DEPARTMENT OF TREASURY  
COMMISSIONER OF THE BUREAU OF STATE LOTTERY  
LOTTERY  
(By authority conferred on the commissioner of Bureau of State Lottery by section 11  
of 1972 PA 239, MCL 432.11)  
R 432.1 Definitions.  
Rule 1. (1) As used in these rules:  
(a) "Act" means 1972 PA 239, MCL 432.1 et seq.  
(b) "Retailer" means a person who has been licensed to sell lottery tickets under the  
act and is referenced in the act as an agent.  
(c) "Terminal" means an on-line lottery game terminal.  
(d) "Ticket" means a lottery ticket, share, or interest issued by the bureau for sale to  
the general public.  
(2) The terms defined in the act have the same meanings when used in these rules.  
History: 1979 AC; 1986 AACS; 1998-2000 AACS; 2006 AACS.  
R 432.2 Employees and contractors.  
Rule 2. (1) None of the individuals referred to in section 31 of the act may have any  
interest, direct or indirect, in dealing in the lottery or in the ownership or leasing of any  
property or premises used by or for the lottery.  
(2) An individual or organization or employees of an organization under contract  
with the bureau is not eligible to win any prize in any lottery operated by the bureau  
during the period of the contract if the individual, organization, or employee has access to  
any of the following that is not open to the general public:  
(a) Bureau data.  
(b) Books and records.  
(c) Electronic data processing programs.  
(d) Systems designs.  
(e) Other information.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS; 2013 AACS; 2018 AACS.  
R 432.3 License eligibility; application.  
Rule 3. (1) In addition to the requirements of section 23 of the act, the  
commissioner shall consider the following additional factors in determining the  
eligibility of any prospective licensee or renewal of a license as a  
retailer:  
(a) The honesty and integrity of the applicant.  
(b) The veracity of the information supplied in the application for lottery retailer's  
license.  
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(c) The applicant's indebtedness to the state or any local government.  
(d) The business experience and general fitness of the applicant.  
(2) Licenses shall be issued only to the following:  
(a) Residents of this state.  
(b) Corporations incorporated in this state or authorized to do business in this state.  
(c) Partnerships in which at least 1 of the partners resides in this state.  
(d) Unincorporated businesses or other entities which are authorized to do business  
in this state.  
(3) A person interested in obtaining a license as a retailer shall file an application  
for a lottery retailer's license with the bureau on application forms which may be  
obtained from the bureau.  
History: 1979 AC; 2006 AACS.  
R 432.4 License revocation.  
Rule 4. (1) A license is evidence of an agency that is revocable at will by either the  
bureau or the retailer. Revocation of the agency is effective 30 days after notice of the  
revocation has been mailed by the revoking party.  
On or before the thirtieth day following notice of revocation, a retailer shall  
surrender the license to the bureau.  
(2) The bureau may immediately suspend, revoke, or not renew a retailer's license  
for any of the following reasons:  
(a) The retailer's application for a license contains false or misleading information.  
(b) The retailer violates any of the provisions of the act, these rules, or instructions  
and directives of the commissioner or bureau.  
(c) The retailer's business location is changed.  
(d) The retailer commits any act that seriously impairs his or her reputation for  
honesty and integrity.  
(e) The retailer does not display lottery point of sale material in a manner that can be  
readily seen by the public or fails to make handout materials readily available to the  
public.  
(f) The retailer is delinquent in making required accounting or fails to pay promptly  
all moneys owed the state.  
(g) The retailer has been convicted of a crime other than a traffic offense.  
(h) The retailer has been arrested for bookmaking or other forms of illegal gambling,  
whether or not convicted of bookmaking or other form of illegal gambling in a court of  
law.  
(i) The retailer has been found guilty of any fraud or misrepresentation.  
(j) There is reasonable cause to believe that the retailer is engaged in fraud,  
misrepresentation, or illegal gaming.  
(k) The retailer fails to take reasonable security precautions with regard to the  
handling of lottery tickets and other materials.  
(l) The commissioner finds that the retailer's experience, character, and general  
fitness are such that his or her participation as a retailer is inconsistent with the public  
interest, convenience, and necessity.  
(m) Any other reason within the permissible discretion of the commissioner.  
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(3) The retailer shall surrender immediately to the appropriate bureau official his  
or her retailer's license and other lottery materials supplied to him or her by the bureau.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS.  
R 432.5 License fee.  
Rule 5. (1) The commissioner shall determine the fee for a license as a retailer. The  
fee is payable at the time of license application.  
(2) The bureau may charge a license renewal fee annually in an amount determined  
by the commissioner.  
