§ 674. Procedures and conditions governing the tri-state lottery—Article II
A. Creation of the Tri-State Lotto Commission. The party states, for the purpose of operating Tri-State Lotto, establish the Tri-State
Lotto Commission.
B. Nature of the Commission. The Commission shall be an interstate body, both corporate and politic, serving as
a common agency of the party states and representing them both collectively and individually
in the exercise of its powers and duties.
C. Organization of the Commission. The Commission shall be composed of one member from each of the party states. Each
party state lottery or sweepstakes commission shall appoint one of its members to
serve on the Tri-State Lotto Commission. Each member shall hold office at the pleasure
of the appointing authority. The Commission shall elect a chair from among its members
annually.
D. Functioning of the Commission.
1. The Commission’s functions shall be performed and carried out by its members and by
advisory committees or panels as the Commission may establish, and by officers, independent
contractors, agents, employees, and consultants as may be appointed by the Commission.
All officers, independent contractors, agents, consultants, and employees shall hold
office at the pleasure of the Commission, unless the Commission otherwise decides,
and the Commission shall prescribe their powers, duties, and qualifications and fix
their compensation and other terms of their employment.
2. No action of the Commission shall be effective or binding unless there is a unanimous
decision by all of the representatives of the various party states.
3. The members of the Commission shall receive compensation for their services pursuant
to this Compact and in accordance with the policies of the respective states, and
they shall be entitled to be reimbursed for the expenses they naturally and necessarily
incur in the performance of their duties.
4. No member of the Commission who is otherwise a public officer or employee shall suffer
a forfeiture of his or her office or employment, or any loss or diminution in the
rights and privileges pertaining to their office or employment, by reason of membership
on the Commission.
E. Powers and duties of the Commission.
1. The Commission shall have the power and it shall be its duty to operate and administer
Tri-State Lotto and to promulgate rules and regulations governing the establishment
and operation of the lotto, including but not limited to the following topics:
a. the design of the game;
b. the price of the tickets;
c. the number and sizes of the prizes on the winning tickets;
d. the manner of selecting the winning tickets and paying the prizes;
e. the frequency of the drawings;
f. the type or types of locations at which tickets may be sold;
g. the method to be used in selling tickets;
h. the compensation required to be paid to Tri-State Lotto sales agents in order to assure
adequate availability of tickets and public convenience in purchasing tickets; and
i. the development of an internal security plan designed to prevent player fraud.
2. The Commission or its designee shall also have the power and it shall be its duty
to license sales agents to sell Tri-State Lotto tickets, in accordance with paragraph
G of this article. The Commission may require a bond from any licensed agent in an
amount to be determined by the Commission.
3. The Commission shall make monthly and year-end reports to the commissions of the party
states, which shall include a complete statement of Tri-State Lotto revenues, prize
disbursements and other expenses, and any other information the party states may require.
4. All Tri-State Lotto accounts and transactions shall be subject to annual postaudits
conducted by independent auditors retained by the Commission for this purpose.
5. In addition to the powers enumerated above, the Commission shall have the power to
adopt a corporate seal and enter into contracts, including but not limited to contracts
with other governments or agencies, to hire, lease, acquire, and dispose of property
to the extent necessary to carry out its functions, powers, and duties as set forth
in this section, and to expend or authorize expenditures of monies for the purpose
of operating Tri-State Lotto pursuant to this Compact. The party states each shall
have the right to require an audit as a party state may from time to time consider
proper.
6. The Commission also shall have additional powers, incidental to the express powers
granted to it by this Compact, as may be necessary or proper for the effective performance
of its functions.
F. Cooperation and assistance of other agencies. To avoid duplication of effort and in the interests of economy, the Commission may
make use of existing studies, plans, data, and other materials in the possession of
the governmental agencies of the party states and their respective political subdivisions.
