26-00, cert.
ef. 8-1-00; LOTT 11-2002(Temp), f. 9-6-02, cert. ef. 9-9-02 thru 3-6-03; LOTT
22-2002, f. & cert.. ef. 11-25-02; LOTT 3-2004(Temp), f. & cert. ef.
4-6-04 thru 10-1-04; LOTT 6-2004, f. & cert. ef. 5-26-04; LOTT 3-2006, f.
2-16-06, cert. ef. 3-1-06; LOTT 8-2006, f. 12-20-06, cert. ef. 1-1-07; LOTT
13-2010, f. 12-20-10, cert. ef. 1-1-11
General Application Requirements
(1) General: Any person may request an application from
(2) Disclosure Required: The Director may require any
degree or type of disclosure necessary of the applicant or any other person in
order to assure the security and integrity of the Lottery. An applicant must
disclose to the Lottery all information required by the Director.
(3) Application Required: An applicant must file a
complete application. The applicant must provide a complete personal
disclosure, including documents and other information requested by the Lottery
relating to the applicant’s personal, financial, and criminal background and an
applicant’s associations with other persons. The application shall also
include, but not be limited to:
(a) Authorization: An authorization, signed by the
applicant, to investigate the applicant.
(b) Consent: Written consent to allow the examination
of all accounts and records to be considered by the Director to be material to
(c) Disclosure: Disclosure of the source of funds,
financing, and business income used for the purchase and operation of the
(d) Premises Ownership: If the premises are not wholly
owned by the applicant, the applicant shall furnish to the Lottery:
(A) A statement of the name and address of the owner or
owners of such premises;
(B) Any document requested by the Lottery showing the
applicant is entitled to possession of the premises;
(C) Complete information pertaining to the interest
held by any person other than the applicant, including interest held under any
mortgage, deed of trust, bond or debenture, pledge of corporate stock, voting
trust agreement, or other device; and
(D) Such other information as the Lottery may require.
(4) Waiver of Personal Disclosure: Notwithstanding
section (3) of this rule:
(a) Public Company or Multi-State Retail Chain: If the
applicant for a traditional lottery game retailer contract is a public company
or a multi-state retail chain, Lottery will waive the personal disclosure
requirements for the manager of each retailer location unless the Director
determines such disclosure is necessary for the security and integrity of the
(5) Compliance Required: An applicant’s failure to
comply with any application or disclosure requirement may be grounds for denial
or rejection of the application.
(6) Material Change: An applicant must immediately
report to the Lottery, in writing, any material changes to the application
during the application process. A “material change” means any change that may
affect the Lottery’s evaluation of the application based on the requirements
contained in Division 40 of these rules.
(7) Waiver: In submitting an application, the applicant
expressly waives any claim against the State of Oregon, its agents, officers,
employees, and representatives, and the Oregon State Lottery, its Director,
agents, officers, employees, and representatives for damages that may result.
Each applicant also accepts any risk of adverse public notice, embarrassment,
criticism, damages, or claims which may result from any disclosure or
publication by a third party of any public information on file with the
(8) Resubmission: When an applicant has submitted a
complete personal disclosure to the Lottery within the preceding twelve months,
the applicant need not necessarily submit a new personal disclosure, but if the
applicant does not submit a new personal disclosure, the applicant must submit,
on forms approved by the Director, a sworn statement regarding any changes
which may have occurred regarding the accuracy of the information provided in
the previous personal disclosure. The Director may require the applicant to
submit a complete personal disclosure if the Director determines substantial
changes have occurred.
Stat. Auth.: OR Const. Art. XV,
Stats. Implemented: ORS 461
Hist.: LOTT 6-2000, f. 7-26-00,
cert. ef. 8-1-00; LOTT 11-2002(Temp), f. 9-6-02, cert. ef. 9-9-02 thru 3-6-03;
LOTT 22-2002, f. & cert.. ef. 11-25-02; LOTT 12-2008, f. 12-23-08, cert.
ef. 1-1-09; LOTT 13-2010, f. 12-20-10, cert. ef. 1-1-11
Application for Temporary Lottery
(1) General: For the purposes of this rule, temporary
retailer contract means a contract issued to a retailer for a temporary period.
A temporary contract may be formed subject to such special terms, conditions,
or limitations as the Director may deem prudent.
