History: L. 1987, ch. 292, § 1; March 19.
(a) "Ancillary lottery gaming facility operations" means additional non-lottery facility game products and services not owned and operated by the state which may be included in the overall development associated with the lottery gaming facility. Such operations may include, but are not limited to, restaurants, hotels, motels, museums or entertainment facilities.
(b) "Commission" means the Kansas lottery commission.
(c) "Electronic gaming machine" means any electronic, electromechanical, video or computerized device, contrivance or machine authorized by the Kansas lottery which, upon insertion of cash, tokens, electronic cards or any consideration, is available to play, operate or simulate the play of a game authorized by the Kansas lottery pursuant to the Kansas expanded lottery act, including, but not limited to, bingo, poker, blackjack, keno and slot machines, and which may deliver or entitle the player operating the machine to receive cash, tokens, merchandise or credits that may be redeemed for cash. Electronic gaming machines may use bill validators and may be single-position reel-type, single or multi-game video and single-position multi-game video electronic game, including, but not limited to, poker, blackjack and slot machines. Electronic gaming machines shall be directly linked to a central computer at a location determined by the executive director for purposes of security, monitoring and auditing.
(d) "Executive director" means the executive director of the Kansas lottery.
(e) "Gaming equipment" means any electric, electronic, computerized or electromechanical machine, mechanism, supply or device or any other equipment, which is: (1) Unique to the Kansas lottery and used pursuant to the Kansas lottery act; and (2) integral to the operation of an electronic gaming machine or lottery facility game; and (3) affects the results of an electronic gaming machine or lottery facility game by determining win or loss.
(f) "Gaming zone" means: (1) The northeast Kansas gaming zone, which consists of Wyandotte county; (2) the southeast Kansas gaming zone, which consists of Crawford and Cherokee counties; (3) the south central Kansas gaming zone, which consists of Sedgwick and Sumner counties; and (4) the southwest Kansas gaming zone, which consists of Ford county.
(g) "Gray machine" means any mechanical, electro-mechanical or electronic device, capable of being used for gambling, that is: (1) Not authorized by the Kansas lottery, (2) not linked to a lottery central computer system, (3) available to the public for play or (4) capable of simulating a game played on an electronic gaming machine or any similar gambling game authorized pursuant to the Kansas expanded lottery act.
(h) "Kansas lottery" means the state agency created by this act to operate a lottery or lotteries pursuant to this act.
(i) "Lottery" or "state lottery" means the lottery or lotteries operated pursuant to this act.
(j) "Lottery facility games" means any electronic gaming machines and any other games which, as of January 1, 2007, are authorized to be conducted or operated at a tribal gaming facility, as defined in K.S.A. 74-9802, and amendments thereto, located within the boundaries of this state.
(k) "Lottery gaming enterprise" means an entertainment enterprise which includes a lottery gaming facility authorized pursuant to the Kansas expanded lottery act and ancillary lottery gaming facility operations that have a coordinated business or marketing strategy. A lottery gaming enterprise shall be designed to attract to its lottery gaming facility consumers who reside outside the immediate area of such enterprise.
(l) "Lottery gaming facility" means that portion of a building used for the purposes of operating, managing and maintaining lottery facility games.
(m) "Lottery gaming facility expenses" means normal business expenses, as defined in the lottery gaming facility management contract, associated with the ownership and operation of a lottery gaming facility.
(n) "Lottery gaming facility management contract" means a contract, subcontract or collateral agreement between the state and a lottery gaming facility manager for the management of a lottery gaming facility, the business of which is owned and operated by the Kansas lottery, negotiated and signed by the executive director on behalf of the state.
(o) "Lottery gaming facility manager" means a corporation, limited liability company, resident Kansas American Indian tribe or other business entity authorized to construct and manage, or manage alone, pursuant to a lottery gaming facility management contract with the Kansas lottery, and on behalf of the state, a lottery gaming enterprise and lottery gaming facility.
(p) "Lottery gaming facility revenues" means the total revenues from lottery facility games at a lottery gaming facility after all related prizes are paid.
(q) (1) "Lottery machine" means any machine or device that allows a player to insert cash or other form of consideration and may deliver as the result of an element of chance, regardless of the skill required by the player, a prize or evidence of a prize, including, but not limited to:
(A) Any machine or device in which the prize or evidence of a prize is determined by both chance and the player's or players' skill, including, but not limited to, any machine or device on which a lottery game or lottery games, such as poker or blackjack, are played;
(B) any machine or device in which the prize or evidence of a prize is determined only by chance, including, but not limited to, any slot machine or bingo machine; or
(C) any lottery ticket vending machine, such as a keno ticket vending machine, pull-tab vending machine or an instant-bingo vending machine.
(2) "Lottery machine" shall not mean:
(A) Any food vending machine defined by K.S.A. 36-501, and amendments thereto;
(B) any nonprescription drug machine authorized under K.S.A. 65-650, and amendments thereto;
(C) any machine which dispenses only bottled or canned soft drinks, chewing gum, nuts or candies;
(D) any machine excluded from the definition of gambling devices under subsection (d) of K.S.A. 21-4302, and amendments thereto; or
(E) any electronic gaming machine or lottery facility game operated in accordance with the provisions of the Kansas expanded lottery act.
(r) "Lottery retailer" means any person with whom the Kansas lottery has contracted to sell lottery tickets or shares, or both, to the public.
(s) (1) "Major procurement" means any gaming product or service, including but not limited to facilities, advertising and promotional services, annuity contracts, prize payment agreements, consulting services, equipment, tickets and other products and services unique to the Kansas lottery, but not including materials, supplies, equipment and services common to the ordinary operations of state agencies.
(2) "Major procurement" shall not mean any product, service or other matter covered by or addressed in the Kansas expanded lottery act or a lottery gaming facility management contract or racetrack gaming facility management contract executed pursuant to the Kansas expanded lottery act.
(t) "Net electronic gaming machine income" means all cash or other consideration utilized to play an electronic gaming machine operated at a racetrack gaming facility, less all cash or other consideration paid out to winning players as prizes.
(u) "Organization licensee" has the meaning provided by K.S.A. 74-8802, and amendments thereto.
(v) "Parimutuel licensee" means a facility owner licensee or facility manager licensee under the Kansas parimutuel racing act.
(w) "Parimutuel licensee location" means a racetrack facility, as defined in K.S.A. 74-8802, and amendments thereto, owned or managed by the parimutuel licensee. A parimutuel licensee location may include any existing structure at such racetrack facility or any structure that may be constructed on real estate where such racetrack facility is located.
(x) "Person" means any natural person, association, limited liability company, corporation or partnership.
(y) "Prize" means any prize paid directly by the Kansas lottery pursuant to the Kansas lottery act or the Kansas expanded lottery act or any rules and regulations adopted pursuant to either act.
(z) "Progressive electronic game" means a game played on an electronic gaming machine for which the payoff increases uniformly as the game is played and for which the jackpot, determined by application of a formula to the income of independent, local or interlinked electronic gaming machines, may be won.
(aa) "Racetrack gaming facility" means that portion of a parimutuel licensee location where electronic gaming machines are operated, managed and maintained.
(bb) "Racetrack gaming facility management contract" means an agreement between the Kansas lottery and a racetrack gaming facility manager, negotiated and signed by the executive director on behalf of the state, for placement of electronic gaming machines owned and operated by the state at a racetrack gaming facility.
(cc) "Racetrack gaming facility manager" means a parimutuel licensee specifically certified by the Kansas lottery to become a certified racetrack gaming facility manager and offer electronic gaming machines for play at the racetrack gaming facility.
(dd) "Returned ticket" means any ticket which was transferred to a lottery retailer, which was not sold by the lottery retailer and which was returned to the Kansas lottery for refund by issuance of a credit or otherwise.
(ee) "Share" means any intangible manifestation authorized by the Kansas lottery to prove participation in a lottery game, except as provided by the Kansas expanded lottery act.
(ff) "Ticket" means any tangible evidence issued by the Kansas lottery to prove participation in a lottery game other than a lottery facility game.
(gg) "Token" means a representative of value, of metal or other material, which is not legal tender, redeemable for cash only by the issuing lottery gaming facility manager or racetrack gaming facility manager and which is issued and sold by a lottery gaming facility manager or racetrack gaming facility manager for the sole purpose of playing an electronic gaming machine or lottery facility game.
(hh) "Vendor" means any person who has entered into a major procurement contract with the Kansas lottery.
(ii) "Video lottery machine" means any electronic video game machine that, upon insertion of cash, is available to play or simulate the play of a video game authorized by the commission, including, but not limited to, bingo, poker, black jack and keno, and which uses a video display and microprocessors and in which, by chance, the player may receive free games or credits that can be redeemed for cash.
History: L. 1987, ch. 292, § 2; L. 1988, ch. 314, § 1; L. 1989, ch. 244, § 1; L. 1992, ch. 299, § 2; L. 2001, ch. 24, § 5; L. 2007, ch. 110, § 1; Apr. 19.
(b) The executive director shall be appointed by the governor, subject to confirmation by the senate as provided by K.S.A. 75-4315b and amendments thereto. The executive director shall be in the unclassified service and shall receive an annual salary fixed by the governor, subject to the limitations of appropriations therefor.