(3) The fees in subrules (1) and (2) of this rule shall not exceed the actual cost to the  
bureau.  
History: 1979 AC; 1998-2000 AACS; 2001 AACS; 2006 AACS; 2009 AACS; 2018 AACS.  
R 432.6 Conditions of licensing.  
Rule 6. (1) Upon issuance of a license, the agent shall agree that he or she will do all  
of the following:  
(a) Be bound by and comply with the act, these rules, and instructions and directives  
of the commissioner or bureau.  
(b) Make tickets available for sale to the public during normal business hours.  
(c) Not purchase any winning ticket from its original purchaser or from subsequent  
purchasers.  
(d) Maintain authorized displays, notions, drop boxes, and other material used in  
conjunction with sales in accordance with instructions issued by the bureau.  
(e) Act in a fiduciary capacity with respect to all tickets accepted from the bureau or  
its authorized distributors until payment has been made.  
(f) Maintain current and accurate records of all operations in conjunction with sales  
in conformity with rules, instructions, and directives of the bureau. The agent shall make  
the records available to representatives of the bureau upon request for inspection and  
audit.  
(g) Ensure that a person under 18 years of age does not sell tickets or pay winning  
tickets.  
(h) Ensure that tickets will not be sold at any price greater than the price stated on  
the ticket.  
(i) Hold the bureau and the state harmless from any liability arising in connection  
with sales.  
(j) Remit funds due for lottery sales and other amounts owing to the bureau at the  
time and in the manner specified by the bureau.  
(k) Validate all winning tickets through the bureau gaming system and pay  
customers the full prize value of validated winning tickets up to the retailer’s cashing  
limit as determined by the commissioner.  
(2) Subrule (1)(b) of this rule does not apply to retailers who are considered “exempt  
from taxation” under Section 501(c) of the Internal Revenue Code, 26 U.S.C. §1 et seq.,  
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but only to the extent such retailers are restricted from making lottery sales to the general  
public as a condition of maintaining their status as “exempt from taxation.”  
History: 1979 AC; 1998-2000 AACS; 2001 AACS; 2006 AACS; 2013 AACS; 2018 AACS.  
R 432.7 Nontransferability of license.  
Rule 7. A license is not assignable or transferable. The commissioner shall be  
notified, in writing, not less than 20 days before any proposed business change or  
substantial change in ownership of the business. A  
substantial change in ownership under this rule means a transfer of 50% or more of  
the equity of any business licensed under these rules. If the business to which a  
license is issued changes its business location,  
then the owner shall submit an application for a license. An owner shall report  
every change of business location, in writing, to the commissioner not less than  
20 days before the change.  
History: 1979 AC; 1998-2000 AACS.  
R 432.8 Bonding of retailer.  
Rule 8. The bureau may require a bond as specified by the commissioner from any  
retailer in an amount the bureau determines will prevent any monetary loss to the state  
because of a retailer's activities in the sale of tickets.The bond is a condition of becoming  
or continuing as a retailer. The bureau may require a financial statement revealing the  
financial condition of any person or organization seeking to become or continue as a  
retailer.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS.  
R 432.9 License expiration and renewal.  
Rule 9. A retailer's license remains in full force and effect until the termination  
date indicated upon the license, but in no case more than 1 year from the date of issuance  
of the license. The license may be terminated before the expiration date by the  
commissioner in accordance with these rules.  
History: 1979 AC; 2006 AACS.  
R 432.10 Special licenses.  
Rule 10. (1) A special license may be issued subject to such special conditions  
or limitations as the commissioner deems prudent and determines to be consonant with  
the dignity of the state, the general welfare of the people and the dignity and integrity of  
the bureau. These limitations or conditions include, but are not limited to, the following:  
(a) License period.  
(b) Hours or days of sale.  
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(c) Location of sale.  
(d) Specific business or organization which may sell tickets.  
(e) Specific sporting, charitable, social, or other special events where lottery  
tickets may be sold.  
(f) Special selling or dispensing methods.  
(2) Retailers holding special licenses are subject to all rules promulgated by the  
bureau.  
History: 1979 AC; 2006 AACS.  
R 432.11 Sales by bureau directly.  
Rule 11. The bureau may sell tickets at any central or branch office or selling  
point it establishes in the state.  
History: 1979 AC.  
R 432.12 Stolen tickets.  
