INFORMATION BULLETIN No. 65 - Regulatory Changes Affecting Break Open Ticket Sales Through Registered Break Open Ticket Sellers (in Third Party Locations) and Premises Owned by the Licensee
As part of the on-going Modernization of Charitable Gaming initiative, the Registrar of Alcohol and Gaming is pleased to announce the development and implementation of a new revenue model for Break Open Ticket (BOT) sales through registered Break Open Ticket Sellers (in 3rd party retail locations) and premises owned by the licensee, effective September 8, 2010.
The new revenue model will be one where expense maximums are based on win (gross wager minus prizes paid). Expense maximums are established by the Registrar and prescribe the maximum amount charities may compensate parties assisting with the sale of BOTs for the products and services they provide to the licensee.
The change to a revenue model based on win requires amendments to the Registrar’s Schedule of Approved Break Open Ticket Types and Associated Expense Maximums. With a revenue model based on win the expense maximums are consistent across all ticket types. As a result the Registrar’s Schedule of Approved Break Open Ticket Types and Associated Expense Maximums lists the approved ticket types and identifies the set expense maximums that apply to all ticket types. This document has been amended and is attached to this information bulletin.
The new revenue model also reflects a reduction in the amount of the Provincial BOT fee (previously set at 5% of BOT gross wager) paid by licensees conducting BOT sales through registered break open ticket sellers in third party locations and premises owned by the licensee. This reduction is being implemented to assist the BOT industry to develop greater economic viability and growth. The fee will be reduced from 5% of gross wager to 4.46% of gross wager.
The reduction in the provincial fee is effective retroactive to July 1, 2010. Details on the transition to the new revenue model are attached to this information bulletin.
If you have any questions or require further clarification please contact Rusty Parr, Gaming Registration Officer at 416-314-0539 or our toll-free line at 1-800-522-2876.
Schedule of Approved Break Open Ticket Types and Associated
Expense Maximums:
The new revenue model for BOT lotteries conducted through registered break open ticket sellers in third party retail locations and premises owned by the licensee is accompanied by a new schedule of associated expense maximums. This new schedule (see following) provides a standardized set of expense maximums for all approved Break Open Ticket types, which differs from the previous schedule which prescribed different expense maximums for each Break Open Ticket type. Industry stakeholders are reminded that the new schedule applies to all approved ticket types and the percentages outlined are based on win (gross wager minus prizes paid).
| Break Open Ticket Sales Venue | Total Maximum Expense (% of Win) | |
|---|---|---|
| For Break Open Tickets sold through a break open ticket seller (3rd party retailer) | ||
| Licensee’s Own Location | 31.25% | |
| Licensee’s Own Location with Dispenser | 35.25% | |
| Gaming Equipment Supplier | 14% | |
| Gaming Services Supplier | 12.75% | |
| Break Open Ticket Seller | 20.75% | |
| Charity Administration Fee | 0.75% | |
| Dispenser | 4% | |
Further Information for Information Bulletin Number 65 - Regulatory Changes Affecting Break Open Ticket Sales Through Registered Break Open Ticket Sellers (in Third Party Locations) and Premises Owned by the Licensee
Contracts Associated with the New Revenue Model with Expense Maximums Based on Percentage of Win
There will be a period of transition for licensees, gaming equipment suppliers, gaming services suppliers, and break open ticket sellers to move to the new revenue model that is based on maximum percentages of win. The supply of product and services to a licensee and sales through a break open ticket seller on behalf of that licensee (at either a third party location or premises owned by the licensee) require that a contract be in place outlining the compensation that has been agreed upon. In order to move to the new revenue model new contracts must be established.
Existing contracts with compensation within the maximums based on gross wager will remain in effect until those contracts have been renegotiated and signed by the licensee or until those contracts expire. Any new contracts signed after September 8, 2010 must be consistent with the new revenue model with maximum compensation rates based on percentages of win.
There will be a period of transition where contracts established under the old revenue model are in existence in the marketplace as well as contracts established under the new revenue model.
Reduction of the Provincial Break Open Ticket Fee
The change to the provincial break open ticket fee is effective July 1, 2010. This applies to any product that was shipped from a break open ticket manufacturer on or after July 1, 2010.
With the reduction in the fee being retroactive there is a need to have any payments of the provincial fee that have been made for product shipped after that date at the rate of 5% to be refunded in part. This requires Break Open Ticket manufacturers and/or Gaming Equipment Suppliers (GES) to refund a portion of the Provincial BOT fee back to the party they received the fee payment from, either the GES or the licensee. A refund to the licensee will be required for any monies that have been remitted by the licensee either to the GES or the Manufacturer for any product shipped to the licensee from July 1, 2010 forward to the effective date of this information bulletin. The amount to be refunded is the difference between the old (5%) and new (4.46%) amounts for the provincial BOT fee. This is calculated at 0.54% of gross wager. The following details how the refunds are to be facilitated, depending on the manner in which the funds were originally remitted:
- Where the licensee has remitted funds to the Gaming Equipment Supplier – the GES must refund the appropriate amount (0.54% of gross wager) back to the licensee within 15 days of the issue date of this information bulletin
- Where the GES has remitted funds to the manufacturer – the manufacturer must refund the appropriate amount (0.54% of gross wager) back to the GES within 15 days of the issue date of this information bulletin and then the GES must immediately refund that amount back to the licensee
- Where the licensee has remitted funds directly to the manufacturer – the manufacturer must refund the appropriate amount (0.54% of gross wager) back to the licensee within 15 days of the issue date of this information bulletin.
Please note that for accountability and tracking purposes, the refund of any monies associated with the Provincial Break Open Ticket Fee must follow the same process in reverse as they were remitted.