(c) The executive director shall appoint persons to the following positions to serve as full-time employees of the state in the unclassified service with compensation fixed by the executive director and approved by the governor, subject to the limitations of appropriations therefor:
(1) A deputy executive director;
(2) a director of security;
(3) a director of administration;
(4) a director of sales and such professional sales related positions as may be necessary within the sales division;
(5) a director of marketing and such professional marketing related positions as may be necessary within the marketing division; and
(6) one personal secretary and one special assistant to the executive director.
(d) Until such time as the Kansas lottery begins the operation of its games, temporary staffing, budgeting, purchasing and related management functions shall be provided by the Kansas department of revenue and other state agencies as directed by the governor to achieve maximum coordination in the planning and implementation of the Kansas lottery.
(e) For a period of 18 months after the effective date of this act, the state director of purchases, upon request of the executive director, shall make emergency purchases, other than purchases of major procurements, on behalf of the Kansas lottery pursuant to subsection (a)(5) of K.S.A. 75-3739 and amendments thereto when the timely implementation of the Kansas lottery requires the immediate delivery of supplies, materials or equipment or the immediate performance of services. The award of any contract for any such purchase shall be subject to the approval of the executive director.
History: L. 1987, ch. 292, § 3; L. 1989, ch. 245, § 1; April 27.
(1) Supervise and administer the operation of the state lottery in accordance with the provisions of this act and such rules and regulations as adopted hereunder.
(2) Appoint, subject to the Kansas civil service act and within the limitations of appropriations therefor, all other employees of the Kansas lottery, which employees shall be in the classified service unless otherwise specifically provided by this act.
(3) Enter into contracts for advertising and promotional services, subject to the provisions of subsection (b); annuities or other methods deemed appropriate for the payment of prizes; data processing and other technical products, equipment and services; and facilities as needed to operate the Kansas lottery, including but not limited to gaming equipment, tickets and other services involved in major procurement contracts, in accordance with K.S.A. 74-8705 and amendments thereto.
(4) Enter into contracts with persons for the sale of lottery tickets or shares to the public, as provided by this act and rules and regulations adopted pursuant to this act, which contracts shall not be subject to the provisions of K.S.A. 75-3738 through 75-3744, and amendments thereto.
(5) Require lottery retailers to furnish proof of financial stability or furnish surety in an amount based upon the expected volume of sales of lottery tickets or shares.
(6) Examine, or cause to be examined by any agent or representative designated by the executive director, any books, papers, records or memoranda of any lottery retailer for the purpose of ascertaining compliance with the provisions of this act or rules and regulations adopted hereunder.
(7) Issue subpoenas to compel access to or for the production of any books, papers, records or memoranda in the custody or control of any lottery retailer, or to compel the appearance of any lottery retailer or employee of any lottery retailer, for the purpose of ascertaining compliance with the provisions of this act or rules and regulations adopted hereunder. Subpoenas issued under the provisions of this subsection may be served upon natural persons and corporations in the manner provided in K.S.A. 60-304 and amendments thereto for the service of process by any officer authorized to serve subpoenas in civil actions or by the executive director or an agent or representative designated by the executive director. In the case of the refusal of any person to comply with any such subpoena, the executive director may make application to the district court of any county where such books, papers, records, memoranda or person is located for an order to comply.
(8) Administer oaths and take depositions to the same extent and subject to the same limitations as would apply if the deposition were in aid of a civil action in the district court.
(9) Require fingerprinting of employees and such other persons who work in sensitive areas within the lottery as deemed appropriate by the director. The director may submit such fingerprints to the Kansas bureau of investigation and to the federal bureau of investigation for the purposes of verifying the identity of such employees and persons and obtaining records of their criminal arrests and convictions.
(b) The Kansas lottery shall not engage in on-site display advertising or promotion of the lottery at any amateur athletic or sporting event including, but not limited to, amateur athletic sporting events at institutions under the jurisdiction and control of the state board of regents.
History: L. 1987, ch. 292, § 4; L. 1992, ch. 299, § 1; July 1.
(1) The contract or contracts for the initial lease of facilities for the Kansas lottery shall be awarded upon the evaluation and approval of the director, the secretary of administration and the director of architectural services;
(2) The commission shall designate certain major procurement contracts or portions thereof to be awarded, in accordance with rules and regulations of the commission, solely to minority business enterprises.
(b) The director may award any major procurement contract by use of a procurement negotiating committee. Such committee shall be composed of: (1) The executive director or a Kansas lottery employee designated by the executive director; (2) the chairperson of the commission or a commission member designated by the chairperson; and (3) the director of the division of purchases or an employee of such division designated by the director. Prior to negotiating a major procurement contract, the committee shall solicit bids or proposals thereon. The division of purchases shall provide staff support for the committee's solicitations. Upon receipt of bids or proposals, the committee may negotiate with one or more of the persons submitting such bids or proposals and select from among such persons the person to whom the contract is awarded. Such procurements shall be open and competitive and shall consider relevant factors, including security, competence, experience, timely performance and maximization of net revenues to the state. If a procurement negotiating committee is utilized, the provisions of K.S.A. 75-3738 through 75-3744, and amendments thereto, shall not apply. Meetings conducted by the procurement negotiating committee shall be exempt from the provisions of the Kansas open meeting act, K.S.A. 75-4317 through 75-4320c, and amendments thereto.
(c) Before a major procurement contract is awarded, the executive director shall conduct a background investigation of: (1) The vendor to whom the contract is to be awarded; (2) all officers and directors of such vendor; (3) all persons who own a 5% or more interest in such vendor; (4) all persons who own a controlling interest in such vendor; and (5) any subsidiary or other business in which such vendor owns a controlling interest. The vendor shall submit appropriate investigation authorizations to facilitate such investigation. The executive director may require, in accordance with rules and regulations of the commission, that a vendor submit any additional information considered appropriate to preserve the integrity and security of the lottery. In addition, the executive director may conduct a background investigation of any person having a beneficial interest in a vendor. The secretary of revenue, securities commissioner, attorney general and director of the Kansas bureau of investigation shall assist in any investigation pursuant to this subsection upon request of the executive director. Whenever the secretary of revenue, securities commissioner, attorney general or director of the Kansas bureau of investigation assists in such an investigation and incurs costs in addition to those attributable to the operations of the office or bureau, such additional costs shall be paid by the Kansas lottery. The furnishing of assistance in such an investigation shall be a transaction between the Kansas lottery and the respective officer and shall be settled in accordance with K.S.A. 75-5516, and amendments thereto.
Upon the request of the chairperson, the Kansas bureau of investigation and other criminal justice agencies shall provide to the chairperson all background investigation information including criminal history record information, arrest and nonconviction data, criminal intelligence information and information relating to criminal and background investigations of a vendor to whom a major procurement contract is to be awarded. Such information, other than conviction data, shall be confidential and shall not be disclosed, except as provided in this section. In addition to any other penalty provided by law, disclosure of such information shall be grounds for removal from office or termination of employment.
(d) All major procurement contracts shall be subject to approval of the commission.
(e) The executive director shall not agree to any renewal or extension of a major procurement contract unless such extension or renewal is awarded in the manner provided by this section.
History: L. 1987, ch. 292, § 5; L. 1998, ch. 144, § 3; L. 2001, ch. 24, § 4; L. 2007, ch. 110, § 60; Apr. 19.
(a) Make and keep books and records which accurately and fairly reflect each day's transactions, including but not limited to: The distribution of tickets and shares to lottery retailers; receipt of funds, prize claims, prize disbursements made by the Kansas lottery or otherwise or prizes liable to be paid by the Kansas lottery; expenses and other financial transactions of the Kansas lottery necessary so as to permit daily accountability.
(b) Make quarterly and annual financial reports to the commission, the governor, the state treasurer and the legislature. Such reports shall be based upon generally accepted accounting principles and include a full and complete statement of lottery revenues, prize disbursements, expenses, net revenues and other financial transactions for the reporting period.
(c) Make available for inspection by the commission, upon request, all books, records, files and other information and documents of the Kansas lottery.
(d) Engage, in accordance with K.S.A. 74-8705, and amendments thereto, an independent firm experienced in marketing research and analysis to conduct periodically an evaluation to determine the effectiveness of marketing, promotion and public information programs used by the Kansas lottery and make recommendations which will enhance such programs.
(e) Prepare and submit budgets and proposals for the operation of the Kansas lottery.
(f) Operate the Kansas lottery in such a manner that, after the initial state appropriation, it is self-sustaining and self-funded.
(g) Make available at the point of sale of any lottery tickets or shares a list of the odds of winning such game, based upon the number of tickets or shares projected to be sold.
(h) Make provision for the timely and efficient transfer of funds due from lottery retailers to the lottery operating fund, including the use of electronic funds transfers whenever possible.
History: L. 1987, ch. 292, § 6; L. 1988, ch. 314, § 2; L. 2001, ch. 24, § 2; July 1.
