Ohio Lottery Retailer Handbook: Consignment of Instant Tickets and Ticket Management, Study notes of Business

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RETAILER

REFERENCE GUIDE

Revised March 2013

Contents

BEING A RETAILER

An Introduction to Your LSR and CSR

You will be assigned a Customer Service Representative (CSR) who will help you place your Instant ticket orders. You will also work with a Lottery Sales Representative (LSR) who will assist you and your staff with training, marketing and promotional support at your store.

Consignment and Issuing of Instant Tickets

The Ohio Lottery issues Instant tickets on consignment. The Lottery will also provide Instant ticket dispensers and point-of-purchase materials to retailers. You will be called regularly by your Customer Service Representative (CSR) to verify the status of your ticket inventory and to place orders for Instant tickets, bet cards, and terminal supplies. Your order will be delivered by UPS and will contain a shipping manifest. It is your responsibility to verify the contents against the manifest, and to scan the bar code on the Instant ticket package or manifest to confirm the Instant ticket delivery. Any discrepancies should be promptly reported to your CSR. Prior to selling from an issued book of tickets, the book must be placed into active status using your lottery terminal. Once activated, the book can be sold and winners cashed. All Instant tickets that are sold over the counter must be deactivated at the end of the business day. Ticket deactivation prevents them from having a value if stolen, and protects you from financial liability.

Security

Retailers are financially responsible for all issued tickets and are encouraged to secure all Lottery tickets, equipment and supplies.

Equipment Relocation

If you need to move any of your lottery machines, please contact your LSR for assistance.

Insurance of Lottery Equipment

As part of the application process to become a retailer, you signed an Indemnification Agreement. By signing this agreement, you acknowledged that you are responsible for reimbursing the Lottery for any damage to the equipment, including full replacement of any equipment that is not repairable. Please contact your regional office for the replacement value of your equipment.

Amber Alert

An Amber Alert message is mandatory and must be read immediately. You will not be able to perform any further terminal functions until the message is read. When you receive an Amber Alert message, print the message and display it prominently in the store. Further updates will be provided as they become available.

DRAWING SCHEDULE

Pool Closes

Drawing Held

Sun Mon Tue Wed Thu Fri Sat

12:25 PM 12:29 PM

7:00 PM

Approx.

7:05 PM

7:25 PM

7:29 PM

(approx. 7:45 PM – Sat. Night)

10:00 PM 11:00 PM

10:45 PM 11:00 PM

KENO drawings are held every 4 minutes from 6:04 a.m. to 2:28 a.m., daily.

Ohio Lottery drawings are aired Monday through Friday at 7:29 p.m., and on Saturday during the game show. Cash Explosion is aired on Saturday’s at 7:30 pm. Saturday Night Pool Closings and draws are as follows:

• Pool Closes at 7 pm for Rolling Cash 5, Classic Lotto and Kicker.
• Kicker is drawn immediately after the pool closes. Rolling Cash 5 and Classic Lotto are drawn at approx. 7:
• Pick 3, Pick 4 and Pick 5 are drawn after 7:45 at a commercial break during the show.

Stations and markets that broadcast the evening Lottery drawings and game show are

shown below:

• WKYC-TV3, NBC Cleveland
• WTVG-TV13, ABC Toledo
• WRGT-TV45 FOX/WKEF-TV22 ABC Dayton
• WSAZ-TV3, Huntington
• WHIZ-TV18, Zanesville
• WFMJ-TV21, Youngstown
• WTOV-TV9, Steubenville
• WCPO-TV9, Cincinnati
• WTTE-TV28/WSYX-TV6, Columbus
• ELIO-TV9/EOHL-TV11/WOHL-TV12, Lima

At that time, the Lottery will charge the total book value, minus the 5.5 percent commission, to your invoice. To ensure additional inventory, please mark all outstanding books as sold. The number of books a retailer is consigned is based on the store’s sales.

