316 NAC 35-309. PICKLE CARD OPERATOR: LICENSE ELIGIBILITY AND REQUIREMENTS

REG-35-309 PICKLE CARD OPERATOR: LICENSE ELIGIBILITY AND REQUIREMENTS 309.01 Any sole proprietorship, partnership, limited liability company, or corporation seeking to sell pickle cards on behalf of a Class II pickle card licensee must first apply for and obtain a pickle card operator’s license. The license must be applied for on a form prescribed by the Department. The pickle card operator’s license fee must be paid by the applicant and cannot be paid or reimbursed by a licensed organization or any of the organization’s agents or employees. The applicant for a pickle card operator’s license must: 309.01A Hold a retailer’s license for consumption on the premises issued by the Nebraska Liquor Control Commission; or 309.01B Hold a retailer’s license for consumption off the premises issued by the Nebraska Liquor Control Commission. 309.02 Designated Premises. An applicant for a pickle card operator’s license must designate on the application a particular premises where the pickle cards will be sold. The pickle card operator’s license is only valid for the area described. The area cannot be greater than the area covered by the applicant’s liquor license. No pickle cards may be sold by a licensed pickle card operator at any location other than the one designated on the license application filed with the Department. Pickle cards cannot be sold on any area of land surrounding the premises of the licensed pickle card operator even if the licensed pickle card operator’s liquor license extends outside the premises or building. For example, no pickle cards may be sold by a licensed pickle card operator in its “beer garden” located outside of its premises or building. 309.02A A pickle card operator’s license covers all employees at the premises designated on the license application filed with the Department. 309.02B A pickle card operator’s license may not be transferred under any circumstances including a change of ownership. A change of stock ownership in a corporation in which any new owner becomes a holder directly or beneficially of less than 10% of any class of stock in the corporation, is not a change of ownership. 309.02B(1) When a change of ownership of a business licensed as a pickle card operator occurs, the business must stop selling pickle cards as of the date its retail liquor license is cancelled by the Nebraska Liquor Control Commission. The new owner must obtain a Temporary Operating Permit from the Nebraska Liquor Control Commission as well as a temporary pickle card operator’s license and applicable authorizations from the Department to begin or continue selling pickle cards prior to the time its own retail liquor license is issued. The temporary pickle card operator license and authorizations are valid for 90 days or until the Nebraska Liquor Control Commission issues the new owner its own retail liquor license, whichever comes first. 309.02C It is the responsibility of the licensed pickle card operator to keep the information filed on its license application current. The Department must be notified within 30 days of any changes to the application information. 309.02C(1) Changes must be reported in writing and the Department may require the filing of a new application. Changes must be confirmed by the signature of an owner, partner, member, or officer of the licensed pickle card operator. Any individual who signs the most current application filed obligates the licensee to comply with the Nebraska Pickle Card Lottery Act and regulations for that licensing period. 309.03 Pickle Card Operator’s License Expiration and Renewal. A pickle card operator’s license expires on September 30 of every odd-numbered year and may be renewed biennially. Additionally, any authorizations to sell pickle cards on behalf of a licensed organization become invalid when the pickle card operator’s license expires and may also be renewed biennially. The pickle card operator’s application for license renewal is due 60 days prior to the expiration date of the license. 309.04 Authorization to Sell Pickle Cards. A licensed pickle card operator may only sell pickle cards on behalf of organizations that hold current Class II pickle card licenses. A licensed pickle card operator cannot sell individual pickle cards on behalf of a licensed organization until it has physical possession of an authorization issued by the Department to sell pickle cards for that organization. A licensed organization must apply to the Department for the authorization on a form prescribed by the Department. The application form must be signed by the utilization of funds member of the licensed organization and an owner, partner, member, or officer of the licensed pickle card operator. 309.05 Pickle Card Operator’s License and Authorization to be Posted. The pickle card operator’s license and authorization to sell pickle cards for each licensed organization must be posted prominently at the specific location for which it was issued before the licensed pickle card operator may sell pickle cards. The licensed pickle card operator must post its original license and authorizations issued by the Department at the location where the majority of pickle cards are sold. A copy of the license or authorizations cannot be substituted for the original. 309.05A A licensed pickle card operator who has had its license or authorizations lost, stolen, or destroyed must notify the Department as soon as possible. A duplicate license or authorization will be issued for no additional fee. 309.05B A licensed pickle card operator who no longer wants to be licensed must notify the Department, in writing, of its intention to cancel its license. A notification of cancellation must be accompanied by the original license and all authorizations issued by the Department. 309.05C If a pickle card operator’s license is suspended, canceled, or revoked, the pickle card operator must surrender physical possession of its license, authorizations, and all pickle cards and pickle card units to the Department immediately after receiving the order of suspension, cancellation, or revocation. 309.05C(1) Suspensions. The Department will return the license and authorizations, and all pickle cards and pickle card units, to the pickle card operator at the end of the suspension period. 309.05C(2) Cancellations. The former licensee may reapply for a pickle card operator’s license when the period of cancellation expires. 