Title 9 Part 5014

No person shall carry on a business in which such person acts as agent for another person in purchasing a lottery ticket, unless such person is duly licensed as a courier service pursuant to this Title.

An applicant for a courier service license shall file an application in a form provided by the commission. An applicant shall have an ongoing duty to supplement such application as may be necessary to maintain updated information and accuracy. In addition to other requirements the commission may establish, such application shall describe how the audit and financial controls, technical standards and internal controls proposed for applicant’s network will comply with the requirements of this Title.

In evaluating an application for a courier service license, the commission shall consider such factors as:

The commission may issue a temporary courier service license to an applicant on a provisional basis pending completion of an initial application review process. As a condition to the issuance of a temporary service license, the applicant shall waive any right to a hearing or to challenge any commission decision in regard to a temporary courier service license. Any such temporary courier service license may be issued only if:

An applicant for a courier service license shall cooperate fully with the commission in the course of the application process. Failure to cooperate with the commission shall be a violation of this section and shall be in itself sufficient grounds for denial of such license application.

Nothing in this Title prohibits the commission itself from engaging in the sale of lottery tickets through a network the commission operates or that is operated on the commission’s behalf.

A courier service shall, as a condition of licensure:

No courier service may offer for sale or delivery any lottery game unless the commission has approved in writing the offering of such game by such licensee. The commission may consider, without limitation, technical requirements and multi-state game requirements in determining whether to grant such approval. Any commission approval may establish a date before which the licensee may not offer the delivery of such lottery game tickets.

At the sole expense of the courier service, the network shall be audited and certified to be compliant with this Part at least annually by an independent party approved by the commission.

As a condition to the issuance and acceptance of a courier service license, such licensee agrees to:

Each courier service shall obtain insurance, which may include cyber liability insurance, errors and omissions insurance and such other insurance coverage as the commission may require, with limits and coverage requirements and minimum carrier ratings satisfactory to the commission.

As a condition to the issuance and acceptance of a courier license, a licensee shall implement, prior to offering a network, independent third-party testing required by the commission as provided in section 5014.9 of this Part.

Each courier service shall make available on such licensee’s website and platform a true copy of the license issued by the commission pursuant to this Title.

Each courier service shall disclose to the commission the lottery games, each of which the commission has considered and approved consistent with section 5014.3(b) of this Part, that such courier service intends to offer for sale. Each courier service shall notify the commission of any proposed changes to such list of lottery games already approved for delivery by such courier service, pursuant to section 5014.3(b) of this Part, no later than 30 days prior to the effective date of such change.

By creating an account using the network of a courier service to place a request for courier services, a courier customer agrees:

A courier service shall prevent the following persons from opening an account or placing a request for courier services through such licensee’s network:

A courier service shall submit for commission approval procedures to prevent prohibited players from placing a request for courier services through such licensee’s network. A courier service shall implement any changes to such procedures as the commission may direct at any time.

A courier service shall specify in the terms of use applicable to such licensee’s network that each category of individuals identified in this section is prohibited from placing requests for courier services through such licensee’s network.

A courier service shall be strictly liable for permitting any prohibited courier customer, as set forth in subdivision (a) of this section, to use such licensee’s network. The commission shall consider, however, before imposing any penalty or sanction upon a licensee for a violation of this section, other than a mandatory penalty set forth in subdivision (e) of this section, any circumstances that such licensee presents in writing to the commission as mitigating factors for the commission’s consideration, including, without limitation, good-faith reliance on false or misleading information provided by the prohibited person and good-faith compliance with appropriate internal controls designed to prevent play by a prohibited person.

The commission shall penalize a courier service found to have allowed a minor to use such licensee’s network as follows:

Prior to placing a request for courier services through a network, a courier customer shall establish an account with the licensee operating such network.

A courier service shall establish controls to ensure that no courier customer is able to establish more than one courier customer account with such courier service. Each such account shall be non-transferable and unique to the courier customer who established the account.

A courier customer account may be funded through the use of a courier customer's credit or debit card; promotional or other credit issued by the licensee, or such other method as the commission may approve.

Each courier service shall establish and maintain a trust account or trust accounts in national or State chartered banking institutions with balances sufficient to pay all money deposited by or on behalf of courier customers for the purchase of tickets, including all courier customer prizes. All prizes collected on behalf of courier customers shall be placed promptly in such trust account or accounts. Monies may be withdrawn from such trust account or accounts for no purpose other than to transfer a courier customer’s funds to such courier customer, purchase courier services through the network as requested by such courier customer or as otherwise may be provided by the Abandoned Property Law. A courier service shall make available within five business days funds a courier customer requests to withdraw from such courier customer’s account. A courier service shall make available to the commission any documents the commission requests in order to monitor compliance with this section.

