58.1-4021 - Deposit of moneys received by agents; performance of functions, etc., in connection with operation of lottery; compensation of agents.
§ 58.1-4021. Deposit of moneys received by agents; performance of functions,etc., in connection with operation of lottery; compensation of agents.
A. The Director shall require all lottery sales agents to deposit to thecredit of the State Lottery Fund in banks, designated by the State Treasurer,all moneys received by such agents from the sale of lottery tickets orshares, less any amount paid as prizes or retained as compensation to agentsfor the sale of the tickets or shares, and to file with the Director, or hisdesignated agents, reports of their receipts, transactions and disbursementspertaining to the sale of lottery tickets in such form and containing suchinformation as he may require. Such deposits and reports shall be submittedat such times and within such intervals as shall be prescribed by rule andregulation of the Department. The Director may arrange for any person,including a bank, to perform such functions, activities or services inconnection with the operation of the lottery as he may deem advisablepursuant to this chapter and the rules and regulations of the Department, andsuch functions, activities and services shall constitute lawful functions,activities and services of the person.
B. The rules and regulations of the Department shall provide for a servicecharge to the licensed agent if any payor bank dishonors a check or drafttendered for deposit to the credit of the State Lottery Fund by a licensedagent or for an electronic transfer of funds to the State Lottery Fund fromthe account of a licensed agent for money received from the sale of lotterytickets.
The regulations of the Department shall provide for a service charge andpenalty to a licensed agent if any payor bank dishonors a check or draft fromthe account of a licensed agent tendered for payment of any prize by alicensed agent to any claimant. Any such charge or penalty so collected bythe Department shall be used first to reimburse the claimant for any chargesor penalties incurred by him as a result of the licensed agent's dishonoredcheck tendered as payment of any prize and the remainder to offset theDepartment's administrative costs.
C. A licensed agent shall be charged interest as provided in § 58.1-15 on themoney that is not timely paid to the State Lottery Fund in accordance withthe rules and regulations of the Department and shall in addition thereto paypenalties as provided by rules and regulations of the Department.
D. Should the Department refer the debt of any licensed agent to the AttorneyGeneral, the Department of Taxation as provided in § 58.1-520 et seq., or anyother central collection unit of the Commonwealth, an additional servicecharge shall be imposed in the amount necessary to cover the administrativecosts of the Department and agencies to which such debt is referred.
E. Notwithstanding the provisions of Chapter 5 (§ 8.01-257 et seq.) of Title8.01, in any action for the collection of a debt owed by any licensed agentto the lottery, venue shall lie in the City of Richmond.
F. All proceeds from the sale of lottery tickets or shares received by aperson in the capacity of a sales agent shall constitute a trust fund untildeposited into the State Lottery Fund either directly or through theDepartment's authorized collection representative. Proceeds shall includecash proceeds of the sale of any lottery products, less any amount paid asprizes or retained as compensation to agents for the sale of the tickets orshares. Sales agents shall be personally liable for all proceeds.
G. If the Director determines that the deposit or collection from any salesagent of any moneys or proceeds under this section is or will be jeopardizedor will otherwise be delayed, he may adjust either the time or the intervalor both for such deposits or collections of any sales agent; require that allsuch moneys or proceeds shall be kept separate and apart from all other fundsand assets and shall not be commingled with any other funds or assets priorto their deposit or collection under this section; and require such othersecurity of any sales agent as he may deem advisable to ensure the timelydeposit or collection of moneys or proceeds to the credit of the StateLottery Fund.
Collection of moneys or proceeds "is or will be jeopardized or willotherwise be delayed" when (i) a check, draft, or electronic funds transferto the credit of the State Lottery Fund is dishonored as described insubsection B; (ii) an independent auditor states that the lottery salesagent's financial condition raises substantial doubt about its ability tocontinue as a going concern; or (iii) the lottery sales agent (a) closes forbusiness or fails to maintain normal business hours without reasonableexplanation, (b) has a credit record reflecting recent actions which castdoubt as to its creditworthiness, (c) states it has or may have cash flowproblems or may be unable to meet its financial obligations, (d) states itmay seek the protection of the federal bankruptcy or state insolvency law,(e) refuses to purchase additional lottery tickets or returns tickets orderedwithout good cause, or (f) does any other act tending to prejudice or torender wholly or partially ineffectual proceedings to collect moneys orproceeds which are or will become due and payable to the State Lottery Fund.
(1987, c. 531; 1990, c. 732; 1990, Sp. Sess., c. 1; 2006, c. 598.)