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This entry was published on 2014-09-22
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Certification of prize winners; payment of prizes
§ 1613. Certification of prize winners; payment of prizes. a. It shall
be the duty of the director to require that all prizes over five
thousand dollars in any game be awarded to holders of winning tickets
for that game as provided in this section and section sixteen hundred
fourteen of this article. Within one week after any drawing or selection
of prize winning lottery tickets, the division shall deliver to the
comptroller a certified list of the tickets to which prizes are awarded
and the amount of each such prize. Upon receipt of such certified list
and voucher of the division, moneys sufficient for the payment of such
prizes shall be paid to the division from the lottery prize account,
upon audit and warrant of the comptroller. Moneys for the payment of
lottery prizes shall be deposited by the director as provided in section
sixteen hundred eleven of this article and the withdrawal of such moneys
for the payment of prize winners shall be subject to a check signed by
the director or such officers or employees of the division as the
director may designate. The division shall each month provide the
comptroller with a record of all such withdrawals from the director's
accounts. Payment of prizes shall be made by the division to holders of
the tickets to which prizes are awarded, except that payment of any
prize drawn may be paid to the estate of a deceased prize winner, may be
paid pursuant to a court order granted as a result of a proceeding as
provided in subdivision d of this section, and except that any person
pursuant to an appropriate judicial order may be paid the prize to which
the winner is entitled. The division shall be discharged of all further
liability upon payment of a prize pursuant to this subdivision.

b. If the person entitled to a prize on any winning ticket is under
the age of eighteen years, and such prize is less than five thousand
dollars, the division may make payment by delivery to an adult member of
the minor's family or a guardian of the minor of a check or draft
payable to the order of such minor. If the person entitled to a prize on
any winning ticket is under the age of eighteen years and if such prize
is five thousand dollars or more, the division may make payment to such
minor by depositing the amount of the prize in any financial institution
to the credit of an adult member of the minor's family or a guardian of
the minor as custodian for such minor. The person so named as custodian
shall have the same duties and powers as a person designated as a
custodian in a manner prescribed by part six of article seven of the
estates, powers and trusts law, and for purposes of this section the
terms "adult", "member of a minor's family", and "guardian" and
"financial institution" shall have the same meaning as in said part of
said law. The division shall be discharged of all further liability upon
payment of a prize to a minor pursuant to this subdivision.

c. 1. Notwithstanding any inconsistent provision of law, the director
may award and pay a "Lotto" prize to a claimant without a winning
ticket, if:

(i) the claimant has filed a perfected claim therefor;

(ii) the perfected claim is for a first prize in excess of five
million dollars;

(iii) at least one year has elapsed since the date of the drawing for
which the prize is claimed;

(iv) no other perfected claim has been filed therefor; and

(v) the perfected claim has been authenticated by the division.

2. For purposes of this section, a "perfected claim" shall consist of
a written request that the prize be awarded and paid to the claimant,
accompanied by:

(i) a "Players Copy" of a claim validation report showing that the
original winning lottery ticket was produced by the on-line lottery
computer system at the same time and place as the validation of a
previous first-prize claim in the "Daily Numbers" game;

(ii) "Lotto" play cards bearing the same number combinations as were
played at such time and place immediately before or immediately
following the validation of such "Daily Numbers" first prize claim;

(iii) a written statement from the licensed lottery sales agent
stating that the agent believes the missing ticket was sold to the

(iv) a verified written statement explaining the circumstances under
which the winning ticket was lost; and

(v) a filing fee of one hundred dollars.

3. Within thirty days of the receipt of a perfected claim, the
division shall attempt to authenticate it by comparing it to the records
of the division, including electronic information provided by its
on-line service provider. A perfected claim may be deemed
"authenticated" if:

(i) the "Players Copy" and "Lotto" play cards included therewith
correspond to the records of the division; and

(ii) none of the information included in the perfected claim is
contradicted by the records of the division.

4. The director may promulgate rules and regulations to implement the
provisions of this subdivision.

d. 1. The right of any person to receive payments under a prize that
is paid in installments over time by the division may be voluntarily
assigned, in whole or in part, if the assignment is made to a person or
entity designated pursuant to an order of the supreme court of the
county where the assigning prize winner resides or where the
headquarters of the division is located. A court may issue an order
approving a voluntary assignment and directing the division to make
prize payments in whole or in part to the designated assignee, if the
court finds that all of the following conditions have been met:

(i) The assignment is in writing, is executed by the assignor, and is,
by its terms, subject to the laws of this state.