No courier service may sell or provide to another person or entity courier customer information or data on purchasers of courier services.

Each courier service shall remit all funds in abandoned customer accounts of courier customers as may be required by Abandoned Property Law section 1315. Unclaimed and abandoned prize money is governed by Tax Law section 1614.

No courier customer request for courier service and no receipt or acknowledgment of any such request constitutes evidence of a validly issued lottery ticket. A ticket, in order to be a validly issued ticket, shall be generated by a lottery terminal authorized by the commission or be a printed instant ticket produced by the commission for sale. A ticket is not deemed validly issued when a request for purchase is made of a courier service, when such a request is acknowledged or when a courier customer makes a payment to a courier service.

A courier service shall disclose prominently on such licensee’s network:

A courier service that purchases a lottery ticket on instruction from a courier customer holds such ticket in trust for such courier customer and acquires no ownership interest in such ticket. Notwithstanding such lack of ownership, a courier service may destroy a draw game lottery ticket so long as such courier service complies with the retention requirements set forth in section 5014.12(f) of this Part.

A licensee shall notify a courier customer on whose behalf such licensee has purchased a winning draw game ticket of the amount of the prize within one hour of the commission’s publication of the winning numbers and prize amounts. Such notification shall be made electronically through the network, secure electronic mail or other method approved by the commission. If the prize is more than $600, the licensee shall also notify the commission promptly of the identity of the prizewinner, the prize amount, the type of game, the date of the drawing and, for a draw game conducted more than once per day, the time of the drawing.

For a draw game prize of $600 or less, a courier service shall validate the winning ticket and redeem the prize on behalf of the courier customer. Such prize amount shall be disbursed to the courier customer by crediting the courier customer's account, direct deposit to the courier customer's bank account, redeemed for cash or by other means approved by the commission.

Within a reasonable time after notifying a courier customer of winning a draw game prize of more than $600, a courier service shall print the prizewinner's full name, as set forth in such prizewinner’s account, on the back of the draw game ticket.

A courier service shall submit to the commission by April 15th of each year an anti-money laundering compliance finding statement on a form issued by the commission and duly executed by the licensee’s designated anti-money laundering compliance officer. A courier service shall implement anti-money laundering procedures that shall, at a minimum:

Each courier service shall submit to the commission for approval a written description of its initial system of internal controls prior to the start of operations. Such system of internal controls shall demonstrate to the satisfaction of the commission that such courier service has adequate controls in place to address data security, responsiveness to cybersecurity events to mitigate any negative events, recovery from cybersecurity events and restoration of normal operations and services, risk assessment and mitigation, training, access controls and identity management, systems operations and availability concerns, courier customer data privacy, incident response, disaster recovery, document retention and any other control issue the commission may identify.

Each courier service shall maintain for a period of two years a record of each courier customer complaint, the inquiry or investigation undertaken by the licensee, action taken by the licensee to resolve the complaint and the final disposition of the complaint. Such records shall contain the original or copies of the complaint, all written communications between the licensee and the complainant, all documents or telephone recordings created in connection with a complaint and any documentation provided to the courier customer by the licensee. Such courier customer complaint records shall include:

The courier service shall also maintain a permanent record summarizing the number and nature of consumer complaints and the resolution or outcome of such complaints.

The commission may grant approval to a courier service to charge courier customers a reasonable service charge per request for courier services, and not per ticket requested to be purchased on the customer’s behalf, or other charge for service associated with use of a network and fulfillment of a request for services.

No courier service is permitted to charge any fee other than the service charge described in subdivision (a) of this section. Prohibited fees include, without limitation, any fee relating to validation of a winning ticket, payment of a prize or a withdrawal from a courier customer’s account.

Any charge assessed or collected in accordance with this section shall not be deemed to be part of the lottery ticket price.

Any fee charged for a transaction in which requested tickets were never generated, for whatever reason, shall be refunded.

A courier service license may be suspended or revoked:

A courier service whose license has been suspended or revoked may seek review or hearing on such action according to the procedures set forth in section 5000.6 of this section, as if such licensee were a lottery sales agent.