(2)(a) Submission: To apply for a temporary retailer
contract, an applicant must submit a complete application for a retailer
(b) Purchase of Existing Business: When an applicant
applies for a temporary contract for a business which the applicant is
purchasing from an existing Lottery retailer, the applicant must submit to the
Lottery a complete application along with any documentation requested by the
Lottery regarding the intended purchase prior to the date the applicant takes
possession of the premises pursuant to a purchase agreement. Notwithstanding
submission of the application prior to the date of possession, the Lottery
shall not enter into a temporary contract with the applicant until on or after
the date the applicant takes legal possession of the business.
(3) Investigation: When the Lottery accepts the
complete application for a temporary retailer contract, the Director will
conduct an abbreviated investigation of the applicant and the business. That
investigation includes, but is not limited to:
(a) A computerized background check for criminal
arrests and convictions;
(b) A credit check using the services of a commercial
credit reporting company; and
(c) An inspection of the business for which the
applicant seeks a temporary retailer contract.
(4) Qualifying: An applicant may qualify for a
temporary retailer contract if, based on the abbreviated investigation and on
the application, all of the following criteria are met:
(a) The applicant is applying for a retailer contract
at a specific location;
(b) The “Criteria Precluding Entering Into a Contract”
described in OAR 177-040-0005 do not apply to the applicant;
(c) The applicant has no criminal convictions of any
kind within five years of the date application is made;
(d) The applicant has no convictions as described in
OAR 177-040-0010(3), “Criminal Behavior”;
(e) The applicant has no Class “A” misdemeanor or
felony charges pending against the applicant;
(f) The applicant has no outstanding judgments, liens,
or collections, except those judgments which the applicant is disputing through
a legal process;
(g) The applicant is in compliance with all tax laws;
(h) The applicant has certified that the business
location complies with OAR 177-040-0070, “Retailer Wheelchair Accessibility
(i) The applicant has the appropriate Oregon Liquor
Control Commission license, as required by ORS Chapter 461, if applying for a
contract to offer Video LotterySM games; and
(j) There are no apparent factors regarding the
applicant to cause the Director to reasonably conclude that the applicant poses
an actual or apparent threat to the fairness, honesty, integrity, or security
of the Lottery and its games. Factors that may pose a threat include, but are
not limited to, any of the following examples:
(A) The applicant or key person has one or more
criminal arrests or convictions, depending on the nature and severity of the
crimes involved; or
(B) The applicant or key person has been involved in
any civil action in which the final judgment indicates that the applicant or
key person is not financially responsible, depending on the nature, severity,
and recency of the action.
(5) Other Requirements: Prior to the effective date of
the temporary retailer contract, the Director may require the applicant to:
(a) Receive training from the Lottery;
(b) Establish an electronic funds transfer (EFT) bank
account for Lottery funds;
(c) Pay all necessary fees associated with the
installation of telephone lines and telephone service;
(d) Agree to pay all necessary fees associated with
amusement device taxes prior to the effective date of a temporary retailer
(e) Agree to be responsible for and to pay all fees in
connection with the application, including any cancellation fees for telephone
lines and service.
(6) Other Video LotterySM Requirements: The applicant and
the applicant’s business must qualify for the type of Lottery sales sought by
the applicant. For example, if the applicant seeks a contract to offer Video
LotterySM games, the business must have an appropriate liquor license and
an age controlled area that meets the Lottery’s requirements. In addition, the
business must not be operating as a casino as described in OAR 177-040-0061.
(7) Guarantor: If the applicant is an entity other than
either a sole proprietor who is a natural person or a private club as defined
in ORS 471.175(8), at least one natural person who is a principal of the
applicant entity and who is a key person may be required to personally
guarantee all monies owed to the Lottery.
(8) Bonding: The Director may require the applicant to
post a bond, letter of credit, or cash deposit in the form of certified funds
prior to the effective date of a temporary retailer contract.
(9) EFT Transfers: If the Lottery enters into a
temporary retailer contract with the applicant, the contract will require the
applicant to pay the amount due the Lottery from the sale of Lottery tickets or
shares by electronic funds transfer (EFT). In most instances, amounts due the
Lottery will be collected via EFT at the end of the fourth day after the close
of the Lottery business week. If an applicant operates multiple Lottery retail
sites before the effective date of this rule, the routine date of the EFT
collection may be set beyond the fourth day after the close of the business
week in order to accommodate the needs of the combined sites. The applicant
must establish an account for deposit of money from the sale of Lottery tickets
and shares with a financial institution that has the capability of making EFT
(10) Burden of Proof: The burden for establishing that
an applicant qualifies for a temporary retailer contract is on the applicant.
