An applicant must satisfy the requirements of the Lottery Act, its rules, and directives to qualify for licensing as a retailer. The following are some, but not necessarily all, of the requirements that an applicant must meet to be licensed as a retailer:
- Maintain and possess an acceptable credit history (refer to Retailer Directive No.3).
- Possess no criminal record that would adversely affect the integrity of the Bureau. Any criminal record must be disclosed on the personal data sheets. This includes, but is not limited to, convictions following a jury or bench trial for crimes involving theft, honesty or moral turpitude, along with guilty pleas, pleas of nolo contender, or any pleas taken under advisement, as well as criminal charges filed against the applicant or the applicant’s principal or owner.
- Not engage in business exclusively as lottery sales agent/retailer.
- Meet Administrative Rule 432.3 requirements which state, “In addition to the requirements of section 23 of the Lottery Act, the Commissioner shall consider the following additional factors in determining the eligibility of any prospective licensee or renewal of a license as a retailer:
- The honesty and integrity of the applicant.
- The veracity of the information supplied in the application for Lottery Retailer’s License.
- The applicant’s indebtedness to the state or any local government.
- The business experience and general fitness of the applicant.
- The following factors may be considered by the Bureau in evaluating a location for placement of a terminal:
- Sales of other goods and services
- Customer traffic in the establishment
- Seating capacity
- Number of employees
- Number of cash registers/checkouts within the premises
- Number of parking spaces at the premises
- Square footage of the premises
- Business location of the establishment
- The establishment’s hours of operation
- Compliance with the American with Disabilities Act of 1990.
- The Commissioner may place a terminal at any location he or she deems necessary for the purpose of maximizing net lottery revenues.
- Must satisfy all other guidelines established in the Lottery Act, its rules, and directives.
- A person must be 18 years of age or older to buy or sell lottery tickets.
- Retailers must display their lottery license or a copy of their Lottery License in a conspicuous place.
- Active retailers may sell tickets only on the premises indicated on the license. Only instant tickets issued to a specific location can be sold at that location. Retailers may not exchange books of instant tickets with other retailers or stores.
- All Retailers are expected to redeem winning tickets with a value up to and including $600. Winning tickets must be validated through the validation system(s) for the retailer to receive credit.
- Write your Retailer Number on the back of all winning tickets that you redeem and deface the validation number. Destroy redeemed tickets after balancing.
- Retailers are expected to make full use of all promotional material provided by the lottery and to prominently post winning numbers/symbols and jackpot amounts as soon as possible.
- Retailers are expected to participate in lottery signage programs and to display approved sign(s) provided by the lottery.
- Traditional retailers are required to have instant tickets available for sale to the public during normal business hours.
- Lottery tickets cannot be sold for more than their established price. They can be sold for less than their established price as a special promotion if the retailer desires. Retailers who sell tickets to other retailers for resale are in violation of the Lottery Act & Rules.
- Retailers cannot offer to give any money or other thing of value to the holder of a lottery ticket or share for winning the lottery, other than the prize if payment of the prize by the retailer is authorized by the Commissioner. Retailers who offer bonuses to winning tickets holders are in violation of the Lottery Act & Rules.
- Retailers cannot purchase a winning ticket or tickets from an original purchaser or from a subsequent purchaser.
- Retailers are prohibited from participating as a retailer for other Lotteries.
- The sale of a valid lottery ticket is final and a retailer shall not accept ticket returns.
- Lottery may prohibit a person authorized by the retailer from participating in a lottery activity i.e. selling tickets or redeeming tickets.
- Retailers are expected to maintain current and accurate records of all operations in conjunction with sales in conformity with Rules, instructions, and directives of the Lottery. The retailer is required to make the records available to Lottery representatives upon request.
- The Retailer shall exercise due diligence in the operation of any installed equipment and shall immediately call 1-800-592-4040 and press option #1 when his or her equipment malfunctions. The retailer shall refrain from attempting to perform any mechanical or electrical maintenance or repairs to the equipment except as instructed by the lottery or its authorized representative. If a terminal malfunction is the result of retailer noncompliance with lottery guidelines or specifications, the retailer may be responsible for repair and/or service charges. The retailer shall replace ribbons, paper stock, and clear paper jams as required.
