{"data":{"id":"us-ky/krs-154a.420","jurisdiction":"us-ky","citation":"KRS 154A.420","heading":"Proceeds from ticket sales to constitute trust fund -- Administrative","body":"regulation governing retailers' deposit of lottery proceeds -- Liability of lottery\nretailers -- Priority of debt to corporation -- Lien to secure retailer's obligation\nto remit proceeds.\n(1) All proceeds from the sale of lottery tickets received by a person in the capacity of a\nlottery retailer shall constitute a trust fund until paid to the corporation either\ndirectly, or through the corporation's authorized collection representat ive. Proceeds\nshall include unsold instant tickets received by a lottery retailer and cash proceeds\nof sale of any lottery products, net of allowable sales commissions and credit for\nlottery prizes paid to winners by lottery retailers. Sales proceeds and u nused instant\ntickets shall be delivered to the corporation or its authorized collection\nrepresentative upon demand. The corporation shall, by administrative regulation,\nrequire retailers to place all lottery proceeds due the corporation in accounts in\ninstitutions insured by the Federal Deposit Insurance Corporation or Federal\nSavings and Loan Insurance Corporation not later than the close of the next banking\nday after the date of their collection by the retailer until the date they are paid over\nto the co rporation. The corporation may require a retailer to establish a single\nseparate electronic funds transfer account, where available, for the purpose of\nreceiving moneys from ticket sales, making payments to the corporation, and\nreceiving payments from the corporation. Lottery retailers shall be personally liable\nfor all proceeds. This section shall apply to all lottery tickets generated by computer\nterminal, other electronic device, and any other tickets delivered to lottery retailers.\n(2) Whenever any person who receives proceeds from the sale of lottery tickets in the\ncapacity of a lottery retailer becomes insolvent, or dies insolvent, the proceeds due\nthe corporation from such person or his estate shall have preference over all debts or\ndemands.\n(3) (a) A lien is hereby given to the corporation on all funds and other personal\nproperty, on all real property, and on all rights to real or personal property\nowned or subsequently acquired by each retailer in the amount of, and to\nsecure, the retailer's obligati ons to remit lottery proceeds to the corporation.\nThe lien shall be in the amount of all sums due to the corporation at any time,\ntogether with all interest, penalties, fees, commissions, charges, and other\nexpenses incurred by reason of nonpayment of the lottery proceeds to the\ncorporation or in the process of collecting those proceeds, and shall have\npriority over any other obligation or liability for which the funds or real or\npersonal property are liable. The lien shall be of equal rank with the tax lie ns\nof the state, or any city, county, or other taxing authority within the state. The\nlien shall arise upon the receipt of lottery proceeds by the retailer, whether or\nnot the retailer is at that time obligated to remit all or any portion of those\nproceeds to the corporation, and shall be enforceable until the liability is paid\nor extinguished.\n(b) The lien imposed by paragraph (a) of this subsection shall not be valid as\nagainst any purchaser, judgment lien creditor, or holder of a security interest\nor mechanic's lien until notice of the corporation's lien has been filed by the\ncorporation with the county clerk of any county or counties in which the\nretailer's business or residence is located, or in any county in which the retailer\nhas an interest in proper ty. The recording of the lien shall constitute notice of\nboth the original obligation to the corporation and all subsequent obligations\nto the corporation of the same retailer. Upon request, the corporation shall\ndisclose the specific amount of liability a t any given date to any interested\nparty legally entitled to the information.\n(c) Even though notice of a lien has been filed as provided by paragraph (b) of\nthis subsection, and notwithstanding the provisions of KRS 382.520, the lien\nimposed by paragraph (a) of this subsection shall not be valid with respect to a\nsecurity interest which comes into existence after the notice of lien has been\nfiled by reason of disbursements made within forty -five (45) days after the\ndate the lien was filed or the date the p erson making the disbursements had\nactual notice of the lien filing, whichever is earlier, if the security interest:\n1. Is in property which at the time of filing is subject to the lien imposed by\nparagraph (a) of this subsection, and is covered by the ter ms of a written\nagreement entered into before the lien is filed; and\n2. Is protected under local law against a judgment lien arising as of the\ntime of the lien filing, out of an unsecured obligation.\n(d) The corporation shall be afforded the same rights and remedies with respect to\nenforcement of any lien and collection of lottery proceeds as is afforded state,\ncounty, city, and other taxing authorities by KRS Chapter 134.","path":["KRS Chapter 154A"],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=3027","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:50:58Z","sha256":"6d41468af7e031dfe19dfadb6d659d25646e86c627a20f3ee9ecbb93ef56e5c0","source_id":"us-ky","stale":false,"prev":"us-ky/krs-154a.410","next":"us-ky/krs-154a.430"},"notice":"GroundRules: Original legal text. Not legal advice."}