Rule 12. A retailer is responsible for all tickets consigned to him or her. If tickets are  
stolen, then the retailer shall report the theft to the bureau and to local or state police  
authorities. The retailer shall pay for the stolen tickets on the settlement date. The  
retailer shall subsequently file a statement swearing to or affirming, under the penalty of  
perjury, the facts of the case. The retailer shall furnish to the bureau a copy of the  
police report covering the theft. Following an investigation by the bureau and police  
authorities, the bureau may issue a refund to the retailer. Refunds may only be issued  
if losses to the bureau have been mitigated by retailer's actions in reporting the  
tickets stolen and the retailer's appropriate accounting of the tickets stolen.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS.  
R 432.13 Sale; inspection; commission; bonus programs; depositories;  
tickets held in trust for benefit of the bureau; disqualification of retailer  
representative; direct ticket distribution to retailers.  
Rule 13. (1) A retailer shall sell tickets only on the premises at the specific  
location named in the license or attachments to the license.  
(2) A retailer shall allow inspections of his or her premises at any time upon the  
reasonable request of authorized inspectors of the bureau. A bureau inspector may make  
an inspection without prior notice to the retailer.  
(3) A retailer is entitled to a commission for tickets sold by him or her in an amount  
to be determined by the commissioner. The commissioner shall announce changes in  
the commission amount not less than 60 days before the effective date and shall include  
the changes in a written communication issued to all retailers.  
(4) The commissioner shall provide details of any bonus program for retailers  
in a written communication issued to all retailers.  
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(5) A retailer shall deposit, in a manner specified by the commissioner for collection  
by the state, all moneys received by the retailer from the sale of tickets, less the amount  
retained as compensation. The retailer shall file with the bureau, or its designated  
agents, reports of ticket sale receipts and transactions. The bureau shall specify the  
form of the reports and the information required. In preparing a report, a retailer shall  
refer to directives and instructions to authorized retailers made available by the  
bureau.  
(6) Until such time as payment has been received by the bureau, all lottery tickets  
made available to a retailer and any net ticket proceeds shall be deemed to be held in  
trust for the benefit of the bureau.  
(7) The bureau may disqualify any person authorized by the licensed retailer as the  
retailer's representative.  
(8) The bureau may distribute tickets directly to retailers if, in the commissioner's  
opinion, it is necessary to maintain continued sales activity.  
History: 1979 AC; 1998-2000 AACS; 2001 AACS; 2006 AACS.  
R 432.14 Rescinded.  
History: 1979 AC; 1998-2000 AACS.  
R 432.15 Lottery tickets.  
Rule 15. (1) The bureau shall prepare tickets for sale to the public. The  
commissioner shall determine the price of a ticket and shall announce the price by  
directives, advertising, and other means calculated to give reasonable notice to the  
public.  
(2) The commissioner may limit wagering on any particular number or  
combination of numbers when he or she determines it is in the best interest of the bureau  
and the state of Michigan.  
(3) When a lottery ticket is purchased, the purchaser accepts the terms of the lottery  
ticket contract. Each lottery ticket provides that all ticket transactions and claims are  
subject to the laws of the state of Michigan, the rules, regulations, all directives of the  
Michigan lottery, and any subsequent changes. In questions involving ticket  
validation, the commissioner's determination is final. In cases of dispute for any  
reason, the commissioner may at his or her sole discretion, replace the disputed ticket  
with an unplayed ticket of equal value or refund the retail sales price. The  
commissioner's decision to replace or refund the ticket is the purchaser's exclusive  
remedy. The rules governing a particular lottery game are set forth in bureau of state  
lottery directives. The directives govern the terms and conditions of play.  
(4) The sale of a valid lottery ticket is final and a retailer shall not accept ticket  
returns.  
(5) The retailer will be responsible for remitting the balance owed for tickets that  
are not accounted for by a retailer in a manner as directed by the commissioner.  
(6) The commissioner shall establish a procedure for the disposition of unsold  
tickets.  
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(7) A retailer shall return tickets printed in error or damaged in any way by the  
bureau to the bureau for credit.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS.  
R 432.16 Claiming of prizes.  
Rule 16. (1) The commissioner shall designate claim centers for the lottery program  
and advertise their locations.  
(2) The processing of winning tickets must be in accordance with directives and  
instructions issued by the commissioner. If a special drawoff is required to determine the  
exact amount won, then the bureau shall notify the claimant when and where to appear  
for the drawoff and where to present his or her winning ticket for validation.  
(3) Mutilated tickets shall be validated only if adequate portions of the ticket remain  
reasonably intact to ensure the authenticity of the ticket.  
(4) A claimant shall fill out a claim form, present the form with the winning ticket,  
and receive a copy of the claim form as his or her receipt.  