Floating Instant Tickets

Retailers should mark sold books according to Lottery Policy and Procedures. Any book that is not marked sold at the correct time is considered in a “float” condition. If this occurs, your LSR will ask for the books(s) in question to be processed as sold. Only retailers are permitted to process book(s) as sold. A float situation must be resolved before more tickets can be issued.

Instant Game Final Settlement and Mark-Sold

Each Instant game has a defined sales cycle. At the end of this sales cycle, the Lottery performs a final settlement. During this period, called final settlement, you are offered an opportunity to return all unsold inventory of the game. You will receive the dates and games included in final settlement on a regular basis. At the end of final settlement, all inventory in your possession will be processed as marked sold and payment will be due to the Lottery.

Retailer Request for Reimbursement

Retailers may pay prizes on tickets that generate a Cash/Pay receipt only. Retailers who mistakenly pay customers on winning tickets that generate any of the other payment receipts may submit a request for reimbursement. The retailer must submit the receipt and original ticket along with the necessary paper work and a $25 processing fee (paid by money order or EFT) for all reimbursements.

Cash Advance

A retailer can receive a cash advance if the store’s cashes exceed sales by $1,000 or more on the week-to-date report. Notify your regional office before 10 a.m. to receive the cash advance.

The money will be credited to your account the same day.

Changing Your Bank Account

Contact your regional office when you want to change the location of your Lottery bank account, or www.ohiolottery.com to download an EFT form. The regional office will notify you when the new account can be used for Lottery transactions.

Incident Reports

Within 24 hours of an incident, report lost, stolen or destroyed tickets or equipment to the local police department and your regional office. When a portion of a book is reported stolen, lost or destroyed, immediately discontinue selling the book until the Lottery authorizes the sale of the remaining tickets.

In case of a fire, file a report within 24 hours with the local fire department and provide the Lottery with a copy of the fire department report.

Credit

Retailers may receive credit for stolen tickets provided they are un-cashed and/or were deactivated.

Sight Validation

Sight validation is prohibited. All tickets must be validated through the Lottery terminal. No prize may be paid if a ticket is stolen, altered, torn or mutilated.

Non-conforming or defective tickets should be returned to your lottery sales representative for credit.

Tickets that do not have an intact barcode should not be cashed If you have a question about cashing damaged instant tickets contact the lottery hotline.

Redeemed Tickets

All redeemed tickets must be destroyed or defaced immediately after balancing on the Lottery ticket system.

If Faced With A Theft

Immediately follow the steps below:

Deactivate the affected book(s). Record the name of anyone you speak with for future reference concerning your incident report. Contact the local police department and complete a police report. Write down your report number. Complete a Stolen or Destroyed Ticket Report and Statement of Retailer Affidavit provided by your LSR. Write down your report number. Obtain a copy of the police report and give it to your LSR within 30 days. Late police reports justify denial of stolen ticket credit. Notify your regional office and the Lottery’s Office of Security as soon as possible. Call the Customer Call Center immediately if you experience a terminal problem while generating or validating tickets. Retailers can submit Retailer Requested Adjustment forms for investigation of Online ticket questions, and possible credit. These forms are provided by your sales representative, regional office, or www.ohiolottery.com. Below are guidelines to follow when requesting credit. If misprinted or defective Instant tickets are discovered, contact your Lottery Sales Representative or Regional Office for further assistance.

COMMISSIONS AND BONUSES

The Ohio Lottery offers selling bonuses to retailers for selling top prize winning tickets in the following situations:

Instant Tickets and Game Show Selling Bonuses

To qualify for a selling bonus, the top prize of the instant game must be $100,000 or more. The selling bonus is 1% of the top prize with a cap of $10,000. The game show selling bonus is 1% of the championship contestant’s total winnings (excludes bonus prize winnings).

Rolling Cash 5

A $500 bonus is paid for selling a Rolling Cash 5 ticket with a 5-of-5 match.

Classic Lotto

A $1,000 bonus is paid for selling a Classic Lotto ticket with a 6-of-6 match.

KICKER

A $1,000 bonus is paid for selling the winning KICKER match.

