177-040-0010 Personal Criteria Which May Be Grounds for Denial of a Lottery Retailer Contract or a Key Person (1) General Personal Criteria: Before approving or denying an application for a Lottery retailer contract or for a key person, the Director shall consider whether the applicant: (a) Character: Is a person of good character, honesty, and integrity. (b) Background: Is a person whose background, including criminal, civil, and financial records, and reputation, does not jeopardize the public interest of the state or the fairness, integrity, security, honesty, or reputation of the Lottery. (c) Associations: Has an association with persons or businesses of known criminal background, or associates with persons who have direct or indirect involvement in the applicant’s business who could jeopardize the public interest of the state or the fairness, integrity, security, honesty, or reputation of the Lottery. The Director may also consider whether the applicant associates with persons who have no involvement in the applicant’s business when the applicant’s association with such persons could create a real or perceived conflict with the Lottery’s security or integrity interests. (d) Public Interest: Is a person whose experience, character, or general fitness is such that approving the applicant would be consistent with the public interest, convenience, and trust in keeping with the sensitive nature of the Lottery. (e) Financial: Demonstrates responsibility and integrity in financial transactions, and is creditworthy and currently in a satisfactory financial condition. The Lottery may use the services of a commercial credit reporting agency in order to evaluate the applicant’s creditworthiness, financial responsibility, and financial condition. The Director may deny an application if the applicant has outstanding judgments, collections, liens, or is not in compliance with all state, federal, or local tax laws. (f) Omissions: Has omitted any material facts or has provided any material misstatement or any untrue statement of material facts. (g) Compliance History: Has a history with the Oregon Lottery, or the Oregon Liquor and Cannabis Commission, or state and local law enforcement, which shows that the applicant could pose a threat to the security and integrity of the Lottery based upon any significant and material compliance or adjudicated violation history. (2) General Financial Criteria: Any person applying for a Lottery retailer contract must: (a) Business Ability: Adequately demonstrate, either individually or through the person’s employees, the business ability and experience necessary to successfully establish, operate, and maintain the business for which application is made. (b) Business Funding: Demonstrate adequate funding and ongoing business income sufficient to open, maintain, and operate the business as proposed by the applicant. The Director shall consider whether funding is from a source that may pose a threat to the fairness, integrity, security, or honesty of the Lottery. (3) Criminal Behavior: The Director shall consider the criminal history or conduct of an applicant as follows: (a) Mandatory Denial: The Director will deny an application when the applicant: (A) Felony Conviction: Has been convicted of any felony within 10 years of the date the Lottery accepts the application. (B) Gambling Conviction: Has been convicted of violating any federal, state, or local gambling law (other than ORS 91.240) within 15 years of the date the Lottery accepts the application. (C) Controlled Substances Conviction: Has been convicted of felony possession of a controlled substance, or any crime involving the manufacture, sale, or delivery of a controlled substance, within 15 years of the date the Lottery accepts the application. (D) Gambling Devices: Owns, manufactures, possesses, operates, has interest in, or gains income or reimbursement from, any unlawful gambling device in any jurisdiction unless the device is approved and certified by another state lottery or federal, state, or local gaming control agency, and such ownership, manufacture, possession, operation, or income is disclosed to and approved by the Lottery. (b) Discretionary Denial: The Director may deny an application when: (A) Felony Conviction: The applicant has any felony conviction more than 10 years old on the date the Lottery accepts the application. (B) Gambling Conviction: The applicant has a conviction more than 15 years old on the date the Lottery accepts the application for violating any state, federal, or local gambling laws. (C) Controlled Substances Conviction: The applicant has been convicted of felony possession of a controlled substance, or has been convicted of any crime involving the manufacture, sale, or