AR Code § 23-115-403 (2020)
2020 Arkansas Code|Title 23 - Public Utilities and Regulated Industries|Subtitle 4 - Miscellaneous Regulated Industries|Chapter 115 - Arkansas Scholarship Lottery Act|Subchapter 4 - Operation of Lottery|§ 23-115-403. Attachments, garnishments, or executions withheld from lottery prizes — Validity of tickets or shares — Lottery prize restrictions — Unclaimed lottery prizes

 (a) Proceeds of a lottery prize are subject to Arkansas state income tax.  (b)  (1) Except as otherwise provided in this chapter, attachments, garnishments, or executions served upon the Office of the Arkansas Lottery that are authorized and issued under Arkansas law shall be honored if timely served upon the office.  (2) Subdivision (b)(1) of this section does not apply to a retailer.    (c)  (1)  (A) The office shall adopt rules to establish a system of verifying the validity of tickets or shares claimed to win lottery prizes and to effect payment of lottery prizes.  (B) A lottery prize, any portion of a lottery prize, or any right of any individual to a lottery prize is not assignable.  (C)  (i) A lottery prize or any portion of a lottery prize remaining unpaid at the death of a lottery prize winner shall be paid to the estate of the deceased lottery prize winner or to the trustee of a trust established by the deceased lottery prize winner as settlor if:  (a) A copy of the trust document or instrument has been filed with the office along with a notarized letter of direction from the settlor; and  (b) A written notice of revocation has not been received by the office before the settlor's death.    (ii) Following a settlor's death and before any payment to a successor trustee, the office shall obtain from the trustee a written agreement to indemnify and hold the office harmless with respect to any claims that may be asserted against the office arising from payment to or through the trust.    (D) Under an appropriate judicial order, an individual shall be paid the lottery prize to which a winner is entitled.    (2) A lottery prize shall not be paid for a claim ticket that is:  (A) Stolen, counterfeit, altered, fraudulent, unissued, produced or issued in error, unreadable, not received, or not recorded by the office within applicable deadlines;  (B) Lacking in captions that conform and agree with the play symbols as appropriate to the particular lottery involved; or  (C) Not in compliance with rules and public or confidential validation and security tests of the office appropriate to the particular lottery involved.    (3)  (A) A particular lottery prize in any lottery shall not be paid more than one (1) time.  (B) If there is a determination that more than one (1) claimant is entitled to a particular lottery prize, the sole remedy of the claimants is the award to each of them of an equal share in the lottery prize.    (4)  (A) Within one hundred eighty (180) days after the drawing in which a cash lottery prize has been won, a holder of a winning cash ticket or share from an Arkansas lottery or from a multistate or multisovereign lottery shall claim the cash lottery prize.  (B)  (i) In an Arkansas lottery in which a player may determine instantly if he or she has won or lost, a player who has won shall claim a cash lottery prize within ninety (90) days after the playing of the instant game.  (ii) In any multistate or multisovereign lottery in which a player may determine instantly if he or she has won or lost, a player who has won shall claim a cash lottery prize within one hundred eighty (180) days after the playing of the instant game.    (C) If a valid claim is not made for a cash lottery prize within the applicable period, the cash lottery prize constitutes an unclaimed lottery prize for purposes of this section.  (D) The office at any time may alter the time periods under subdivisions (c)(4)(A) and (B) of this section by rule.    (5) If practicable, an auditor chosen by the office shall be present at a draw to determine the winners of a draw game to verify the accuracy of the results.    (d)  (1) A lottery prize shall not be paid upon a ticket or share purchased or sold in violation of this chapter.  (2) A lottery prize described in subdivision (d)(1) of this section is an unclaimed lottery prize for purposes of this section.    (e) The office is discharged of all liability upon payment of a lottery prize.  (f)  (1) The office shall not pay a lottery prize that exceeds the amount of five hundred dollars ($500) to any:  (A) Employee of the office; or  (B) Member of the immediate family of an employee of the office living in the same household as the employee.    (2) If an officer, employee, agent, or subcontractor of a vendor has access to confidential information that may compromise the integrity of a lottery, a ticket or share shall not be purchased by and a lottery prize shall not be paid to:  (A) The officer, employee, agent, or subcontractor of the vendor; or  (B) A member of the immediate family of the officer, employee, agent, or subcontractor of the vendor.      (g)  (1) During a fiscal year, the office may expend up to two million five hundred thousand dollars ($2,500,000) of unclaimed lottery prize money for one (1) or more of the following:  (A) Increasing the pool from which future lottery prizes are to be awarded;  (B) Maintaining online game reserves at a fiscally sound level; or  (C) Prize promotion.    (2) On the last day of each fiscal year, the office shall deposit into the trust account for net lottery proceeds the amount of unclaimed lottery prize money existing at the end of the fiscal year less one million dollars ($1,000,000).  (3) The office shall include in its monthly reports to the Legislative Council the following monthly and year-to-date amounts:  (A) Unclaimed lottery prize money;  (B) Expenditures from unclaimed lottery prize money; and  (C) Deposits to net lottery proceeds from unclaimed lottery prize money.