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Gross proceeds from the above lotteries, after certain
“instant” payoffs were distributed to players, were deposited and
maintained in a separate bank account owned by Lucky. Large
payoffs to players were paid out by Lucky after the lottery
proceeds had been deposited into the bank account. For the Keno
lotteries held in 1995 and 1996, total payoffs to players
exceeded $2 million.
After obtaining the nonassignable right to establish Keno
lotteries, Lucky entered into contracts with various site
organizations (e.g., Eagles Lodges and Koala Clubs) relating to
the lotteries to be established within certain municipalities on
property owned by the site organizations. Under these contracts,
Lucky agreed to provide all equipment, materials, and supplies
needed for operation of the Keno lotteries, to provide the
appropriate training, and to pay the site organizations a fee of
6 percent of Lucky’s 14-percent share of the lottery proceeds.
The site organizations agreed to provide some personnel to
assist in operation of the lotteries, to provide Lucky with daily
reports of the lotteries, and to obtain liability and property
insurance relating to the lotteries.
All of the equipment, materials, and supplies provided by
Lucky that were used in the Keno lotteries remained the property
of Lucky, and brochures used to advertise the Keno lotteries
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Last modified: May 25, 2011