(11) Termination: In the Director’s sole discretion,
the Director may immediately terminate a temporary retailer contract if the
Director determines that continuing to contract with the applicant is not in
the best interest of the Lottery including, but not limited to, when:
(a) The applicant provided false or misleading material
information, or the applicant made a material omission in the application for a
(b) The applicant or any key person is arrested or
convicted of a Class “A” misdemeanor or felony during the term of the temporary
(c) An EFT payment is rejected for non-sufficient funds
(NSF), or the applicant fails to provide timely information to the Lottery
regarding any change of the applicant’s EFT bank account;
(d) Any other reason contained in the contract or
administrative rules that provides a basis for termination of a retailer
(e) When the Director concludes that continuing to
contract with the applicant may pose a threat to the fairness, honesty,
integrity, or security of the Lottery and its games.
(12) Length of Temporary Contract: A temporary retailer
contract shall be valid for a specific time period for up to 120 days. A
temporary retailer contract may, in the Director’s discretion, be extended for
up to 120 additional days.
Hist.: LOTT 5-2000, f. 7-26-00,
cert. ef. 11-1-00; LOTT 11-2002(Temp), f. 9-6-02, cert. ef. 9-9-02 thru 3-6-03;
LOTT 22-2002, f. & cert.. ef. 11-25-02; LOTT 3-2004(Temp), f. & cert.
ef. 4-6-04 thru 10-1-04; LOTT 6-2004, f. & cert. ef. 5-26-04; LOTT 2-2008,
f. & cert. ef. 6-2-08; LOTT 13-2010, f. 12-20-10, cert. ef. 1-1-11
Retailer Wheelchair Accessibility
(1) Purpose: The purpose of this rule is to require
that all new and existing Lottery retailers provide and maintain access to
Oregon Lottery® games and related services to persons who use wheelchairs.
Access to Video LotterySM games may be achieved by providing access to at least one Video
LotterySM game terminal, regardless of slight variations in game theme or
play between the different types of Video LotterySM game terminals.
(2) General Requirements: All Lottery retailers shall
provide and maintain access to all persons who use wheelchairs to enable their
full and equal enjoyment of Lottery games and related services. Retailers shall
comply with the Retailer Wheelchair Accessibility Program by installing
required accessibility features, by removing identified barriers through
structural modifications, or by creating alternative methods of providing
access to Lottery games and related services.
(a) Barrier Removal and Accessibility Features: All
barriers must be removed that impede wheelchair access to Lottery games and
related services. Examples of barrier removal or accessibility features
include, but are not limited to:
(E) Rearranging tables, chairs, vending machines,
display racks, and other furniture;
(F) Installing offset hinges to widen doorways;
(G) Installing accessible door hardware;
(H) Installing elevators; and
(I) Relocating Lottery games and related services
within the retailer’s premises to accommodate persons who use wheelchairs.
(b) Alternative Methods: Alternative methods of
providing access to Lottery games and related services must be appropriate or
reasonable for the person using a wheelchair, and will apply only when
accessibility to the Lottery game or related service does not require physical
access by the person using a wheelchair to a specific area of the premises.
(For example, playing Keno does not require physical access to a Lottery
terminal if the retailer provides table service to persons who use wheelchairs.
Conversely, playing Video LotterySM games does require physical access to the Video LotterySM game terminal.) All alternative
methods of providing access must be approved by the Director and will only be
permitted when the retailer demonstrates to the satisfaction of the Director
the necessity of offering alternative methods of access instead of removing
barriers or installing accessibility features. The Director’s decision is
(c) Costs of Modifications: The retailer is responsible
for all costs related to removing barriers, installing accessibility features,
or offering alternative methods of access for the purpose of making a
retailer’s premises wheelchair accessible.
(3) Retailer Wheelchair Accessibility Certification:
All applicants shall submit with the application, a signed Wheelchair
Accessibility Certification form certifying that the retail location is
wheelchair accessible. The Certification form shall be provided by the Lottery
and shall contain the Lottery’s wheelchair accessibility standards. The
Wheelchair Accessibility Certification form must be completed and signed by the
(4) Permitted Exemptions:
(a) The Director may grant the following exemptions to
the requirements of this rule. The Director shall review the circumstances and
supporting documentation provided by a retailer to determine if a retailer’s
request for an exemption should be granted. The Director shall determine the
type and scope of documentation to be required for each exemption
classification. All decisions made by the Director are final. A retailer or
applicant whose request for an exemption is denied by the Director is required
to satisfy the requirements of this rule as a condition for maintaining its
eligibility for a Lottery retailer contract.
(A) Historic Properties: To the extent a historic
building or facility is exempt under federal law, this rule does not apply to a
qualified historic building or facility that is listed in or eligible for
listing in the National Register of Historic Places under the National Historic
Preservation Act or is designated as historic under state or local law.
