State Lottery Division

C.R.S. tit. 44, art. 40
in effect

C.R.S. § 44-40-101 Definitions

44-40-101. Definitions. As used in this article 40, unless the context otherwise requires: (1) "Cash prize" means any prize paid in cash in its entirety, including any expenditures made to fund Colorado or multistate prize reserves. (2) "Commission" means the Colorado lottery commission. (3) "Director" means the director of the state lottery division. (4) "Division" means the state lottery division. (5) "Lottery" means any and all lotteries created and operated pursuant to this article 40, including, without limitation, the game commonly known as lotto, in which prizes are awarded on the basis of designated numbers conforming to numbers selected at random, electronically or otherwise, by or at the direction of the commission, and any multistate lottery or game that is authorized by a multistate agreement to which the division is party. All references in this article 40 to "the lottery" shall be construed to include any or all lotteries within the meaning of this subsection (5). "Lottery" shall not include a promotional drawing as defined in subsection (8) of this section. (6) "Multistate agreement" means an agreement entered into by the division and at least one other state's lottery authority that authorizes the division to allow Colorado residents to participate in one or more multistate lotteries pursuant to rules promulgated by the commission. (7) "Noncash prize" means any prize paid in merchandise or a combination of cash and merchandise. (8) "Promotional drawing" means a prize promotion involving the conduct of giveaways through the use of free chances, including the use of nonwinning tickets from existing or prior games, for purposes of commercial advertisement of the lottery, the creation of goodwill, the promotion of new lottery products, or the collection of names.

C.R.S. § 44-40-102 State lottery division - creation - location - enterprise status

44-40-102. State lottery division - creation - location - enterprise status. (1) (a) There is hereby created, within the department, the state lottery division, the head of which is the director of the state lottery division, who shall be appointed and subject to removal by the executive director in accordance with section 13 of article XII of the state constitution. The state lottery division shall be headquartered in the city of Pueblo in facilities provided at the expense of the lottery division. (b) The state lottery division and the Colorado lottery commission, created in section 44-40-108, shall constitute an enterprise for the purposes of section 20 of article X of the state constitution, so long as the commission retains the authority to issue revenue bonds and the division receives less than ten percent of its total annual revenues in grants, as defined in section 24-77-102 (7), from all Colorado state and local governments combined. So long as it constitutes an enterprise pursuant to this section, the state lottery division and the Colorado lottery commission shall not be subject to any of the provisions of section 20 of article X of the state constitution. (2) The state lottery division, including the Colorado lottery commission created in section 44-40-108, and the director of the state lottery division are type 2 entities, as defined in section 24-1-105, and exercise their powers and perform their duties and functions specified in this article 40 under the department; except that the commission has full and exclusive authority to promulgate rules related to the lottery without any approval by, or delegation of authority from, the department. (3) For purposes of part 2 of article 72 of title 24, the records of the division and the commission shall be public records, as defined in section 24-72-202 (6), regardless of whether the state lottery division and the Colorado lottery commission constitute an enterprise pursuant to subsection (1) of this section.

C.R.S. § 44-40-103 Function of division

44-40-103. Function of division. The function of the division is to establish, operate, and supervise the lottery authorized by section 2 of article XVIII of the state constitution, as approved by the electors.

C.R.S. § 44-40-104 Director - qualifications - powers and duties

44-40-104. Director - qualifications - powers and duties. (1) The director shall be qualified by training and experience to direct a lottery and the work of the division; and, notwithstanding the provisions of section 24-5-101, shall be of good character and shall not have been convicted of any felony or gambling-related offense. (2) The director shall devote his or her entire time and attention to the duties of his or her office and shall not be engaged in any other profession or occupation. (3) The director may promote the lottery by: (a) Establishing promotional drawings. The general assembly hereby finds and declares that promotional drawings shall not be subject to regulation under this article 40. No award of prizes through a promotional drawing shall be deemed a lottery or game of chance. (b) Selling memorabilia or other promotional items. Any revenue generated from the sale of the items shall be transmitted to the state treasurer to be credited to the lottery fund created in section 44-40-111 (1). (4) The director, as administrative head of the division, shall direct and supervise all its administrative and technical activities. In addition to the duties imposed upon the director elsewhere in this article 40, it shall be the director's duty: (a) To supervise and administer the operation of the lottery in accordance with the provisions of this article 40 and the rules of the commission, state fiscal rules, state personnel rules, and state procurement rules, to perform all duties and obligations pursuant to and administer any multistate agreements, and to provide for all expenses incurred in connection with any multistate agreements unless the expenses are otherwise provided for in the multistate agreements; (b) To attend meetings of the commission or to appoint a designee to attend in his or her place; (c) To employ and direct the personnel as may be necessary to carry out the purposes of this article 40, but no person shall be employed who has been convicted of a felony or gambling-related offense, notwithstanding the provisions of section 24-5-101. The director by agreement may secure and, pursuant to section 44-40-111 (2), provide payment for any services that the director may deem necessary from any department, agency, or unit of the state government and may employ and compensate consultants and technical assistants as may be required and as otherwise permitted by law. The director shall ensure that the division conducts full criminal background investigations of vendors, officers of licensed sales agents, members of the commission, and division employees as are necessary to ensure the security and integrity of the operation of the state lottery. The executive director may request the division of gaming to perform the investigations on members of the commission, division employees, and vendors. (d) To license, in accordance with the provisions of section 44-40-107 and the rules of the commission, as agents to sell lottery tickets persons that in his or her opinion will best serve the public convenience and promote the sale of tickets or shares; (e) To deny, suspend, or revoke any lottery license subject to the provisions of section 24-4-104. The director may designate an administrative law judge, pursuant to part 10 of article 30 of title 24, to take evidence and to make findings and report them to the director. (f) To confer, as necessary or desirable and not less than once each month, with the commission on the operation of the lottery; (g) To make available for inspection by the commission or any member of the commission, upon request, all books, records, files, and other information and documents of his or her office; (h) To advise the commission and recommend rules and other matters as he or she deems necessary and advisable to improve the operation of the lottery; month, with the commission on the operation of the lottery; (g) To make available for inspection by the commission or any member of the commission, upon request, all books, records, files, and other information and documents of his or her office; (h) To advise the commission and recommend rules and other matters as he or she deems necessary and advisable to improve the operation of the lottery; (i) To make a continuous study and investigation of the operation and the administration of similar laws that may be in effect in other states or countries, any literature on the subject that from time to time may be published or available, and any federal laws that may affect the operation of the lottery, and the reaction of Colorado citizens to existing and potential features of the lottery with a view to recommending or effecting changes that will tend to serve the purposes of this article 40; (j) To take any action that may be necessary to protect the security and integrity of the lottery games; (k) To determine the manner of payment of prizes to the holders of winning tickets or shares, which determination shall include consideration of whether a prize should be awarded as a lump sum or as an amortized annuity in light of the "Internal Revenue Code of 1986", as amended, and the rules promulgated pursuant thereto; (l) To determine any other matters that are necessary or desirable for the efficient and economical operation and administration of the lottery; and (m) To perform any other lawful acts that he or she and the commission may consider necessary or desirable to carry out the purposes and provisions of this article 40.

C.R.S. § 44-40-105 Executive director - duties

44-40-105. Executive director - duties. (1) It shall be the executive director's duty: (a) To enter into contracts for materials, equipment, and supplies to be used in the operation of the lottery, for the design and installation of games or lotteries, and for promotion of the lottery. No contract shall be legal or enforceable that provides for the management of the lottery or for the entire operation of its games by any private person, firm, or corporation, because management of the lottery and control over the operation of its games shall remain with the state; except that management of and control over the operation of a multistate lottery shall be determined by the terms of a multistate agreement. Except for advertising and promotional contracts, when a contract other than a multistate agreement is awarded, a performance bond satisfactory to the executive director, executed by a surety company authorized to do business in this state or otherwise secured in a manner satisfactory to the state, in an amount set annually by the executive director shall be delivered to the state and shall become binding on the parties upon execution of the contract. (b) To annually prepare and submit to the commission a proposed budget for the ensuing fiscal year, which budget shall present a complete financial plan setting forth all proposed expenditures and anticipated revenues of the division. The fiscal year of the division shall commence on July 1 and end on June 30 of each year.

