565.10 Retailer contract.
(1) Selection of retailers; retailer contract. Under rules promulgated by the department under s. 565.02 (3) (b) and (4) (a), the administrator may contract with a person for the retail sale of lottery tickets or lottery shares. Retailers shall be selected for contract so as to provide adequate and convenient availability of lottery tickets and lottery shares to prospective buyers.
(2) Age restriction. No lottery retailer contract may be entered into with any person under 18 years of age. If the retailer is a partnership, this subsection applies to each partner of the partnership. If the retailer is a limited liability company, this subsection applies to each member of the limited liability company. If the retailer is an association or a corporation, this subsection applies to each officer and director of the association or corporation.
(3) Felony and other violations restriction; delinquent taxes and contributions restriction.
(a) Notwithstanding s. 111.321, no lottery retailer contract may be entered into with a person if, during the immediately preceding 10 years, the person has been convicted of, or entered a plea of guilty or no contest to, any of the following, unless the person has been pardoned:
1. A felony.
2. Any gambling-related offense.
3. Fraud or misrepresentation in any connection.
4. A violation of this chapter or any rule promulgated under this chapter.
(b) No lottery retailer contract may be entered into with a person who has been finally adjudged to be delinquent in the payment of taxes under ch. 71, 72, 76, 77, 78, or 139, who has been found delinquent in the payment of contributions to the unemployment reserve fund under s. 108.16 in a proceeding under s. 108.10, or who owes a payment to the uninsured employers fund under s. 102.82 or 102.85 (4) or to the work injury supplemental benefit fund under s. 102.49 (5) (a), 102.59 (2), or 102.60 (5) (b) if the person remains liable for those taxes, contributions, or payments at the time the person seeks to enter into the lottery retailer contract.
(c)
1. Except as provided in subd. 4., if the retailer is a partnership, pars. (a) and (b) apply to the partnership and each partner of the partnership.
1L. Except as provided in subd. 4., if the retailer is a limited liability company, pars. (a) and (b) apply to the limited liability company and to each of its members.
2. Except as provided in subd. 4., if the retailer is an association, pars. (a) and (b) apply to the association and each officer and director of the association.
3. Except as provided in subd. 4., if the retailer is a corporation, pars. (a) and (b) apply to the corporation, each officer or director of the corporation and each owner, directly or indirectly, of any equity security or other ownership interest in the corporation. In the case of owners of publicly held securities of a publicly traded corporation, pars. (a) and (b) apply only to those persons who are beneficial owners of 5 percent or more of the publicly held securities.
4. The restrictions under par. (a) do not apply to the partnership, limited liability company, association or corporation if the department determines that the partnership, limited liability company, association or corporation has terminated its relationship with the partner, member, officer, director or owner who was convicted or entered the plea or with the partner, member, officer, director, owner or other individual whose actions directly contributed to the partnership's, limited liability company's, association's or corporation's conviction or entry of plea.
(3m) False statement or material omission. No retailer or person seeking a contract under this section may intentionally make a false statement or material omission in any disclosure statement required to obtain, retain or renew a retailer contract.
(4) Exclusive business restriction. No lottery retailer contract may be entered into with any person who is engaged in business exclusively as a lottery ticket or lottery share retailer unless one of the following is true:
(a) The retailer contract is a temporary retailer contract.
(b) Subject to approval of each such retailer contract by the department, the retailer contract is with one of the following:
1. An individual who has a physical or mental disability which constitutes or results in a substantial handicap to his or her employment.
2. A group of individuals who have physical or mental disabilities which constitute or result in substantial handicaps to their employment.
3. A nonprofit organization, as defined in s. 108.02 (19), whose primary purpose is to provide service to or for individuals who have physical or mental disabilities which constitute or result in substantial handicaps to their employment.
(5) State agencies; government property.
(a) In entering into a lottery retailer contract with state agencies, other than the department, and agencies of local units of government, the administrator shall attempt to minimize the competitive effect of sales by the state or local agencies on other retailers. An application for a retailer contract by a local unit of government shall be approved by the governing body of the local unit of government.
(b) A lottery retailer contract may be entered into with a private person operating activities on state or local government property. The department shall give preference to an individual, group of individuals or nonprofit organization, as specified under sub. (4) (b), in entering into contracts under this paragraph.
(7) Length and sales authorization of contract.
(a) Except as provided in par. (b), a lottery retailer contract shall be for a period of 3 years and shall specify whether the retailer is authorized to conduct lottery ticket sales on a year-round, seasonal or temporary basis.