Mega Millions*

The selling bonus is $1,000 per one million dollars of (Ohio’s share) of the advertised jackpot. The selling bonus is shared equally by the Ohio lottery retailers who sold winning jackpot tickets for a specific drawing. The minimum bonus is $10,000 with a cap of $100,000 per jackpot. The retailer(s) selling the Mega Millions $250,000 prize will receive a $1,000 bonus per winning ticket.

Powerball*

The selling bonus is $1,000 per one million dollars of (Ohio’s share) of the advertised jackpot. The selling bonus is shared equally by the Ohio lottery retailers who sold winning jackpot tickets for a specific drawing. The minimum bonus is $10,000 with a cap of $100,000 per jackpot. The retailer(s) selling the Powerball 5 + 0 match will receive a $1,000 bonus per winning ticket.

*Winning Megaplier and Power Play second tier prizes do not receive an extra bonus.

Raffle

$5,000 selling bonus is paid to the retailer(s) for selling a $1 million top prize Raffle game ticket (selling bonuses for this game can change).

The Ohio Lottery records commissions and bonuses earned by retailers in separate line items on the Invoice Report. Each January, you will receive a 1099 Miscellaneous for tax filing purposes. The statement shows your Lottery income for the previous year.

Sales Commission - A 5.5 percent commission is paid on the sale of Lottery tickets.

Cashing Commission - A 1 percent cashing commission is paid for tickets cashed weekly. If the cash-to-sales ratio is 49.5 percent or greater, an additional 0.5 percent bonus commission is paid. The lottery account must show sales in order to receive a cashing bonus. This is automatically calculated on the weekly invoice report.

Claim Bonuses - A $5 claim bonus is paid for validating and assisting a customer with a winning ticket that produces a Pay To Bearer or File Claim receipt. The Retailer assists the customer with completion of the claim form and directions for the nearest bank cashing location for a Pay To Bearer receipt or with a File Claim receipt directs the customer to the nearest Regional Office for claim processing. The claims bonus is reflected on the weekly invoice report.

Liability Limit Alerts

When a Keno Agent reaches a Limit 1 which is 75 percent of their weekly liability limit:

1. Sales Management will email all Limit 1 Alert Notifications during normal business hours to local Regional management and the LSR detailing the limit(s) reached and the balance remaining.

2. The local Regional Office or the LSR during normal business hours will call the location explaining that they have reached limit 1 which is 75 percent of their weekly online sales, less weekly online cashes and weekly online cancels. They will inform them that if they hit limit 2 which is 100 percent of their weekly liability limit their terminal(s) will automatically suspend sales however they will still be able to cash tickets and that cashing tickets will in-turn lower their liability, which will allow the terminal(s) to resume selling. They will also inform them that to avoid a Terminal Suspension other than cashing tickets they can increase their liability deposit amount by increments of $250.00 during normal Lottery business hours. This can be done by contacting their Lottery Sales Representative or local Regional Office.

When a Keno Agent reaches a Limit 2 which is 100 percent of their weekly liability limit:

1. Sales Management will email all Limit 2 Alert Notifications during normal business hours to local Regional management and the LSR detailing the limit(s) reached and the balance remaining.

2. The local Regional Office or the LSR during normal business hours will call the location explaining that they are still be able to cash tickets and that cashing tickets will in-turn lower their liability, which will allow the terminal(s) to resume selling. They will also inform them that to avoid a Terminal Suspension other than cashing tickets they can increase their liability deposit amount by increments of $250.00 during normal Lottery business hours. This can be done by contacting their Lottery Sales Representative or local Regional Office.

CUSTOMER RELATIONS/FINANCES

Sales of Lottery Products to Minors

Lottery Retailers are prohibited from selling lottery tickets to minors.

When a Ticket Will Not Validate

The terminal will display information regarding the problem. Typical messages include, but are not limited to, previously cashed or drawings not held.

Previously Cashed

The ticket was already cashed. Do not pay the customer.