C.R.S. § 44-40-106 Contractors supplying services, equipment, or materials - gaming equipment - disclosures - record check - definitions

44-40-106. Contractors supplying services, equipment, or materials - gaming equipment - disclosures - record check - definitions. (1) Any person, firm, association, or corporation, referred to in this section as "supplier", that enters into a contract to supply services, equipment, or materials or gaming materials or equipment for use in the operation of the state lottery shall first disclose to the division: (a) In addition to the supplier's business name and address, the names and addresses of the following: (I) If the supplier is a partnership, all of the general and limited partners; (II) If the supplier is a limited liability company, all of the members; (III) If the supplier is a trust, the trustee and all persons entitled to receive income or benefit from the trust; (IV) If the supplier is an association, the members, officers, and directors; (V) If the supplier is a corporation, the officers, directors, and each owner or holder, directly or indirectly, of any equity security or other evidence of ownership of any interest in the corporation; except that, in the case of owners or holders of publicly held equity securities of a publicly traded corporation, only the names and addresses of those owning or holding five percent or more of the publicly held securities need be disclosed; (VI) If the supplier is a subsidiary or intermediary company, the intermediary company, holding company, or parent company involved therewith, and the officers, directors, and stockholders of each; except that, in the case of owners or holders of publicly held securities of an intermediary company or holding company that is a publicly traded corporation, only the names and addresses of those owning or holding five percent or more of the publicly held securities need be disclosed; (b) If the supplier is a corporation, all the states in which the supplier is incorporated to do business, and the nature of that business; (c) Other jurisdictions in which the supplier has contracts to supply gaming materials or equipment; (d) The details of any criminal conviction, state or federal, of the supplier or any person whose name and address are required by subsection (1)(a) of this section. This subsection (1)(d) applies irrespective of any of the laws of the state to the contrary regarding expungement or sealed records. (e) The details of any disciplinary action taken by any state against the supplier or any person whose name and address are required by subsection (1)(a) of this section regarding any matter related to the selling, leasing, offering for sale or lease, buying, or servicing of gaming materials or equipment; (f) A statement of the gross receipts realized in the preceding year from the sale, lease, or distribution of gaming materials or equipment to states operating lotteries and to private persons licensed to conduct gambling, which statement shall differentiate that portion of the gross receipts attributable to transactions with states operating lotteries from that portion of the gross receipts attributable to transactions with private persons licensed to conduct gambling; (g) The name and address of any source of gaming materials or equipment for the supplier; (h) The number of years the supplier has been in the business of supplying gaming materials or equipment; of the gross receipts attributable to transactions with states operating lotteries from that portion of the gross receipts attributable to transactions with private persons licensed to conduct gambling; (g) The name and address of any source of gaming materials or equipment for the supplier; (h) The number of years the supplier has been in the business of supplying gaming materials or equipment; (i) Any other information, accompanied by any documents, that the commission, by rule, may require as being necessary or appropriate in the public interest to accomplish the purposes of this article 40. (2) If the supplier is a subsidiary or intermediary company, the intermediary company, holding company, or parent company involved therewith shall supply the same information required by this section of the supplier. (3) The costs of any investigation into the background of the apparent successful bidder shall be assessed against the bidder and shall be paid by the bidder at the time of billing by the state. The investigation may be conducted by the department or the attorney general, and no contract may be signed until the investigation is completed. Investigators shall have peace officer authority during the period of investigation. (4) No person, firm, association, or corporation contracting to supply services, equipment, or materials or gaming equipment or materials to the state for use in the operation of the state lottery shall be directly or indirectly connected with any person, firm, association, or corporation licensed as a sales agent under this article 40, any employee of the department, the director, or the members of the commission. (5) No contract shall be formed with any supplier if: (a) A person disclosed pursuant to subsection (1)(a) or (1)(g) of this section is a person who has been convicted of a felony or gambling-related offense, who has engaged in any form of illegal gambling, who is not of good character and reputation relevant to the secure and efficient operation of the lottery, or who has been convicted of a crime involving fraud or misrepresentation. However, when a felony conviction, other than a gambling-related offense, is an issue in the formation of a contract with a supplier, the director may determine that the supplier is otherwise of good character and reputation. The director's determination shall be submitted to a three-member panel who shall approve or reject the determination. The panel's decision shall constitute final agency action for purposes of section 24-4-106. The panel shall be composed of the chairman of the lottery commission, the executive director, and the secretary of state. Upon the determination and approval, the director may enter into a contract with the supplier. (b) A disciplinary action disclosed pursuant to subsection (1)(e) of this section was resolved adversely to the supplier. (6) No contract for the supply of services, equipment, or materials or gaming materials or equipment for use in the operation of the state lottery shall be enforceable against the state if the provisions of this section are not complied with. nto a contract with the supplier. (b) A disciplinary action disclosed pursuant to subsection (1)(e) of this section was resolved adversely to the supplier. (6) No contract for the supply of services, equipment, or materials or gaming materials or equipment for use in the operation of the state lottery shall be enforceable against the state if the provisions of this section are not complied with. (7) In the case of any procurement for a contract for lottery tickets, lottery consulting services, or lottery terminals or equipment having a value of one hundred thousand dollars or more, or in the case of procurement for a contract for drawing equipment regardless of value, each prospective corporate supplier shall, prior to entering into a contract, provide a verified affidavit as to ownership, if any, of any interest, direct or indirect, in any operator of a casino, jai alai fronton, racetrack, or other gaming establishment, a current personal financial statement, and individual federal and state income tax returns from the past three years for each of its officers and each of the directors. The executive director shall determine, depending upon the organization of each company, by rule, which officers of any parent, intermediary, and holding companies, and which directors of the supplier or of a parent, intermediary, or holding company, are affiliated with the lottery and are required to file a current personal financial statement and individual federal and state income tax returns from the past three years. The provision of said affidavit, financial statement, and tax returns shall not be required at the time of submission of the prospective corporate supplier's bid or proposal. (8) (a) Any contractor that has entered into a contract to supply gaming materials or equipment to the lottery shall report to the division any change in, addition to, or deletion from the information disclosed to the division in accordance with the provisions of subsections (1)(a), (1)(d), (1)(e), (2), and (7) of this section. The report shall be written and addressed to the division and shall be mailed or delivered to the division within thirty days of the date the change in, addition to, or deletion from the information takes place or becomes effective. (b) Any costs associated with an investigation regarding the information disclosed in the report shall be paid by the contractor who shall remit the costs within thirty days of billing by the division. (c) (I) If the report contains any information, or if the division receives any information from any source other than the contractor, which information would have prohibited the director from awarding the contract to the contractor if the information had been provided or had been effective before the director awarded the contract, the director may terminate the contract following an investigation. (II) If the report contains any information, or if any information is discovered by the division from any source other than the contractor, which information would have given the director discretion to refuse to enter the contract had the information been provided or been effective before the director awarded the contract, the director, following an investigation, may terminate the contract. (III) Any termination shall be accomplished in accordance with the termination provisions of the contract. (9) Every contract for the supply of gaming equipment or material shall provide the following: (a) The director shall exclude from lottery facilities an employee of a contractor who has been convicted of a felony. tract, the director, following an investigation, may terminate the contract. (III) Any termination shall be accomplished in accordance with the termination provisions of the contract. (9) Every contract for the supply of gaming equipment or material shall provide the following: (a) The director shall exclude from lottery facilities an employee of a contractor who has been convicted of a felony. (b) The director shall also exclude employees of a contractor from participating in activities involving the gaming materials or equipment supplied pursuant to the contract. (10) (a) Each supplier, prior to entering into a contract to supply gaming materials or equipment, shall submit a set of fingerprints to the division. The division shall forward the fingerprints to the Colorado bureau of investigation for the purpose of conducting a state and national fingerprint-based criminal history record check utilizing records of the Colorado bureau of investigation and the federal bureau of investigation. Only the actual costs of the record check shall be borne by the supplier. Nothing in this subsection (10) shall preclude the division from making further inquiries into the background of the supplier. (a.5) When the results of a fingerprint-based criminal history record check of a supplier performed pursuant to this subsection (10) reveal a record of arrest without a disposition, the division shall require the supplier to submit to a name-based judicial record check, as defined in section 22-2-119.3 (6)(d). (b) Notwithstanding any other provision of this section to the contrary, for purposes of this subsection (10), "supplier" means an individual or any person described in subsection (1)(a) or (1)(g) of this section. (11) The requirements of the "Procurement Code", articles 101 to 112 of title 24, shall apply to all contracts entered into by the lottery. The executive director shall ensure that any competitive solicitation process conducted by the lottery is designed to encourage broad vendor competition. (12) The evaluation team for any bid for a contract for services, equipment, or materials or for the purchase or lease of gaming equipment and materials, the amount of which bid is in excess of one million dollars, shall include an individual who is neither employed by nor affiliated with the division and who possesses specific expertise in the procurement of the services, equipment, or materials or in the purchase or lease of the gaming equipment or materials that are the subject of the bid. The individual shall be selected by the executive director in accordance with the requirements of this subsection (12).

