You should call your state's lottery commission and ask about their account requirements for vendors. Any conditions are normally reflected in the vendor's contract with the commission, not law or regulation. They should be glad to help you. If you want advice from other bankers, you might want to re-post in your state's forum - the requirements vary from state to state.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.