Each agency is authorized to make these materials available to the Commission and
otherwise to assist it in the performance of its functions. The officers and personnel
of these agencies, and of any other government or agency, may serve at the request
of the Commission upon advisory committees and panels as the Commission creates; and
the officers and personnel may serve upon the committees and panels without forfeiture
of office or employment and with no loss or diminution in the status, rights, and
privileges that they otherwise enjoy.
G. Licensing of Tri-State Lotto sales agents.
1. The Commission or its designee may license as agents to sell Tri-State Lotto tickets
those persons as in its opinion will best serve the public convenience, except that
no license shall be issued to any person to engage in business exclusively as a sales
agent.
2. For purposes of this article, the term “person” shall be construed to mean and include
an individual, partnership, association, organization, club, company, corporation,
trust, estate, society, joint stock company, receiver, trustee, assignee, referee,
or any other person acting in a fiduciary or representative capacity, whether appointed
by a court or otherwise, and any combination of individuals. “Person” shall also
be construed to mean and include agencies and instrumentalities of the state, and
counties, cities, towns, and villages.
3. Before issuing a license to any person, the Commission shall consider with respect
to the person:
a. financial responsibility and the security of the business or activity in which the
person is engaged;
b. accessibility of the place of business or activity to the public;
c. sufficiency of existing licenses to serve public convenience;
d. whether the place of business or activity is predominantly frequented by persons under
the age of 18 years;
e. volumes of expected sales; and
f. the possession of a valid party state license.
H. Suspension and revocation of licenses.
1. The Commission may suspend or revoke, after notice and hearing, any license issued
pursuant to this Compact. The license may, however, be temporarily suspended by the
Commission without prior notice, pending any prosecution, investigation, or hearing.
A license may be suspended or revoked by the Commission for just cause, including
one or more of the following reasons:
a. failure to account for tickets received or the proceeds of the sale of tickets or
to file a bond if required by the Commission or to comply with instructions of the
Commission concerning the licensed activity;
b. conviction of any criminal offense;
c. failure to file any return or report, to keep records, or to pay any tax;
d. engaging in fraud, deceit, misrepresentation, or conduct prejudicial to public confidence;
e. insufficiency of the number of tickets sold by the sales agent; and
f. a material change, since issuance of the license, with respect to any of the matters
required to be considered by the Commission under paragraph G.3 of this article.
2. Any suspension or revocation of a state license shall automatically result in suspension
of the Tri-State license.
I. Inapplicability of other statutes.
1. No law providing for any penalty or disability for the sale of lottery tickets or
any acts done in connection with a lottery shall apply to the sale of tickets or acts
performed pursuant to this Compact.
2. The provisions of this Compact shall apply and take precedence in the event of any
conflict between the provisions contained in this Compact and the provisions of other
laws of any of the party states.
J. Sale of tickets prohibited.
1. No ticket shall be sold at a price greater than those fixed by the Commission; nor
shall a sale be made by any person other than a licensed sales agent. Any person who
violates any of these provisions shall be subject to the sanctions of each respective
party state’s lottery statutes.
2. No ticket shall be sold to any person under the age of 18 years, but this shall not
be deemed to prohibit the purchase of a ticket for the purpose of making a gift by
a person 18 years of age or older to a person less than that age. Any licensee or
the employee or agent of any licensee who sells or offers to sell a ticket to any
person under the age of 18 shall be subject to the sanctions of each respective party
state’s lottery statutes.
3. No ticket shall be sold to and no prize shall be paid to any of the following persons:
a. any member, officer, or employee of the Commission; or
b. any spouse, child, brother, sister, or parent residing as a member of the same household
in the principal place of abode of any of the foregoing persons.
K. Collection and disposition of revenue.
1. All monies received by any and all Tri-State Lotto sales agents from the sales of
Tri-State Lotto tickets, less the amount, if any, retained pursuant to paragraph E.1.h
of this article shall be delivered weekly to the commission of the party state in
which the sales were made.