C.R.S. § 44-40-107 Licenses

44-40-107. Licenses. (1) The director shall issue, suspend, revoke, and renew licenses for lottery sales agents pursuant to subsection (3) of this section and rules adopted by the commission. Licensing rules shall include requirements relating to the financial responsibility of the licensee, the accessibility of the licensee's place of business or activity to the public, the sufficiency of existing licenses to serve the public interest, the volume of expected sales, the character of the licensee, the security and efficient operation of the lottery, the licensed agent recovery reserve authorized in section 44-40-121, and other matters necessary to protect the public interest and trust in the lottery and to further the sales of lottery tickets or shares. Rules shall also require that licenses be prominently displayed in areas visible to the public. (2) (a) A license shall be revoked upon a finding that the licensee: (I) Has provided false or misleading information to the division; (II) Has been convicted of any gambling-related offense; (III) Has endangered the security of the lottery; (IV) Has become a person whose character is no longer consistent with the protection of the public interest and trust in the lottery; or (V) Has intentionally refused to pay a prize in his or her possession to a person entitled to receive the prize under this article 40. (b) A license may be suspended, revoked, or not renewed for any of the following causes: (I) A change of business location; (II) An insufficient sales volume; (III) A delinquency in remitting money owed to the lottery; (IV) The endangering of the efficient operation of the lottery; (V) Any violation of this article 40 or any rule adopted pursuant to this article 40; or (VI) Conviction of any felony. (3) Procedures for issuance, suspension, revocation, and renewal of licenses shall be in accordance with article 4 of title 24, and the director shall have all the powers and shall be subject to all the requirements of article 4 of title 24 in conducting any hearings relating to the granting, suspension, revocation, or renewal of licenses. When a felony conviction or a conviction involving fraud is an issue in the issuance, suspension, revocation, or renewal of a lottery sales agent's license, the director's determination shall be submitted to a three-member panel who shall approve or reject the determination. The panel's decision shall constitute final agency action for the purposes of section 24-4-106. The panel shall be composed of the chairman of the lottery commission, the executive director, and the secretary of state. (4) Licensed sales agents may include persons, firms, associations, or corporations, profit or nonprofit, but the following are ineligible for any license as a sales agent: (a) Any person who will engage in business exclusively as a lottery sales agent; (b) Any person who has been convicted of a gambling-related offense, notwithstanding the provisions of section 24-5-101; (c) Any person who is or has been a professional gambler or gambling promoter; (d) Any person who has engaged in bookmaking or any other form of illegal gambling; (e) Any person who is not of good character and reputation, notwithstanding the provisions of section 24-5-101, in the community where he or she resides; (f) Any person who has been convicted of a crime involving misrepresentation, notwithstanding the provisions of section 24-5-101; (g) Any firm or corporation in which a person defined in subsections (4)(b) to (4)(f) of this section has a proprietary, equitable, or credit interest; (h) Any organization in which a person defined in subsections (4)(b) to (4)(f) of this section is an officer, director, or managing agent, whether compensated or not; or lving misrepresentation, notwithstanding the provisions of section 24-5-101; (g) Any firm or corporation in which a person defined in subsections (4)(b) to (4)(f) of this section has a proprietary, equitable, or credit interest; (h) Any organization in which a person defined in subsections (4)(b) to (4)(f) of this section is an officer, director, or managing agent, whether compensated or not; or (i) Any organization in which a person defined in subsections (4)(b) to (4)(f) of this section is to participate in the management or sales of lottery tickets or shares. (5) Licensed sales agents may include persons, firms, associations, or corporations, profit or nonprofit, but the following may be determined to be ineligible for any license as a sales agent: (a) Any person who has been convicted of a felony or a crime involving fraud, notwithstanding the provisions of section 24-5-101; (b) Any firm or corporation in which a person defined in subsection (5)(a) of this section has a proprietary, equitable, or credit interest; (c) Any organization in which a person defined in subsection (5)(a) of this section is an officer, director, or managing agent, whether compensated or not; or (d) Any organization in which a person defined in subsection (5)(a) of this section is to participate in the management or sales of lottery tickets or shares. (6) Each licensed sales agent shall keep a complete set of books of account, correspondence, and all other records necessary to show fully the lottery transactions of the licensee, all of which shall be open at all times during business hours for the inspection and examination of the division or its duly authorized representatives. The division may require any licensed sales agent to furnish the information that the division considers necessary for the proper administration of this article 40 and may require an audit to be made of the books of account and records when the division considers necessary by an auditor, selected by the director, who shall likewise have access to all the books and records of the licensee, and the licensee may be required to pay the expense thereof. (7) All licenses for lottery sales agents shall specify the place that sales shall take place, and no license shall be effective upon residential premises. (8) The costs of any investigation into the background of an applicant seeking a license for a lottery sales agent shall be assessed against the applicant and shall be paid by the applicant at the time of billing by the state. The investigation may be conducted by the division or the attorney general. Investigators shall have peace officer authority during the period of investigation. (9) If there are more applications to operate lotto than there are outlets available, then at least one hundred locations will be decided by a drawing by lot with the balance of all lotto outlets to be located at the direction of the division. Any person licensed as a lottery sales agent pursuant to the provision of this section shall be eligible to enter into this drawing by lot to determine if the person will be allowed to operate a lotto game at the same location. (10) If the rental payments for the business premises of any lottery sales agent are based in whole or in part on a percentage of retail sales, and the computation of retail sales in the rental agreement does not specifically include the sale of tickets or shares in the lottery, the compensation received by the sales agent, as determined by the commission pursuant to section 44-40-109 (2)(h), and not the gross revenues from the sale of lottery tickets or shares shall be the amount of the retail sale for the purpose of computing the rental payment. omputation of retail sales in the rental agreement does not specifically include the sale of tickets or shares in the lottery, the compensation received by the sales agent, as determined by the commission pursuant to section 44-40-109 (2)(h), and not the gross revenues from the sale of lottery tickets or shares shall be the amount of the retail sale for the purpose of computing the rental payment. (11) (a) Each applicant for a lottery sales agent license, with the submission of the application, shall submit a set of fingerprints to the division. The division shall forward the fingerprints to the Colorado bureau of investigation for the purpose of conducting a state and national fingerprint-based criminal history record check utilizing records of the Colorado bureau of investigation and the federal bureau of investigation. Only the actual costs of the record check shall be borne by the applicant. Nothing in this subsection (11) shall preclude the division from making further inquiries into the background of the applicant. (a.5) When the results of a fingerprint-based criminal history record check of an applicant performed pursuant to this subsection (11) reveal a record of arrest without a disposition, the division shall require the applicant to submit to a name-based judicial record check, as defined in section 22-2-119.3 (6)(d). (b) For purposes of this subsection (11), "applicant" means an individual or each officer or director of a firm, association, or corporation that is applying for a license pursuant to this section.

