Chapter 1 General Government - The California Performance Review

The California Performance ReviewExhibit 2 17Revenue Changes Due to the Introduction of a Multi-State Lottery GamePick 3 Cash 5 Lotto Overall Change Due to Multi-State LotteryArizona N/A –23.0 % –41.0% +8.0%Georgia +6.6% –0.9% –18.0% +7.0%Louisiana +1.0% N/A –14.0% +78.0%Michigan +5.0% –18.0% –24.0% +12.0%New Jersey –1.0% –17.0% –32.0% +14.0%Sources: Texas State Comptroller survey and Multi-State Lottery Association.Exhibit 3 18Percentage Change in Online Games for the Most Populous States (all Mega Millions)State Pick 3 Cash 5 Lotto OverallIllinois –4.23% N/A –20.45% –2.35%Georgia +6.60% –0.90% –17.80% +7.20%Michigan +4.93% –18.00% –23.61% +12.34%New Jersey –1.10% –16.82% –32.18% +13.98%Virginia –2.96% –2.41% –28.11% –2.61%Average +0.65% –12.71% –24.43% +5.71%Source: Texas State Comptroller surveyNeighboring statesDespite gaming opportunities in neighboring states such as Oregon and Nevada, AnthonyMolica, former Chief Executive Officer of the California Lottery Commission, predicts thatmany residents from these states would cross the border to play Mega Millions and othergames if California joins these multi-state lotteries. According to Mr. Molica, the largestCalifornia Lottery retailers are near the Oregon border, at Lake Tahoe and at Baker, the firstCalifornia town after leaving Las Vegas. Baker alone, for example, generates $6 million peryear in revenue, mostly from Nevada residents. 19Possible barriers to California’s participation in a multi-state lotteryThere are two possible barriers to joining a multi-state lottery that must be evaluated by theLottery Commission. The most important is the issue of pari-mutuel games vs. banked games.The California Lottery Act, as interpreted by the California Supreme Court, requires that theA Government for the People for a Change 25