2. Within one week after a Tri-State Lotto drawing has been held, the party state commission
shall pay to the Commission, who in turn shall promptly pay to an account known as
the Tri-State Lotto Prize Account, monies as are necessary for the payment of prizes,
less actual prizes paid by the respective party state in the preceding week, but not
to exceed 50 percent of the total amount for which tickets have been sold.
3. Interest earned by the Tri-State Lotto Prize Account shall accrue to the party states
in direct proportion to their contribution to the account. Distribution shall be made
at least semi-annually.
4. The withdrawals, pursuant to paragraph L of this article, of monies from the Tri-State
Lotto Prize Account deposited by the Commission shall be subject to a check signed
by a member of the Commission or such officer, employee, or agent of the Commission
as the Commission may designate. The monies in the Prize Payment Account shall be
paid out of the account on vouchers certified or approved by the Commission or its
designated officer, agent, or employee.
5. The Commission shall receive from party states, within one week after a Tri-State
Lotto drawing, an additional sum of monies not to exceed 15 percent of the total amount
for which tickets have been sold. The monies shall be deposited in a bank, banking
house, or trust company selected by the Commission in an account to be named the Tri-State
Lotto Operations Account. The Operations Account shall be used to pay Tri-State Lotto
current operating costs which shall be charged proportionally to the party states.
If operating costs exceed or fall short of the amount obtained in the account, appropriate
adjustments shall be made on a quarterly basis within 30 days of the end of each quarter.
6. Interest earned by the Tri-State Lotto Operations Account shall accrue to the party
states in direct proportion to their contribution to the account. Distribution shall
be made at least semi-annually.
L. Distribution of prizes.
1. All prizes over 5,000 dollars shall be awarded to holders of winning tickets as provided
in this section. Within one week after any drawing or selection of prize-winning tickets,
the Commission shall deliver to each of the party states a certified list of the tickets
to which prizes are awarded and the amount of each prize. Upon delivery of the certified
list and voucher of the Commission, monies sufficient for the payment of the prizes
may be withdrawn from the Prize Account established in paragraph K.2 of this article.
The Commission shall each month provide each party state with a record of all withdrawals.
Payment of prizes shall be made by the Commission or its designee to holders of the
tickets to which prizes are awarded. The right of any person to a prize drawn shall
not be assignable, except that payment of any prize drawn may be paid to another person
as provided in this section.
1A. Payment of a prize may be made to a person other than the winner as follows:
a. To the estate of a deceased prizewinner upon receipt by the Commission of a certified
court order appointing an executor or administrator.
b. To any person pursuant to a certified final order of a court of competent jurisdiction,
including orders pertaining to claims of ownership in the prize, division of marital
property in divorce actions, bankruptcy, child support, appointment of a guardian
or conservator, and distribution of an estate.
c. To any person, including a trustee, pursuant to a certified final order of a court
of competent jurisdiction of a party state approving the voluntary assignment of the
right to a prize, provided the court affirmatively finds all of the following:
(1) That the assignor and the assignee are not represented by the same counsel.
(2) That the assignment is in writing and represents the entire agreement between the
parties.
(3) That the assignment agreement contains the following provisions:
(A) The assignor’s name, Social Security number or tax identification number, and address.
(B) The assignee’s name, Social Security number or tax identification number, citizenship
or resident alien number, if applicable, and address.
(C) The specific prize payment or payments assigned, or any portion thereof, including:
(i) The payable due dates and amounts of each payment to be assigned.
(ii) The gross amount of the annual payment or payments to be assigned before taxes.
(D) A notice of right to cancel in immediate proximity to the space reserved for the signature
of the assignor in boldface type of a minimum size of 10 points, which shall provide
that:
(i) The assignor may cancel the assignment without cost until midnight 15 business days
after the day on which the assignor has signed an agreement to assign a prize or portion
of a prize.
(ii) Cancellation occurs when notice of cancellation is given to the assignee.
(iii) Notice is sufficient if it indicates the intention of the assignor not to be bound.