The post auditor shall compute annually the reasonably anticipated cost of providing audits pursuant to this subsection, subject to review and approval by the contract audit committee established by K.S.A. 46-1120, and amendments thereto. Upon such approval, the Kansas lottery shall reimburse the division of post audit for the amount approved by the contract audit committee. The furnishing of audit services pursuant to this subsection shall be a transaction between the post auditor and the Kansas lottery and shall be settled in accordance with the provisions of K.S.A. 75-5516, and amendments thereto.
(b) On or before December 31, 2004, and at least once every three years thereafter, there shall be conducted a security audit of the Kansas lottery. A security audit shall include a comprehensive study and evaluation of all aspects of security in the operation of the Kansas lottery. The auditor to conduct a security audit shall be specified in accordance with K.S.A. 46-1122, and amendments thereto. If the legislative post audit committee specifies under such statute that a person, as defined by K.S.A. 46-1112, and amendments thereto, other than the post auditor is to perform all or part of such audit work, such person shall be selected and shall perform such audit work as provided in the applicable provisions of K.S.A. 46-1123, and amendments thereto, and K.S.A. 46-1125 through 46-1127, and amendments thereto. The person selected to perform a security audit shall be experienced in security procedures, including, but not limited to, computer and systems security. A contract to conduct a security audit required by this subsection, shall be considered a major procurement contract as defined by K.S.A. 74-8702, and amendments thereto, and shall not be awarded until a background investigation is conducted on the person or firm selected to perform the audit. Such background investigation shall be subject to the requirements of subsection (c) of K.S.A. 74-8705, and amendments thereto.
For the purpose of conducting a security audit under this subsection, a person or a firm selected to perform the security audit shall not be limited to a legal entity permitted by law to engage in practice as a certified public accountant.
The post auditor shall compute the reasonably anticipated cost of providing audits pursuant to this subsection, subject to review and approval by the contract audit committee established by K.S.A. 46-1120, and amendments thereto. Upon such approval, the Kansas lottery shall reimburse the division of post audit for the amount approved by the contract audit committee. The furnishing of audit services pursuant to this subsection shall be a transaction between the post auditor and the Kansas lottery and shall be settled in accordance with the provisions of K.S.A. 75-5516, and amendments thereto.
History: L. 1987, ch. 292, § 7; L. 1993, ch. 10, § 2; L. 2001, ch. 24, § 3; July 1.
(b) The executive director may charge an application fee to persons applying to become lottery retailers.
(c) All lottery retailer contracts awarded by the Kansas lottery under this act shall be renewable annually after issuance unless sooner canceled or terminated.
(d) No lottery retailer contract awarded under this act shall be transferred or assignable.
(e) Lottery tickets or shares shall only be sold by the lottery retailer at the location approved by the Kansas lottery.
(f) To be selected as a lottery retailer, a natural person acting as a sole proprietor must:
(1) Be at least 18 years of age;
(2) have sufficient financial resources to support the activities required to sell lottery tickets or shares;
(3) be current in payment of all taxes, interest and penalties owed to any taxing subdivision where the lottery retailer will sell lottery tickets or shares;
(4) be current in filing all applicable tax returns and in payment of all taxes, interest and penalties owed to the state of Kansas, excluding items under formal appeal pursuant to applicable statutes; and
(5) not be engaged exclusively in the sale of lottery tickets and shares.
(g) No natural person shall be selected as a lottery retailer who:
(1) Has been convicted of a felony in this or any other jurisdiction, unless at least 10 years have passed since satisfactory completion of the sentence or probation imposed by the court for each such felony;
(2) has been convicted of an illegal gambling activity in this or any other jurisdiction;
(3) has been found to have violated the provisions of this act or any rule and regulation adopted hereunder;
(4) is a vendor or an employee or agent of any vendor doing business with the Kansas lottery;
(5) resides in the same household of an employee of the Kansas lottery or of a member of the commission; or
(6) has made a statement of material fact to the Kansas lottery, knowing such statement to be false.
(h) For a partnership to be selected as a lottery retailer, the partnership must meet the requirements of subsections (f)(2), (f)(3), (f)(4) and (f)(5) and each partner must meet the requirements of subsections (f)(1), (f)(3), (f)(4) and (g)(1) through (g)(6).
(i) For a corporation to be selected as a lottery retailer, the corporation must meet the requirements of subsections (f)(2), (f)(3), (f)(4) and (f)(5) and each officer or director and each stockholder who owns 5% or more of the stock of such corporation must meet the requirements of subsections (f)(3), (f)(4) and (g)(1) through (g)(6).
(j) For an unincorporated association to be selected as a lottery retailer, the association must meet the requirements of subsections (f)(2), (f)(3), (f)(4) and (f)(5) and each officer or director must meet the requirements of subsections (f)(1), (f)(3), (f)(4) and (g)(1) through (g)(6).
(k) The executive director may terminate the contract of any lottery retailer who fails to meet any of the applicable qualifying standards for selection as a retailer provided in this section or on the grounds for termination provided in the contract pursuant to rules and regulations adopted by the commission.
(l) If a lottery retailer's rental payments for the business premises are contractually computed, in whole or in part, on the basis of a percentage of retail sales, and such computation of retail sales is not explicitly defined to include sale of tickets or shares in a state-operated lottery, the compensation received by the lottery retailer from the lottery shall be considered the amount of the retail sale for purposes of computing the rental payment.
History: L. 1987, ch. 292, § 8; L. 1988, ch. 314, § 3; L. 2007, ch. 110, § 61; Apr. 19.
(b) Except as provided by subsection (c), the members of the commission shall serve for terms of four years and until their successors are appointed and confirmed, except that the members first appointed shall serve for terms designated by the governor as follows: One member shall serve for a term of one year, one shall serve for a term of two years, one shall serve for a term of three years and two shall serve for terms of four years. Any vacancy occurring in the membership of the commission shall be filled in the same manner as the original appointment for the remainder of the unexpired term.
(c) The terms of members who are serving on the commission on the effective date of this act shall expire on March 15, of the year in which such member's term would have expired under the provisions of this section prior to amendment by this act. Thereafter, members shall be appointed for terms of four years and until their successors are appointed and confirmed.
(d) The commission shall hold at least four regular meetings each year and such additional meetings as the chairperson deems desirable. Special meetings shall be called by the chairperson upon written request of the executive director or any three members of the commission. All meetings shall be held at a place and time fixed by the chairperson. A majority of the members of the commission shall constitute a quorum to transact its business.
(e) The commission shall consult with and advise the executive director relating to the operation of the state lottery, shall assist the director in the establishment of policies and shall review and approve the proposed annual budget for the Kansas lottery prepared by the executive director, subject to all state laws governing budget procedures for state agencies.
(f) The commission, in conjunction with the executive director, shall make an ongoing study of the operation and administration of lotteries in operation in other states or countries, of available literature on the subject, of federal laws and regulations which may affect the operation of the lottery and of the reaction of citizens of this state to existing or proposed features of lottery games, with a view toward implementing improvements that will tend to serve the purposes of this act.
(g) Major procurements recommended by the executive director shall be subject to the approval of the commission.
(h) The commission may enter into written agreements with one or more other states or corporations made up of representatives of one or more other states' lotteries and participate in the operation, marketing and promotion of a joint lottery or joint lottery games, conforming to the provisions of this act, which agreements shall not be subject to the provisions of K.S.A. 75-3738 through 75-3744, and amendments thereto.
(i) Subject to the limitations of appropriations therefor, members of the commission shall receive such compensation as determined by the governor. Members of the commission attending meetings of the commission or subcommittee meetings thereof approved by the commission shall be paid subsistence allowances, mileage and other expenses as provided in K.S.A. 75-3223, and amendments thereto. In addition, the chairperson of the commission, or the member of the commission designated by the chairperson to serve on a procurement negotiating committee, shall be paid amounts equal to amounts provided by K.S.A. 75-3223, and amendments thereto, for subsistence allowances, mileage and other expenses for attendance at meetings of a procurement negotiating committee pursuant to K.S.A. 74-8705, and amendments thereto.
History: L. 1987, ch. 292, § 9; L. 1988, ch. 314, § 4; L. 1991, ch. 246, § 1; L. 1995, ch. 241, § 18; L. 1998, ch. 144, § 4; July 1.
(1) Subject to the provisions of subsection (c), the types of lottery games to be conducted, including, but not limited to, instant lottery, on-line, traditional games, lottery facility games and electronic gaming machine games but not including games on video lottery machines or lottery machines.
(2) The manner of selecting the winning tickets or shares, except that, if a lottery game utilizes a drawing of winning numbers, a drawing among entries or a drawing among finalists, such drawings shall always be open to the public and shall be recorded on both video and audio tape.
(3) The manner of payment of prizes to the holders of winning tickets or shares.
(4) The frequency of the drawings or selections of winning tickets or shares.
(5) The type or types of locations at which tickets or shares may be sold.
(6) The method or methods to be used in selling tickets or shares.
(7) Additional qualifications for the selection of lottery retailers and the amount of application fees to be paid by each.
(8) The amount and method of compensation to be paid to lottery retailers, including special bonuses and incentives.
(9) Deadlines for claims for prizes by winners of each lottery game.
(10) Provisions for confidentiality of information submitted by vendors pursuant to K.S.A. 74-8705, and amendments thereto.
(11) Information required to be submitted by vendors, in addition to that required by K.S.A. 74-8705, and amendments thereto.