- The retailer shall be responsible for the physical security of the lottery equipment. Damage to the equipment/satellite communication lines attributable to the retailer’s negligence will result in an assessment to the retailer for the cost of equipment repair or replacement.
- A retailer does not have a property interest in the license granted by the Lottery or any lottery equipment.
- The retailer will act in a fiduciary capacity with respect to all tickets accepted from the Lottery or its authorized distributors until payment has been made.
- Retailers are responsible for all tickets consigned to them. If tickets are stolen, then the retailer shall report the theft to the lottery and to local or state police authorities. The retailer shall pay for the stolen tickets on the settlement date. The retailer shall subsequently file a statement swearing to or affirming, under the penalty of perjury, the facts of the case. The retailer shall furnish to lottery a copy of the police report covering the theft. Following an investigation by lottery and police authorities, the lottery may issue a refund to the retailer. Refunds may only be issued if losses to the lottery have been mitigated by retailer’s actions in reporting the tickets stolen and the retailer’s appropriate accounting of tickets stolen.
- Retailers agree to hold the Lottery and the State of Michigan harmless from any liability arising in connection with the sales or redemption of lottery products.
Buying or Selling a Michigan Lottery Licensed Business?
Here are some important things you need to know:
- If you want to purchase a business that sells Lottery tickets, you will need to submit a retailer license application.
- If your application is approved, you will be issued a license conditional on the Seller paying the final settlement invoice.
- Until the buyer has been issued a license and the license is active, the seller is responsible for the security of any ticket inventory.
For locations selling instant tickets, the unopened confirmed books will be transferred from the seller’s retailer number to the buyer’s retailer number. The information below is meant to assist the Buyer and Seller with calculating the cost of the existing instant ticket inventory.
There are three types of tickets (or packs):
- Packs of tickets that have been activated through the terminal, and may be partially sold.
- The Seller will be charged by the Lottery for 94% of face value for the pack once the pack has been active 90 days, or 90% of the low-tier prizes have been claimed.
- Packs may be partially or completely sold.
- The Seller has already been charged 94% of face value for the pack.
- Packs have been delivered to the business, but have not been activated.
- These packs are still considered property of the Lottery, on consignment with the retailer.
- There is no charge for these packs until they are activated.
The Commissioner has established the following fee schedule:
- Application processing (non-refundable, due at time of application): $150
- Annual license renewal (probationary status retailers only): $200
- Investigation fee resulting in disciplinary action: $700
Communication System Fees
- Initial VSAT installation/New Retailer: $550
- Additional device installation: $100
- Exterior move (retailer requested): VSAT $400, Terminal $100
- Interior terminal move (retailer requested): $100
Additional Equipment Fees
- Additional monitor above the two provided: $900
- Additional ticket checker: $750
- Other equipment may be charged on a cost pass-through basis
Potential Additional Fees
- Delinquency (see Retailer Directive 2): $200
- Low Sales (weekly fee, see Terminal Minimum Performance Directive 20.SLS 1.10.2): $70
- Failure to activate packs of instant game tickets (two or more occurrences within 13 week period): $25
What can you tell me about the retailer settlement process?
- Retailers must not be delinquent in settling accounts with the Lottery.
- Retailers are required to maintain a separate bank account for Lottery use only in a financial institution that is a member of The National Automated Clearing House Association. The Lottery must be authorized to initiate electronic funds transfers (EFT) to or from the account.
- Cash only must be deposited in this account, do not include checks in your deposit.
- The sales week is Tuesday through Monday. Your invoice is available Tuesday of each week. Bank deposits must be made by 2:00 p.m. on Tuesday to assure available funds for EFT withdrawal.
- A retailer’s selling privileges may be suspended upon determination that the retailer is delinquent for any settlement. Retailers are considered delinquent when sufficient good, available funds are not available in the financial institution account at the time the Lottery attempts to electronically withdraw the retailer’s settlement.
- Retailers are expected to promptly “make good” a delinquency by remitting a cashier’s or certified check to the Lottery for the full amount of the delinquency plus any delinquency fee. A fee may be assessed for each delinquency in accordance with the fee schedule currently in effect.