309.05C(3) Revocations. The former licensed pickle card operator may not reapply for any license at any time in the future under the Nebraska Pickle Card Lottery Act unless otherwise authorized by the Department. 309.05D When a licensed pickle card operator successfully appeals an order of suspension, revocation, or cancellation, the Department will return the license and authorizations which were surrendered to the Department. 309.06 Method of Payment. The definite profit, less the licensed pickle card operator’s commission, of each pickle card unit received by a licensed pickle card operator must be paid for by a check made payable to the licensed organization, either in advance of, or upon delivery of, the pickle card unit to the pickle card operator. It is a violation of these regulations for a licensed pickle card operator to receive credit in any form when receiving a pickle card unit from a licensed organization, including but not limited to, post-dating of a check written by the licensed pickle card operator or holding a check written by the licensed pickle card operator by the licensed organization, sales agent, or utilization of funds member. 309.06A To satisfy the payment by check requirement, a pickle card operator must make payment by a check written from the business account of the pickle card operator, or by a personal check written by an owner, officer, member, or partner of the pickle card operator. 309.06B Payment by money order, certified check, credit card, or any other method is prohibited, unless otherwise authorized by the Department. 309.07 Receipt Requirements. With each delivery of pickle card units to a licensed pickle card operator, the licensed sales agent must ensure that a receipt to the operator is included. 309.07A These receipts must be on a form prescribed by the Department and must contain the following information either on the prescribed form or on an attachment to the form which has been approved by the Department: 309.07A(1) The name of the licensed organization; 309.07A(2) The name, address, and Nebraska ID number of the licensed pickle card operator; 309.07A(3) A description of the pickle card units sold, including the name of the game, form number, and serial number; 309.07A(4) The gross proceeds and definite profit of each unit; 309.07A(5) The licensed pickle card operator’s commission from each unit; 309.07A(6) The check number, the date of the check, and amount of the check issued from the licensed pickle card operator to the licensed organization; and 309.07A(7) The signatures of the sales agent of the licensed organization certifying receipt of payment and of the licensed pickle card operator certifying receipt of the pickle card units and the date of sale. 309.07B Both the pickle card units delivered and the receipt or a copy issued by the sales agent must be physically present at the pickle card operator’s premises until the units are fully sold. 309.08 An applicant for a pickle card operator’s license is responsible for and must pay its own license fee. The licensed pickle card operator is also responsible for any other expenses it incurs in connection with the sale of pickle cards on behalf of a licensed organization, including registering pickle card dispensing devices with the Department and obtaining registration decals from the Department. 309.09 Revenue Limitation. No licensed pickle card operator can generate annual revenue from the sale of individual pickle cards which exceeds the annual revenue generated from its other retail sales. 309.09A For the purposes of this regulation, “revenue generated from other retail sales” means the gross income received from the sale of goods and services not including revenues generated from charitable gaming activities and “revenue from the sale of individual pickle cards” means the licensed pickle card operator’s commission from the sale of all pickle cards. 309.09B For example, if a licensed pickle card operator receives $500,000 from the sale of all goods and services except pickle card sales at its place of business prior to the expenses of operating that business, its revenue generated from other retail sales is $500,000. That amount will be compared with its commissions from the sale of pickle cards during the same annual period. 309.10 Prohibition of Multiple Interests. An owner, partner, member, or officer of a licensed pickle card operator cannot act or be licensed as a utilization of funds member or sales agent for any licensed organization conducting a lottery by the sale of pickle cards. This does not exclude an employee of a licensed pickle card operator from acting as a utilization of funds member for a licensed organization to which the employee belongs. No licensed pickle card operator can have a substantial interest, as defined in Reg-35-300.09, in any individual, partnership, firm, corporation, or other party licensed as a distributor or a manufacturer. 309.11 Returning Pickle Card Units. Prior to placing a pickle card unit in play, the licensed pickle card operator may return the unit to the licensed organization or its sales agent and the licensed organization may refund the amount paid by the pickle card operator for that pickle card unit. The refund transaction must be reflected on all copies of the original receipt. 309.11A If the returned pickle card unit is delivered to another licensed pickle card operator by the licensed organization, the expenses incurred by the licensed organization in connection with the re-marketing of that pickle card unit must be applied to the organization’s allowable expense limitation on resale. 309.12 Limitation on Consideration for Selling Pickle Cards. No licensed pickle card operator can receive any additional consideration, in any form, directly or indirectly, over and above the 30% of definite profit pickle card operator’s commission limitation, from any individual or organization; or any member, employee, or agent of any licensed organization, as an inducement to sell pickle cards. 309.13 Suspension of Liquor License. If a licensed pickle card operator has its retail liquor license temporarily suspended, it no longer meets the licensing requirements for a pickle card operator. During the period its liquor license is suspended, it cannot sell pickle cards. When the suspension is lifted, the pickle card operator may resume selling pickle cards. (Neb. Rev. Stat. §§ 9-316, 9-317.01, 9-322, 9-328, 9-329, 9-329.02, 9-329.03, 9-340.02, 9-345.03, and 53-149. July 3, 2013.)