(12) The major procurement contracts or portions thereof to be awarded to minority business enterprises pursuant to subsection (a) of K.S.A. 74-8705, and amendments thereto, and procedures for the award thereof.
(13) Rules and regulations to implement, administer and enforce the provisions of the Kansas expanded lottery act. Such rules and regulations shall include, but not be limited to, rules and regulations which govern management contracts and which are designed to (A) ensure the integrity of electronic gaming machines and other lottery facility games and the finances of lottery gaming facilities and racetrack gaming facilities and (B) alleviate problem gambling, including a requirement that each lottery gaming facility and each racetrack gaming facility maintain a self-exclusion list by which individuals may exclude themselves from access to electronic gaming machines and other lottery facility games.
(14) The types of electronic gaming machines, lottery facility games and electronic gaming machine games to be operated pursuant to the Kansas expanded lottery act.
(b) No new lottery game shall commence operation after the effective date of this act unless first approved by the governor or, in the governor's absence or disability, the lieutenant governor. This subsection shall not be construed to require approval of games played on an electronic gaming machine.
(c) The lottery shall adopt rules and regulations concerning the game of keno. Such rules and regulations shall require that the amount of time which elapses between the start of games shall not be less than four minutes.
History: L. 1987, ch. 292, § 10; L. 1988, ch. 366, § 23; L. 1992, ch. 299, § 3; L. 1995, ch. 261, § 1; L. 2001, ch. 24, § 6; L. 2007, ch. 110, § 44; Apr. 19.
(b) Except as provided by K.S.A. 2007 Supp. 74-8724 and the Kansas expanded lottery act, and amendments thereto, the executive director shall remit all moneys collected from the sale of lottery tickets and shares and any other moneys received by or on behalf of the Kansas lottery to the state treasurer in accordance with the provisions of K.S.A. 75-4215, and amendments thereto. Upon receipt of each such remittance, the state treasurer shall deposit the entire amount in the state treasury to the credit of the lottery operating fund. Moneys credited to the fund shall be expended or transferred only as provided by this act. Expenditures from such fund shall be made in accordance with appropriations acts upon warrants of the director of accounts and reports issued pursuant to vouchers approved by the executive director or by a person designated by the executive director.
(c) Moneys in the lottery operating fund shall be used for:
(1) The payment of expenses of the lottery, which shall include all costs incurred in the operation and administration of the Kansas lottery; all costs resulting from contracts entered into for the purchase or lease of goods and services needed for operation of the lottery, including but not limited to supplies, materials, tickets, independent studies and surveys, data transmission, advertising, printing, promotion, incentives, public relations, communications and distribution of tickets and shares; and reimbursement of costs of facilities and services provided by other state agencies;
(2) the payment of compensation to lottery retailers;
(3) transfers of moneys to the lottery prize payment fund pursuant to K.S.A. 74-8712, and amendments thereto;
(4) transfers to the state general fund pursuant to K.S.A. 74-8713, and amendments thereto;
(5) transfers to the state gaming revenues fund pursuant to subsection (d) and as otherwise provided by law; and
(6) transfers to the county reappraisal fund as prescribed by law.
(d) The director of accounts and reports shall transfer moneys in the lottery operating fund to the state gaming revenues fund created by K.S.A. 79-4801, and amendments thereto, on or before the 15th day of each month in an amount certified monthly by the executive director and determined as follows, whichever is greater:
(1) An amount equal to the moneys in the lottery operating fund in excess of those needed for the purposes described in subsections (c)(1) through (c)(4); or
(2) except for pull-tab lottery tickets and shares, an amount equal to not less than 30% of total monthly revenues from the sales of lottery tickets and shares less estimated returned tickets. In the case of pull-tab lottery tickets and shares, an amount equal to not less than 20% of the total monthly revenues from the sales of pull-tab lottery tickets and shares less estimated returned tickets.
History: L. 1987, ch. 292, § 11; L. 1988, ch. 392, § 1; L. 1989, ch. 25, § 8; L. 1989, ch. 244, § 2; L. 2000, ch. 173, § 18; L. 2001, ch. 5, § 341; L. 2004, ch. 168, § 1; L. 2007, ch. 110, § 45; Apr. 19.
(b) The executive director shall certify periodically to the director of accounts and reports such amounts as the executive director determines necessary to pay prizes to the holders of valid winning lottery tickets or shares or for the purchase of nonmonetary prizes. Upon receipt of such certification, the director of accounts and reports shall transfer the amount certified from the lottery operating fund to the lottery prize payment fund. Moneys credited to the fund shall be expended only for:
(1) The payment of prizes to the holders of valid winning lottery tickets or shares;
(2) the reimbursement of retailers who have paid holders of winning tickets or shares;
(3) the purchase of nonmonetary prizes; or
(4) purposes otherwise specifically authorized by law.
(c) Prior to making any expenditure for reimbursement of a retailer or payment of a prize of $50 or more, the executive director shall cause all proposed prize payments to be matched against the state debtor files maintained by the director of accounts and reports and shall certify and pay or deliver any matched prize or the cash amount thereof to the director of accounts and reports for setoff as prescribed under K.S.A. 75-6201 et seq., and amendments thereto.
(d) Expenditures from the lottery prize payment fund shall be made in accordance with appropriations acts upon warrants of the director of accounts and reports, or a person designated by the director of accounts and reports pursuant to K.S.A. 75-3732, and amendments thereto, issued pursuant to vouchers approved by the executive director, or a person designated by the executive director.
History: L. 1987, ch. 292, § 12; L. 1988, ch. 314, § 5; L. 2000, ch. 173, § 19; July 1.
(b) At the time of repayment of a loan pursuant to subsection (a), the executive director shall certify to the director of accounts and reports the amount to be repaid and any interest due thereon. Upon receipt of such certification, the director of accounts and reports shall promptly transfer the amount certified from the lottery operating fund to the state general fund.
(c) Except as provided by subsection (a), moneys credited to the state general fund shall not be used or obligated to pay the expenses of the Kansas lottery or prizes of the lottery and no claim for the payment of an expense of the lottery or the payment of a lottery prize shall be made against any moneys other than moneys credited to the lottery operation fund, moneys credited to the lottery prize payment fund or moneys collected from the sale of lottery tickets or shares.
History: L. 1987, ch. 292, § 13; March 19.
(b) Employees designated by the executive director pursuant to subsection (a) shall have the authority to:
(1) Make arrests, conduct searches and seizures and carry firearms while investigating violations of this act and during routine conduct of their duties as determined by the executive director or designee of the executive director;
(2) make arrests, conduct searches and seizures and generally to enforce all the criminal laws of the state as violations of those laws are encountered by such employees during the routine performance of their duties; and
(3) issue notices to appear pursuant to K.S.A. 22-2408 and amendments thereto.
(c) No employee of the Kansas lottery shall be certified to carry firearms under the provisions of this section without having first successfully completed the firearm training course or courses prescribed for law enforcement officers under subsection (a) of K.S.A. 74-5604a and amendments thereto.
(d) The commission may adopt rules and regulations prescribing other training required for such employees.
History: L. 1987, ch. 292, § 14; March 19.
History: L. 1987, ch. 292, § 15; March 19.
(1) Have, either directly or indirectly, an interest in a business knowing that such business contracts with the Kansas lottery for a major procurement, whether such interest is as a natural person, partner, member of an association, stockholder or director or officer of a corporation; or
(2) accept or agree to accept any economic opportunity, gift, loan, gratuity, special discount, favor or service, or hospitality other than food and beverages, having an aggregate value of $20 or more in any calendar year from a person knowing that such person (A) contracts or seeks to contract with the state to supply gaming equipment, materials, tickets or consulting services for use in the lottery or (B) is a lottery retailer or an applicant for lottery retailer.
(b) It is unlawful for a lottery retailer, an applicant for lottery retailer or a person who contracts or seeks to contract with the state to supply gaming equipment, materials, tickets or consulting services for use in the lottery to offer, pay, give or make any economic opportunity, gift, loan, gratuity, special discount, favor or service, or hospitality other than food and beverages, having an aggregate value of $20 or more in any calendar year to a person, knowing such person is the executive director, a member of the commission or an employee of the Kansas lottery, or a person residing in the household thereof.
(c) It shall be unlawful for any person to serve as executive director, a member of the commission or an employee of the Kansas lottery while or within five years after holding, either directly or indirectly, a financial interest or being employed by or a consultant to any of the following:
(1) Any lottery gaming facility manager, subcontractor or agent of a lottery gaming facility manager, manufacturer or vendor of electronic gaming machines or central computer system provider, or any business which sells goods or services to a lottery gaming facility manager; or
(2) any licensee pursuant to the Kansas parimutuel racing act, other than the Kansas lottery or a person holding a license on behalf of the Kansas lottery, or any business which sells goods or services to a parimutuel licensee.
(d) No person who holds a license issued by the Kansas racing and gaming commission shall serve as executive director or as a member of the commission or shall be employed by the Kansas lottery while or within five years after holding such license.
(e) No person shall participate, directly or indirectly, as an owner, owner-trainer or trainer of a horse or greyhound, or as a jockey of a horse, entered in a race meeting conducted in this state while executive director, a member of the commission or an employee of the Kansas lottery.
