1. The director shall select a person that the director deems best able to serve the public convenience and promote the sale of a ticket. The director shall consider relevant factors, including the applicant's credit history, physical security and public accessibility of the applicant's site, integrity, sufficiency of existing retailers to serve the public convenience, especially in a geographically remote area of the state, and volume of expected sales of tickets. A person lawfully engaged in nongovernmental business on state property or a person within the exterior boundary of an Indian reservation or on tribal trust land may be selected as a retailer. 2. A retailer may not be the lottery's gaming system or advertising agency vendor or an employee or agent of the vendor. 3. To be eligible as a retailer, an individual acting as a sole proprietor must: a. Have a satisfactory credit check; b. Be current in payment of all taxes, interest, and penalties owed to the state and be current under a payment plan, excluding an item under formal dispute or appeal pursuant to law; c. Be at least eighteen years of age; d. Be of good character and reputation; e. Not have been convicted of a felony in this or any other jurisdiction, unless at least ten years have passed since satisfactory completion of the sentence or probation imposed by the court in each felony; f. Not have been found to have knowingly violated a lottery law or rule; g. Not have been found to have a background, including a criminal record, or prior activities that pose a threat to the public interests of this state or to the security and integrity of the lottery, create or enhance the dangers of unsuitable or illegal practices in the conduct of lottery activities, or present questionable business practices and financial arrangements incidental to the lottery activity; h. Not be a parent, stepparent, child, stepchild, spouse, or sibling who is a regular member of the same household of an employee of the lottery or member of the lottery advisory commission; and i. Not have knowingly made a false statement of material fact to the lottery. 4. To be eligible as a retailer, a partnership must meet the requirement of subdivision a of subsection 3 and each partner must meet the requirements of subdivisions b through i of subsection 3.
5. To be eligible as a retailer, an organization other than a partnership must meet the requirements of subdivisions a and b of subsection 3 and each officer and director who is primarily responsible for making financial decisions and each shareholder who owns ten percent or more of an ownership interest in the organization must meet the requirements of subdivisions c through i of subsection 3.
53-12.1-08. Purchase of ticket or payment of prize to certain individuals prohibited - Price of a ticket - Sale by retailer only - Second chance drawings - Prize paid to owner of a winning ticket - Prize subject to taxation - Discharge of liability - Penalty. 1. A North Dakota lottery ticket may not be bought by or otherwise provided to, and a prize may not be paid to, the following individuals or to a parent, stepparent, child, stepchild, spouse, or sibling who is a regular member of the same household of the following individuals: a. A member of the lottery advisory commission or employee of the lottery, unless authorized in writing by the director; or b. An officer or employee of the lottery's gaming system vendor. 2. An individual who knowingly violates subsection 1 is guilty of a class B misdemeanor on the first offense and a class A misdemeanor on a subsequent offense. 3. A retailer or employee of a retailer may buy a ticket and be paid a prize for a winning ticket. 4. Only a retailer may sell a ticket. A retailer may sell a ticket only at the site stated on the license or at a temporary site for a special event authorized by the lottery. A retailer may not sell a ticket at a price greater than the price set by the lottery rules. A person convicted of violating this subsection is guilty of a class A misdemeanor on the first offense and a class C felony on a subsequent offense. 5. A retailer may conduct a second chance drawing of entry forms or tickets to promote the sale of a ticket at that site provided that an individual is not required to purchase a ticket to participate. 6. No ticket may be sold or given to a minor. A retailer, employee of a retailer, or any other person who knowingly violates this subsection is guilty of a class B misdemeanor on the first offense and a class A misdemeanor on a subsequent offense. 7. The prize to be paid or awarded for a winning ticket must be paid to the individual who the director determines is the owner of the ticket. However, the prize of a deceased winning player must be paid to the lawful representative of the estate. A prize may not be paid on a winning ticket that has been purchased by use of a stolen lottery gift certificate or acquired illegally. 8. If an individual steals a ticket or lottery gift certificate from a retailer, the individual is guilty of a class A misdemeanor. However, if the total value of the tickets or gift certificates stolen exceeds five hundred dollars, the offense is a class C felony. 9. A prize awarded is subject to state and federal income tax laws and rules. 10. An individual who, with intent to defraud, falsely makes, alters, forges, passes, or counterfeits a ticket or gift certificate issued by the lottery, regardless of the amount gained, is guilty of a class C felony. 11. The state, members of the lottery advisory commission, and employees of the lottery are discharged of all further liability upon payment of a prize.
53-12.1-09. Operating fund - Continuing appropriation - Authorization of disbursements - Report - Net proceeds. There is established within the state treasury the lottery operating fund into which must be deposited all revenue from the sale of tickets, interest received on money in the fund, and all other fees and moneys collected, less a prize on a lottery promotion, prize on a winning ticket paid by a retailer, and a retailer's commission. Except for moneys in the lottery operating fund appropriated by the legislative assembly for administrative and operating costs of the lottery under section 53-12.1-10, all other money in the fund is continuously appropriated for the purposes specified in this section. During each regular session, the attorney general shall present a report to the appropriations committee of each house of the legislative assembly on
the actual and estimated operating revenue and expenditures for the current biennium and projected operating revenue and expenditures for the subsequent biennium authorized by this section. A payment of a prize or expense or transfer of net proceeds by the lottery may be made only against the fund or money collected from a retailer on the sale of a ticket. A disbursement from the fund must be for the following purposes: 1. Payment of a prize as the director deems appropriate to the owner of a valid, winning ticket; 2. Notwithstanding section 53-12.1-10, payment of a marketing expense that is directly offset by cosponsorship funds collected; 3. Payment of a gaming system or related service expense, retailer record and credit check fees, game group dues, and retailer commissions; and 4. Transfer of net proceeds: a. Eighty thousand dollars must be transferred to the state treasurer each quarter for deposit in the gambling disorder prevention and treatment fund; b. An amount for the lottery's share of a game's prize reserve pool must be transferred to the multistate lottery association; c. Starting July 1, 2023, two hundred fifty thousand dollars must be transferred to the state treasurer each quarter for deposit in the attorney general multijurisdictional drug task force grant fund; and d. The balance of the net proceeds, less holdback of any reserve funds the director may need for continuing operations, must be transferred to the state treasurer on at least an annual basis for deposit in the state general fund.
53-12.1-10. Administrative and other operating costs of the lottery - Lottery operating fund. Money in the lottery operating fund may be spent pursuant to legislative appropriation for costs of administering and operating the lottery, including costs relating to employees, supplies, surveys, advertising and marketing, printing, promotion, premium incentive items, a facility, and services provided by another state agency.