(b) The administrator may, under rules promulgated by the department, contract for a period that is shorter than 3 years in order to stagger lottery retailer contract expiration dates throughout a 3-year period.
(8) Contract fees. A contract entered into under this section may require payment of a nonrefundable initial application fee or a nonrefundable annual fee for continuation, or both, in an amount promulgated by the department by rule under s. 565.02 (4) (b). A separate nonrefundable fee, in an amount specified in rules promulgated under s. 565.02 (4) (b), may be required for each certificate of authority issued under sub. (11).
(8m) Payment to department or contractor. Payment by a retailer to the department or to any contractor for lottery tickets or lottery shares shall be by check, bank draft, electronic fund transfer or other recorded means, as determined by the administrator. No payment under this subsection may be in cash.
(9) Contract not assignable or transferable. A lottery retailer contract may not be assigned or transferred from one person or location to another.
(10) Location of sales. A retailer may sell lottery tickets or lottery shares only at locations specified in the contract entered into under this section.
(11) Certificate of authority; required display. The department shall issue to each retailer a separate certificate of authority for each location from which the retailer may sell lottery tickets or lottery shares. Each retailer shall conspicuously display the certificate of authority on the premises where retail sales of lottery tickets or lottery shares are authorized under the certificate in a location which is accessible for public inspection.
(12) Certificate of authority not assignable or transferable. A certificate of authority may not be assigned or transferred from one person or location to another.
(13) Bond. The department may by rule under s. 565.02 (4) (d) require fidelity bonds from retailers. In lieu of a bond, the department may purchase blanket bonds covering all or selected retailers or may allow a retailer to deposit and maintain with the department interest-bearing or interest-accruing securities approved by the department. Such securities shall be held in trust by the department and shall have at all times a market value at least equal to the amount required by the department.
(14) Compensation.
(a) In this subsection, “nonprofit organization" means a religious, charitable, service, fraternal or veterans organization or any organization, other than the state or a political subdivision of the state, to which contributions are deductible for federal income tax purposes or state income or franchise tax purposes, which meets all of the following criteria:
1. Is incorporated in this state as a nonprofit corporation or organized in this state as a religious or nonprofit organization.
2. Has been in existence for at least 3 years immediately preceding its application for a contract under this subsection.
3. Has at least 15 members in good standing.
4. Operates without profit to its members and no part of the net earnings of the organization inure to the benefit of any private shareholder or individual.
5. Conducts activities within this state in addition to selling lottery tickets or lottery shares.
(b)
1. The basic compensation to be paid to a retailer for the sale of a lottery ticket or lottery share described under s. 565.01 (6m) (a) 2. is 5.5 percent of the retail price of lottery tickets or lottery shares sold by the retailer.
2. The basic compensation to be paid to a retailer for the sale of a lottery ticket or lottery share described under s. 565.01 (6m) (a) 1. is 6.25 percent of the retail price of lottery tickets or lottery shares sold by the retailer.
NOTE: 1997 Wis. Act 27, section 4759 created s. 560.10 (14) (b) 2. to read as shown above. The “2" in “6.25" was erroneously marked as partially vetoed in section 4759. Section 4759 was not listed as partially vetoed in the Governor's Veto Message and the veto message made no mention of the subject matter of section 4759. See also, 70 Atty Gen. 189 and State ex rel. Klezcka v. Conta, 82 Wis. 2d 679, 264 N.W.2d 539 (1978).
3m. The department may, in rules promulgated under s. 565.02 (4) (g), provide for additional compensation, above the compensation provided under subd. 1. or 2., to be paid to retailers who meet certain performance goals identified by the department.
4. The department may, in the rules promulgated under s. 565.02 (4) (f), provide for the payment of a higher rate of compensation to nonprofit organizations making sales under a contract issued on a temporary basis than the rate of compensation paid to other retailers.
(15) Remitting proceeds. A retailer shall daily, unless another frequency that is at least once every 60 days is provided by the department by rule, remit to the department the lottery proceeds from the sale of lottery tickets or lottery shares. The amount of compensation deducted by the retailer, if any, shall be indicated as a deduction from the total remitted.
(16) Displaying notification that prizes claimed. Each lottery retailer contract shall require the retailer to display a sign as provided by rule under s. 565.02 (3) (j) when the department notifies the retailer that the top prizes in a scratch-off game have been claimed.
History: 1987 a. 119, 399; 1989 a. 172; 1991 a. 39, 269; 1993 a. 112; 1995 a. 27; 1997 a. 27; 1999 a. 9; 2005 a. 22, 25.