(f) It shall be unlawful for the executive director, a member of the commission or an employee of the Kansas lottery to accept any compensation, gift, loan, entertainment, favor or service from any lottery gaming facility manager, subcontractor or agent of a lottery gaming facility manager, manufacturer or vendor of electronic gaming machines or central computer system provider.
(g) It shall be unlawful for the executive director, a member of the commission or an employee of the Kansas lottery to accept any compensation, gift, loan, entertainment, favor or service from any licensee pursuant to the Kansas parimutuel racing act, except such suitable facilities and services within a racetrack facility operated by an organization licensee as may be required to facilitate the performance of the executive director's, member's or employee's official duties.
(h) Violation of this section is a class A misdemeanor.
(i) If the executive director, a member of the commission or an employee of the Kansas lottery, or any person residing in the household thereof, is convicted of an act described by this section, such executive director, member or employee shall be removed from office or employment with the Kansas lottery.
(j) In addition to the provisions of this section, all other provisions of law relating to conflicts of interest of state employees shall apply to the members of the commission and employees of the Kansas lottery.
History: L. 1987, ch. 292, § 16; L. 2007, ch. 110, § 46; Apr. 19.
(b) Violation of this section is a severity level 8, nonperson felony.
History: L. 1987, ch. 292, § 17; L. 1993, ch. 291, § 242; July 1.
(1) To sell a lottery ticket or share at a price other than that fixed by rules and regulations adopted pursuant to this act;
(2) for any person other than a lottery retailer authorized by the Kansas lottery to sell or resell any lottery ticket or share;
(3) to sell a lottery ticket or share to any person, knowing such person to be under 18 years of age; or
(4) to sell a lottery ticket at retail by electronic mail, the internet or telephone.
(b) (1) Violation of this section is a class A nonperson misdemeanor upon conviction for a first offense; and
(2) violation of this section is a severity level 9, nonperson felony upon conviction for a second or subsequent offense.
History: L. 1987, ch. 292, § 18; L. 1993, ch. 291, § 243; L. 1994, ch. 291, § 80; L. 2001, ch. 24, § 7; July 1.
(1) The executive director, a member of the commission or an employee of the Kansas lottery;
(2) an officer or employee of a vendor contracting with the Kansas lottery to supply gaming equipment or tickets to the Kansas lottery for use in the operation of any lottery conducted pursuant to this act;
(3) a spouse, child, stepchild, brother, stepbrother, sister, stepsister, parent or stepparent of a person described by subsection (a)(1) or (2); or
(4) a person who resides in the same household as any person described by subsection (a)(1) or (2).
(b) (1) Violation of subsection (a) is a class A nonperson misdemeanor upon conviction for a first offense.
(2) Violation of subsection (a) is a severity level 9, nonperson felony upon conviction for a second or subsequent offense.
(c) Notwithstanding subsection (a), the executive director may authorize in writing any employee of the Kansas lottery and any employee of a lottery vendor to purchase a lottery ticket for the purposes of verifying the proper operation of the state lottery with respect to security, systems operation and lottery retailer contract compliance. Any prize awarded as a result of such ticket purchase shall become the property of the Kansas lottery and be added to the prize pools of subsequent lottery games.
(d) Certain classes of persons who, because of the unique nature of the supplies or services they provide for use directly in the operation of a lottery pursuant to this act, may be prohibited, in accordance with rules and regulations adopted by the commission, from participating in any lottery in which such supplies or services are used.
(e) Nothing in this section shall prohibit lottery retailers or their employees from purchasing lottery tickets and shares or from being paid a prize of a winning ticket or share.
(f) Each person who purchases a lottery ticket or share thereby agrees to be bound by rules and regulations adopted by the commission and by the provisions of this act.
History: L. 1987, ch. 292, § 19; L. 1988, ch. 314, § 6; L. 1993, ch. 291, § 244; L. 1994, ch. 291, § 81; July 1.
(b) The prize to be paid or awarded for each winning ticket or share shall be paid to one natural person who is adjudged by the executive director, the director's designee or the retailer paying the prize, to be the holder of such winning ticket or share, or the person designated in writing by the holder of the winning ticket or share on a form satisfactory to the executive director, except that the prize of a deceased winner shall be paid to the duly appointed representative of the estate of such winner or to such other person or persons appearing to be legally entitled thereto.
(c) The executive director shall award the designated prize to the holder of the ticket or share upon the validation of a claim or confirmation of a winning share. The executive director shall have the authority to make payment for prizes by any means deemed appropriate upon the validation of winning tickets or shares.
(d) The right of a person to a prize drawn or awarded is not assignable.
(e) All prizes awarded shall be taxed as Kansas source income and shall be subject to all state and federal income tax laws and rules and regulations. State income taxes shall be withheld from prizes paid whenever federal income taxes are required to be withheld under current federal law.
(f) Unclaimed prize money not payable directly by lottery retailers shall be retained for the period established by rules and regulations and if no claim is made within such period, then such unclaimed prize money shall be added to the prize pools of subsequent lottery games.
(g) The state of Kansas, members of the commission and employees of the Kansas lottery shall be discharged of all further liability upon payment of a prize pursuant to this section.
(h) The Kansas lottery shall not publicly disclose the identity of any person awarded a prize except upon written authorization of such person.
History: L. 1987, ch. 292, § 20; L. 1988, ch. 381, § 15; L. 1991, ch. 246, § 2; July 1.
History: L. 1988, ch. 314, § 7; Repealed, L. 1991, ch. 246, § 3; July 1.
History: L. 1987, ch. 292, § 21; March 19.
(b) The unsolicited advertisement or promotion of any lottery by the Kansas lottery through electronic mail or telephone is prohibited.
(c) All advertising and marketing practices of the Kansas lottery shall meet or exceed the standards of the North American association of state and provincial lotteries (NASPL) which are in effect on July 1, 2001, or any later version as adopted by the commission in rules and regulations.
History: L. 1992, ch. 299, § 4; L. 2001, ch. 24, § 8; July 1.
(b) This section shall be part of and supplemental to the Kansas lottery act.
History: L. 1992, ch. 300, § 1; L. 1995, ch. 261, § 2; L. 2001, ch. 24, § 1; L. 2007, ch. 110, § 47; Apr. 19.
(b) The Kansas lottery commission shall adopt rules and regulations governing the establishment of the veterans benefit game pursuant to K.S.A. 74-8710, and amendments thereto, except that subsection (b) of K.S.A. 74-8710, and amendments thereto, shall not apply to the veterans benefit game established by this section.
(c) Notwithstanding the provisions of K.S.A. 79-4801 et seq., and K.S.A. 74-8711, and amendments thereto, all net profits, received from the sale of veterans benefit game lottery tickets, materials and games, as prescribed by rules and regulations adopted pursuant to subsection (b) of this section, shall be deposited in the state treasury and shall be used as follows: (1) The amount equal to 50% of such net profits shall be appropriated for purposes directly benefitting members of the Kansas army and air national guard and their families to provide for Kansas national guard educational assistance act scholarships pursuant to K.S.A. 74-32,145 et seq., and amendments thereto, and, to the extent that moneys are available, for other purposes directly benefitting members of the Kansas army and air national guard and their families as provided by appropriation act; and (2) the amount equal to 50% of such net profits shall be appropriated for operating expenditures and capital improvements, or as otherwise provided by appropriation act, for the use and benefit of the Kansas veterans' home, the Kansas soldiers' home and the state veterans cemetery system.
(d) The Kansas lottery commission shall change the design or theme of the veterans benefit game regularly so that the game remains competitive with the other instant lottery scratch-off games offered by such commission. The tickets for the instant lottery game authorized by this section shall clearly state that the profits derived from the game shall be used to benefit veterans and veterans issues in this state.
History: L. 2003, ch. 140, § 1; L. 2004, ch. 168, § 2; July 1.
Party lotteries hereby agree to create a multistate lottery, hereinafter referred to as MUSL, an association of state lotteries and the District of Columbia, to operate a game, as follows:
1. That the party lotteries herein establish and create the multistate lottery board of directors, hereinafter referred to as board, on which each participating lottery shall be represented, to initiate, promulgate, administer and carry out a lottery game that will enhance each party lottery's revenue.
2. That a dual system of voting is established. One vote will be taken in which each party lottery has one vote. A second vote will be taken in which each party lottery has a number of votes equivalent to its proportionate percentage of the total population (as per the most recent U.S. census) of the states participating in MUSL multiplied by 100, except that the maximum vote a party lottery shall have under the second vote shall not exceed 1/3 of the total votes cast. Following the commencement of sales, each party lottery's second vote will have the number of votes equivalent to its proportionate percentage of total MUSL sales multiplied by 100, except that the maximum vote a party lottery shall have under the second vote shall not exceed 1/3 of the total votes cast. This percentage will be based upon each lottery's average monthly sales experience for the twelve or proportionate calendar months preceding the vote.
Unless a different percentage is provided in this agreement, the percentage of votes necessary to allow action by the MUSL is 51% of the votes cast pursuant to both methods of voting.
The terms of this agreement cannot be changed without a 2/3 vote of all party lotteries cast pursuant to both methods of voting.
