Vendor, affiliate, lottery sales agent and occupational licenses. Suspension or revocation of license. Compliance by licensees. Provisional authorization for occupational license applicant. Incidents involving lottery gaming system. Regulations

# (a)

The Commissioner of Consumer Protection shall issue vendor, affiliate, lottery sales agent and occupational licenses in a form and manner prescribed by the commissioner and in accordance with the provisions of this section.

# (b)

No person or business organization awarded a primary contract by the Connecticut Lottery Corporation to provide facilities, components, goods or services that are necessary for and directly related to the secure operation of the activities of said corporation shall do so unless such person or business organization is issued a vendor license by the Commissioner of Consumer Protection. For the purposes of this subsection, “primary contract” means a contract to provide facilities, components, goods or services to said corporation by a person or business organization (1) that provides any lottery game or any online wagering system related facilities, components, goods or services and that receives or, in the exercise of reasonable business judgment, can be expected to receive more than seventy-five thousand dollars or twenty-five per cent of its gross annual sales from said corporation, or (2) that has access to the facilities of said corporation and provides services in such facilities without supervision by said corporation. Each applicant for a vendor license shall pay a nonrefundable application fee of two hundred fifty dollars.

# (c)

No person or business organization, other than a shareholder in a publicly traded corporation, may be a contractor or a subcontractor for the provision of facilities, components, goods or services that are necessary for and directly related to the secure operation of the activities of the Connecticut Lottery Corporation, or may exercise control in or over a vendor licensee unless such person or business organization is licensed as an affiliate licensee by the commissioner. Each applicant for an affiliate license shall pay a nonrefundable application fee of two hundred fifty dollars.

# (d)

# (1)

Each employee of a vendor or affiliate licensee who has access to the facilities of the Connecticut Lottery Corporation and provides services in such facilities without supervision by said corporation or performs duties directly related to the activities of said corporation shall obtain an occupational license.

# (2)

Each officer, director, partner, trustee or owner of a business organization licensed as a vendor or affiliate licensee and any shareholder, executive, agent or other person connected with any vendor or affiliate licensee who, in the judgment of the commissioner, will exercise control in or over any such licensee shall obtain an occupational license.

# (3)

Each employee of the Connecticut Lottery Corporation shall obtain an occupational license.

# (e)

The commissioner shall issue occupational licenses in the following classes:

# (1)

Class I for persons specified in subdivision (1) of subsection (d) of this section;

# (2)

Class II for persons specified in subdivision (2) of subsection (d) of this section;

# (3)

Class III for persons specified in subdivision (3) of subsection (d) of this section who, in the judgment of the commissioner, will not exercise authority over or direct the management and policies of the Connecticut Lottery Corporation; and (4) Class IV for persons specified in subdivision (3) of subsection (d) of this section who, in the judgment of the commissioner, will exercise authority over or direct the management and policies of the Connecticut Lottery Corporation. Each applicant for a Class I or III occupational license shall pay a nonrefundable application fee of twenty dollars. Each applicant for a Class II or IV occupational license shall pay a nonrefundable application fee of one hundred dollars. The nonrefundable application fee shall accompany the application for each such occupational license.

# (f)

No person or business organization may be a lottery sales agent unless such person or organization is licensed as a lottery sales agent by the commissioner.

# (g)

In determining whether to grant a vendor, affiliate, lottery sales agent or occupational license to any such person or business organization, the commissioner may require an applicant to provide information as to such applicant and person in charge related to:

# (1)

Financial standing and credit;

# (2)

moral character;

# (3)

criminal record, if any;

# (4)

previous employment;

# (5)

corporate, partnership or association affiliations;

# (6)

ownership of personal assets; and (7) such other information as the commissioner deems pertinent to the issuance of such license, provided the submission of such other information will assure the integrity of the state lottery. The commissioner shall require each applicant for a vendor, affiliate, lottery sales agent or occupational license, provided if an applicant for a lottery sales agent is a business organization the commissioner shall require such entity's person in charge to submit to state and national criminal history records checks and may require each such applicant, or person in charge, to submit to an international criminal history records check before such license is issued. The state and national criminal history records checks required pursuant to this subsection shall be conducted in accordance with section 29-17a. The commissioner shall issue a vendor, affiliate, lottery sales agent or occupational license, as the case may be, to each applicant who satisfies the requirements of this subsection and who is deemed qualified by the commissioner. The commissioner may reject for good cause an application for a vendor, affiliate, lottery sales agent or occupational license.

# (h)

Each vendor, affiliate or Class I or II occupational license shall be effective for not more than one year from the date of issuance. Each Class III or IV occupational license shall remain in effect throughout the term of employment of any such employee holding such a license. The commissioner may require each employee issued a Class IV occupational license to submit information as to such employee's financial standing and credit annually. Initial application for and renewal of any such license shall be in such form and manner as the commissioner shall prescribe.

# (i)

# (1)

Upon petition of the corporation, a vendor licensee or an affiliate licensee, the department may authorize an applicant for an occupational license to provisionally perform the work permitted under the license applied for, if: (A) The applicant has filed a completed occupational license application in the form and manner required by the commissioner, and (B) the corporation, vendor licensee or affiliate licensee attests that the provisional authorization is necessary to continue the efficient operation of the lottery, and is based on circumstances that are extraordinary and not designed to circumvent the otherwise applicable licensing procedures.

