(A)(1) Upon the theft of instant tickets, a lottery retailer shall report immediately the theft to both the local law enforcement authority and to the commission‘s division of security.

(2) If tickets are stolen before the book is activated, and no tickets within the book have been sold:

(a) the lottery retailer must be charged a nonrefundable service fee for each incident in an amount determined by the commission to cover its costs only, so long as the name of the local law enforcement agency contacted and the assigned case number are furnished promptly to the commission;

(b) if the name of the local law enforcement agency and the assigned case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, the commission shall charge the lottery retailer in accordance with subsection (3)(b).

(3) If tickets are stolen after the book has been activated or tickets within the book have been sold:

(a) a lottery retailer must be charged the net sales value (retail sales value less commission) for each book, less the low tier prize values of stolen tickets not paid at the time of the incident, so long as the lottery retailer furnished the name of the local law enforcement agency and the assigned case number to the commission;

(b) if the name of a law enforcement agency and case number are not provided to the commission within thirty calendar days after the discovery by the lottery retailer of the theft, credit for the unpaid low tier prizes must not be given and the lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4) The commission shall adjust charges described in item (3) for the following reasons:

(a) the commission shall charge a lottery retailer the low tier prize value of tickets that are presented to the commission as claims subsequent to the date of the incident. The commission shall determine which prizEs must be subsequently paid based upon the facts of the incident, and that amount must be charged to the lottery retailer;

(b) the commission shall provide credit for recovered stolen tickets as follows:

(i) the net sales value of the tickets recovered must be compared to the total value of the uncashed low tier prizes for each book of tickets. The lottery retailer shall receive credit for the greater of these two values;

(ii) recovered tickets must be returned to the commission by the declared end of game redemption deadline or one hundred eighty days from the date of the incident, whichever is later. The game, book, and ticket number must be legible on each ticket for the lottery retailer to receive credit. If tickets are being held as evidence in a criminal investigation by a law enforcement agency, the commission shall accept a property report from that agency by the declared end of the game redemption deadline or one hundred eighty days from the date of the incident, whichever is later, detailing the game, book, and ticket number or Void If Removed Number (VIRN) for the tickets being held, as documentation to provide credit;

(iii) recovered scratched tickets may be accepted for credit only if that condition of the tickets is identified in documentation provided to the commission by the local law enforcement agency;

(iv) the lottery retailer shall receive no credit for recovered tickets that have been validated; and

(v) the commission shall determine the credits provided based upon the facts of the incident, and that amount must be credited to the lottery retailer.

(5) Books reported to the commission as stolen must be marked in the commission’s records to prevent validation and payment of prizes within the book.

(B)(1) Upon the loss or damage of instant tickets, a lottery retailer immediately shall report the loss or damage to both the local law enforcement authority and to the commission’s division of security.

(2) If tickets are damaged before the book is activated, no tickets within the book are sold, and all tickets in the book are returned to the commission, a lottery retailer must not be charged a service fee. If tickets are lost before the book is activated and no tickets within the book have been sold, a lottery retailer must be charged a nonrefundable service fee of twenty-five dollars for each incident for up to four books and five dollars for each book over four books.

(3) If tickets are lost or damaged after the book is activated or if tickets within the book are sold, a lottery retailer must be charged the net sales value (retail sales value less commission) for each book.

(4) Upon the written approval by the commission, the commission shall provide credit for recovered lost or damaged tickets for the net sales value of the tickets recovered.

(a) To receive approval, the lottery retailer shall provide the facts of the incident in writing to the commission for consideration.

(b) The written request and recovered tickets must be returned to the commission by the redemption deadline and the game, book, and ticket number must be legible on each ticket in order for the lottery retailer to receive credit.

(c) Scratched tickets must not be accepted for credit. A scratched ticket is one that in the commission’s judgment has been compromised as to the security and integrity of the ticket due to removal of latex.

(d) Tickets identified as validated before the recovery result in no credit to the lottery retailer.

(5) Books reported to the commission as lost or damaged must be marked as such in the commission’s records to prevent validation and payment of prizes within the book.

(6) In the event of acts of God, occurrences of nature, or other natural disasters, the commission may waive the requirements of this subsection.