3. That the quorum necessary to hold an official meeting of the MUSL board shall be representation in person or by proxy from at least 51% of all party lotteries. However, unless a majority of the proportionate population votes, as defined in paragraph 2 of this agreement are also represented, any decisions adopted at any MUSL board meeting must subsequently be ratified within 14 days by a majority vote utilizing the proportionate percentage share allocation of votes.
4. That the director or designee, of each party lottery shall represent it on the board and may cast the votes allocated to it either in person or proxy.
5. That the board shall elect for a term as prescribed in its bylaws, a president, vice-president, secretary and two coordinators from its membership hereinafter to be called the executive committee.
6. That a percent of the gross sales as determined by the MUSL board and stipulated in MUSL rules from the MUSL game sales of each party lottery will be aggregated in a common prize pool.
7. That operating costs of the MUSL shall be paid by each party lottery proportionate to its percentage of MUSL game sales as compared with total MUSL game sales. The executive committee will advise the board of the budget and estimated expenditures of MUSL for each fiscal year. The budget proposal will specifically estimate the portion of the total budget to be paid to MUSL by each of the member lotteries based upon the percentage described.
8. That the revenues not allocated to prizes or operating cost as outlined above and generated within each party lottery shall remain in that lottery.
9. That the board's functions shall be performed and carried out by such advisory committees or panels, or both as the board may establish and by such officers and independent contractors as may be appointed by the board. All such officers, independent contractors, agents, consultants and employees shall serve at the pleasure of the board and the board shall prescribe their powers, duties and qualifications and fix their compensation and other terms of their service.
10. That each party lottery shall be responsible for travel and per diem expenses incurred by its board members unless otherwise approved by the board.
11. That the party lotteries shall operate and administer a game in accordance with rules governing the establishment and operation thereof, as promulgated by the board. Notwithstanding the above, the game rules shall be adopted by the party lotteries or similar rules and regulations will be adopted by each lottery which are approved by the MUSL board.
The rules may be changed or modified by the MUSL only after the MUSL has given each member two weeks notice that a rule change or modification will be voted upon at a MUSL meeting. A rule can be changed or modified by the MUSL by an affirmative vote of 2/3 of the MUSL members cast pursuant to both methods of voting. Following receipt of notice that an amendment or modification has been adopted the party lotteries shall adopt the amendment or modification or a similar amendment or modification which is approved by the MUSL board.
12. That the executive committee shall make annual reports to the party states, which shall include a full and complete statement of MUSL revenues, prize disbursements and other expenses and any other information the party lotteries may require. These reports shall be the basis to determine each party lottery's share of expenses as prescribed in the bylaws, this agreement and the rules.
13. That each party lottery shall provide all necessary operational reports and other data required by MUSL.
14. That all MUSL accounts and transactions shall be subject to annual post audits conducted by independent auditors retained by the board for this purpose and each of the party lotteries shall receive a certified copy of the same. All such records and transactions shall be available to all party lotteries for copying, inspection and auditing purposes as may be required under the laws of their state.
15. That the fiscal year of the MUSL shall be from July 1 of one calendar year to June 30th of the succeeding calendar year.
16. That prizes received pursuant to this agreement shall be subject to the statutory authority and rules and regulations of the party lotteries wherein the ticket was purchased. Any litigation relating to tickets and prizes shall be resolved according to the laws of the state where the ticket was purchased.
17. That MUSL shall continue in existence until this agreement is revoked by all of the party lotteries. The withdrawal of one or more party lotteries shall not terminate this agreement among the remaining lotteries. Upon termination of MUSL, any assets acquired by MUSL with the exception of the prize reserve fund, will be liquidated in a manner determined by the board. The proceeds from the liquidation will be divided among all of the lotteries which were members of MUSL in good standing at any time during the 12 months preceding termination. The amount of the proceeds received by each lottery will be calculated by use of the following formula:
individual lottery MUSL sales during the twelve month period X proceeds total MUSL sales during the available for 12-month period distribution
A party lottery wishing to withdraw from this agreement shall give the board a six months notice of its intention to withdraw. However, a lottery may terminate such agreement at any time without prior notice if authority to participate is withdrawn by executive or legislative action or if participation in the MUSL is in conflict with the constitution or statutes of any state. In addition, the MUSL can vote out a party lottery for cause with the consent of 2/3 of the party lotteries voting by both methods of voting as outlined in paragraph 2, except the party lottery being voted upon shall be excluded from the vote in that proceeding and in the calculations as outlined in paragraph 2. A lottery which withdraws or is voted out by MUSL more than 12 months prior to termination of MUSL will not be entitled to a share of the property or assets of MUSL, except for such lottery's proportionate share of the prize reserve fund.
In the event that a party lottery terminates, voluntarily or involuntarily, or MUSL is terminated by agreement of the parties, the prize reserve fund share of the party lottery or lotteries shall not be returned to the party lottery or lotteries until the later of one year from and after the date of termination or final resolution of any pending unresolved liabilities arising from transactions processed during the tenure of the departing lottery or lotteries. The voluntary or involuntary termination of a party lottery or lotteries does not cancel any obligation to MUSL which the party lottery or lotteries incurred before the withdrawal date.
18. That all intellectual property rights developed and approved by MUSL with respect to the game including, but not limited to, trade marks, trade names, logos, copyrights, slogans and devices shall be acquired and held by a party lottery designated by MUSL for the use and benefit of MUSL. The use thereof shall be limited to party lotteries participating in this game.
19. That each party lottery agrees that upon termination from MUSL that it will not use any of the intellectual property identified with the game.
20. That the board shall not pledge the credit of the party lotteries, directly or indirectly, except that each party lottery shall be liable for its proportionate shares of prize moneys and operational costs as specified in paragraphs 6 and 7 of this agreement.
21. Compliance with MUSL standards is a prerequisite for MUSL membership. The board shall review the internal control procedures submitted by each lottery and vote upon whether or not each lottery's internal controls comply with MUSL standards as set forth in MUSL rules and regulations. If MUSL incurs a prize liability under this provision due to the error of a lottery whose internal control procedures have been approved and the error was not due to a contractor's actions or omission, the party lottery will pay to the prize winner the disputed prize or $1,000,000 whichever is less at the direction of the board. Upon the payment herein before outlined, MUSL will indemnify and hold harmless each member lottery for any additional liabilities relating to the MUSL prize payments. In addition, it is recognized that $1,000,000 may not be enough to cover the value of the prize liability incurred, and a prize reserve fund will be established to enable MUSL to fund the difference between this amount and the actual prize liability. In addition, the companies which operate online gaming systems on behalf of the party lotteries will be required to have some level of insurance to cover such liabilities in the event one of them makes a mistake.
If MUSL incurs any liability as the result of the acts of a party contractually obligated to the member lottery, that lottery shall pursue all contractual and legal remedies available to it under the contract. Any money recovered by the lottery will be turned over to MUSL up to the amount expended by MUSL as a result of the error. A lottery's pursuit of its contractual and legal remedies against the party at fault is that lottery's only obligation to MUSL in the event of a MUSL loss.
The MUSL shall establish and then maintain a prize reserve fund solely for the purpose of indemnifying the member lotteries. The board will determine the manner in which the prize reserve fund is to be invested and interest earned on the fund will become part of the fund if the fund balance is below the ceiling amount designated by the board. Interest earned on the fund when the fund balance is not below the ceiling amount will be treated as prize money.
22. That no lottery shall be allowed to join the MUSL without the consent of 2/3 of the party lotteries voting pursuant to both methods of voting. The board will designate the terms which must be met by a lottery seeking admission, including but not limited to, setting the amount which the lottery must contribute to the MUSL prize reserve fund. This paragraph is not applicable to the lotteries listed in this first paragraph of this agreement provided that they sign this agreement by October 1, 1987.
23. That this agreement may be executed in as many counterparts, as there are party lotteries. When so executed each shall be deemed to be an original and such counterparts together shall constitute one and the same agreement.
24. That all notices required to be sent to a party lottery pursuant to this agreement shall be in writing and sent by certified mail, return receipt requested at the addresses appearing hereunder or any other address which may be given from time to time to the board.
History: L. 1988, ch. 288, § 1; Jan. 28.
History: L. 1988, ch. 288, § 2; Jan. 28.
(b) If any provision of this act or the application thereof to any person or circumstance is held invalid, the invalidity shall not affect any other provision or application of the act which can be given effect without the invalid provision or application.
(c) Any action challenging the constitutionality of or arising out of any provision of this act, any lottery gaming facility management contract or any racetrack gaming facility management contract entered into pursuant to this act shall be brought in the district court of Shawnee county.
History: L. 2007, ch. 110, § 2; Apr. 19.
(b) Not more than 30 days after the effective date of this act the lottery commission shall adopt and publish in the Kansas register the procedure for receiving, considering and approving, proposed lottery gaming facility management contracts. Such procedure shall include provisions for review of competitive proposals within a gaming zone and the date by which proposed lottery gaming facility management contracts must be received by the lottery commission if they are to receive consideration.
(c) The lottery commission shall adopt standards to promote the integrity of the gaming and finances of lottery gaming facilities, which shall apply to all management contracts, shall meet or exceed industry standards for monitoring and controlling the gaming and finances of gaming facilities and shall give the executive director sufficient authority to monitor and control the gaming operation and to ensure its integrity and security.
