Lottery License and Sales Tax Compliance
If you are behind on your sales tax payment plan or even filing returns, your lottery license can be revoked by the state of Illinois. You will be afforded an opportunity to have your case heard at the IDOR, simply for the reason that you are losing an interest in a license – a means that helps you earn money.
All Illinois licenses (e.g., Lottery, Liquor) are subject to compliance with the state. If you are not compliant (sales tax returns filed and paid), you will eventually face revocation of your sales tax certificate and/or lottery license. Contact our firm if you are facing trouble with the IDOR.
Title 11: Alcohol, Horse Racing, and Lottery
Subtitle C: Lottery
Chapter II: Department of the Lottery
Part 1770 Lottery (General)
Section 1770.90 Delinquent Financial Obligations
a) Financial Obligations
It is the obligation of each Lottery sales agent to remain current on his or her financial obligations to the Department. Lottery accounts are due and owing, in full, each Wednesday, unless the sales agent has been notified by the Department of an alternate settlement day due to a bank holiday or other business disruption. Accounts not settled on the designated settlement day shall be deemed delinquent.
b) Sanctions for Delinquent Accounts
The Department will apply sanctions with respect to delinquent licensed sales agent accounts, according to the following schedule of sanctions:
1) First Delinquency
- If the delinquency is the first within the past 12 months:
- Payment must be delivered to one of the Department’s regional offices or wire transferred by:
- 4:00 p.m. next business day if reported before noon
- 10:00 a.m. second business day if reported after noon
- Payment must be delivered to one of the Department’s regional offices or wire transferred by:
- If paid on time:
- Only charged with one delinquency, no further sanction
- If not paid on time:
- Terminal(s) will be immediately deactivated
- Account referred to accounts receivable staff or regional office
- Reactivation only after review by the Department’s Chief Financial Officer (CFO) or designee
2) Second Delinquency
- If the delinquency is the second in the past 12 months:
- Terminal(s) will be immediately deactivated
- Reactivation occurs after payment unless:
- Second incident occurs within one month of the first
- Payment was made after the extended deadline
- In such cases:
- Reactivation only after CFO review
- Factors considered:
- History of delinquencies
- Financial status (e.g., credit report)
- Ability to provide security deposit, letter of credit, or bond
- Other relevant information
3) Subsequent Delinquencies
- If delinquency is:
- The second within 30 days
- Or the third or more in the past 12 months:
- Terminal(s) immediately deactivated
- Reactivation only after payment and CFO review
- Considerations same as above
c) License Suspension or Revocation
The Department may suspend or revoke a license at any stage after review if the Superintendent determines it is in the Lottery’s best interest. Evaluation includes:
- Review of delinquency circumstances
- Past delinquency history
- Determination between incidental errors and financial instability
d) Agent’s Responsibility
It is the agent’s responsibility to ensure all payments are properly prepared and submitted. Improper preparation is not a valid excuse for nonpayment.
e) Continued Liability
Deactivation, terminal removal, or license suspension/revocation does not relieve the agent of any financial obligations owed to the Department.
(Source: Amended at 36 Ill. Reg. 14356, effective September 14, 2012)
Frequently Asked Questions
Can my Illinois lottery license be revoked for unpaid sales tax?
Yes, if you fall behind on filing or paying your sales tax returns, the Illinois Department of Revenue (IDOR) may revoke your lottery license. Compliance with sales tax obligations is a condition for maintaining any Illinois license, including lottery and liquor licenses.
Will I have an opportunity to contest the revocation of my lottery license?
Yes, you are entitled to a hearing before the IDOR if your license is at risk of revocation. This process allows you to present your case and potentially retain your license, which is considered a means of earning a livelihood.
How quickly can the Illinois Lottery deactivate my terminal for unpaid obligations?
The Illinois Lottery can deactivate your terminal immediately after a missed payment deadline. The specific deadlines depend on when the delinquency is reported, with some requiring payment by the next business day and others by the second business day.
How does repeated delinquency affect my lottery license?
Repeated delinquencies escalate consequences. A second delinquency within 12 months or within 30 days of the first can result in immediate terminal deactivation and requires CFO-level review for reinstatement. Continued issues may lead to permanent license suspension or revocation.
Does losing my license or terminal relieve me of owed payments?
No. Even if your terminal is deactivated or your license revoked, you remain fully liable for all outstanding financial obligations to the Illinois Department of the Lottery.