10 Del. Admin. Code § 204-5.0

Current through Reigster Vol. 28, No. 6, December 1, 2024

Section 204-5.0 - Technology Providers: Contracts; Requirements; Duties

5.1 The Director shall, pursuant to the procedures set forth in Chapter 69 of Title 29 of the Delaware Code, enter into contracts with licensed technology providers as he or she shall determine to be appropriate, pursuant to which the technology providers shall furnish to the State a sports lottery system that results in the efficient and economical operation of the lottery, convenience of the players, and is in accordance with the agents' business plans as approved and amended by the Director.

5.2 All contracts with technology providers who are sports lottery system providers shall include, without limitation, provisions to the following effect:

5.2.1 The technology provider shall furnish a person to work with the agency and its consultants to provide assistance as needed in establishing, planning and executing acceptance tests on the sports lottery machines provided by such technology provider. Technology provider assistance shall be provided as requested by the agency in troubleshooting communication and technical problems that are discovered when sports lottery machines are initially placed at the agent's site;

5.2.2 The technology provider shall submit sports lottery machine illustrations, schematics, block diagrams, circuit analysis, technical and operation manuals, program source code and object code, and any other information requested by the Director for the purposes of analyzing and testing the sports lottery machines;

5.2.3 For testing, examination and analysis purposes, the technology provider shall furnish working models of sports lottery machines, associated equipment, and documentation at locations designated by the Director. The technology provider shall maintain the current software and sports lottery machines in good working order acceptable to the agency. The technology provider shall pay all costs of any testing, examination, analysis and transportation of the sports lottery machines, which may include the entire dismantling of the machines, and some tests that may result in damage or destruction to one or more electronic components of the machines. The agency and its agents shall have no liability for any damage or destruction. The agency may require that the technology provider provide specialized equipment or the agency may employ the services of an independent technical laboratory expert to test the sports lottery machine at the technology provider's expense;

5.2.4 Technology providers shall submit all hardware, software, and test equipment necessary for testing their sports lottery machines, and shall provide the Director with keys and locks subject to the Director's specifications for each approved sports lottery machine;

5.2.5 The software or other equivalent technology of each sports lottery machine shall be certified to be in compliance with published specifications; and

5.2.6 No sports lottery machine shall be put into use prior to certification of its model by the Director.

5.3 All contracts with technology providers shall include, without limitation, provisions to the following effect:

5.3.1 Technology providers shall agree to promptly report any violation or any facts or circumstances that may result in a violation of these rules; provide immediate access to all their records and their physical premises for inspection at the request of the Director; and attend all trade shows or conferences as required by the Director;

5.3.2 Technology providers shall agree to modify their hardware and software as necessary to accommodate sports game changes directed by the agency from time to time;

5.3.3 Technology providers shall provide such bonds and provide evidence of such insurance as the Director shall require from time to time and in such amounts and issued by such companies as the Director shall approve; and

5.3.4 Technology providers shall have a valid license to conduct business in the State of Delaware, shall comply with all applicable tax provisions, and shall in all other respects be qualified to conduct business in Delaware.

5.4 Each sports lottery machine certified by the Director shall bear a unique serial number and shall conform to the exact specifications of the sports lottery machine model tested and certified by the Director.

5.5 Technology providers shall hold harmless the agency, the State of Delaware, and their respective employees for any claims, loss, cost, damage, liability or expense, including, without limitation, legal expense arising out of any hardware or software malfunction resulting in the wrongful award or denial of credits or cash.

5.6 A technology provider shall not distribute a sports lottery machine for placement in the state unless the machine has been approved by the agency. Only licensed technology providers may apply for approval of a sports lottery machine or associated equipment. The technology provider shall submit two copies of sports lottery machine illustrations, schematics, block diagrams, circuit analysis, technical and operation manuals, program source code and object code, and any other information requested by the agency for the purposes of analyzing and testing the sports lottery machine or associated equipment.

5.7 The agency may require that two working models of a sports lottery machine be transported to the location designated by the agency for testing, examination, and analysis. The technology provider shall pay all costs of testing, examination, analysis and transportation of such sports lottery machine models, which may include the entire dismantling of the sports lottery machine, and tests which may result in damage or destruction to one or more electronic components of such sports lottery machine model. The agency may require that the technology provider provide specialized equipment or the services of an independent technical expert in testing the terminal.