(d) The Kansas lottery commission may approve management contracts with one or more prospective lottery gaming facility managers to manage, or construct and manage, on behalf of the state of Kansas and subject to the operational control of the Kansas lottery, a lottery gaming facility or lottery gaming enterprise at specified destination locations within the northeast, south central, southwest and southeast Kansas gaming zones where the commission determines the operation of such facility would promote tourism and economic development. The commission shall approve or disapprove a proposed management contract within 90 days after the deadline for receipt of proposals established pursuant to subsection (b).
(e) In determining whether to approve a management contract with a prospective lottery gaming facility manager to manage a lottery gaming facility or lottery gaming enterprise pursuant to this section, the commission shall take into consideration the following factors: The size of the proposed facility; the geographic area in which such facility is to be located; the proposed facility's location as a tourist and entertainment destination; the estimated number of tourists that would be attracted by the proposed facility; the number and type of lottery facility games to be operated at the proposed facility; and agreements related to ancillary lottery gaming facility operations.
(f) Subject to the requirements of this section, the commission shall approve at least one proposed lottery gaming facility management contract for a lottery gaming facility in each gaming zone.
(g) The commission shall not approve a management contract unless:
(1) (A) The prospective lottery gaming facility manager is a resident Kansas American Indian tribe and, at a minimum: (i) Has sufficient access to financial resources to support the activities required of a lottery gaming facility manager under the Kansas expanded lottery act; and (ii) has three consecutive years' experience in the management of gaming which would be class III gaming, as defined in K.S.A. 46-2301, and amendments thereto, operated pursuant to state or federal law; or
(B) the prospective lottery gaming facility manager is not a resident Kansas American Indian tribe and, at a minimum: (i) Has sufficient access to financial resources to support the activities required of a lottery gaming facility manager under the Kansas expanded lottery act; (ii) is current in filing all applicable tax returns and in payment of all taxes, interest and penalties owed to the state of Kansas and any taxing subdivision where such prospective manager is located in the state of Kansas, excluding items under formal appeal pursuant to applicable statutes; and (iii) has three consecutive years' experience in the management of gaming which would be class III gaming, as defined in K.S.A. 46-2301, and amendments thereto, operated pursuant to state or federal law; and
(2) the commission determines that the proposed development consists of an investment in infrastructure, including ancillary lottery gaming facility operations, of at least $225,000,000 in the northeast, southeast and south central Kansas gaming zones and $50,000,000 in the southwest Kansas gaming zone. The commission, in determining whether the minimum investment required by this subsection is met, shall not include any amounts derived from or financed by state or local retailers' sales tax revenues.
(h) Any management contract approved by the commission under this section shall:
(1) Have a maximum initial term of 15 years from the date of opening of the lottery gaming facility. At the end of the initial term, the contract may be renewed by mutual consent of the state and the lottery gaming facility manager;
(2) specify the total amount to be paid to the lottery gaming facility manager pursuant to the contract;
(3) establish a mechanism to facilitate payment of lottery gaming facility expenses, payment of the lottery gaming facility manager's share of the lottery gaming facility revenues and distribution of the state's share of the lottery gaming facility revenues;
(4) include a provision for the lottery gaming facility manager to pay the costs of oversight and regulation of the lottery gaming facility manager and the operations of the lottery gaming facility by the Kansas racing and gaming commission;
(5) establish the types of lottery facility games to be installed in such facility;
(6) provide for the prospective lottery gaming facility manager, upon approval of the proposed lottery gaming facility management contract, to pay to the state treasurer a privilege fee of $25,000,000 for the privilege of being selected as a lottery gaming facility manager of a lottery gaming facility in the northeast, southeast or south central Kansas gaming zone and $5,500,000 for the privilege of being selected as a lottery gaming facility manager of a lottery gaming facility in the southwest Kansas gaming zone. Such fee shall be deposited in the state treasury and credited to the lottery gaming facility manager fund, which is hereby created in the state treasury;
(7) incorporate terms and conditions for the ancillary lottery gaming facility operations;
(8) designate as key employees, subject to approval of the executive director, any employees or contractors providing services or functions which are related to lottery facility games authorized by a management contract;
(9) include financing commitments for construction;
(10) include a resolution of endorsement from the city governing body, if the proposed facility is within the corporate limits of a city, or from the county commission, if the proposed facility is located in the unincorporated area of the county;
(11) include a requirement that any parimutuel licensee developing a lottery gaming facility pursuant to this act comply with all orders and rules and regulations of the Kansas racing and gaming commission with regard to the conduct of live racing, including the same minimum days of racing as specified in K.S.A. 2007 Supp. 74-8746, and amendments thereto, for operation of electronic gaming machines at racetrack gaming facilities;
(12) include a provision for the state to receive not less than 22% of lottery gaming facility revenues, which shall be paid to the expanded lottery act revenues fund established by K.S.A. 2007 Supp. 74-8768, and amendments thereto;
(13) include a provision for 2% of lottery gaming facility revenues to be paid to the problem gambling and addictions grant fund established by K.S.A. 2007 Supp. 79-4805, and amendments thereto;
(14) if the prospective lottery gaming facility manager is an American Indian tribe, include a provision that such tribe agrees to waive its sovereign immunity with respect to any actions arising from or to enforce either the Kansas expanded lottery act or any provision of the lottery gaming facility management contract; any action brought by an injured patron or by the state of Kansas; any action for purposes of enforcing the workers compensation act or any other employment or labor law; and any action to enforce laws, rules and regulations and codes pertaining to health, safety and consumer protection; and for any other purpose deemed necessary by the executive director to protect patrons or employees and promote fair competition between the tribe and others seeking a lottery gaming facility management contract;
(15) (A) if the lottery gaming facility is located in the northeast or southwest Kansas gaming zone and is not located within a city, include a provision for payment of an amount equal to 3% of the lottery gaming facility revenues to the county in which the lottery gaming facility is located; or (B) if the lottery gaming facility is located in the northeast or southwest Kansas gaming zone and is located within a city, include provision for payment of an amount equal to 1.5% of the lottery gaming facility revenues to the city in which the lottery gaming facility is located and an amount equal to 1.5% of such revenues to the county in which such facility is located;
(16) (A) if the lottery gaming facility is located in the southeast or south central Kansas gaming zone and is not located within a city, include a provision for payment of an amount equal to 2% of the lottery gaming facility revenues to the county in which the lottery gaming facility is located and an amount equal to 1% of such revenues to the other county in such zone; or (B) if the lottery gaming facility is located in the southeast or south central Kansas gaming zone and is located within a city, provide for payment of an amount equal to 1% of the lottery gaming facility revenues to the city in which the lottery gaming facility is located, an amount equal to 1% of such revenues to the county in which such facility is located and an amount equal to 1% of such revenues to the other county in such zone;
(17) allow the lottery gaming facility manager to manage the lottery gaming facility in a manner consistent with this act and applicable law, but shall place full, complete and ultimate ownership and operational control of the gaming operation of the lottery gaming facility with the Kansas lottery. The Kansas lottery shall not delegate and shall explicitly retain the power to overrule any action of the lottery gaming facility manager affecting the gaming operation without prior notice. The Kansas lottery shall retain full control over all decisions concerning lottery gaming facility games;
(18) include provisions for the Kansas racing and gaming commission to oversee all lottery gaming facility operations, including, but not limited to: Oversight of internal controls; oversight of security of facilities; performance of background investigations, determination of qualifications and credentialing of employees, contractors and agents of the lottery gaming facility manager and of ancillary lottery gaming facility operations, as determined by the Kansas racing and gaming commission; auditing of lottery gaming facility revenues; enforcement of all state laws and maintenance of the integrity of gaming operations; and
(19) include enforceable provisions: (A) Prohibiting the state, until July 1, 2032, from (i) entering into management contracts for more than four lottery gaming facilities or similar gaming facilities, one to be located in the northeast Kansas gaming zone, one to be located in the south central Kansas gaming zone, one to be located in the southwest Kansas gaming zone and one to be located in the southeast Kansas gaming zone, (ii) designating additional areas of the state where operation of lottery gaming facilities or similar gaming facilities would be authorized or (iii) operating an aggregate of more than 2,800 electronic gaming machines at all parimutuel licensee locations; and (B) requiring the state to repay to the lottery gaming facility manager an amount equal to the privilege fee paid by such lottery gaming facility manager, plus interest on such amount, compounded annually at the rate of 10%, if the state violates the prohibition provision described in (A).
(i) The power of eminent domain shall not be used to acquire any interest in real property for use in a lottery gaming enterprise.
(j) Any proposed management contract for which the privilege fee has not been paid to the state treasurer within 30 days after the date of approval of the management contract shall be null and void.
(k) A person who is the manager of the racetrack gaming facility in a gaming zone shall not be eligible to be the manager of the lottery gaming facility in the same zone.
