Chapter 1 General Government - The California Performance Review

The California Performance ReviewScratchers ® game in 2003 and it has become the top-selling Scratchers ® game grossing over $3million per week. For the entire Scratchers ® product category, sales through the first fivemonths of this fiscal year are about $20 million higher than for the same period last year dueprimarily to the new bingo game. 15Attempts to change the lawThere have been two unsuccessful attempts to change the law to allow the lottery to pay outmore in prizes. There have not been any attempts, however, to change the law to allow thelottery to offer banked games. Prior legislation initially intended to eliminate all game themerestrictions was amended to just eliminate the restriction against the use of the bingo-theme, asnoted above.SB 930 was introduced in the 2001 legislative session and SB 329 was introduced in the 2003legislative session. Both of these bills would have increased the percentage of gross lotteryrevenues allocated to prizes by reducing the percentage allocated to education andadministration. SB 329 also had a sunset clause and it guaranteed that education wouldcontinue to receive at least $1 billion dollars per year from the lottery. The California Teacher’sAssociation (CTA) opposed both of these bills and neither one made it out of the Legislature.Assembly Bill 2938 is under consideration in the current legislative session. This bill wouldallow increasing allocations to payouts to 62 percent, reducing allocations to education to25 percent and reducing allocations to administration to 13 percent. Like SB 329, it has a sunsetclause and a $1 billion dollar guarantee to education. CTA has already expressed itsopposition to this bill. 16The bottom lineCalifornia lottery players, retailers and, most importantly, its public schools, all stand to gainfrom changing state laws that restrict the lottery’s ability to increase sales. These changes arenot only consistent with the mandated purpose of The Lottery Act as approved by the voters,they represent the only risk-free way to ensure that lottery dollars to education will notactually decrease. These changes are also less controversial than other revenue generatingopportunities, such as allowing the lottery to operate Video Lottery Terminals (electronic slotmachines).RecommendationThe Governor should work with the Legislature to change state law to allow the CaliforniaLottery to pay out more in prizes, offer banked games and games with popular themes.A Government for the People for a Change 33