(a) All proceeds from the sale of the lottery tickets or shares shall constitute a trust fund until paid to the corporation either directly or through the corporation‘s authorized collection representative. A lottery retailer and officers of a lottery retailer’s business shall have a fiduciary duty to preserve and account for lottery proceeds and lottery retailers shall be personally liable for all proceeds. Proceeds shall include unsold instant tickets received by a lottery retailer and cash proceeds of the sale of any lottery products, net of allowable sales commissions and credit for lottery prizes sold to or paid to winners by lottery retailers. Sales proceeds and unused instant tickets shall be delivered to the corporation or its authorized collection representative upon demand.
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Terms Used In Tennessee Code 4-51-120

  • Board: means the board of directors of the Tennessee education lottery corporation. See Tennessee Code 4-51-102
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: means the Tennessee education lottery corporation. See Tennessee Code 4-51-102
  • Fiduciary: A trustee, executor, or administrator.
  • Person: means any individual, corporation, partnership, unincorporated association, or other legal entity. See Tennessee Code 4-51-102
  • proceeds: means all lottery revenue derived from the sale of lottery tickets or shares and all other moneys derived from the lottery or received by the Tennessee education lottery corporation. See Tennessee Code 4-51-102
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • retailer: means a person who sells lottery tickets or shares on behalf of the Tennessee education lottery corporation pursuant to a contract. See Tennessee Code 4-51-102
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(b)

(1) Pursuant to § 4-51-105(a)(3), the corporation shall adopt and enforce policies designed to safeguard and limit the opportunity for loss of lottery proceeds that are not in the possession of the corporation. Such policies may include, but are not limited to:

(A) Requirements governing financial institutions into which retailers shall deposit lottery proceeds;
(B) Requirements for the establishment of separate accounts for the deposit of lottery proceeds by retailers;
(C) The timing of deposit of lottery proceeds by retailers; and
(D) The timing of withdrawal of funds from retailer accounts by the corporation.
(2) Any policies designed to safeguard and limit the opportunity for loss of lottery proceeds, and any revisions to such policies, shall be filed with the state funding board.
(c) Notwithstanding any law to the contrary, whenever any person who receives proceeds from the sale of lottery tickets or shares in the capacity of a lottery retailer becomes insolvent or dies insolvent, the proceeds due the corporation from such person or that person’s estate shall have preference over all debts or demands.
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