(a) Responsibility for Lottery Tickets Received.
  (1) Except as otherwise expressly provided by this subsection or by §401.370 of this title (relating to Retailer's Financial Responsibility for Lottery Tickets Received and Subsequently Stolen or Lost), each retailer shall bear the risk of loss for all lottery tickets received. Receipt of tickets by a retailer shall constitute a purchase of such tickets, and each retailer shall be liable to the commission for the retail sales price of such tickets, less any applicable commission or credit.
  (2) A retailer may return full and complete packs of unactivated tickets in original condition and receive an accounting indicating that the packs have been removed from the retailer's inventory. Nothing in this subsection waives the requirements of §401.361 of this title (relating to Required Sales of Lottery Tickets).
  (3) A retailer must report damage to or destruction of tickets to the commission's lottery operations division through the retailer hotline as soon as reasonably practicable under the circumstances, but no later than three (3) weeks from the occurrence or event. A ticket is considered "damaged" or "destroyed" if rendered unsaleable through circumstances or events not the fault of the retailer.
  (4) Under the circumstances set out in this paragraph, the director may credit a retailer for activated tickets that are damaged or destroyed.
    (A) The director may credit a retailer's account for a range of activated tickets in a pack reported as damaged or destroyed providing:
      (i) no validations have occurred on tickets in the range reported as damaged or destroyed;
      (ii) the retailer has complied with paragraph (3) of this subsection;
      (iii) if the tickets were damaged or destroyed by fire, the retailer made a formal report of the fire to appropriate fire department authorities within 24 hours of the discovery of the fire, and has provided to the commission's lottery operations division a copy of a report by a Fire Marshal that identifies the location and the cause of the fire or the commission's lottery operations division has obtained written documentation from lottery operator field staff verifying the reported fire damage; or
      (iv) if the tickets were damaged or destroyed other than by fire, the retailer has provided to the commission's lottery operations division a copy of an insurance claim or a receipt for repairs that identifies damage at the retail location that is related to the damaged or destroyed tickets.
    (B) The director may not grant credit under subparagraph (A) of this paragraph in connection with more than two separate incidents in a twelve-month period.
(b) Responsibility for Winning Lottery Tickets Paid. After a retailer has paid a prize on a winning ticket, that retailer shall completely deface such ticket and render it physically incapable of being subsequently presented as a winning ticket. A retailer who has failed to deface such a winning ticket and render it physically incapable of being subsequently presented as a winning ticket shall pay to the commission the full amount of each subsequent prize that is paid on such ticket.
(c) Responsibility for Lottery-Related Property. Each retailer shall be financially responsible to the commission for all lottery-related property placed at the retailer's location.
(d) An "activated" pack of tickets is a pack of tickets that has been delivered to a retailer and that is shown as "active" in the lottery management system. An "unactivated" pack of tickets is a pack of tickets in "Available," "Issued" or "Confirmed" status in the lottery management system.

Source Note: The provisions of this §401.362 adopted to be effective February 5, 1997, 22 TexReg 955; amended to be effective May 20, 2001, 26 TexReg 3489; amended to be effective September 16, 2004, 29 TexReg 8809; amended to be effective November 19, 2008, 33 TexReg 9219; amended to be effective November 2, 2023, 48 TexReg 6353