C.R.S. § 44-40-108 Colorado lottery commission - creation

44-40-108. Colorado lottery commission - creation. (1) There is hereby created, within the state lottery division, the Colorado lottery commission, consisting of five members, all of whom shall be citizens of the United States and residents of this state, appointed by the governor, with the consent of the senate. No member shall have been convicted of a felony or gambling-related offense, notwithstanding the provisions of section 24-5-101. No more than three of the five members shall be members of the same political party. A chairman and a vice-chairman of the commission shall be chosen from the membership by a majority of the members at the first meeting of each fiscal year. (2) At least one member of the commission shall have been a law enforcement officer for not less than five years; at least one member shall be an attorney admitted to the practice of law in Colorado for not less than five years; and at least one member shall be a certified public accountant who has practiced accountancy in Colorado for at least five years. (3) All members shall be appointed for terms of four years. No member of the commission shall be eligible to serve more than two terms. (4) Any vacancy on the commission shall be filled for the unexpired term in the same manner as the original appointment. (5) Any member of the commission may be removed by the governor at any time and for any reason. (6) Commission members shall receive as compensation for their services up to one hundred dollars per month for each month in which there is an official commission meeting and shall be reimbursed for necessary traveling and other reasonable expenses incurred in the performance of their official duties. Upon appointment, and prior to confirmation by the senate, each member shall file with the secretary of state a financial disclosure statement in the form required to be filed by elected state officials. The statement shall be renewed as of each January 1 during the member's term of office. The chairperson of the lottery commission shall also be reimbursed for necessary traveling and other reasonable expenses incurred in the performance of his or her duties related to his or her participation on the three-member panel established in sections 44-40-106 (5)(a) and 44-40-107 (3). (7) (a) The commission shall hold at least one meeting each month and any additional meetings that may be prescribed by rules of the commission. In addition, special meetings may be called by the chairman, any two commission members, or the director, upon delivery of seventy-two hours' written notice to each member. Notwithstanding the provisions of section 24-6-402, in emergency situations in which a majority of the commission certifies that exigencies of time require that the commission meet without delay, the requirements of public notice and of seventy-two hours' written notice to members may be dispensed with, and commission members as well as the public shall receive the notice as is reasonable under the circumstances. (b) For purposes of part 4 of article 6 of title 24, the commission shall be a state public body, as defined in section 24-6-402 (1)(d), regardless of whether the state lottery division and the Colorado lottery commission constitute an enterprise pursuant to section 44-40-102 (1). (8) A majority of the commission shall constitute a quorum, and the concurrence of a majority of the commission shall be required for any final determination by the commission. The commission shall keep a complete and accurate audio record of all its meetings for a period of at least three years.

C.R.S. § 44-40-109 Commission - powers and duties - rules

44-40-109. Commission - powers and duties - rules. (1) In addition to any other powers and duties set forth in this article 40, the commission has the following powers and duties: (a) To promulgate rules governing the establishment and operation of the lottery as it deems necessary to carry out the purposes of this article 40. The director shall prepare and submit to the commission written recommendations concerning proposed rules for this purpose. Although the commission is a type 2 entity, as defined in section 24-1-105, the commission has full and exclusive authority to promulgate rules related to the lottery without any approval by, or delegation of authority from, the department. (b) To conduct hearings upon complaints charging violations of this article 40 or rules promulgated pursuant to this article 40, other than any hearings relating to the granting, suspension, revocation, or renewal of licenses for lottery sales agents, and to conduct other hearings as may be provided by rules of the commission; (c) To carry on a continuous study and investigation of the lottery throughout the state for the purpose of ascertaining any defects in this article 40 or in the rules issued under this article 40 whereby any abuses in the administration and operation of the lottery or any evasion of this article 40 or the rules may arise or be practiced, for the purpose of formulating recommendations for changes in this article 40 and the rules to prevent any abuses and evasions, to guard against the use of this article 40 and the rules as a cloak for the carrying on of organized gambling and crime, and to ensure that the law and rules shall be in the form and be so administered as to serve the true purposes of this article 40; (d) To report immediately to the governor, the attorney general, the speaker of the house of representatives, the president of the senate, the minority leaders of both houses, and any other state officers, as from time to time the commission deems appropriate, any matters that it deems to require an immediate change in the laws of this state in order to prevent abuses and evasions of this article 40 or rules promulgated thereunder or to rectify undesirable conditions in connection with the administration or operation of the lottery; (e) To require any special reports from the director that it may consider desirable; (f) To authorize and issue revenue bonds pursuant to the provisions of section 44-40-122; (g) To annually set the amount of the performance bond required of persons entering into contracts to provide materials, equipment, or supplies used in the operation of the lottery or to design or install games or lotteries; and (h) To investigate and participate in multistate agreements and to regulate multistate lotteries. The director shall act as the commission's agent in the investigations if the commission so directs. (2) Except as provided in subsection (3) of this section, rules promulgated pursuant to subsection (1) of this section must include: (a) The types of lotteries to be conducted, but no lottery conducted under this article 40 other than instant scratch games shall be based upon the game of chance commonly known as bingo, nor shall any lottery be conducted that depends upon the outcome of any athletic contest except races at state-licensed dog or horse tracks if approved by the Colorado racing commission; (b) The price of tickets or shares in the lottery; (c) The numbers, sizes, and payment of the prizes on the winning tickets or shares; (d) The manner of selecting the winning tickets or shares. All drawings shall be held in public and witnessed by an independent auditor employed by a certified public accountant firm, and all drawing equipment used in the public drawings must be examined prior to and after each public drawing by an independent auditor employed by a certified public accountant firm. the winning tickets or shares; (d) The manner of selecting the winning tickets or shares. All drawings shall be held in public and witnessed by an independent auditor employed by a certified public accountant firm, and all drawing equipment used in the public drawings must be examined prior to and after each public drawing by an independent auditor employed by a certified public accountant firm. (e) The frequency of the drawing or selection of winning tickets or shares, without limitation; (f) Without limit to number, the types of locations where tickets or shares may be sold; except that the commission shall not promulgate any rule, issue any order, or adopt any policy or interpretation before July 1, 2017, that authorizes or permits the purchase of tickets, including instant scratch tickets, or shares by means of the internet, telephone, computer, or any other electronic device or equipment that the purchaser can access or use to purchase lottery tickets other than by doing so personally at a licensed lottery sales agent's physical place of business; (g) The method to be used in selling tickets or shares; (h) The manner and amount of compensation, if any, to be paid licensed sales agents necessary to provide for the adequate availability of tickets or shares to prospective buyers and for the convenience of the public; (i) The manner in which lottery sales revenues are to be collected. (3) (a) The commission shall promulgate rules pursuant to subsection (1) of this section for the general administration of all instant scratch games. The rules must include: (I) The method to be used in selling instant scratch game tickets; (II) The method of paying prizes on winning instant scratch game tickets; and (III) The manner and amount of compensation, if any, to be paid to licensed sales agents necessary to provide for the adequate availability of instant scratch game tickets to prospective buyers and for the convenience of the public. (b) (I) The commission shall establish and approve all instructions governing instant scratch games. The instructions shall include, but shall not be limited to: (A) The method for determining instant scratch game winners; (B) The establishment of claim periods; (C) The price of instant scratch game tickets; (D) The numbers and sizes of prizes; and (E) The method for selecting and validating winning instant scratch game tickets. (II) The commission shall publish all approved instructions governing instant scratch games in a clearly identifiable section on the official website of the state lottery. The published instructions shall be binding on purchasers and claimants of instant scratch game tickets. (III) The procedural rule-making requirements of section 24-4-103 shall not apply to the commission's duties specified in this subsection (3)(b).

