La. Admin. Code tit. 42 § XV-535

Current through Register Vol. 50, No. 11, November 20, 2024

Section XV-535 - Retailer Security

A. The following rules shall apply to the retailer security, which §9053 of the Louisiana Lottery Corporation Law requires of retailers.

B. The security shall consist of a letter of credit or bond issued by a bank or surety company acceptable to the corporation. For purposes of this Section, the term "bond" shall include cash, cash-equivalent instruments or such other instruments as the corporation determines provide immediate liquidity.

C. The security may be in an amount of no greater than two times the retailer's average gross sales of lottery tickets for the period within which the retailer is required to remit sales proceeds to the corporation. The calculation of the security amount shall exclude the amount of lottery tickets for which the retailer has paid in advance.

D. The security under this Section shall constitute security for all obligations of the retailer to the corporation pursuant to these retailer regulations or the retailer's contract with the corporation. The obligations of retailers shall include, without limitation, the retailer's obligation to remit sales proceeds and unsold lottery tickets to the corporation. The corporation may enforce the security immediately upon a retailer's default in any such obligations for the full amount of the defaulted obligations up to the amount of the security, without affecting the corporation's right to any deficiency. Enforcement shall occur by drawing upon a letter of credit, request for payment under a bond or otherwise according to law.

E. In order to facilitate the acquisition of the required security by retailers, the corporation shall maintain the retailer security account, a special banking account for the pooling of retailer security and the acquisition of a letter of credit or bond as required by §9053 of the Louisiana Lottery Corporation Law. In lieu of posting security, a retailer having a security obligation may pay a non-refundable $10 fee to the corporation and the corporation shall deposit this fee into the retailer security account. Such fee may be increased or decreased by the corporation from time to time. Upon any default by any retailer, the corporation may pay such defaulted obligations, up to the amount of the security required of the retailer, from the letter of credit or bond secured by the retailer security account. Upon such payment, the retailer shall be obligated to reimburse the corporation for the full amount of such defaulted obligation and the corporation shall deposit the reimbursement into the retailer security account. At the end of each fiscal year, the president and the board may authorize inclusion of all or a portion of the unused amounts remaining in the retailer security account at the end of the fiscal year in the revenues of the corporation for the fiscal year.

F. The retailer's authority to sell lottery tickets shall be suspended for any period in which the retailer does not maintain the security required under this Section, but will be reinstated upon the reinstatement of the security. Failure to maintain adequate security shall be grounds for suspension or termination of a retailer contract and license.

La. Admin. Code tit. 42, § XV-535

Promulgated by the Louisiana Lottery Corporation in The State Times on May 21, 1991, amended LR 26:712 (April 2000).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:9001 et seq.