(5) A winning ticket may only be claimed by a natural person. Annuitized prize  
payments may be assigned to a person or entity in accordance with section 25 of the act.  
(6) Upon validation of a winning ticket, payment of the amount due shall be  
forwarded to the claimant in accordance with bureau procedures. If a claim is not  
validated as proper, then the bureau shall deny the claim and promptly notify the  
claimant.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS; 2009 AACS; 2018 AACS.  
R 432.17 Ownership of lottery tickets.  
Rule 17. (1) A valid lottery ticket that has been sold by a licensed retailer is  
presumed to be owned by the person whose name is entered on the claim form,  
notwithstanding that the name of another person may appear on the ticket face or reverse  
side. Except as provided in subrule (2) of this rule, the bureau shall pay a prize to the  
person whose name is entered on the claim form or present the prize to a third party  
who is authorized, in writing, as the claimant's representative. All liability of the bureau,  
the state, their employees and agents terminates upon payment.  
(2) Upon receipt of information supported by proper evidence that another person is  
entitled to payment, or upon assertion that the ticket was not legally issued initially, the  
commissioner may withhold payment pending an investigation. If the ownership of a  
winning lottery ticket is disputed and the results of the commissioner's investigation are  
inconclusive, then the commissioner may initiate an appropriate judicial proceeding to  
determine ownership.  
(3) The claimant of a lottery prize shall not assign or sell his or her right to any prize  
except as provided for by law. The commissioner shall develop policies, procedures, and  
fee schedules for the disposition of a claimant's rights to future payments.  
(4) The prize for a winning ticket must be claimed by the expiration date printed, or  
as defined, on the ticket.  
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History: 1979 AC; 1998-2000 AACS; 2006 AACS; 2018 AACS.  
R 432.18 Payment of prizes.  
Rule 18. (1) The bureau shall make payment of prizes as soon as reasonably  
possible after the claim has been filed, verified, and the claimant identified to the  
satisfaction of the commissioner.  
(2) The commissioner shall establish a schedule for payment of certain major  
prizes in installments rather than a lump sum.  
(3) The bureau shall make payment of prizes by mail, when applicable, to the  
claimant at the address that the claimant entered on the claim form.  
(4) When a drawing or ceremony is conducted, winners shall receive payment  
in full, or if applicable, the first installment of a prize, at an appointment scheduled  
with the bureau as soon as practicable after the drawing. The bureau shall make  
payment by state treasurer's warrant, special check, or in any other manner  
determined by the commissioner in advance of the drawing.  
(5) The agents, officers, and employees of the state and the bureau are  
discharged of all liability upon payment of a prize to a claimant.  
(6) Upon the death of a prize winner who has not yet collected the full amount  
of his or her minimum guaranteed prize, the bureau shall continue payment in the  
manner specified by law. Unless specifically provided for by law, the bureau shall not  
accelerate payment of prize money before its normal date of payment because of the  
death of the prize winner. The amount paid will not exceed the minimum prize  
guarantee as indicated in the game directive.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS; 2009 AACS.  
R 432.19 Disposition of funds from sale of tickets.  
Rule 19. The commissioner shall specify the frequency of the transfer of net  
revenue to the beneficiaries specified by law.  
History: 1979 AC; 1998-2000 AACS.  
R 432.20 Drawings.  
Rule 20. (1) The commissioner shall detail the types of drawings and drawing  
procedures in a directive. All drawings shall be conducted in a public place and the  
selection of winners shall be based on chance. The commissioner shall include any  
new drawings or changes in drawing procedures in the directives or directive  
amendments. The commissioner shall make every attempt to keep the public informed of  
drawing procedures and changes in the procedures.  
(2) The bureau shall provide that all drawings to determine the awarding of prizes  
are open to the public. The bureau shall make the time and place of drawings known to  
the public in advance to the extent practicable.  
(3) The bureau shall disseminate information regarding the time and place of future  
drawings, the winning numbers in previous drawings, and other information of  
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public interest, including descriptive information regarding current games, to retailers,  
interested parties, and the public through brochures, pamphlets, newsletters, reports,  
and other means to the extent practicable.  
(4) If the number of contestants in a drawing is variable, then the commissioner  
may limit the number of contestants in any particular drawing for administrative or  
practical reasons.  
History: 1979 AC; 1998-2000 AACS; 2006 AACS.  
R 432.21 Prize structure.  
Rule 21. (1) The prize structure shall be determined by the commissioner from  
time to time and shall be consistent with the act. Every attempt shall be made to inform  
the public, retailers, and interested parties of the existing prize structure of any  
lottery game, and reasonable notice shall be given before any changes in the prize  
structure. When possible, the current prize structure shall be listed on the ticket itself  
or in informational materials available at sales locations.  
