Would anyone be willing to share standard practice for verification of lottery income(less than 50% of revenue)when exempting a phase II non-listed business - convenience store that sells lottery tickets? Do you require financial statements? Do you have the customer complete and sign documentation of the % of eligible and ineligible activities? I am trying to establish a consistent practice for a small community bank - of which I have recently been deemed Complaince/BSA/CRA/Risk Mangement Officer. HELP!

In our state, lottery agents are required to maintain a seperate account so it is easy to see gross lottery sales. We are fortunate that with our lottery customers we are able to see that it is a very minor portion of their overall business. I document this in our annual exemption review for the customer and so far auditors and examiners have been happy with this process.