C.R.S. § 44-40-110 Conflict of interest

44-40-110. Conflict of interest. (1) Members of the commission and employees of the division are declared to be positions of public trust and, therefore, in order to insure the confidence of the people of the state in the integrity of the division, its employees, and the commission, the following restrictions shall apply: (a) No member of the commission or employee of the division, including the director, and no member of their immediate families, shall have any personal pecuniary interest in any lottery or in the sale of any lottery tickets or shares or in any corporation, association, or firm contracting with the state to supply gaming equipment or materials for use in the operation of the lottery or in any corporation, association, or firm licensed as a sales agent under this article 40. Employment by any political subdivision, or service on the governing body or on any board, agency, or commission of any political subdivision that is entitled to receive a portion of the proceeds of the lottery shall not constitute an interest prohibited by this section, except for the purposes of appointment to or service on the commission. (b) No member of the commission or employee of the division, including the director, and no member of their immediate families, shall receive any gift, gratuity, employment, or other thing of value from any person, corporation, association, or firm that contracts with or that offers services, supplies, materials, or equipment used by the division in the normal course of its operations. (c) No member of the commission or employee of the division, including the director, and no member of their immediate families, shall purchase any ticket for any lottery conducted under this article 40; except that lottery investigators may purchase lottery tickets when authorized to do so by the director for investigative purposes. No person described in this subsection (1)(c) shall be eligible to receive any prize awarded in such a lottery. (d) No person, corporation, or firm that contracts with the division or that offers services, supplies, materials, or equipment used by the division in the normal course of its operations shall offer any gift, gratuity, employment, or other thing of value to any commission member, employee of the division, or members of their immediate families except as authorized by rules promulgated pursuant to subsection (1)(b) of this section. (e) No member of the commission or employee of the division who terminates his or her relationship with the commission or the division shall, for a period of one year from the date of termination of membership on the commission or employment with the division, as applicable, accept employment with any lottery vendor or represent any lottery vendor before the division or the commission. (f) The commission shall adopt by rule a code of ethics that shall be binding upon all of its members. Each member of the commission shall complete training at least once each year on the code and shall further certify on an annual basis that he or she is knowledgeable about the code and has no conflicts of interest proscribed by this section.

C.R.S. § 44-40-111 Lottery fund - creation - definitions

44-40-111. Lottery fund - creation - definitions. (1) There is hereby created, in the office of the state treasurer, the lottery fund. The initial appropriation to the division, and all subsequent revenues of the division not earlier paid as prizes, shall be paid into the lottery fund. All expenses of the division, including the expenses of organized crime investigation and prosecution relating to the lottery, shall be paid from the lottery fund. For the purposes of this section and section 44-40-109, "expenses" do not include amounts expended for lottery prizes. Prizes for the lottery shall be paid only from the lottery fund or from money collected from the sale of lottery tickets or shares. Amounts for prizes and expenses are hereby appropriated to the division, except as provided in subsection (3) of this section. (1.5) For the 2022-23 state fiscal year, and for each state fiscal year thereafter, the general assembly shall appropriate two hundred thousand dollars from the lottery fund to the division to cover expenses relating to the division's efforts to promote responsible gaming in the state. (2) The division shall deposit all liquidated damages into the lottery fund, and any revenues received from liquidated damages shall not be expended by the division unless appropriated by the general assembly. The division shall not receive any goods or services in lieu of an assessment of liquidated damages, nor shall the division require a vendor to purchase goods and services in lieu of an assessment of liquidated damages. (3) Expenses of the division shall be paid from the lottery fund only as appropriated by the general assembly. (4) Upon request, it is the duty of the state treasurer to report to the director or the commission the amount of money on hand in the lottery fund. All accounts and expenditures from the lottery fund shall be certified by the director and paid by the state treasurer upon warrants drawn by the controller. The controller is authorized as directed to draw warrants payable out of the lottery fund upon vouchers therefor properly certified. (5) (a) The amount to be transferred from the lottery fund to the conservation trust fund shall be forty percent of the net proceeds of the lottery for the preceding fiscal quarter after payment of the expenses of the division and any prizes for the lottery and after reserving sufficient money, as of the end of the fiscal year, to ensure the operation of the lottery for the ensuing fiscal year. The money reserved by the lottery shall be held in cash and investments. Beginning with the fourth quarter of fiscal year 1998-99, and each fiscal year thereafter, distributions of net lottery proceeds to the conservation trust fund shall be made in accordance with the provisions of section 33-60-104 (1)(a). (b) (I) Beginning with the first quarter of fiscal year 1998-99 and each fiscal year thereafter, distributions of net lottery proceeds to the division of parks and wildlife shall be made in accordance with the provisions of section 33-60-104 (1)(b). (II) The appropriation of money from the state lottery for capital construction shall be consistent with part 13 of article 3 of title 2 until part 13 is repealed. ing with the first quarter of fiscal year 1998-99 and each fiscal year thereafter, distributions of net lottery proceeds to the division of parks and wildlife shall be made in accordance with the provisions of section 33-60-104 (1)(b). (II) The appropriation of money from the state lottery for capital construction shall be consistent with part 13 of article 3 of title 2 until part 13 is repealed. (c) The lottery money available for appropriation to the division of parks and wildlife pursuant to subsection (5)(b) of this section shall be appropriated and expended for the acquisition and development of new state parks, new state recreation areas, or new recreational trails, for the expansion of existing state parks, state recreation areas, or recreational trails, or for capital improvements of both new and existing state parks, state recreation areas, or recreational trails. Except as provided in section 33-60-105, in addition to appropriation for the division's capital construction budget, said lottery money may be appropriated for the division's operating budget for expenditures attributable to the maintenance and operation of state parks, state recreation areas, or recreational trails, or any portions thereof, that have been acquired or developed with lottery money. (d) This subsection (5) becomes effective on September 1, 1998. (6) The state treasurer shall invest the money in the lottery fund so long as said money is timely available to pay the expenses of the division, to pay the prizes to the lottery winners, to make authorized transfers to the conservation trust fund, and to fund the annual appropriations authorized by subsection (5) of this section. Investments shall be those otherwise permitted by state law, and interest or any other return on the investments shall be paid into the lottery fund. (7) The division shall be operated so that, after the initial state appropriation, it shall be self-sustaining. (8) No claim for the payment of any expense of the division or the payment of any lottery prize can be made unless it is against the lottery fund or against money collected from the sale of lottery tickets or shares. No other money of the state of Colorado shall be used or obligated to pay the expenses of the division or prizes of the lottery. (9) The total disbursements for lottery prizes shall be no less than fifty percent of the total revenue accruing from the sale of lottery tickets or shares. (10) (a) Net lottery proceeds to be distributed to the conservation trust fund, as computed pursuant to this section, shall be transferred to the conservation trust subaccount of the lottery fund, which subaccount is hereby created, once each month. Transfers shall be made from net lottery proceeds reflected in the monthly statement for the period ending sixty days prior to each monthly distribution. The state treasurer shall invest all money in the conservation trust subaccount in investments permitted by state law. Notwithstanding subsection (6) of this section, interest or any other return on the investments of the conservation trust subaccount must be distributed to the conservation trust fund. ed in the monthly statement for the period ending sixty days prior to each monthly distribution. The state treasurer shall invest all money in the conservation trust subaccount in investments permitted by state law. Notwithstanding subsection (6) of this section, interest or any other return on the investments of the conservation trust subaccount must be distributed to the conservation trust fund. (b) Beginning with the first quarter of fiscal year 1998-99, distributions shall be made on a quarterly basis in accordance with the provisions of section 33-60-104, with the distribution of net lottery proceeds for the first quarter occurring on December 1 of the fiscal year, distribution of net lottery proceeds for the second quarter occurring on March 1 of the fiscal year, distribution of net lottery proceeds for the third quarter occurring on June 1 of the fiscal year, and distribution of net lottery proceeds for the fourth quarter occurring on September 1 following the close of the fiscal year. (11) The general assembly may establish priorities in the general appropriation act for expenditures for projects to be financed from net lottery proceeds appropriated for capital construction. The priorities shall govern the use of quarterly distributions from the lottery fund in order to assure that available revenues are used to fund higher priority projects before they are used to fund lower priority projects. (12) (a) As used in this subsection (12), unless the context otherwise requires: (I) "Outdoor equity fund" means the outdoor equity fund created in section 33-9-206. (II) "Parks and outdoor recreation cash fund" means the parks and outdoor recreation cash fund created in section 33-10-111 (1). (III) "Public school capital construction assistance fund" means the public school capital construction assistance fund created in section 22-43.7-104. (IV) "Wildlife cash fund" means the wildlife cash fund created in section 33-1-112 (1)(a). (b) Pursuant to subsection (10)(b) of this section, the state treasurer shall transfer money that would otherwise be allocated to the general fund pursuant to section 3 (1)(b)(III) of article XXVII of the state constitution, and as described in section 33-60-104 (1)(c), as follows: (I) For the 2020-21 state fiscal year, to the extent available, the first seven hundred fifty thousand dollars to the outdoor equity fund; the next three million dollars to the public school capital construction assistance fund; and any remaining money as follows: Twenty-five percent to the wildlife cash fund, twenty-five percent to the parks and outdoor recreation cash fund, and fifty percent to the public school capital construction assistance fund; (II) For the 2021-22 state fiscal year, to the extent available, the first one million five hundred thousand dollars to the outdoor equity fund; the next three million dollars to the public school capital construction assistance fund; and any remaining money as follows: Twenty-five percent to the wildlife cash fund, twenty-five percent to the parks and outdoor recreation cash fund, and fifty percent to the public school capital construction assistance fund; (III) For the 2022-23 state fiscal year, to the extent available, the first two million two hundred fifty thousand dollars to the outdoor equity fund; the next three million dollars to the public school capital construction assistance fund; and any remaining money as follows: Twenty-five percent to the wildlife cash fund, twenty-five percent to the parks and outdoor recreation cash fund, and fifty percent to the public school capital construction assistance fund; and irst two million two hundred fifty thousand dollars to the outdoor equity fund; the next three million dollars to the public school capital construction assistance fund; and any remaining money as follows: Twenty-five percent to the wildlife cash fund, twenty-five percent to the parks and outdoor recreation cash fund, and fifty percent to the public school capital construction assistance fund; and (IV) For the 2023-24 state fiscal year and each state fiscal year thereafter, to the extent available, the first three million dollars to the outdoor equity fund; the next three million dollars to the public school capital construction assistance fund; and any remaining money as follows: Twenty-five percent to the wildlife cash fund, twenty-five percent to the parks and outdoor recreation cash fund, and fifty percent to the public school capital construction assistance fund. (c) The money transferred under this subsection (12) and any income and interest derived from the deposit and investment of such money is exempt from any restriction on spending, revenue, or appropriations, including, without limitation, the restrictions of section 20 of article X of the state constitution.