(ii) The purchase price being paid for the payments being assigned
represents a present value of the payments being assigned, discounted at
an annual rate that does not exceed ten percentage points over the Wall
Street Journal prime rate published on the business day prior to the
date of execution of the contract.

(iii) The contract of assignment expressly states that the assignor
has three business days after the contract was signed to cancel the

(iv) The assignor provides a sworn affidavit attesting that he or she:

(A) Is of sound mind, is in full command of his or her faculties, and
is not acting under duress;

(B) Has been advised regarding the assignment by his or her own
independent legal counsel, who is unrelated to and is not being
compensated by the assignee or any of the assignee's affiliates, and has
received independent financial or tax advice concerning the effects of
the assignment from a lawyer or other professional who is unrelated to
and is not being compensated by the assignee or any of the assignee's

(C) Understands that he or she will not receive the prize payments or
portions thereof for the years assigned;

(D) Understands and agrees that, with regard to the assigned payments,
the division and its officials and employees will have no further
liability or responsibility to make the assigned payments to him or her;

(E) Has been provided with a one-page written disclosure statement
setting forth, in bold type of not less than fourteen points, the
payments being assigned, by amounts and payment dates; the purchase
price being paid; the rate of discount to present value, assuming daily
compounding and funding on the contract date; and the amount, if any, of
any origination or closing fees that will be charged to him or her; and

(F) Was advised in writing, at the time he or she signed the
assignment contract, that he or she had the right to cancel the
contract, without any further obligation, within three business days
following the date on which the contract was signed.

(v) Written notice of the proposed assignment and any court hearing
concerning the proposed assignment is provided to the division's counsel
at least thirty days prior to any court hearing. The division is not
required to appear in or be named as a party to any such action seeking
judicial confirmation of an assignment under this subdivision, but may
intervene as of right in any such proceeding.

2. A certified copy of a court order approving a voluntary assignment
must be provided to the division no later than thirty days before the
date on which the payment is to be made.

3. A court order obtained pursuant to this section, together with all
such prior orders, shall not require the division to divide any single
prize payment among more than three different persons. Nothing in this
section shall prohibit substituting assignees as long as there are no
more than three assignees at any one time for any one-prize payment.

4. If a husband and wife are co-owners of a prize, any assignment of
the prize must be made jointly.

5. A voluntary assignment may not include portions of payments that
are subject to offset on account of a defaulted or delinquent child
support obligation, non-wage garnishment, or criminal restitution
obligation or on account of a debt owed to a state agency. Each court
order issued under paragraph one of this subdivision shall provide that
any delinquent child support or criminal restitution obligations of the
assigning prize winner and any debts owed to a state agency by the
assigning prize winner, as of the date of the court order, shall be set
off by the division first against remaining payments or portions thereof
due the prize winner and then against payments due the assignee.

6. The division and its respective officials and employees shall be
discharged of all liability upon payment of an assigned prize under this
subdivision. The assignor and assignee shall hold harmless and indemnify
the division, the state of New York, and its employees and agents from
all claims, actions, suits, complaints, and liabilities related to the

7. The division may establish a reasonable fee to defray any
administrative expenses associated with assignments made under this
subdivision, including the cost to the division of any processing fee
that may be imposed by a private annuity provider. The fee amount shall
reflect the direct and indirect costs associated with processing

8. If at any time the Internal Revenue Service or a court of competent
jurisdiction issues a determination letter, revenue ruling, other public
ruling of the Internal Revenue Service, or published decision to the
division or to any lottery prize winners declaring that the voluntary
assignment of prizes will affect the federal income tax treatment of
prize winners who do not assign their prizes, the division shall
immediately file a copy of that letter, ruling, or published decision
with the attorney general, the secretary of state, and the
administrative office of court administration. A court may not issue an
order authorizing a voluntary assignment under this subdivision after
the date any such ruling, letter, or published decision is filed.

9. A contract of assignment in which the assignor is a lottery winner
shall include a sworn affidavit from the assignee. The form of the
affidavit shall include:

(i) A summary of assignee contacts with the winner;

(ii) A summary of any law suits, claims, and other legal actions from
lottery winners regarding conduct of the assignee or its agents;

(iii) A statement that the assignee is in good standing in its state
of domicile and with any other licensing or regulatory agency as may be
required in the conduct of its business;

(iv) A brief business history of the assignee;

(v) A statement describing the nature of the business of the assignee;

(vi) A statement of the assignee's privacy and non-harassment policies
and express affirmation that the assignee has followed those policies in
New York.

10. The assignee shall notify the division of its business location
and mailing address for payment purposes during the entire course of the
assignment. The division shall be discharged of all further liability
upon payment of a prize pursuant to this subdivision.