Qualified means exempt from accessibility requirements under the federal
historic preservation laws.
(B) Legal Impediment to Barrier Removal: Any law, act,
ordinance, state regulation, ruling or decision which prohibits a Lottery
retailer from removing a structural impediment or for making a required
improvement may be the basis for an exemption to this rule. A Lottery retailer
requesting an exemption under this subsection will not be required to seek a
zoning variance to establish the legal basis for the impediment, but is
required to document and attest to the legal impediment.
(C) Landlord Refusal: An exemption granted to an
existing Lottery retailer based on the refusal of a landlord to grant
permission to a Lottery retailer to make the structural improvements required
by the Lottery under this rule shall only apply to the retailer’s current lease
term. No new landlord refusal exemptions are authorized after August 1, 2000.
All existing exemptions granted before August 1, 2000 may be continued until
the retailer’s contract expires.
(D) Undue Financial Hardship: Undue financial hardship
exemptions are not authorized. Any existing exemptions granted before August 1,
2000 may be continued until the retailer’s contract expires.
(5) Complaints Relating to Non-Accessibility: The
Director will receive and process all accessibility complaints concerning a
Lottery retailer as follows:
(a) Initial Complaint and Investigation: When possible,
complaints must be in writing and submitted to the Lottery on a Lottery
retailer wheelchair accessibility complaint form. The Lottery will investigate
the complaint. If the retailer is found to be in compliance with this rule, a
letter will be mailed to the retailer and complainant.
(b) Letter of Impending Rule Violation: If the Lottery
determines that there are any violations of this rule, the Lottery shall issue
a letter of impending rule violation to the retailer. The retailer shall submit
a response no later than 30 days after mailing of the letter of impending rule
violation. The Director shall determine if the retailer’s response is
acceptable under this rule. If the retailer is found to be in compliance with
this rule, a letter will be mailed to the retailer and the complainant.
(c) Letter of Rule Violation: If the retailer’s
response to the Lottery’s letter of impending rule violation is unacceptable
under this rule, or if the retailer does not provide an explanation in the 30
day response period, the Lottery shall issue a letter of rule violation. The
letter of rule violation shall describe the violations found at the retailer’s
location under the terms of this rule.
(d) Corrective Action Plan: The Lottery retailer shall
submit a corrective action plan to the Lottery within 30 days of the issuance
of the letter of rule violation. The Director may extend the response time for
reasons beyond the reasonable control of the retailer. The plan shall describe
in detail how the retailer will comply with this rule. The Lottery shall notify
the retailer of the Lottery’s acceptance or rejection of the plan. If the plan
is rejected, the notification shall contain the reasons for rejection of the
plan and the corrections needed to make the plan acceptable to the Lottery. If
the retailer agrees to make the required corrections, the Lottery shall accept
the plan as modified. If a retailer fails to submit a plan within 30 days of
issuance of the letter of rule violation and has not requested an extension of time
to submit a plan, or if a retailer has requested an extension but the request
is denied by the Lottery, the Lottery may terminate the retailer contract.
(e) Time Line for Implementation of Corrective Actions:
The retailer must complete corrective actions within 90 days of the date the
Lottery accepts the retailer’s corrective action plan. If the retailer has not
eliminated the violations cited in the letter of rule violation within 90 days
of mailing, but has requested an extension of time, the Lottery may grant an
extension of no more than 90 days. The Lottery will send a notice of the
extension to the retailer and the complainant. Any extension commences
immediately upon expiration of the original 90 day period. In no event shall
the total amount of time exceed 180 days from the date the Lottery accepts the
retailer’s corrective action plan.
(f) Notice of Rule Compliance: If the retailer corrects
the violations specified in the letter of rule violation, and the retailer has
provided an updated Wheelchair Accessibility Certification form certifying full
compliance, the Lottery will issue a notice of rule compliance. Until this
notice is issued, a complaint is considered pending.
(g) Termination: Failure of the retailer to make timely
corrections in compliance with this rule and the retailer’s corrective action
plan may result in termination of the retailer contract.
(6) Inspections and Audits: The Director may inspect
and audit any Lottery retailer’s premises for compliance with this rule at any
time including random compliance audits. The Lottery will conduct the audit and
inspection during the retailer’s regular business hours or at such other time
as agreed upon by the retailer and the Lottery. The burden of proof to
establish that a retailer’s premises are in compliance with this rule is on the
Stat. Auth.: OR Const. Art. XV,
Sec. 4(4) & ORS 461
Stats. Implemented: ORS 461.300
Hist.: LC 5-1997, f. 6-13-97,
cert. ef. 7-1-97; LOTT 6-2000, f. 7-26-00, cert. ef. 8-1-00; LOTT 8-2003, f.