(2) Periodic bonus promotions offering special prizes shall be detailed in special  
directives. Information regarding bonuses shall be disseminated to the extent possible  
through the news media, advertising, point of sale materials and other practicable  
means. The time of announcement of promotions shall be determined by the  
commissioner.  
(3) The commissioner may award prizes of cash or merchandise as door prizes at  
drawings or special events. Numbers shall be drawn at random to determine door prize  
winners according to procedures determined by the commissioner from time to time  
and announced in appropriate directives.  
History: 1979 AC; 2006 AACS.  
R 432.22 Rescinded.  
History: 1979 AC; 1998-2000 AACS.  
R 432.31 Rescinded.  
History: 1986 AACS; 1998-2000 AACS.  
R 432.32 Rescinded.  
History: 1986 AACS; 1998-2000 AACS.  
R 432.33 Rescinded.  
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History: 1986 AACS; 1998-2000 AACS.  
R 432.34 Rescinded.  
History: 1986 AACS; 1998-2000 AACS.  
R 432.35 Rescinded.  
History: 1986 AACS; 1998-2000 AACS.  
R 432.36 Retailer performance requirements and terms and conditions;  
disciplinary action; conference.  
Rule 36. (1) A licensee does not have a property interest in the license granted or  
the on-line lottery terminal.  
(2) The commissioner shall establish and provide advance written notice of retailer  
performance requirements and specific terms and conditions to assure the efficient and  
effective functioning of the bureau, maintain the bureau's security and integrity, and  
assure compliance with the act, these rules, contracts with retailers, directives, and  
other written communications with retailers. The performance requirements and terms  
and conditions include all of the following:  
(a) The weekly minimum sales performance requirement for total game sales shall  
not be more than a $4,000.00 weekly average.  
(b) Reporting changes in ownership and location.  
(c) Continued terminal operation.  
(d) In-store location, installation, and operation of a terminal.  
(e) Promotion and marketing requirements, including the use of promotional  
materials.  
(f) Requirements for the prompt settlement of funds due the bureau for lottery  
sales or other fees.  
(g) Hours of operation, customer service requirements, claims processing, and  
redemption of winning tickets.  
(h) Attendance at training sessions.  
(i) Compliance with federal, state, and local laws, rules, and regulations.  
(j) Prohibiting participation as a retailer for other lotteries.  
(k) Requirements necessary to assure compliance with the act and these rules and to  
assure the security, integrity, and efficient and effective operation of the bureau.  
(3) Violation of the performance requirements or terms and conditions shall result in  
disciplinary action depending on the nature and severity of the violation. Disciplinary  
action may include any, or a combination of any, of the following:  
(a) Counseling.  
(b) Suspension of selling privileges.  
(c) Probation.  
(d) On-line terminal deactivation.  
(e) License revocation.  
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(4) If the severity of a violation warrants license revocation, then the retailer may  
request a conference with the commissioner or his or her designee. At the informal  
conference, the commissioner shall review the alleged violation with the retailer. The  
retailer shall have the opportunity to refute the alleged violation or to explain the reasons  
for the violation.After the conference, the commissioner may decide to do any of the  
following:  
(a) Continue the disciplinary action.  
(b) Modify or suspend the disciplinary action.  
(c) Revoke the retailer's license without benefit of further consideration.  
History: 1986 AACS; 1998-2000 AACS; 2006 AACS.  
R 432.37 Fees.  
Rule 37 (1) The commissioner shall establish fees for all of the following:  
(a) The processing and investigative costs of licensing retailers.  
(b) Communications system installation, or relocation, or operation.  
(c) Failure of a retailer to promptly settle for any game as required by bureau rules,  
contracts, directives, or written communications.  
(d) Inactive license status.  
(2) The fees in subrule (1) of this rule shall not exceed the actual cost to the bureau  
for the action.  
(3) Retailers whose weekly sales fall below the minimum sales performance  
requirements established under R 432.36 may be assessed a weekly low sales  
performance fee. The commissioner shall determine the amount of the fee assessed  
for failure to meet minimum sales performance requirements under R 432.36.  
History: 1986 AACS; 1998-2000 AACS; 2001 AACS; 2006 AACS.  
R 432.38 Result of invalid rule.  
Rule 38. If any rule or part of a rule is found to be invalid, only that rule or part  
thereof shall be considered to be invalid.  
History: 1986 AACS.  
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;