Chapter Tax 61

Chapter Tax 61

RETAILERS

Tax 61.01   Purpose.

Tax 61.02   Definitions.

Tax 61.03   Procedure for selecting and renewing contracting retailers.

Tax 61.04   Criteria for selecting retailers.

Tax 61.05   Fidelity bond.

Tax 61.06   Certificate of authority.

Tax 61.07   Contract denial appeal procedure.

Tax 61.08   Retailer contract terms and conditions.

Tax 61.085   Retailer performance program.

Tax 61.09   Limitation on length of suspension.

Tax 61.10   Appeal procedure.

Tax 61.25   Discretion of enforcement.

Ch. Tax 61 Note Note: Chapter LOT 5 was created as an emergency rule effective June 17, 1988. Chapter LOT 5 was renumbered chapter WGC 61 and corrections made under s. 13.93 (2m) (b) 1. and 6., Stats., Register, March, 1995, No. 471. Chapter WGC 61 was renumbered chapter Tax 61 under s. 13.93 (2m) (b) 1., Stats., and corrections made under s. 13.93 (2m) (b) 7., Stats., Register, October, 2000, No. 538.

Tax 61.01 Tax 61.01 Purpose. The purpose of this chapter is to provide the administrator with the procedure and criteria for selecting retailers to sell lottery tickets, to establish the retailer’s duties and obligations under the contract, to provide the administrator with the procedure and criteria to terminate or suspend the retailer’s contract and to provide the applicant and retailer an appeal procedure if a contract is denied or a contract is terminated or suspended.

Tax 61.01 Note Note: Section Tax 61.01 interprets ss. 565.10 and 565.12, Stats.

Tax 61.01 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; CR 01-088: am. Register February 2002 No. 554, eff. 3-1-02.

Tax 61.02 Tax 61.02 Definitions. In this chapter:

Tax 61.02(1) (1) “Administrator” means the administrator of the department’s lottery division or any designees.

Tax 61.02(1m) (1m) “Billing procedure” means the procedures used to collect revenue due the lottery by retailers consistent with s. 565.10 (15), Stats.

Tax 61.02(2) (2) “Commencement of a game” means the date, designated by the administrator, on which lottery tickets for a particular game under sub. (3) shall go on sale to the general public.

Tax 61.02(3) (3) “Lottery ticket” or “lottery share” means one of the following types:

Tax 61.02(3)(a) (a) For instant scratch ticket games under s. 565.01 (6m) (a) 1., Stats., a chance received for consideration that may entitle a player to a prize as a winning ticket under sub. (8), consistent with lottery games under s. 565.27, Stats.

Tax 61.02(3)(b) (b) For on-line ticket games under s. 565.01 (6m) (a) 2., Stats., a chance received for consideration that may entitle a player to a prize as a winning ticket under sub. (8), consistent with lottery games under s. 565.27, Stats.

Tax 61.02(3)(c) (c) For break-open ticket games under s. 565.01 (6m) (a) 1., Stats., a chance received for consideration that may entitle a player to a prize as a winning ticket under sub. (8), consistent with lottery games under s. 565.27, Stats.

Tax 61.02(4) (4) “Low tier prize” means a lottery prize of $49.00 or less, unless otherwise specified in the retailer’s handbook.

Tax 61.02(5) (5) “Retailer performance program” or “RPP” means a program that is designed to provide additional compensation, above the compensation provided under s. 565.10 (14) (b) 1. or 2., Stats., to retailers who meet certain performance goals identified by the Wisconsin lottery.

Tax 61.02(6) (6) “Selling location” means each cash register or instant ticket vending machine at a Wisconsin lottery retail outlet where a lottery ticket is sold.

Tax 61.02(7) (7) “Settlement date” means the date, designated by the administrator, by which the retailer is to return unsold instant scratch tickets for a particular game.

Tax 61.02(8) (8) “Validation” means the action of identifying whether a Wisconsin lottery ticket is a winning lottery ticket, by industry means consistent with the type of ticket under sub. (3).

Tax 61.02(9) (9) “Winning lottery ticket” or “winning lottery share” any lottery ticket under sub. (3), for which an appropriate validation under sub. (8) has been conducted by a representative of the lottery, which indicates that the lottery ticket is a winning ticket.

Tax 61.02(10) (10) “Wisconsin lottery” means the department of revenue Wisconsin lottery division, the executive assistant, the secretary or the deputy secretary of revenue.

Tax 61.02 Note Note: Section Tax 61.02 interprets ss. 565.10 and 565.12, Stats.

Tax 61.02 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; correction in (7) made under s. 13.93 (2m) (b) 6., Stats., Register, March, 1995, No. 471; renum. (1) to (7) to be (2) to (5), (7), (8) and (10), cr. (1), (6) and (9), Register, October, 2000, No. 538, eff. 11-1-00.; CR 01-088: am. (2), r. (3), renum. subs. (4) to (10) to be (3) to (9), and am. (6), (7) and (9) as renumbered Register February 2002 No. 554, eff. 3-1-02; CR 04-083: am. (2), (3) and (4), cr. (3) (a) to (c) and (8), renum. (8) and (9) to be (9) and (10) and am. Register April 2005 No. 592, eff. 5-1-02; CR 07-087: cr. (1m), am. (6) Register April 2008 No. 628, eff. 5-1-08.