C.R.S. § 44-40-112 Audits and annual reports

44-40-112. Audits and annual reports. (1) The lottery fund shall be audited at least annually by or under the direction of the state auditor, who shall submit a report of the audit to the legislative audit committee. The annual audit shall include compliance with section 3 of article XXVII of the state constitution. The expenses of the audit shall be paid from the lottery fund. (2) Repealed.

C.R.S. § 44-40-113 Prizes

44-40-113. Prizes. (1) The right of any person to a prize is not assignable; except that payment of any prize may be paid to: (a) The estate of a deceased prizewinner; or (b) Any person pursuant to a voluntary assignment of the right to receive future annual prize payments, in whole or in part, if the assignment is made pursuant to an appropriate judicial order of the district court located in the city and county of Denver or the judicial district where the assignor resides or where the commission's headquarters are located. (2) (a) A copy of the petition for an order described in subsection (1)(b) of this section and of all notices of any hearing in the matter shall be served on the executive director no later than ten days prior to any hearing or entry of any order. (b) The commission may intervene as of right in any proceeding solely to protect the interests of the commission but shall not be deemed an indispensable or necessary party. (c) The court receiving the petition is authorized to issue an order approving the assignment and directing the executive director to pay to the assignee all future prize payments so assigned upon finding that all of the following conditions have been met: (I) The assignment has been memorialized in writing and executed by the assignor and is subject to Colorado law; (II) The assignor provides a sworn declaration to the court attesting to the facts that the assignor has had the opportunity to be represented by independent legal counsel in connection with the assignment, has received independent financial and tax advice concerning the effects of the assignment, and is of sound mind and not acting under duress; and (III) The proposed assignment does not and will not include or cover payments or portions of payments subject to offsets pursuant to subsection (6) of this section, unless appropriate provision is made in the order to satisfy the obligations giving rise to the offset. (d) Within ten days of receipt of a certified copy of a court order granted pursuant to this subsection (2), the executive director shall acknowledge in writing to both the assignor and the assignee the executive director's agreement to make the payments in accordance with the provisions of the order. The executive director shall make the payments pursuant to said order. (e) The commission shall not adopt rules for the implementation of this subsection (2) that are more restrictive than the provisions of this subsection (2), that impose requirements in addition to those set forth in this subsection (2), or that are inconsistent with the expressed intent of the general assembly. (f) The executive director is authorized to establish a reasonable fee to defray any administrative expenses of the executive director associated with assignments made pursuant to this section. The fee amounts shall reflect the direct and indirect costs associated with processing the assignments. h in this subsection (2), or that are inconsistent with the expressed intent of the general assembly. (f) The executive director is authorized to establish a reasonable fee to defray any administrative expenses of the executive director associated with assignments made pursuant to this section. The fee amounts shall reflect the direct and indirect costs associated with processing the assignments. (3) Notwithstanding any provision of this article 40 to the contrary, the commission may authorize licensed sales agents to retain all prizes pursuant to the rules of the commission for the persons entitled to the prizes for one hundred eighty days after the termination dates of the lottery games for which the prizes were won. The prizes shall be held in trust on behalf of the division for payment to the persons so entitled. No separate accounting of the prizes needs to be made by the licensed sales agent unless requested by the director. Any person who fails to claim a prize during the one-hundred-eighty-day period shall forfeit all rights to the prize, and the amount of the prize shall become the property of the licensee. All other unclaimed prizes shall be retained by the division for the persons entitled to the prizes for the one-hundred-eighty-day period. Any person who fails to claim a prize that is held by the division or its designee during that time shall forfeit all rights to the prize, and the amount of the prize shall remain in the lottery fund. (4) The division shall be discharged of all liability upon the payment of any prize pursuant to this article 40. (5) Any prize won by a person under eighteen years of age who purchased a winning ticket in violation of section 44-40-116 (1)(c) shall be forfeited. If a person otherwise entitled to a prize or a winning ticket is under eighteen years of age, the director may direct payment of the prize by delivery to an adult member of the minor's family or a guardian of the minor of a check or draft payable to the order of the minor. (6) (a) Prior to the payment of any lottery cash prize or noncash prize required by rule of the commission to be paid only at the lottery offices and subject to state and federal tax reporting, the department of revenue shall require the winner to submit the winner's social security number and federal employer identification number, if applicable, and shall check the social security number of the winner with those certified by the department of human services for the purpose of the state lottery winnings offset as provided in section 26-13-118. For a lottery cash prize, beginning January 1, 2012, the department of revenue shall also check the social security number of the winner with those certified by the department of personnel for the purpose of the state lottery winnings offset as provided in section 24-30-202.7. The social security number and the federal employer identification number shall not become part of the public record of the department of revenue. If the social security number of a lottery winner appears among those certified by the department of human services, the department of revenue shall obtain the current address of the winner, notify the department of human services, and suspend the payment of the cash prize or noncash prize until the requirements of section 26-13-118 are met e part of the public record of the department of revenue. If the social security number of a lottery winner appears among those certified by the department of human services, the department of revenue shall obtain the current address of the winner, notify the department of human services, and suspend the payment of the cash prize or noncash prize until the requirements of section 26-13-118 are met. If, after consulting with the department of human services, the department of revenue determines that the lottery winner owes a child support debt or child support costs pursuant to section 14-14-104, or owes child support arrearages as part of an enforcement action pursuant to article 5 of title 14, or owes child support arrearages or child support costs that are the subject of enforcement services provided pursuant to section 26-13-106, then the department of revenue shall withhold from the amount of the cash prize paid to the lottery winner an amount equal to the amount of child support debt, child support arrearages, and child support costs that are due or, if the amount of the cash prize is less than or equal to the amount of child support debt, arrearages, and costs due, shall withhold the entire amount of the lottery cash prize. Any cash prize so withheld for the department of human services shall be transmitted to the state treasurer for disbursement by the department of human services as directed in section 26-13-118. If the social security number of a lottery cash prize winner appears among those certified by the department of personnel, the department of revenue shall obtain the current address of the winner, notify the department of personnel, and suspend the payment of the cash prize until the requirements of section 24-30-202.7 are met. If, after consulting with the department of personnel, the department of revenue determines that the lottery winner owes an outstanding debt that has been certified pursuant to section 24-30-202.7, then the department of revenue shall withhold from the amount of the cash prize paid to the lottery winner an amount equal to the amount of the outstanding debt or, if the amount of the cash prize is less than or equal to the amount of the outstanding debt, shall withhold the entire amount of the lottery cash prize. Any cash prize so withheld for the department of personnel shall be transmitted to the state treasurer for disbursement in accordance with section 24-30-202.7 (4). (b) A lottery winner of a noncash prize who owes child support debt, child support arrearages, or child support costs shall forfeit the prize, unless: (I) (A) All of the child support debt, child support arrearages, and child support costs are paid by the lottery winner within ten working days after claiming the suspended noncash prize; and (B) The department of human services has notified the department of revenue that payment has been received; or (II) An administrative review is requested pursuant to section 26-13-118 (2), and the requirements set forth in subsection (6)(c) of this section are met. (c) If an administrative review is requested pursuant to section 26-13-118 (2), the noncash prize shall remain suspended until the department of human services notifies the department of revenue that the administrative review process has been completed pursuant to rules of the state board of human services. If at the administrative review it is determined that the winner owes child support debt, child support arrearages, or child support costs, the winner shall forfeit the noncash prize unless: (I) The winner pays the child support debt, child support arrearages, and child support costs in full within ten days after the date of the letter informing the lottery winner of the results of the administrative review; and (II) The department of human services notifies the department of revenue that payment has been received. ld support costs, the winner shall forfeit the noncash prize unless: (I) The winner pays the child support debt, child support arrearages, and child support costs in full within ten days after the date of the letter informing the lottery winner of the results of the administrative review; and (II) The department of human services notifies the department of revenue that payment has been received. (d) If forfeited by the lottery winner, the noncash prize shall be sold at fair market value. The proceeds of the sale shall be transmitted to the state treasurer for disbursement in accordance with the requirements of section 26-13-118 (3). (e) (I) Notwithstanding any provision of this subsection (6) to the contrary, if, in addition to owing an outstanding debt, a lottery winner owes restitution, fines, fees, costs, or surcharges, as described in section 44-40-114 or a child support debt or arrearages or child support costs as described in this subsection (6), any lottery winnings offset against the restitution, fines, fees, costs, or surcharges, or child support debt or arrearages or child support costs shall take priority and be applied first. If, in such instance, the lottery winner owes these types of debts, these offsets shall take priority and the provisions of section 44-40-114 (3) shall apply. (II) The remaining lottery winning money, if any, after the offsets described in subsection (6)(e)(I) of this section shall be applied toward the payment of outstanding debt and processed in accordance with this section. (7) Notwithstanding any provision of this section to the contrary, all or any part of a prize won by a person may be pledged as collateral for a loan; however, the pledging of all or any part of the prize creates no liability to the state of Colorado.

