(a) All moneys received from the sale of lottery tickets, keno, and from Internet ticket games, shall be accounted for to the State Treasurer and all net moneys shall be placed into a special account known as the State Lottery Fund. From the Fund, the Director shall first pay for the operation and administration of the lottery as authorized in this subchapter and thereafter shall pay as prizes not less than 45% on the average of the total amount of tickets which have been sold and are scheduled for sale throughout the games, which percentage shall include prizes already awarded or to be awarded. The total of payments for operations and administration of the lottery shall not exceed 20% of the gross amount received from the sales of such games. The remaining moneys shall accumulate in the State Lottery Fund for the payments of operations and administration costs and on a monthly basis, or more frequently if required by the Director, the lottery shall undertake to provide into the General Fund of the State a payment of earnings of 30% of the total revenues accruing from the sales of such games or shares shall be so dedicated. In the event that the percentage allocated for operations (including prize payments) generates a surplus, said surplus shall be allowed to accumulate to an amount not to exceed $1,000,000. On a quarterly basis, the Director shall report to the Secretary of Finance any surplus in excess of $1,000,000 and remit to the General Fund of the State the entire amount of those surplus funds in excess of $1,000,000. (b) All proceeds, net of proceeds returned to players pursuant to paragraph (b)(1) of this section, from the operation of the video lottery shall be electronically transferred daily or weekly at the discretion of the Lottery Director into a designated State Lottery account by the agent, and transferred to the State Lottery Fund by the Lottery on a daily or weekly basis and shall be applied as follows: (1) Proceeds returned to players. — A portion of such proceeds, but not less than 87% of the total proceeds on an average annual basis received from the operation of a video lottery, shall be retained by and returned to the players under rules prescribed by the Director. Proceeds returned to players in excess of the payout authorized pursuant to § 4805(a)(15) of this title shall be the sole responsibility of the video lottery agent and the State Lottery's proceeds shall not be reduced on account of such excess payment. Subject to the recommendations of the Lottery Director, and approval of the Secretary of Finance, a video lottery agent may choose to offer free promotional play to players. The amount of free promotional play permitted shall be recommended by the Lottery Director and approved by the Secretary of Finance. The amount of money given away as free promotional play and used by players shall not be included in the amounts remaining after all payments to players. If the amount of money given away as free promotional play by a video lottery agent and used by players exceeds the amount authorized by the Lottery Director and the Secretary of Finance authorized during a fiscal year, the video lottery agent shall reimburse net proceeds the amount of the overage which will be distributed as outlined in paragraphs (b)(3) and (b)(4) of this section. (2) Certain administrative and vendor costs. — The State shall retain a portion of such proceeds in an amount equal to 75% of all costs of equipment (both video lottery machines and related equipment), including video lottery machine license and proprietary fees, whether leased or owned by the State, used or under the control of such agent, the cost of the central computer used to monitor the equipment used by the agent, and related vendor fees, and from these proceeds, and the proceeds provided pursuant to paragraph (b) (4)a. of this section, remit these amounts to vendors. (3) a. Proceeds returned to the State. — Except as otherwise provided by this paragraph, of amounts remaining after all payments under paragraphs (b)(1) and (b)(2) of this section, there shall be returned to the State 42½%, less any qualified capital expenditure adjustment provided for in this paragraph. For licensees which conducted 40 or fewer (but at least 1) days of live harness horse races during 1992, should such licensees' video lottery proceeds, net of proceeds returned to players, at the end of any fiscal year fall below $107,500,000, then, in the subsequent fiscal year, there shall be returned to the State 41½% of amounts remaining after all payments under paragraphs (b)(1) and (b)(2) of this section, less any qualified capital expenditure adjustment provided for in this paragraph. 1. Beginning in fiscal year 2020, for each video lottery agent, the percentage of proceeds returned to the State shall be decreased by 2% if such video lottery agent's qualified capital expenditures equal or exceed 3% of video lottery agent net proceeds remaining after payments made under paragraph (b)(1) of this section for the calendar year ending the immediately preceding December 31. Notwithstanding the first sentence of this paragraph (b)(3)a.1. of this section, for calendar year ending December 31, 2018, only, qualified capital expenditures must equal or exceed 2.8%. 2. For purposes of this paragraph (b)(3)a. of this section, "qualified capital expenditures" means amounts properly characterized as capital expenditures under generally accepted accounting principles during each calendar year ending December 31 and apply to any facilities used by the video lottery agent in connection with its operations. "Qualified capital expenditures" does not include payments made for debt service. 