OAR 177-040-0003: Application for Temporary Lottery Retailer Contract

(1) General: For the purposes of this rule, “temporary retailer contract” means a contract issued to a retailer for a temporary period. A temporary retailer contract may be formed subject to such special terms, conditions, or limitations as the Director may deem prudent. (2) Video Lottery Limitations: Video Lottery retailer contract applications are eligible for temporary contracts if both of the following apply and other requirements of this rule are met: (a) The contract for a retailer premises is being terminated due to sale of business, change of ownership, or 100% stock buyout, and the resulting contract application is for the same retailer premises and the network service line is not removed from the retailer premises. (b) 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 Lottery 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. (3)(a) Submission: To apply for a temporary retailer contract, an applicant must submit a complete application for a retailer contract. (b) Purchase of Existing Business: When an applicant applies for a temporary retailer 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 retailer contract with the applicant until on or after the date the applicant takes legal possession of the business. (4) 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 criminal background check; (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. (5) 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 Program”; (i) The applicant has the appropriate Oregon Liquor and Cannabis Commission license, as required by ORS Chapter 461, if applying for a contract to offer Video Lottery 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 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. (6) 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 contract; and (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. (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 draws. (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 retailer contract; (b) The applicant or any key person is convicted of a Class “A” misdemeanor or felony during the term of the temporary retailer contract; (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 contract; and (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.