# (2)

The department may issue a provisional authorization to an applicant for an occupational license in advance of issuance or denial of such license for a period not to exceed six months. Provisional authorization shall permit such applicant to perform the functions and require the applicant to comply with the requirements of the occupational license applied for as set forth in the provisions of this chapter and regulations adopted pursuant to this chapter. Provisional authorization shall not constitute approval for an occupational license. During the period of time that any provisional authorization is in effect, the applicant granted such authorization shall be subject to and comply with all applicable statutes and regulations. Any provisional authorization issued by the department shall expire immediately upon the earlier of: (A) The date of issuance of written notice from the department that the occupational license has been approved or denied, or (B) six months after the date the provisional authorization was issued.

# (3)

An individual whose occupational license application is denied after a period of provisional authorization shall not reapply for an occupational license for a period of one year from the date of the denial.

# (4)

An individual whose provisional authorization expires pursuant to subparagraph (B) of subdivision (2) of this subsection may apply for an additional provisional authorization. The department may issue such additional provisional authorization upon a determination that the conditions of subparagraph (B) of subdivision (1) of this subsection exist.

# (j)

When an incident occurs, or is reasonably suspected to have occurred, that causes a disruption in the operation, security, accuracy, integrity or availability of the lottery gaming system, the vendor licensed to provide such lottery gaming system shall, immediately upon discovery of such incident, but not later than twenty-four hours after discovery of such incident, provide the department with a written incident report including the details of the incident and the vendor's proposed corrections. Not later than five business days after notifying the department of an incident, the vendor licensee shall provide the department with a written incident report that (1) details the incident, including the root cause of the incident, and (2) outlines the vendor's plan to make corrections, mitigate the effects of the incident and prevent incidents of a similar nature from occurring in the future. If the vendor licensee is unable to determine the root cause and correct the incident within the initial five business days, the licensee shall continue to update the department every five business days with written incident reports until the root cause is determined and the incident is corrected. The department may require the vendor licensee to submit the lottery gaming system to a gaming laboratory for recertification.

# (k)

# (1)

The commissioner may suspend or revoke for good cause a vendor, affiliate, lottery sales agent or occupational license after a hearing held before the commissioner in accordance with chapter 54. The commissioner may order summary suspension of any such license in accordance with subsection (c) of section 4-182.

# (2)

Any such applicant aggrieved by the action of the commissioner concerning an application for a license, or any person or business organization whose license is suspended or revoked, may appeal pursuant to section 4-183.

# (3)

The commissioner may impose a civil penalty on any licensee for a violation of any provision of this chapter or any regulation adopted under section 12-568a in an amount not to exceed two thousand five hundred dollars after a hearing held in accordance with chapter 54.

# (l)

The commissioner may require that the books and records of any vendor or affiliate licensee be maintained in any manner which the commissioner may deem best, and that any financial or other statements based on such books and records be prepared in accordance with generally accepted accounting principles in such form as the commissioner shall prescribe. The commissioner or a designee may visit, investigate and place expert accountants and such other persons as deemed necessary in the offices or places of business of any such licensee for the purpose of satisfying himself or herself that such licensee is in compliance with the regulations of the department.

# (m)

For the purposes of this section, (1) “business organization” means a partnership, incorporated or unincorporated association, firm, corporation, limited liability company, trust or other form of business or legal entity; (2) “control” means the power to exercise authority over or direct the management and policies of a licensee; and (3) “person” means any individual.

# (n)

The Commissioner of Consumer Protection may adopt such regulations, in accordance with chapter 54, as are necessary to implement the provisions of this section. (P.A. 97-277, S. 6, 13; P.A. 01-175, S. 8, 32; June Sp. Sess. P.A. 05-3, S. 38; June Sp. Sess. P.A. 09-3, S. 159; P.A. 11-51, S. 182; P.A. 13-299, S. 82; P.A. 24-142, S. 78.) History: P.A. 97-277 effective June 26, 1997; P.A. 01-175 referenced executive director and added language re state and national criminal history records checks in accordance with Sec. 29-17a, added prohibition re provision of facilities, components, goods or service without background investigation and added reference to Sec. 12-574(i), effective July 1, 2001; June Sp. Sess. P.A. 05-3 rewrote section to provide for vendor, affiliate and occupational licensure, require certain information from an applicant and a criminal history records check, provide for suspension or revocation of licenses, appeal from suspension or revocation, civil penalties and review of licensee records and allow adoption of regulations, effective June 30, 2005; June Sp. Sess. P.A. 09-3 amended Subsecs. (b), (c) and (e) to increase fees; pursuant to P.A. 11-51, “executive director of the Division of Special Revenue”, “executive director” and “division” were changed editorially by the Revisors to “Commissioner of Consumer Protection”, “commissioner” and “department”, respectively, effective July 1, 2011; P.A. 13-299 amended Subsec. (h)(2) to delete provision re appeal to Gaming Policy Board, effective July 1, 2013; P.A. 24-142 amended Subsec. (a) to add reference to “lottery sales agent” and licenses “in a form and manner prescribed by the commissioner and”, amended Subsec. (c) to add reference to contractor, added new Subsec. (f) re licensing as lottery sales agent, redesignated existing Subsec. (f) as Subsec. (g) and added provisions re lottery sales agent and person in charge, redesignated Subsec. (g) as Subsec. (h), added new Subsec. (i) re provisional authorization for occupational license applicant, added new Subsec. (j) re incidents involving the lottery gaming system, redesignated existing Subsec. (h) as Subsec. (k) and added reference to lottery sales agent in Subdiv. (1), redesignated Subsec. (i) as Subsec. (l), redesignated Subsec. (j) as Subsec. (m) and added reference to limited liability company, and redesignated existing Subsec. (k) as Subsec. (n), effective June 6, 2024. (Return to ChapterTable of Contents) (Return toList of Chapters) (Return toList of Titles)