Yes, customers that sell lottery tickets (such as gas stations and convenience stores) are required to segregate lottery proceeds from other business funds under Illinois administrative rules for the state’s lottery.

In addition, your customers’ contracts with the Illinois Lottery likely require them to maintain segregated trust accounts. The Illinois Lottery Retailer Agreement states that a retailer that sells lottery tickets must “segregate from all of its other business receipts and funds and hold in trust all proceeds from Lottery sales, which the Retailer will deposit in a separate Lottery trust fund account . . . .”

For resources related to our guidance, please see:

• 11 Ill. Adm. Code 1770.60(t) (“All Lottery proceeds are funds of the State of Illinois, must be segregated from other business or personal funds, must be held in trust on behalf of the Illinois Lottery, and the licensed sales agent must, under penalty of law, maintain a separate bank account exclusively for deposit and transfer of weekly Lottery fund settlements by means of an Electronic Fund Transfer system.  The account must be designated on the bank’s records as ‘Lottery Trust Fund Account.’”)

• Illinois Lottery, Retailer Agreement for Sale of Lottery Tickets, page 2 (“A. The Retailer will segregate from all of its other business receipts and funds and hold in trust all proceeds from Lottery sales, which the Retailer will deposit in a separate Lottery trust fund account in a bank or other financial institution from which the Retailer will pay to the Lottery, on time, the full amount due the Lottery in accordance with the procedures established by the Lottery. These proceeds must be kept separate and apart from other business or personal funds or accounts and must be segregated as a trust fund on behalf of the Lottery.”)