(iv) Notice of cancellation, if given by mail, shall be deemed given when deposited in
a mailbox properly addressed and first class mail postage prepaid. Failure to provide
the notice of right to cancel as provided in this subdivision shall render the assignment
agreement unenforceable and the assignor may collect reasonable attorney’s fees in
any action to enforce such agreement.
(4) That prior to execution of the assignment agreement, the assignee has provided to
the assignor in writing, on a disclosure form separate and apart from the agreement,
the following:
(A) the aggregate dollar value of payments assigned;
(B) the total consideration paid to the assignor by the assignee;
(C) an itemization of all other fees or costs to be paid by the assignor, or deducted
from the payment to the assignor.
(5) That the assignor has represented to the court in sworn testimony, if a personal appearance
is required by the court, or in the assignor’s written affidavit, sworn to under penalty
of perjury, that:
(A) Prior to signing the assignment agreement, the assignor reviewed the agreement and
understood its terms and effects.
(B) The assignor has consulted with independent financial and tax advisors not referred
by or associated with the assignee.
(C) The assignor has signed the assignment agreement acting under free will without undue
influence or duress.
(D) The assignor is not under any obligation to pay child support, or is under such obligation
and is in good standing with respect to that obligation or has agreed to a payment
plan with the party state agency responsible for child support and is in full compliance
with that plan.
(E) The assigned payment or payments are not subject to any claims, liens, levies, security
interests, assignments, or offsets asserted by other persons or the party states or
has provided the court with written consent of each person having such an interest.
(6) If the assignor is married, the assignor has submitted to the court a signed and notarized
statement of the spouse consenting to the assignment. If a notarized statement is
not presented to the court, the court shall determine the ability of the assignor
to make the proposed assignment without the spouse’s consent.
1B.a. A winner may pledge all or any part of a prize as collateral for a loan. Notwithstanding
any provision of Article 9 of the Uniform Commercial Code to the contrary, perfection
of a security interest in a prize shall be completed by filing, in addition to any
other filings that may be required, a financing statement with the Commission.
b. In order to be entitled to receive a prize payment or payments from the Commission,
a secured party shall be required to obtain a certified final order of a court of
competent jurisdiction that:
(1) Adjudges the prize winner in default of a loan agreement with the secured party.
(2) Makes findings with respect to the loan agreements and financing statements constituting
the loan transaction that are equivalent to those required pursuant to subdivisions
1A.c.(1)-(3) of this paragraph and, in addition, a finding that truth-in-lending disclosures
set forth in 12 C.F.R. §§ 226.17, 226.18, 226.19, and 226.20 were made.
(3) Identifies specific payments and awards ownership of said payments to the secured
party.
c. Nothing in this paragraph shall be construed to:
(1) Create or enlarge a cause of action in favor of a secured party.
(2) Alter or impair any rule of law applicable to or governing the rights of a debtor
under federal or state lending statutes.
(3) Alter or impair the provisions of Article 9 of the Uniform Commercial Code except
to the extent inconsistent with the provisions of this paragraph.
1C. The Commission may intervene as of right in any action pursuant to subsection 1A.c
or paragraph 1B of this section, but shall not be deemed an indispensable or necessary
party.
1D. A certified copy of the final order required by subsection 1A.b of this section, a
certified copy of the final order and the assignor’s affidavit required by subsection
1A.c of this section, and a certified copy of the final order required by paragraph
1B of this section shall be served on the Commission together with a nonrefundable
processing fee of $500.00 within 15 days after entry of the order.
1E. The Commission may file a request to modify or vacate a final order pursuant to subsection
1A.c or paragraph 1B of this section within 15 days after service of the order on
the Commission.
1F. Commencing on the 30th day after full compliance with paragraph 1D of this section,
or after final determination of any motion filed to vacate or modify a final order
entered pursuant to paragraph 1E of this section, the Commission shall be obligated
to make payments, subject to tax withholding, in accordance with said order.