C.R.S. § 44-40-114 Prizes - lottery winnings offset for restitution, fines, fees, costs, or surcharges

44-40-114. Prizes - lottery winnings offset for restitution, fines, fees, costs, or surcharges. (1) Prior to the payment of any lottery winnings required by rule of the commission to be paid only at the lottery offices, the department of revenue shall require the winner to submit the winner's social security number and federal employer identification number, if applicable, and shall check the social security number of the winner with those certified by the judicial department for the purpose of the state lottery winnings offset as provided in sections 16-11-101.8 and 16-18.5-106.5. The social security number and the federal employer identification number shall not become part of the public record of the department of revenue. (2) If the social security number of a lottery winner appears among those certified by the judicial department, the department of revenue shall suspend the payment of the winnings until the requirements of sections 16-11-101.8 and 16-18.5-106.5 are met. If, after consulting with the judicial department, the department of revenue determines that the lottery winner is obligated to pay the amounts certified under sections 16-11-101.8 and 16-18.5-106.5, then the department of revenue shall withhold from the amount of winnings paid to the lottery winner an amount equal to the amount that is due or, if the amount of winnings is less than or equal to the amount due, shall withhold the entire amount of the lottery winnings. Any money so withheld shall be transmitted to the state treasurer for disbursement as directed in sections 16-11-101.8 (2) and 16-18.5-106.5 (3). (3) If a lottery winner owes a child support debt or arrearages or child support costs as described in section 44-40-113 (6), and also owes restitution, fines, fees, costs, or surcharges as described in sections 16-11-101.8 and 16-18.5-106.5, the lottery winnings offset against the child support debt or arrearages or costs shall take priority and be applied first. The remaining lottery winning money, if any, shall be applied second toward the payment of outstanding restitution, and then toward fines, fees, costs, or surcharges and processed in accordance with this section.

C.R.S. § 44-40-115 Legal services

44-40-115. Legal services. (1) The attorney general shall provide legal services for the division and the commission at the request of the director or the commission. The attorney general shall make reasonable efforts to ensure that there is continuity in the legal services provided and that the attorneys providing legal services to the division and the commission have expertise in the field. (2) The director shall cause the attorney general to make investigations and to prosecute and defend, on behalf of and in the name of the division, suits and proceedings for any of the purposes necessary and proper for carrying out the functions of the division. (3) Expenses of the attorney general incurred in the performance of his or her responsibilities under this section shall be paid from the lottery fund.

C.R.S. § 44-40-116 Unlawful acts

44-40-116. Unlawful acts. (1) It is unlawful for any person: (a) To sell a lottery ticket or share at a price greater than or less than that fixed by the commission; however, a lottery ticket or share that is offered at no additional charge in conjunction with the sale of a product or service shall not be deemed to violate this section unless the offer is made to a person under eighteen years of age; (b) To sell a lottery ticket or share unless authorized or licensed by the director to do so, but this shall not prevent lottery tickets or shares from being given as gifts; (c) To sell a lottery ticket or share to any person under eighteen years of age or for any person under eighteen years of age to purchase a lottery ticket or share, but this shall not prevent receipt of a lottery ticket or share given as a gift to a person under eighteen years of age; (d) To sell a lottery ticket or share at any place other than that place authorized and specified on the license.

C.R.S. § 44-40-117 Penalties

44-40-117. Penalties. (1) In addition to any other penalties that may apply, any person violating any of the provisions of section 44-40-116 commits a class 2 misdemeanor and shall be punished as provided in section 18-1.3-501. (2) Any person violating the sale restrictions of section 44-40-116 (1)(c) may also be proceeded against pursuant to section 18-6-701 for contributing to the delinquency of a minor. (3) A person issuing, suspending, revoking, or renewing contracts pursuant to section 44-40-106 or licenses pursuant to section 44-40-107 for personal pecuniary gain or a thing of value as defined in section 18-1-901 (3)(r), or a person violating the provisions of section 44-40-110, commits a class 4 felony and shall be punished as provided in section 18-1.3-401. (4) Any person violating any of the provisions of this article 40 relating to disclosure by providing any false or misleading information commits a class 6 felony and shall be punished as provided in section 18-1.3-401.