Tax 61.03 Tax 61.03 Procedure for selecting and renewing contracting retailers.

Tax 61.03(1) (1) Any person may apply for a contract to sell lottery tickets by submitting to the Wisconsin lottery a completed application for a lottery retail sales contract. Applications are available upon request by contacting the Wisconsin lottery. A nonrefundable check for $75.00 made payable to the Wisconsin lottery shall accompany each application for a contract. A nonrefundable electronic fund transfer or check for $25.00 made payable to the Wisconsin lottery shall accompany each application for a contract renewal.

Tax 61.03 Note Note: Applications and application fees should be mailed or delivered to Wisconsin Lottery, 2135 Rimrock Road, PO Box 8941, Madison WI 53708-8941.

Tax 61.03(2) (2) The administrator shall examine the completed application, and based on criteria under s. 565.10 (2) to (5), Stats., and s. Tax 61.04 (1), shall either grant a contract or deny the application. The administrator shall grant the contract or deny the application within 35 business days after the Wisconsin lottery receives the completed application and application fee under sub. (1) or within 35 business days after the administrator completes a credit check under s. Tax 61.04 (1) (a), whichever is later.

Tax 61.03 Note Note: Section Tax 61.03 interprets s. 565.10 (1) to (5), Stats.

Tax 61.03 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; corrections in (2) made under s. 13.93 (2m) (b) 7., Stats., Register, March, 1995, No. 471; CR 01-088: am. Register February 2002 No. 554, eff. 3-1-02.

Tax 61.04 Tax 61.04 Criteria for selecting retailers.

Tax 61.04(1) (1) In addition to the criteria under s. 565.10 (1) to (5), Stats., the administrator shall determine if the applicant meets all of the following conditions:

Tax 61.04(1)(a) (a) The applicant or the applicant’s business shall satisfactorily pass a credit check by the administrator.

Tax 61.04(1)(b) (b) The applicant shall affirm, in the contract application, that the applicant’s business is physically secure and that the premise has a secure place to store lottery tickets.

Tax 61.04(1)(d) (d) The applicant is expected to sell a minimum monthly average of $400 worth of instant scratch tickets or instant break-open tickets or the sum of both each fiscal quarter, under s. 565.01 (6m) (a) 1., Stats., which shall be represented in any retailer contract or addenda. The administrator may deny a contract or a renewal to an applicant whose anticipated sales will not meet the stated minimum monthly average of sales per fiscal quarter or whose historical sales have not met the stated minimum monthly average of sales per fiscal quarter.

Tax 61.04(1)(e) (e) The applicant may not be an employee of the department of revenue Wisconsin lottery division, or the executive assistant, the secretary or the deputy secretary of revenue, per s. 565.05 (1) (b), Stats.

Tax 61.04(2) (2) If the applicant is a state agency or a local unit of government, the criteria under s. 565.10 (2) and (3) (a), Stats., and sub. (1) (e) shall apply to the entity’s officers and directors.

Tax 61.04(3) (3) If the administrator finds that there are so many qualified applicants in a given geographic area of the state that, if all those applicants would be granted contracts to sell lottery tickets, there would be an undue concentration of retailers selling lottery tickets in that area, the administrator shall perform market evaluations on the retail establishments seeking a contract. Contracts shall only be granted to those retailers achieving the highest marketing evaluation score until the undue concentration is eliminated. The administrator shall, however, grant a sufficient number of contracts in a given area to serve public convenience.

Tax 61.04(4) (4) Any applicant who has a physical or mental disability that constitutes or results in a substantial handicap to the applicant’s employment may be awarded a contract exclusively to sell lottery tickets if the applicant meets all of the following conditions:

Tax 61.04(4)(a) (a) Each applicant includes with the retailer application a letter from the Wisconsin division of vocational rehabilitation verifying that the applicant’s disability is a substantial handicap to employment.

Tax 61.04(4)(b) (b) Each applicant meets all other criteria under subs. (1) to (3).

Tax 61.04(4)(c) (c) Each applicant’s contract is approved by the administrator.

Tax 61.04 Note Note: Section Tax 61.04 interprets s. 565.10 (1) to (5), Stats.

Tax 61.04 History History: Cr. Register, March, 1989, No. 399, eff. 4-1-89; corrections made under s. 13.93 (2m) (b) 6., Stats., Register, March, 1995, No. 471; am. (1) (d), Register, October, 2000, No. 538, eff. 11-1-00; CR 01-088: am. (1) (intro.), (a), (e), (3), and (4) Register February 2002 No. 554, eff. 3-1-02; CR 04-083: r. and recr. (1) (b), r. (c), am. (d) Register April 2005 No. 592, eff. 5-1-05.

Tax 61.05 Tax 61.05 Fidelity bond.

Tax 61.05(1) (1) The Wisconsin lottery may require from each retailer a fidelity bond or an irrevocable letter of credit, or both, in the amount determined by the administrator and based upon the applicant’s projected lottery ticket sales. The administrator may also require from each retailer the payment of interest for any outstanding unpaid balance that results from a dishonored retailer’s check or electronic funds transfer, under s. Tax 61.08 (14) (d).