- A retailer who fails to “make good” a delinquency shall be subject to license revocation. A retailer may also be subject to collection proceedings for failure to “make good” on a delinquency. Collection proceedings may be initiated by the Lottery or by a designated third-party.
- A retailer who exceeds the established number of delinquencies within six consecutive months shall be subject to license revocation or be required to post a cash bond to continue as a licensed retailer.
- The retailer shall immediately notify Retailer Services of any lapse in on-line terminal operation that will exceed 48 hours in duration.
- The retailer’s license may be revoked if the Retailer has an unapproved lapse in operation that exceeds 30 calendar days.
- All retailers may be subject to a terminal minimum sales performance evaluation every quarter. Failure to meet the minimum sales performance may result in license revocation. The minimum sales performance amount is set by the Lottery and is subject to change, but will not exceed a $4,000.00 weekly average.
- Failure to meet the performance requirements or the contract terms and conditions may result in disciplinary action depending on the nature and severity of the violation. When the severity of a violation warrants equipment removal and/or license revocation, the retailer may request a conference with the Commissioner or the Commissioner’s designee. At this informal conference, the alleged violation will be reviewed with the retailer. The retailer will have the opportunity to refute the alleged violation or to explain the reasons for the violation. The retailer will be notified in writing of the Commissioner’s decision. The Commissioner’s decision is final.
- It is each owner/shareholder’s responsibility to report to the Lottery any changes in his or her personal or business situation that would adversely affect the Lottery’s integrity and/or its operations. This includes but is not limited to: any change of ownership, changes in a home address, phone number, etc; misdemeanor or felony convictions; liquor, food stamp, or tobacco violations; tax defaults or liens; personal or business bankruptcies; or any pending lawsuits against an owner/shareholder or the business.
- Each owner/shareholder authorizes the release of all information regarding his or her personal/business credit and criminal history to the Lottery. Each owner/shareholder understands it is his or her responsibility to report any changes in a personal or business situation. Each owner/shareholder accepts that any violation of the Lottery Act, Rules, contract, directives, instructions, or communications (including this communication) may be cause for revocation of any Lottery license.
When purchasing a location that currently sells lottery, all lottery equipment that is currently installed at the location will remain. Once licensed, Lottery will provide you with a new passcode that will be used to sign on the terminal(s). You will not be charged an installation fee for equipment currently installed at the location.If you are starting a business that does not have lottery equipment installed, IGT the vendor who installs lottery equipment will contact you to schedule training on the equipment and installation. Traditional retailers will be equipped with a terminal, ticket printer, customer display unit, indoor unit and a ticket checker. A satellite dish will be mounted on the roof that operates lottery equipment.
Club Keno locations will receive a monitor to view drawings instead of the customer display unit.
A communication equipment installation fee of $550 will be withdrawn from your account after the equipment is installed.
Additional equipment installation such as, monitors, and self-serve equipment must be approved by your District Sales Representative.
The retailer shall exercise due diligence in the operation of any installed equipment and shall immediately call 1-800-592-4040, option #1 when equipment malfunctions. Please be prepared to troubleshoot with a Hotline operator. The goal is to restore your terminal’s operation as soon as possible. If the troubleshooting steps are unsuccessful, a technician will be dispatched to your location. The Retailer shall refrain from attempting to perform any mechanical or electrical maintenance or repairs to the equipment except as instructed by Lottery or its authorized representative. If terminal malfunction is a result of Retailer noncompliance with Lottery guidelines or specifications, the retailer may be responsible for repair and/or service charges. The Retailer shall replace ribbons, paper stock, and clear paper jams as required.
Power to the Altura Terminal must remain on at all times! NO NOT UNPLUG! The central computer communicates with the terminal during off hours (1:59 a.m. to 5:59 a.m.). The terminal should only be unplugged when instructed to do so by a Hotline Associate!
To report any changes, contact Lottery at:
Michigan Lottery, Retailer Services
P.O. Box 30023
Lansing, MI 48909
If you are a current Michigan Lottery retailer and have additional questions, please contact your Michigan Lottery District Sales Representative.
If you are prospective Michigan Lottery retailer and have questions about the application process, please contact Retailer Service/Licensing at 517-335-5619.