1G. No modification or amendment to an order pursuant to subsections 1A.b or c or paragraph
1B of this section and no additional or subsequent assignment of a prize shall be
valid or binding on the Commission unless the modification, amendment, or assignment
is approved by a separate court order that meets the requirements of this section.
1H. The Commission, its officers, agents, and employees shall be discharged of all further
liability upon payment of a prize pursuant to this section.
1I. The financial, tax, trust, or personal records filed, received, maintained, or produced
by the Commission in connection with payment of a prize as provided in this section
are confidential. Such records shall not be deemed public records under 1 V.S.A. § 317. Upon written request, the Commission may release the name, town of residence, date
of prize, and the gross and net amounts of the annual prize payment of a winner. Financing
statements filed with the Commission are public records.
1J. The Tri-State Lotto Compact recognizes that each party state has enacted laws authorizing
a party state agency to collect child support debts and arrearages. Upon receipt of
notice from a party state agency, the Commission shall suspend payment of winnings
in the amount of the child support debt or arrearage and notify the winner. Child
support debts and arrearages of a winner shall be offset by the Commission in the
manner in which the state Lottery Commission of a party state is required by law to
offset such debts and arrearages.
2. If the person entitled to a prize on any winning ticket is under the age of 18 years,
and the prize is less than 5,000 dollars, the Commission may make payment by delivery
to an adult member of the minor’s family or a guardian of the minor of a check or
draft payable to the order of the minor. If the person entitled to a prize on any
winning ticket is under the age of 18 years and if the prize is 5,000 dollars or more,
the Commission may make payment to the minor by depositing the amount of the prize
in any bank to the credit of an adult member of the minor’s family or a guardian of
the minor as custodian for the minor. The Commission shall be discharged of all further
liability upon payment of a prize to a minor pursuant to this subdivision.
3. Prizes may be paid in such manner as the Commission may direct in its rules and regulations
as long as the rules and regulations are not inconsistent with this Compact.
M. Unclaimed prize money. Unclaimed prize money for the prize on a winning ticket shall be retained by the Commission
for payment to the person entitled for one year after the drawing in which the prize
was won. If no claim is made for the prize within one year from the date of the drawing,
the prize money shall be credited to the prize pool. Upon the expiration of one year
from the drawing date, the ticket holder shall forfeit any claim or entitlement to
the prize monies.
N. Duration of Commission and Tri-State Lotto. The Commission and Tri-State Lotto shall continue in existence until this Compact
is revoked by all of the party states. The withdrawal of one party state shall not
render the Compact invalid between the remaining states.
O. Interpretation. This Compact shall be construed liberally to accomplish its purposes.
P. Amendments. Amendments and supplements to this Compact may be adopted by concurrent legislation
of the party states.
Q. Immunity and limitation of liability. The Vermont Board of Liquor and Lottery shall be immune from:
1. any claim based upon an act or omission of an employee exercising due care, in the
execution of a statute or regulation, whether or not the statute or regulation is
valid, or based upon the exercise or performance or failure to exercise or perform
a discretionary function or duty on the part of the employee whether or not the discretion
involved is abused;
2. any claim arising in respect to the assessment or collection of any fee or commission
or the levy upon or detention of any goods or merchandise by a law enforcement officer;
3. any claim for damages caused by the fiscal operations of the department;
4. any claim arising out of alleged assault, battery, false imprisonment, false arrest,
malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit,
fraud, interference with contractual rights, or invasion of the right to privacy;
or
5. any other claim for which a remedy is provided or which is governed specifically by
other statutory enactment.
R. Fiscal year. The fiscal year of the Tri-State Lotto Commission shall be from July 1 of one calendar
year to June 30 of the succeeding calendar year.
S. [Repealed.] (Added 1985, No. 28, § 2; amended 1995, No. 156 (Adj. Sess.), §§ 1, 2, eff. June 1, 1996; 2003, No. 152 (Adj. Sess.), § 13, eff. Jan. 1, 2005; 2018, No. 1 (Sp. Sess.), § 105; 2019, No. 14, § 71, eff. April 30, 2019.)