(l) Management contracts authorized by this section may include provisions relating to:
(1) Accounting procedures to determine the lottery gaming facility revenues, unclaimed prizes and credits;
(2) minimum requirements for a lottery gaming facility manager to provide qualified oversight, security and supervision of the lottery facility games including the use of qualified personnel with experience in applicable technology;
(3) eligibility requirements for employees, contractors or agents of a lottery gaming facility manager who will have responsibility for or involvement with actual gaming activities or for the handling of cash or tokens;
(4) background investigations to be performed by the Kansas racing and gaming commission;
(5) credentialing requirements for any employee, contractor or agent of the lottery gaming facility manager or of any ancillary lottery gaming facility operation as provided by the Kansas expanded lottery act or rules and regulations adopted pursuant thereto;
(6) provision for termination of the management contract by either party for cause; and
(7) any other provision deemed necessary by the parties, including such other terms and restrictions as necessary to conduct any lottery facility game in a legal and fair manner.
(m) A management contract shall not constitute property, nor shall it be subject to attachment, garnishment or execution, nor shall it be alienable or transferable, except upon approval by the executive director, nor shall it be subject to being encumbered or hypothecated. The trustee of any insolvent or bankrupt lottery gaming facility manager may continue to operate pursuant to the management contract under order of the appropriate court for no longer than one year after the bankruptcy or insolvency of such manager.
(n) (1) The Kansas lottery shall be the licensee and owner of all software programs used at a lottery gaming facility for any lottery facility game.
(2) A lottery gaming facility manager, on behalf of the state, shall purchase or lease for the Kansas lottery all lottery facility games. All lottery facility games shall be subject to the ultimate control of the Kansas lottery in accordance with this act.
(o) A lottery gaming facility shall comply with any planning and zoning regulations of the city or county in which it is to be located. The executive director shall not contract with any prospective lottery gaming facility manager for the operation and management of such lottery gaming facility unless such manager first receives any necessary approval under planning and zoning requirements of the city or county in which it is to be located.
(p) Prior to expiration of the term of a lottery gaming facility management contract, the lottery commission may negotiate a new lottery gaming facility management contract with the lottery gaming facility manager if the new contract is substantially the same as the existing contract. Otherwise, the lottery gaming facility review board shall be reconstituted and a new lottery gaming facility management contract shall be negotiated and approved in the manner provided by this act.
History: L. 2007, ch. 110, § 3; Apr. 19.
(1) Three members appointed by the governor;
(2) two members appointed by the president of the senate; and
(3) two members appointed by the speaker of the house of representatives.
(b) To be eligible for appointment to the board, a person shall submit to the appointing authority evidence of significant business experience, particularly in business development and location of new businesses to maximize revenue.
(c) A person shall not be eligible for appointment to the board if the person:
(1) Is a resident of or owns property in a gaming zone;
(2) has an interest in any business domiciled in or conducting a significant portion of its business in a gaming zone; or
(3) has, or has had during the preceding two years, either directly or indirectly, a financial interest in or is, or has been during the preceding two years, employed by or a consultant to a prospective lottery gaming facility manager or any ancillary lottery gaming facility operations proposed by a prospective lottery gaming facility manager.
(d) Not more than four members of the board shall be members of the same political party.
(e) The governor shall designate one member of the board to serve as chairperson of the board.
(f) The vote of at least four members of the board shall be required to take action.
(g) Subject to the limitations of appropriations therefor, members of the board shall receive such compensation as determined by the governor. Members of the board attending meetings of the board or subcommittee meetings thereof approved by the board shall be paid subsistence allowances, mileage and other expenses as provided in K.S.A. 75-3223, and amendments thereto.
(h) The board is hereby attached to the Kansas racing and gaming commission as a part thereof. All budgeting, purchasing and related management functions of the board shall be administered by the executive director of the Kansas racing and gaming commission and the executive director shall provide office and meeting space and such clerical and other staff assistance as may be necessary to assist the board in carrying out its powers, duties and functions under this act. The board may employ any experts, consultants or other professionals at the expense of a prospective lottery gaming facility manager to provide assistance in evaluating a lottery gaming facility management contract submitted to the board.
History: L. 2007, ch. 110, § 4; Apr. 19.
(b) Upon execution of a lottery gaming facility management contract or contracts by the executive director, the executive director shall submit such contract or contracts to the lottery gaming facility review board. The board shall determine which contract best maximizes revenue, encourages tourism and otherwise serves the interests of the people of Kansas. In making its determination, the board shall conduct public hearings, take testimony, solicit the advice of experts and investigate the merits of each contract submitted by the executive director.
(c) Within 30 days after execution of a lottery gaming facility management contract with a parimutuel licensee for development of a lottery gaming facility at a parimutuel licensee location, the parimutuel licensee must submit to the Kansas racing and gaming commission, for approval by the commission, a plan for compliance with the requirements for live racing and purse supplements established pursuant to K.S.A. 2007 Supp. 74-8745 and 74-8767, and amendments thereto. Upon application of a parimutuel licensee, the Kansas racing and gaming commission shall open a proceeding to consider such licensee's proposal for development of a lottery gaming facility at the parimutuel licensee location. Such proposal shall include provisions for: (1) Compliance with the requirements of K.S.A. 2007 Supp. 74-8745, and amendments thereto; (2) payment of purse supplements from the appropriate funds established by K.S.A. 2007 Supp. 74-8767, and amendments thereto; and (3) a plan for protecting and promoting live racing in Kansas. The Kansas racing and gaming commission shall hear evidence and testimony from all interested parties. Upon a finding by the Kansas racing and gaming commission that the proposal is in the best interest of live racing in Kansas and more beneficial to live racing than placement of electronic gaming machines at such parimutuel licensee location, the Kansas racing and gaming commission may approve such proposal. The Kansas racing and gaming commission shall notify the lottery gaming facility review board of the commission's approval or disapproval of the proposal. If the Kansas racing and gaming commission does not approve the proposal, the lottery gaming facility review board shall not give further consideration to the lottery gaming facility management contract with the parimutuel licensee and the executive director shall direct the state treasurer to refund, without interest, the privilege fee paid pursuant to such contract.
(d) (1) Not more than 60 days after all lottery gaming facility management contracts for a lottery gaming facility in a gaming zone have been submitted to the lottery gaming facility review board, the board: (A) If more than one lottery gaming facility management contract has been submitted for a lottery gaming facility in a gaming zone, shall select by public vote the lottery gaming facility management contract, if any, which the board determines is the best possible such contract; or (B) if the executive director submits only one lottery gaming facility management contract for a lottery gaming facility in a gaming zone, shall determine whether such contract is the best possible such contract.
(2) If the board cannot reach agreement that a lottery gaming facility management contract is the best possible such contract, the board shall request the executive director to renegotiate the contract or contracts until the board determines that the best possible such contract or contracts have been executed.
(e) Upon a determination by the lottery gaming facility review board that a lottery gaming facility management contract is the best possible such contract, the board shall submit the contract to the Kansas racing and gaming commission for approval. The Kansas racing and gaming commission shall conduct such background investigations of prospective lottery gaming facility managers, their directors and officers and any other persons having an interest in such prospective managers, as determined in accordance with rules and regulations adopted by the Kansas racing and gaming commission. Upon completion of such investigations and approval of the background of the prospective lottery gaming facility manager, directors, officers and other persons having an interest in such prospective manager, but not more than 10 days after receiving the recommendation of the lottery gaming facility review board, the Kansas racing and gaming commission shall vote to approve in whole or reject in whole the recommendation of the lottery gaming facility review board. If the Kansas racing and gaming commission does not approve the background of such prospective lottery gaming facility manager, directors, officers and other persons having an interest in such prospective manager or does not approve the recommendation of the lottery gaming facility review board, the Kansas racing and gaming commission shall notify the executive director of the lottery and the process for selection of a lottery gaming facility manager shall begin again in the manner provided in K.S.A. 2007 Supp. 74-8734 and 74-8735, and amendments thereto.
(f) The deadline for receipt of proposals established pursuant to subsection (b) of K.S.A. 2007 Supp. 74-8734, and amendments thereto, the time limit imposed by subsection (a) for action by the lottery commission, the time limit imposed by subsection (d) for action by the lottery gaming facility review board or the time limit imposed by subsection (e) for action by the Kansas racing and gaming commission, upon application by the respective commission or board, may be extended by the governor for a period not to exceed 60 days if the governor, in the governor's discretion, determines that the respective commission or board has acted on good faith to comply with the time limit. Failure to comply with any such time limit, unless extended as provided by this subsection, or to comply with an extended time limit authorized by this subsection, shall render the respective commission or board subject to relief in the form of mandamus, injunction or other legal remedy.
History: L. 2007, ch. 110, § 5; Apr. 19.
(b) Upon the adoption of a resolution calling for an election pursuant to this section, the county election officer shall cause the following proposition to be placed on the ballot at the election called for that purpose: "Shall the Kansas lottery be authorized to operate a lottery gaming facility in _________ county?"
(c) If a majority of the votes cast and counted at such election is in favor of approving the operation of a lottery gaming facility within the county, the Kansas lottery may operate a lottery gaming facility in such county, subject to the provisions of this act. If a majority of the votes cast and counted at an election under this section is against permitting the operation of a lottery gaming facility within the county, the Kansas lottery shall not operate a lottery gaming facility in such county. The county election officer shall transmit a copy of the certification of the results of the election to the e