§ 1203. Distribution; retail purchase and sale

(a) Only nonprofit organizations may purchase break-open tickets from a distributor licensed under this chapter.

(b) No person, other than a licensed distributor or a nonprofit organization acting under subsection (f) of this section, shall distribute a box of break-open tickets. No person shall distribute a box of break-open tickets unless the box bears indicia as required by the Commissioner. No person shall distribute or sell a break-open ticket at retail unless the ticket bears a unique serial number.

(c) A distributor licensed under this chapter may sell break-open tickets only to nonprofit organizations as defined in subdivision 1201(5) of this chapter, except that a person other than a licensed distributor may sell such tickets to a licensed distributor upon written approval of the Commissioner.

(d) Only nonprofit organizations may sell break-open tickets at retail.

(e) Break-open tickets shall not be sold at premises licensed to sell alcoholic beverages except:

(1) at clubs as defined in 7 V.S.A. § 2; or

(2) a nonprofit organization may sell break-open tickets at premises licensed to sell alcoholic beverages if, notwithstanding 13 V.S.A. § 2143(e), all proceeds from the sale of break-open tickets are used by the nonprofit organization exclusively for charitable, religious, educational, and civic undertakings, with only the following costs deducted from the proceeds:

(A) actual cost of the break-open tickets;

(B) the prizes awarded;

(C) reasonable legal fees necessary to organize the nonprofit organization and to ensure compliance with all legal requirements; and

(D) reasonable accounting fees necessary to account for the proceeds from the sale of break-open tickets.

(f) A nonprofit organization that sells break-open tickets, other than a club as defined in 7 V.S.A. § 2, shall report to the Department of Liquor and Lottery on a quarterly basis the number of tickets purchased and distributed, and the corresponding serial numbers of those tickets, the amount of revenue realized by the nonprofit organization, and the amounts accounted for under subdivisions (e)(2)(A)-(D) of this section. The nonprofit organization shall also identify an individual from the organization responsible for the reporting requirements under this subsection. If the Department of Liquor and Lottery determines that a nonprofit organization has failed to comply with the requirements of this subsection, the Department of Liquor and Lottery shall notify the nonprofit organization and any licensed distributors of this failure, and any licensed distributor that continues to sell break-open tickets to that nonprofit organization after notice shall be considered in violation of the requirements of this chapter until the Department of Liquor and Lottery has determined the nonprofit organization is back in compliance with this subsection.

(g) The provisions of this chapter regarding sales and purchases of break-open tickets also apply to transfers of break-open tickets for no charge. (Added 2017, No. 73, § 13, eff. Sept. 1, 2017; amended 2019, No. 73, § 38.)