Retail Licensing Program Important Information
The New York Lottery was created to raise revenues to support education in New York State. The Lottery is unique in that it earns its revenue through sales, rather than through taxation or fees. Every Lottery retailer is a part of a successful public-private partnership that includes the Lottery administration, the private businesses that contract to provide tickets and sales support programs, and, most importantly, the retailers. It is a business partnership that has earned over $48 billion for education since 1967.
The Lottery currently licenses approximately 18,000 retail locations across the State. Each license to sell Lottery products represents an investment by the State in a retail location. All equipment, telephone costs, advertising materials—including marketing and maintenance support—are provided to the licensee at no cost in addition to a commission of six percent on every sale. In order to justify this investment, the Lottery must be assured of the retailer’s ability to create new Lottery sales. If a new location merely redistributes sales from existing locations, it is not considered a justifiable investment. It is for this reason that the search for new retail locations now concentrates on reaching a new consumer—the occasional player. This occasional player does not specifically seek to purchase Lottery products but would be more inclined to purchase them if Lottery products were available at stores where they do their shopping. This retailer expansion effort, therefore, leans toward reaching retail locations that have high customer counts. These locations offer the best opportunities for incremental Lottery sales.
Lottery research and experience demonstrate that a retailer that relies too heavily on Lottery sales commissions at the expense of a more varied product mix will often fail. By law, the decision to license a retailer must be based strictly on the Lottery’s judgment that the partnership will create additional incremental sales for the Lottery, while reasonably compensating a retailer for the level of effort applied.
There are two Lottery retailer licensing options. A retailer may be selected to be a full-service retailer or, at select social locations, a Quick Draw® retailer.
Every New York Lottery terminal features a Scratch-off Games automatic prize validating tool. This bar code technology not only makes sales and prize validation simple and convenient for the customer, it also provides the retailer with improved security and an automatic record of sales and purchases to facilitate bookkeeping. As a condition of licensing, all retailers must demonstrate:
- Commitment of sales and service personnel time throughout the business day and night
- Dedication of space for the location of the terminal, Instant Game tickets, and ancillary point-of-sale items
The Quick Draw game is a computerized Lottery game requiring a full-service terminal that is geared toward business with a social environment.
A retailer’s selection as a Lottery licensee will be determined not only by the nature and quality of his or her business, but by his or her willingness and ability to sell Lottery games. The license evaluation process looks at a number of factors to determine the potential for incremental revenue:
- Business location
- Type of business
- Business traffic and customer base
- Existing Lottery sales in immediate area
- Convenience, accessibility, hours, and quality of customer service
- Owner/management attitude
- You must be open for business and provide financial documentation upon request
The law states that the Lottery must also consider the financial responsibility and security of the retailer’s business, whether the business is predominantly frequented by minors, and whether the retailer has any criminal history.
The Lottery recruits a variety of retail establishments to strengthen its network of qualified Lottery retailers. The Lottery reserves the right to deny a license request in lieu of pending recruitment activities.
Once you have submitted the completed application, an experienced District Sales Representative will visit the business to conduct an evaluation. A subsequent evaluation may be conducted by another District Sales Representative to ensure objectivity. The information collected during these on-site visits will then be further reviewed by the retailer’s regional Lottery office manager, who will consider other pertinent marketing, sales, and demographic information concerning the location before making a final decision. Applicants will receive written confirmation of the evaluation results and the Lottery’s decision.
Once operational, a retailer is assigned minimum weekly sales criteria in accordance with the Minimum Sales Standards Program and enters a probationary period. During this period, he or she must demonstrate his or her ability to meet these sales levels. A Lottery representative will review the retailer’s Minimum Sales Standards on a semi-annual basis. If sales standards have not been met, the terminal may be removed.
All retailers must meet three additional requirements:
- Each owner of the retail location will be charged for fingerprinting as part of an extensive background investigation.
- Each retailer will be assessed a settlement assurance fee which will be based upon his or her sales criteria. A nominal fee will be deducted weekly from the retailer’s commissions.
- The Lottery collects its receipts and credits a retailer’s commissions electronically. A retailer will have to establish and maintain a checking account to accommodate electronic funds transfers (EFTs) of Lottery sales receipts.
Quick Draw is a computer-generated game that offers players a wide variety of chances to win cash prizes every four minutes. The Lottery generally reserves licenses for this game for retail establishments with social environments. Quick Draw requires the same terminal on which full-service retailers operate; however, it also requires a dedicated video monitor to display drawing results. This monitor is linked to the terminal to receive drawing information. A business seeking to be licensed as a Quick Draw retailer must meet the same requirements as a full-service retailer. (See “Selection as a Full-Service Retailer.”) Additionally, legislation requires that certain other eligibility conditions be met for Quick Draw retailer licensure. Businesses with an on-premises liquor license, bowling centers, Off-Track Betting parlors and racetracks qualify for Quick Draw by the nature of their business. All other businesses must have a minimum of 2,500 square feet to qualify for Quick Draw.
There are several reasons why a retailer’s application may not be approved when evaluated against the various factors governing selection. The reasons will be provided in writing at the time the evaluation is completed. A retailer may be able to change some of the conditions that prevented his or her selection for a Lottery license. However, there are many reasons for non-selection that may be beyond the retailer’s ability to change or correct. These include the nature of the retailer’s business or the existence of a significant number of Lottery retailers in that retailer’s business area. If a retailer should choose to reapply, the Lottery will not automatically conduct a reevaluation. Further evaluation will not take place unless significant changes have occurred in the areas which caused the retailer not to be selected.
New York City Region
| Upstate Eastern Region
One Broadway Center, Suite 700
Schenectady, NY 12305
| Western Region
Central New York Office
620 Erie Blvd West, Suite 106
Syracuse, NY 13204
45 South Service Rd
Plainview, NY 11803
| Hudson Valley Office
18 Westgate Dr
Fishkill, NY 12524
| Western Office
165 Genesee St
Buffalo, NY 14203