delivery of a controlled substance, more than 15 years old on the date the Lottery accepts the application. (D) Gambling Leases: The applicant has ever engaged in conduct which violates ORS 91.240. (E) Criminal Conduct: The applicant has engaged in conduct which constitutes a violation of any gambling law or any law which defines a felony or misdemeanor based on reasonably reliable information. (F) Fraudulent Behavior: The applicant has been held responsible, by judgment, settlement, consent decree, or otherwise, in any court proceeding, or proceeding before an administrative body which was based in whole or in part on allegations of misleading or dishonest conduct including, but not limited to, fraud, deceit, misrepresentation, embezzlement, breach of fiduciary responsibility. (G) Offenses: The applicant has been convicted of, or otherwise subject to official sanction for, any offense other than an offense described in subsection (3)(a) of this rule, except traffic infractions, unless the applicant has engaged in conduct which demonstrates the applicant’s habitual disregard for the law. (H) Miscellaneous: The Director has reasonably reliable information that the applicant has engaged in conduct which constitutes an offense as described under paragraph (G). (I) Misleading or Dishonest Conduct: The Director has reasonably reliable information that the applicant has engaged in misleading or dishonest conduct in any court proceeding or before an administrative body. (4) Ownership and Gaming Interests: The Director may deny an application when the applicant: (a) Ownership Interests: Is qualified, but there is an ownership interest in the applicant’s business or premises by a person who is unqualified to hold a Lottery contract based on the requirements of OAR 177-040-0010 or any retailer contract, regardless of the qualifications of the applicant; (b) Denial of Gaming Licenses: Has been denied any type of gaming license, gaming permit, or gaming contract in any state or jurisdiction for a reason(s) that in the judgment of the Director would jeopardize the security, integrity, honesty, fairness, or reputation of the Lottery; (c) Cancellation of Gaming Licenses: Has had any type of gaming license, gaming permit, or gaming contract canceled, suspended, or revoked in any state or jurisdiction for a reason(s) that in the judgment of the Director would jeopardize the fairness, integrity, security, honesty, or reputation of the Lottery; or (d) Termination of Gaming Contract: Has had any type of gaming contract terminated in any state or jurisdiction for a reason that in the judgment of the Director would jeopardize the fairness, integrity, security, honesty, or reputation of the Lottery. (5) Mitigating Circumstances: Where denial of an application is discretionary with the Director under this rule, the Director may consider the following mitigating factors: (a) Nature: The nature and severity of the conduct, incident, offense, or circumstance; (b) Time: The passage of time since the conduct, incident, offense, or circumstance; (c) Intervening Factors: Any intervening factors since the conduct, incident, offense, or circumstance; (d) Number of Offenses: The number of offenses, crimes, or incidents; (e) Relevance: The relevance of the conduct, incident, offense, or circumstance to the performance of duties under the Lottery retailer contract; or (f) Other: Any extenuating circumstances. (6) Application to Existing Contracts: The criteria described in this rule apply to any existing Lottery retailer contract and may provide grounds for the Director to terminate an existing Lottery retailer contract. (7) Finality of Determination: The denial by the Director of an application is final. (8) Re-Application: If an application is denied by the Director, an applicant, or an applicant that is similar to the previously denied applicant, must wait one year from the date of denial to reapply. In the Director’s sole discretion, the Director may waive this requirement based on a showing of good cause by the applicant. Statutory/Other Authority: OR Const. Art. XV & Sec. 4(4) Statutes/Other Implemented: ORS 461.300 History: LOTT 10-2021, minor correction filed 08/02/2021, effective 08/02/2021 LOTT 4-2017, f. 8-25-17, cert. ef. 9-1-17 LOTT 2-2007, f. 3-1-07, cert. ef. 3-4-07 LOTT 22-2005, f. 12-21-05, cert. ef. 12-31-05 LOTT 22-2002, f. & cert. ef. 11-25-02 LOTT 11-2002(Temp), f. 9-6-02, cert. ef. 9-9-02 thru 3-6-03 LOTT 4-2002, f. & cert. ef. 3-25-02 LOTT 17-2001(Temp), f.& cert. ef. 12-20-01 thru 6-7-02 LOTT 6-2000, f. 7-26-00, cert. ef. 8-1-00 LC 4-1995, f. 4-27-95, cert. ef. 5-1-95 LC 6-1993, f. & cert. ef. 7-2-93 LC 4-1990, f. & cert. ef. 4-3-90 SLC 8-1985, f. & ef. 6-21-85 SLC 3-1985(Temp), f. & ef. 1-15-85