& cert. ef. 6-30-03; LOTT 13-2010, f. 12-20-10, cert. ef. 1-1-11
Caption: Establish process for requesting
study on Video LotterySM retailer compensation rates.
Order No.: LOTT 14-2010
Filed with Sec. of
Certified to be
Rules Adopted: 177-040-0024
Subject: The Oregon State Lottery adopted the above referenced
administrative rule to establish a process for requesting a study on Video
LotterySM retailer compensation rates for the Oregon Lottery
Commission. This study is to be done in conjunction with a review of the Video
LotterySM retailer compensation rates set forth in OAR
177-040-0028 on or after October 2014 and prior to the expiration of the
current Retailer Contract on June 28, 2015.
Rules Coordinator: Mark W. Hohlt—(503) 540-1417
Compensation Rate Study for Video
(1) Purpose: The purpose of this rule is to direct the
Director of the Oregon State Lottery to conduct a comprehensive Video LotterySM retailer compensation study to
assist the Lottery Commission in determining what retailer compensation system
will best fulfill its legal obligation to determine the compensation to be paid
to Video LotterySM retailers for their sales of Lottery tickets or shares by
undertaking to develop a compensation system that maximizes the net revenue to
the state for the public purpose consistent with providing a reasonable rate of
return for Video LotterySM retailers, for the Lottery Retailer Contract which term begins
June 28, 2015.
(2) Selection of Independent Consulting Company or
Consultant: The Video LotterySM retailer compensation study shall be completed by an independent
economic consulting company or economic consultant chosen by the Director. The
Director may select a consulting company or consultant using any procurement
process deemed appropriate by the Director, but in selecting the consulting
company or consultant, the Director shall determine that the company or
consultant has the requisite experience, expertise, and knowledge for this type
of study. The Director shall submit a report to the Lottery Commission before
entering into any contract for services with the consulting company or
consultant selected by the Director.
(3) Analysis of Video LotterySM Retailer Compensation Systems:
The study shall provide an analysis and comparison of various Video LotterySM retailer compensation systems,
and shall set forth the pros and cons for each system and the estimated costs
to Lottery if it were to use each system. The analysis shall include, but is
not limited to, the following Video LotterySM retailer compensation systems:
(a) Tiered compensation rate system where retailer
compensation is calculated as a percentage of net receipts, but the percentage
declines as net receipts increase over a business year. The higher the net
receipts, the lower the percentage paid. This analysis shall include, but is
not limited to, the current compensation system described in OAR 177-040-0026.
(b) Single compensation rate system where the retailer
compensation is calculated by applying a single, specified percentage to a
retailer’s net receipts over a business year. This analysis shall include a
method or methods for determining the single percentage rate.
(c) Individualized compensation rate system where
compensation is calculated based on a percentage of net receipts as determined
individually for each Video LotterySM retailer. This analysis shall include the method or methods the
Lottery would use to determine the percentage rate or rates for each individual
(4) Lottery Commission Responsibilities To Be
Addressed: In analyzing the various compensation rate systems, as required in
section (3) of this rule, the study must consider and address the following
constitutional and statutory responsibilities of the Lottery Commission and the
Lottery Director to:
(a) Insure the integrity, security, honesty, and
fairness of the Lottery (Article XV, section 4, 4(a), and ORS 461.150);
(b) Undertake to develop a system to maximize net
revenue while providing a reasonable rate of return for contractors (ORS
(c) Select as Lottery game retailers such persons to
best serve the public convenience and promote the sale of Lottery tickets or
shares (ORS 461.300);
(d) Provide adequate and convenient availability of
Video LotterySM games in both rural and metropolitan locations to promote sales
(e) Determine retailer compensation (ORS 461.310); and
(f) Make ongoing study and comparison of the operations
of lotteries in other states and countries (ORS 461.180).
(5) Other Factors: Notwithstanding subsection (4) of
this rule, the Director shall determine what other factors are necessary for
consideration and review in order to complete a comprehensive Video LotterySM retailer compensation rate study.
(6) Completion: This study is to be completed no later
than October 1, 2014.
Stat. Auth.: ORS 461
Stats. Implemented: ORS 461.300,
Hist.: LOTT 14-2010, f. 12-30-10,
cert. ef. 1-1-11
Notes 1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.