§ 23-115-403 - Attachments, garnishments, or executions withheld from lottery prizes -- Validity of tickets or shares -- Lottery prize restrictions -- Unclaimed lottery prizes.
23-115-403. Attachments, garnishments, or executions withheld from lottery prizes -- Validity of tickets or shares -- Lottery prize restrictions -- Unclaimed lottery prizes.
(a) Proceeds of a lottery prize are subject to Arkansas state income tax.
(b) (1) Except as otherwise provided in this chapter, attachments, garnishments, or executions authorized and issued under Arkansas law shall be withheld if timely served upon the Arkansas Lottery Commission.
(2) Subdivision (b)(1) of this section does not apply to a retailer.
(c) The commission shall adopt rules to establish a system of verifying the validity of tickets or shares claimed to win lottery prizes and to effect payment of lottery prizes, except that:
(1) (A) A lottery prize, any portion of a lottery prize, or any right of any individual to a lottery prize is not assignable.
(B) A lottery prize or any portion of a lottery prize remaining unpaid at the death of a lottery prize winner shall be paid to the estate of the deceased lottery prize winner or to the trustee of a trust established by the deceased lottery prize winner as settlor if:
(i) A copy of the trust document or instrument has been filed with the commission along with a notarized letter of direction from the settlor; and
(ii) No written notice of revocation has been received by the commission before the settlor's death.
(C) Following a settlor's death and before any payment to a successor trustee, the commission shall obtain from the trustee a written agreement to indemnify and hold the commission harmless with respect to any claims that may be asserted against the commission arising from payment to or through the trust.
(D) Under an appropriate judicial order, an individual shall be paid the lottery prize to which a winner is entitled;
(2) A lottery prize shall not be paid arising from claimed tickets that are:
(A) Stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the commission within applicable deadlines;
(B) Lacking in captions that conform and agree with the play symbols as appropriate to the particular lottery involved; or
(C) Not in compliance with rules and public or confidential validation and security tests of the commission appropriate to the particular lottery involved;
(3) (A) A particular lottery prize in any lottery shall not be paid more than one (1) time.
(B) If there is a determination that more than one (1) claimant is entitled to a particular lottery prize, the sole remedy of the claimants is the award to each of them of an equal share in the lottery prize;
(4) (A) Within one hundred eighty (180) days after the drawing in which a cash lottery prize has been won, a holder of a winning cash ticket or share from an Arkansas lottery or from a multistate or multisovereign lottery shall claim the cash lottery prize.
(B) (i) In an Arkansas lottery in which a player may determine instantly if he or she has won or lost, a player who has won shall claim a cash lottery prize within ninety (90) days after the playing of the instant game.
(ii) In any multistate or multisovereign lottery in which a player may determine instantly if he or she has won or lost, a player who has won shall claim a cash lottery prize within one hundred eighty (180) days after the playing of the instant game.
(C) If a valid claim is not made for a cash lottery prize within the applicable period, the cash lottery prize constitutes an unclaimed lottery prize for purposes of this section.
(D) The commission at any time may alter the time periods under subdivisions (4)(A) and (B) of this section by rule; and
(5) (A) If practicable, an auditor chosen by the commission shall be present at a draw to determine the winners of a draw game to verify the accuracy of the results.
(B) The commission may request an auditor employed by the Division of Legislative Audit for the purposes of subdivision (c)(5) of this section.
(d) (1) A lottery prize shall not be paid upon a ticket or share purchased or sold in violation of this chapter.
(2) A lottery prize described in subdivision (d)(1) of this section is an unclaimed lottery prize for purposes of this section.
(e) The commission is discharged of all liability upon payment of a lottery prize.
(f) (1) A ticket or share shall not be purchased by and a lottery prize shall not be paid to any:
(A) Member of the commission;
(B) Employee of the commission; or
(C) Member of the immediate family of a member of the commission or an employee of the commission.
(2) If an officer, employee, agent, or subcontractor of a vendor has access to confidential information that may compromise the integrity of a lottery, a ticket or share shall not be purchased by and a lottery prize shall not be paid to the:
(A) Officer, employee, agent, or subcontractor of the vendor; or
(B) Immediate family of the officer, employee, agent, or subcontractor of the vendor.
(g) Unclaimed lottery prize money shall be added to net lottery proceeds.