Section 1770.90 Delinquent Financial Obligations

Section 1770

Section 1770.90  Delinquent

Financial Obligations

a)         It is the obligation of each Agent to remain current on the

Agent's financial obligations to the Department.  Lottery accounts are due and

owing, in full, each Wednesday, unless the Agent has been notified by the

Department of an alternate settlement day due to a bank holiday or other

business disruption.  Accounts not settled on the designated settlement day

shall be deemed delinquent.

b)         The Department will apply sanctions with respect to delinquent

Agent accounts, according to the following schedule of sanctions:

1)         First delinquency:  In the event an Agent is delinquent in

settlement of that Agent's Lottery account, and the delinquency is the first

within the past 30 days, including the month of delinquency, the Agent will

transfer the funds to the Department's account by 4:00 p.m. the next business

day, if the delinquency was reported before noon (12:00 p.m.), or by 10:00 a.m.

the second business day if the delinquency was reported after noon. If the delinquent

settlement amount is paid by the extended settlement deadline, the Agent will

be charged with one delinquency but will receive no further sanction.  However,

if the settlement amount is not paid by the extended settlement deadline, the

delinquent Agent's terminal and any related terminals will be immediately

deactivated and the account will be referred to the Lottery's accounts

receivable staff.  The terminal or related terminals will not be reactivated

until the follow-up report is received and reviewed by the Department's Chief

Financial Officer or designee;

2)         Second delinquency:  In the event an Agent is delinquent in

settlement of that Agent's Lottery account, and the delinquency is the second

one in the past 90 days, including the month of the delinquency, the delinquent

Agent's terminal or related terminals will be immediately deactivated and the Agent

will be charged with a second delinquency

t's Chief

Financial Officer or designee;

2)         Second delinquency:  In the event an Agent is delinquent in

settlement of that Agent's Lottery account, and the delinquency is the second

one in the past 90 days, including the month of the delinquency, the delinquent

Agent's terminal or related terminals will be immediately deactivated and the Agent

will be charged with a second delinquency.  When the delinquent settlement

amount is deposited to an account at a branch of the Department's chosen bank or

wire transferred to the Department's account, the terminal or related terminals

will be reactivated unless the second incident is within one month after the

first, or the payment was made after the extended payment deadline.  If this

occurs, the terminal and any related terminals will be reactivated only after

review and approval by the Department's Chief Financial Officer or designee.

In determining whether to reactivate a terminal or related terminals, Department

staff may consider the Agent's prior history, general financial status as

disclosed by a current credit report, ability to provide a security deposit,

letter of credit or bond to protect against future delinquencies, and other

relevant financial and administrative information as may be available to or

requested by the Department;

3)         Third delinquency:  In the event an Agent is delinquent in settlement

of that Agent's Lottery account or any extended payment deadline, and the

delinquency is the third one in the past 12 months, including the month of the

delinquency, the delinquent Agent's terminal and any related terminals will be

immediately deactivated and the Agent will be charged with a third and final

delinquency, at which point the Department will revoke an Agent's license.

c)         The Department may suspend or revoke an Agent's license after

review of a delinquency, at any stage, if the Director determines that suspension

or termination is in the best interest of the Lottery

l and any related terminals will be

immediately deactivated and the Agent will be charged with a third and final

delinquency, at which point the Department will revoke an Agent's license.

c)         The Department may suspend or revoke an Agent's license after

review of a delinquency, at any stage, if the Director determines that suspension

or termination is in the best interest of the Lottery.  Prior to making a

determination to suspend or revoke, the Department will conduct an evaluation

of the circumstances surrounding delinquency, including a review of a delinquent

agent's past delinquency record, in order to differentiate between incidental

agent management error and lack of financial stability or responsibility.

d)         It is the responsibility of the Agent to ensure that all

payments due to the Department are properly prepared.  Failure to properly

prepare and tender any payment due to the Department shall not be an excuse for

failure to fulfill obligations due to the Department.

e)         The deactivation or removal of an on-line terminal, or the

suspension or revocation of the license of an Agent, shall not relieve the Agent

of liability for any obligation due to the Department.