Ticket validated at another terminal

This message indicates the ticket presented was cashed by another retailer. Call the Customer Call Center for further instructions. Do not pay the customer. A retailer cannot be reimbursed for proceeds paid on a ticket that could not be validated on the Lottery terminal, or without the assistance of Lottery Customer Call Center.

If A Customer Disputes Your Findings

Give the person the ticket back and provide a claim form. The customer needs to complete the claim form and check the box at the top for Inquiry. The completed claim form and the ticket in question needs to be mailed for review by the lottery using the address on the back of the form.

180 Day Validation Period

Winning tickets must be validated and presented for payment within (a) 180 days from the announced closing date of the game for Instant tickets, (b) 180 days from the draw date for all Online tickets or (c) 180 days from the day the EZ Play ticket was printed. Remind customers that the period of 180 calendar days is not equal to six months. Instant game closing dates are available on the web site at www.ohiolottery.com.

Prize Tax Withholdings

The Ohio Lottery is required to notify both the Internal Revenue Service (IRS) and the State of Ohio for any individual winning wager of $600 or more. The winner will receive a W-2G for federal and state tax filing purposes for any individual prize of $600 and up.

Ohio Lottery prizes of more than $5,000 are subject to state and federal tax withholdings. Winners should check with their local municipality to find out if local taxes apply to Lottery winnings.

Group Claims/ Non Resident

Groups have a number of options for claiming prizes. Have them contact the Lottery’s Customer Call Center or the nearest regional office.

Non-Resident Alien/Foreign Winner

A non-resident winner cannot use the bank cashing program and must go to a regional office to claim a prize.

The original ticket and the Cash Pay receipt are to be stapled together and held in the cash drawer until the drawer is balanced. Do not return the original ticket to the customer when cash is paid.

If the cashing confirmation is set at $50 and the prize is under $50, the cashing receipt prints automatically. The default cashing confirmation ($50) can be changed to a lower amount ($1 -$49) which will cause a pop up window to ask if you want to proceed.

A Multi-Draw ticket is cashed the same way as a single drawing ticket; however, when you validate a Multi-Draw ticket, if there are valid drawings remaining, an Exchange Ticket is automatically printed. The Exchange Ticket contains the same ticket information as the original ticket with the exception of the drawing period, which is changed to reflect the valid upcoming drawing dates.

Using the Lottery terminal to validate and cash tickets is the only way to verify that a ticket is a legitimate winner and to ensure that your business receives proper credit for paying a winner or handling a claim.

Winning tickets can be validated the day of the drawing with the exception of Mega Millions/Megaplier and Powerball/Power Play which can be cashed the next day. Instant tickets can be validated immediately upon purchase.

Following are the different types of payment receipts generated when a winning ticket is validated through the terminal. The receipt also provides direction on the action you must take to complete the service. Complete processing instructions are also printed on the back of any claim form and are available at www.ohiolottery.com.

Top Prize Drawing (TPD) Claims:

TPD prizes of $2,000 or $2,500 will generate a pay-to-bearer and can be paid at a bank cashing location. TPD prizes of $5, will be processed according to the file claim instructions. Once a claim is completed and processed, the winner is automatically entered into the TPD drawing.

CASH/PAY RECEIPTS

The Cash/Pay receipt is the only type of receipt that permits a retailer to pay cash prizes directly to a winner. All other payment receipts require a claim form and additional processing steps.

The retailer is required to pay the customer the amount of the winning ticket, up to $599 for each winning wager. That means that the maximum value of this type of receipt could be as high as $5,990 if the ticket had 10 winning wagers of $599 each. Refer to the Cash Advance section under Managing Your Lottery Account in this handbook. You can contact your regional office to secure a cash advance for these higher payouts.

A retailer must ensure that funds are available to pay the winner prior to validation. The Lottery terminal is equipped with a cash confirmation screen that will verify whether you wish to proceed with cashes over a certain dollar amount. The default setting is $50.

The retailer retains both the ticket and the Cash/Pay receipt until the retailer’s internal accounting procedures are satisfied. At that time, the ticket and receipt should be defaced and discarded.