(a) The commission shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code for the licensing of lottery sales agents for the sale and dispensing of lottery tickets, materials and lottery games, and the operations of electronic computer terminals therefor, subject to the following:

(1) The commission shall issue its annual license to the lottery sales agents for each lottery outlet and for a fee established by the commission to cover its costs, but not to exceed $1,000. Application for licensing as a lottery sales agent shall be on forms prescribed and furnished by the director;

(2) No licensee may engage in business exclusively as a lottery sales agent;

(3) The commission shall ensure geographic distribution of lottery sales agents throughout the state;

(4) Before issuance of a license to an applicant, the commission shall consider factors such as the financial responsibility, security, background, accessibility of the place of business or activity to the public, public convenience and the volume of expected sales;

(5) No person under the age of twenty-one may be licensed as an agent. No licensed agent may employ any person under the age of eighteen for sales or dispensing of lottery tickets or materials or operation of a lottery terminal;

(6) A license is valid only for the premises stated on the license;

(7) The director may issue a temporary license when determined necessary;

(8) A license is not assignable or transferable;

(9) Before a license is issued, an agent shall be bonded for an amount and in the form and manner determined by the director, or shall provide other security, in an amount, form and manner determined by the director, that will ensure the performance of the agent's duties and responsibilities as a licensed lottery agent or the indemnification of the commission;

(10) The commission may issue licenses to any legitimate business, organization, person or entity, including, but not limited to, civic or fraternal organizations; parks and recreation commissions or similar authorities; senior citizen centers, state-owned stores, persons lawfully engaged in nongovernmental business on state property, persons lawfully engaged in the sale of alcoholic beverages; political subdivisions or their agencies or departments, state agencies, commission-operated agencies; persons licensed under the provisions of article twenty-three, chapter nineteen of this code; and religious, charitable or seasonal businesses;

(11) Licensed lottery sales agents shall receive seven percent of gross sales as commission for the performance of their duties: Provided, That a portion of the commission not to exceed one and one quarter percent of gross sales may be paid from unclaimed prize moneys accumulated under section sixteen of this article. In addition, the commission may promulgate a bonus-incentive plan as additional compensation not to exceed one percent of annual gross sales. The method and time of payment shall be determined by the commission;

(12) Licensed lottery sales agents shall prominently display the license on the premises where lottery sales are made; and

(13) No person or entity or subsidiary, agent or subcontractor of that person or entity may receive or hold more than twenty-five percent of the licenses to act as licensed lottery sales agent in any one county or municipality nor more than five percent of the licenses issued throughout this state: Provided, That the limitations of twenty-five percent and five percent in this subdivision do not apply if it is determined by the commission that there are not a sufficient number of qualified applicants for licenses to comply with these requirements.

(b) The commission shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code specifying the terms and conditions for contracting with lottery retailers for sale of preprinted instant type lottery tickets and may provide for the dispensing of the tickets through machines and devices. Tickets may be sold or dispensed in any public or private store, operation or organization, without limitation. The commission may establish an annual fee not to exceed $50 for those persons, per location or site, and shall issue a certificate of authority to act as a lottery retailer to them. The commission shall establish procedures to ensure the security, honesty and integrity of the lottery and distribution system. The commission shall establish the method of payment, commission structure, methods of payment of winners, including payment in merchandise and tickets, and may require prepayment by lottery retailers, require bond or security for payment and require deposit of receipts in accounts established therefor. Retailers shall prominently display the certificate of authority issued by the commission on the premises where lottery sales are made.