5.8 After each test has been completed, the agency shall provide the sports lottery systems provider with a report that contains findings, conclusions, and pass/fail results. Prior to approving a particular sports lottery machine model, the agency may require a trial period not in excess of sixty (60) days for a licensed agent to test the sports lottery machine. During the trial period, the technology provider may not make any modifications to the sports lottery machine model unless such modifications are approved by the agency.

5.9 The technology provider is responsible for the assembly and initial operation, in the manner approved and licensed by the agency, of all of its sports lottery machines and associated equipment. The technology provider may not change the assembly or operational functions of any of its sports lottery machines approved for placement in Delaware unless a "request for modification to an existing sports lottery machine prototype" is made to the agency. Such request must contain all appropriate information relating to the type of change, the reason for the change, and all documentation required. The agency must approve such request prior to any changes being made, and the agency shall reserve the right to require second testing of sports lottery machines after modifications have been made.

5.10 Each sports lottery machine approved for placement in an agent's place of business shall conform to the exact specifications of the sports lottery machine prototype tested and approved by the agency. Any sports lottery machine which does not so conform shall be disconnected from the Delaware sports lottery system until compliance has been achieved. Each sports lottery machine shall at all times operate and be placed in accordance with the provisions of these regulations.

5.11 The following duties are required of all licensed technology providers, without limitation:

5.11.1 Manufacture terminals and associated equipment for placement in Delaware in accordance with the specifications of the agency.

5.11.2 Manufacture terminals and associated equipment to ensure timely delivery to Delaware agents.

5.11.3 Maintain and provide an inventory of associated equipment to assure the timely repair and continued, approved operation and play of licensed sports lottery machines acquired under the contract for placement in Delaware and maintain said equipment at a Delaware storage facility or warehouse.

5.11.4 Provide an appropriate number of service technicians with the appropriate technical knowledge and training to provide for the service and repair of its sports lottery machines and associated equipment so as to assure the continued, approved operation and play of those machines acquired under contract for placement in Delaware.

5.11.5 Obtain any certification of compliance required under the applicable provisions of rules adopted by the Federal Communications Commission.

5.11.6 Promptly report to the agency any violation or any facts or circumstances that may result in a violation of State or Federal law and/or any rules or regulations adopted pursuant thereto.

5.11.7 Conduct sports lottery operations in a manner that does not pose a threat to the public health, safety, or welfare of the citizens of Delaware, or reflect adversely on the security or integrity of the sports lottery.

5.11.8 Hold the agency and the State of Delaware and its employees harmless from any and all claims that may be made against the agency, the State of Delaware, or the employees of either, arising from the technology provider's participation in or the operation of a sports lottery game.

5.11.9 Defend and pay for the defense of all claims that may be made against the agency, the State of Delaware, or the employees of either, arising from the technology provider's participation in sports lottery operations.

5.11.10 Maintain all required records.

5.11.11 Provide only those sports lottery machines, validation units and associated equipment approved under these regulations.

5.11.12 It shall be the continuing duty of the technology provider licensee to provide the Director with an updated list of the names and addresses of all its employees who are involved in the daily operation of the sports lottery machines. These employees will include individuals or their supervisors involved with (1) the repair or maintenance of the sports lottery machines, or (2) positions that provide direct access to the sports lottery machines. It shall be the continuing duty of the technology provider licensee to provide for the bonding of each of these individuals to ensure against financial loss resulting from wrongful acts on their parts.

5.11.13 It shall be the ongoing duty of the technology provider licensee to notify the Director of any change in officers, partners, directors, key employees, sports lottery operations employees, or owners. These individuals shall also be subject to a background investigation. The failure of any of the above-mentioned individuals to satisfy a background investigation may constitute "cause" for the suspension or revocation of the technology provider's license.

5.11.14 Supervise its employees and their activities to ensure compliance with these rules.

5.11.15 Promptly report to the agency any violation or any facts or circumstances that may result in a violation of State or Federal law and/or any rules or regulations pursuant thereto, excluding violations concerning motor vehicle laws.

5.11.16 Comply with such other requirements as shall be specified by the Director.

10 Del. Admin. Code § 204-5.0

21 DE Reg. 974 (6/1/2018)
22 DE Reg. 592 (1/1/2019) (Final)