C.R.S. § 44-40-118 Advertising

44-40-118. Advertising. Any promotional advertising regarding the lottery shall set forth the odds of winning and the average return on the dollar in prize money to the public. All promotional advertising expenses shall be paid from the lottery fund.

C.R.S. § 44-40-119 Other laws inapplicable

44-40-119. Other laws inapplicable. Any other state or local law in conflict with this article 40 is inapplicable, but this section does not supersede or affect part 6 of article 21 of title 24.

C.R.S. § 44-40-120 Division subject to termination - annual financial audits of the division

44-40-120. Division subject to termination - annual financial audits of the division. (1) (a) Unless continued or reestablished by the general assembly acting by bill, the division shall terminate on July 1, 2049. (b) (I) The state auditor shall conduct annual financial audits of the division. (II) At least once every five years, and more frequently in the state auditor's discretion, the state auditor shall conduct an analysis and evaluation of the performance of the division and shall submit a written report, together with any supporting materials as may be requested, to the general assembly. The first report shall be completed by January 1, 2004. (c) In conducting the analysis and evaluation required by subsection (1)(b)(II) of this section, the state auditor shall take into consideration, but not be limited to considering, the following factors: (I) The amount of revenue generated by the lottery for its beneficiaries as specified in article XXVII of the state constitution; (II) The administrative and other expense of lottery dollar collections as compared to revenue derived; (III) An evaluation of the contracts, and compliance with the contracts, of lottery equipment contractors and licensed sales agents; (IV) Whether there has been an increase in organized crime related to gambling within the state; (V) A report on the results of the analysis prepared by the division on the socioeconomic profile of persons who play the lottery, including information comparing the results of past analyses to assess the movement of persons from various categories; (VI) Whether the commission encourages public participation in its decisions rather than participation only by the people whom it regulates; (VII) An evaluation of the effectiveness and efficiency of the division's complaint, investigation, and disciplinary procedures; (VIII) Whether the division performs its statutory duties efficiently and effectively; (IX) Whether administrative or statutory changes are necessary to improve the operation of the lottery in the best interests of the state's citizens; (X) Any other matters of concern about the operation and functioning of the lottery; and (XI) A report on any gifts and gratuities received by members of the commission and employees of the division. (2) Prior to any revision of the division's functions, a committee of reference in each house of the general assembly shall hold a public hearing thereon to consider the report provided by the state auditor, as required by subsection (1)(b)(II) of this section. The hearing shall include the factors set forth in subsection (1)(c) of this section.

C.R.S. § 44-40-121 Licensed agent recovery reserve - payments from reserve - revocation of license

44-40-121. Licensed agent recovery reserve - payments from reserve - revocation of license. (1) There is hereby created in the lottery fund the licensed agent recovery reserve, which shall be used under the direction of the division in the manner prescribed in this section. (2) (a) Beginning January 1, 1988, each licensed sales agent shall pay to the division a fee. (b) The amount of the fee and the frequency with which it shall be collected shall be established by the commission pursuant to rule. (c) All fees collected by the division pursuant to subsection (2)(b) of this section shall be transmitted to the state treasurer, who shall credit the same to the lottery fund, and the fees shall be maintained administratively as part of the licensed agent recovery reserve. Any interest earned on the investment of the fees in the fund shall be credited at least annually to said reserve. (d) No money shall be appropriated from the general fund for the payment of any expenses incurred under this section, and no expenses shall be charged against the state. (3) When a licensed sales agent has failed to remit any money owed to the lottery under rule, the division shall transfer money in the amount equivalent to the unpaid amount from the licensed agent recovery reserve to the lottery fund. (4) If the division is required to make a transfer pursuant to subsection (3) of this section, the director shall revoke the sales agent's license in accordance with the provisions of section 44-40-107 (3). If the license is revoked, the sales agent shall not be eligible to be licensed again until he or she has repaid in full the amount paid from the licensed agent recovery reserve.

C.R.S. § 44-40-122 Revenue bonds - authority - issuance - requirements - covenants

44-40-122. Revenue bonds - authority - issuance - requirements - covenants. (1) (a) The commission may, by resolution that meets the requirements of subsection (2) of this section, authorize and issue revenue bonds in an amount not to exceed ten million dollars in the aggregate for expenses of the division. The bonds may be issued only after approval by both houses of the general assembly either by act or joint resolution and after approval by the governor in accordance with section 39 of article V of the state constitution. The bonds shall be payable only from money allocated to the division for expenses of the division pursuant to section 44-40-111 (1). (b) All bonds issued by the commission shall provide that: (I) No holder of any such bond may compel the state or any subdivision thereof to exercise its appropriation or taxing power; and (II) The bond does not constitute a debt of the state and is payable only from the net revenues allocated to the division for expenses as designated in the bond. (2) (a) Any resolution authorizing the issuance of bonds under the terms of this section shall: (I) State the date of issuance of the bonds; (II) State a maturity date or dates during a period not to exceed thirty years from the date of issuance of the bonds; (III) State the interest rate or rates on, and the denomination or denominations of, the bonds; (IV) State the medium of payment of the bonds and the place where the bonds will be paid. (b) Any resolution authorizing the issuance of bonds under the terms of this section may: (I) State that the bonds are to be issued in one or more series; (II) State a rank or priority of the bonds; (III) Provide for redemption of the bonds prior to maturity, with or without premium. (3) Any bonds issued pursuant to the terms of this section may be sold at public or private sale. If bonds are to be sold at a public sale, the commission shall advertise the sale in any manner that the commission deems appropriate. All bonds issued pursuant to the terms of this section shall be sold at a price not less than the par value thereof, together with all accrued interest to the date of delivery. (4) Notwithstanding any provisions of the law to the contrary, all bonds issued pursuant to this section are negotiable. (5) (a) A resolution pertaining to issuance of bonds under this section may contain covenants as to: (I) The purpose to which the proceeds of sale of the bonds may be applied and to the use and disposition thereof; (II) Any matters that are customary in the issuance of revenue bonds including, without limitation, the issuance and lien position of other or additional bonds; and (III) Books of account and the inspection and audit thereof. (b) Any resolution made pursuant to the terms of this section shall be deemed a contract with the holders of the bonds, and the duties of the commission under the resolution shall be enforceable by any appropriate action in a court of competent jurisdiction. (6) Bonds issued under this section and bearing the signatures of members of the commission in office on the date of the signing thereof shall be valid and binding obligations, regardless of whether, prior to the delivery thereof and payment therefor, any or all of the persons whose signatures appear thereon have ceased to be members of the commission. (7) (a) Except as otherwise provided in the resolution authorizing the bonds, all bonds of the same issue under this section shall have a prior and paramount lien on the net revenues pledged therefor. The commission may provide for preferential security for any bonds, both principal and interest, to be issued under this section to the extent deemed feasible and desirable by the commission over any bonds that may be issued thereafter. in the resolution authorizing the bonds, all bonds of the same issue under this section shall have a prior and paramount lien on the net revenues pledged therefor. The commission may provide for preferential security for any bonds, both principal and interest, to be issued under this section to the extent deemed feasible and desirable by the commission over any bonds that may be issued thereafter. (b) Bonds of the same issue or series issued under this section shall be equally and ratably secured, without priority by reason of number, date, sale, execution, or delivery, by a lien on the net revenue pledged in accordance with the terms of the resolution authorizing the bonds.

C.R.S. § 44-40-123 Immunity

44-40-123. Immunity. A lottery sales agent licensed pursuant to section 44-40-107 shall not be liable for monetary damages or otherwise for the sale of a lottery ticket that complies with this article 40, rules promulgated pursuant to this article 40, or orders issued by the director.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://leg.colorado.gov/sites/default/files/images/olls/crs2024-title-44.docxFetched: 10/6/2026

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