3. Any amounts incurred or paid in any single year which exceed the 3% required for the adjustment under paragraph (b) (3)a.1. of this section may be carried forward for no more than 2 years, except that amounts used to reduce the license fee under § 4819(d)(2) of this title may not also be carried forward. b. The State shall also receive the funds on each credit slip that has not been presented for redemption within 1 year from the date the slip is issued. c. Application of funds retained by the state lottery. — The funds retained by the state lottery shall be applied as follows: first, to the administrative costs and expenses in respect of the video lottery including, but not limited to, administrative expenses including payroll and other employment costs attributable to the operation of the video lottery by the State Lottery Office, law-enforcement and security expenses, including payroll and other employment costs of the state lottery, the Office of the Attorney General and the Division of Gaming Enforcement, attributable to the operation by the state lottery of a video lottery; second, $1,000,000 or 1%, whichever is greater, of the proceeds returned to the State under this paragraph (b)(3), to the Division of Substance Abuse and Mental Health of the Department of Health and Social Services for funding programs for the treatment, education and assistance of compulsive gamblers and their families; third, costs of the Administrator of Racing and racing inspectors referenced in Chapters 100 and 101 of Title 3; fourth, the State's contribution to the Delaware Standardbred Breeder's Program and Delaware Certified Thoroughbred Program (DCTP); and fifth, the remainder shall be paid into the State's General Fund. d. The State's contribution to the Delaware Standardbred Breeder's Program pursuant to this subsection shall be $1,250,000, and said amount is to be allocated equally as of January 1 of the calendar year among existing licensees which conduct live harness horse racing, but moneys shall not be expended for the program until such time as a plan has been approved pursuant to paragraph (b) (4)b.2. of this section. The State's contribution to the Delaware Certified Thoroughbred Program (DCTP) pursuant to this subsection shall be $500,000, and said amount shall be allocated as of January 1 of each calendar year to the existing licensee which conducts live thoroughbred horse racing, but moneys shall not be expended for the program until such time as a plan has been approved pursuant to paragraph (b)(4)b.1. of this section. (4) Application of remaining proceeds. — The proceeds remaining after payments as set forth in paragraphs (b)(1), (2) and (3) of this section shall be applied as follows: a. Balance of administrative and vendor costs. — The State shall receive an amount equal to 25% of all costs of equipment (both video lottery machines and related equipment), including video lottery machine license and proprietary fees, whether leased or owned by the State, used or under the control of such agent, the cost of the central computer used to monitor the equipment used by the agent, and related vendor fees to be applied pursuant to paragraph (b)(2) of this section. b. Purses. — 1. For video lottery agents licensed only to conduct horse racing meets under Chapter 101 of Title 3 or Chapter 4 of Title 28, such agents shall be paid and shall pay additional purses (and related administrative expenses of the horse racing association) to be applied under the direction of the Delaware Thoroughbred Racing Commission, for races conducted at such agent's racetrack in accordance with § 10148 of Title 3 or § 427 of Title 28 as appropriate, in an amount calculated as follows: 9.6% of the proceeds remaining after payments made under paragraph (b)(1) of this section. Seven hundred fifty thousand dollars of those proceeds, which would otherwise fund purses, on an annual basis, shall fund a Delaware Certified Thoroughbred Program (DCTP) to enhance the quantity of thoroughbred foals and/or yearlings stabled within Delaware for a period meeting the Delaware minimum residency requirement. The DCTP shall be administered by a Board comprised of the following: A. Four members of the Delaware Thoroughbred Horseman's Association; B. One member designated by the video lottery agent licensed to conduct live thoroughbred horse racing meets under Chapter 101 of Title 3; C. One member appointed by the Speaker of the House of the General Assembly; D. One member appointed by the President Pro Tempore of the Senate of the General Assembly; E. The Secretary of Agriculture or the Secretary's designee; and F. The Secretary of Finance or the Secretary's designee. Members shall be chosen by the organizations they represent, and shall serve 4-year terms, except the 4 initial Board members selected by the Delaware Thoroughbred Horseman's Association shall serve an initial term of 2 years, and 4 years thereafter. The Board created hereunder must develop and present a plan for the administration of the DCTP no later than December 31, 2005. This plan and all subsequent plans amending the DCTP shall be subject to the written approval of the Secretary of Agriculture or the Secretary's designee, the Secretary of Finance or the Secretary's designee, and the Chairperson of the Thoroughbred Racing Commission or the Chairperson's designee. The Board shall transmit minutes and actions from all meetings to the Chairperson of the Delaware Thoroughbred Racing Commission within 10 days of the meeting. The Board shall submit an annual report detailing the allocation of such funds of the DCTP to the Commission and make available to the State Auditor such information as may be required to perform an annual audit of funds allocated from the DCTP. The Board may also, at its discretion, use funds from the DCTP for advertising, promotion, education and administrative purposes directly related to the program, however, the total amount for these purposes cannot exceed 5% of the total allocation. Funds dedicated to the DCTP shall not be subject to a 1-year payout requirement, but payouts may be dispersed throughout the year. 2. For video lottery agents licensed only to conduct harness racing meets under Chapter 100 of Title 3, such agents shall be paid and shall pay additional purses (and related administrative expenses of the horse racing association) to be applied under the direction of the Delaware Harness Racing Commission to purses for races conducted at such agent's racetrack in accordance with
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