AB 864

This bill makes various changes to the state lottery. Under current law, the state lottery is an enterprise in which a player, by purchasing a ticket, is entitled to participate in a game of chance in which any of the following applies: 1) the ticket is evidence of the numbers or symbols selected by the player or selected randomly by a computer, and the player becomes entitled to a prize if the player’s ticket is randomly selected by a computer at the time of the ticket’s purchase or if the ticket is selected in a chance drawing or 2) the winning tickets are randomly predetermined, and the player reveals preprinted numbers or symbols from which it can be immediately determined whether the ticket is a winning ticket entitling the player to win a certain prize.

The games described in item 1 are commonly known as the lotto, and the bill defines the term “lotto game” to mean a state lottery game that is played, revealed, or displayed on a preprinted digital or physical ticket and that is identified as a “lotto game” in the Lottery Division of the Department of Revenue’s published features and procedures for the game. The games described in item 2 are commonly known as instant games or scratch-off games and include some games commonly known as pull-tab games. The bill creates definitions for these games as follows: An “instant game” is defined in the bill to mean a state lottery game, commonly known as a scratch-off game, that is played, revealed, or displayed on a preprinted digital or physical ticket and that is identified as an “instant game” in the Lottery Division’s published features and procedures for the game. A “break open game” is defined in the bill to mean a state lottery game, commonly known as a pull-tab game, that is played, revealed, or displayed on a preprinted digital or physical ticket and that is identified as a “break open game” in the Lottery Division’s published features and procedures for the game.

Under current law, funds are appropriated to DOR to pay vendors for certain procurements related to “on-line and instant ticket services and supplies,” which together include “on-line” (or “lotto”) game and instant game lottery products and their associated services, including technologies necessary to maximize the state lottery revenues and minimize the state lottery’s total operating costs. The bill directs that DOR may use the appropriated funds for services and supplies related to instant games, break open games, and lotto games, including tickets for those games and technologies necessary to maximize the state lottery revenues related to those games and minimize the state lottery’s total operating costs related to those games.

Under current law, DOR must pay to a lottery retailer basic compensation ranging from 5.5 to 6.25 percent of the retail price of state lottery tickets sold by the retailer, and DOR can pay an additional amount to a retailer that meets certain performance goals identified by DOR. The bill requires DOR to pay lottery retailers a basic compensation of 5.5 percent of the retail price of sold lotto game tickets, 6.25 percent of the retail price of sold instant game tickets, and 15 percent of the retail price of sold break open game tickets. The bill also increases the additional amount that DOR can pay to retailers that meet certain performance goals for the sale of break open game tickets.

Also under current law, contracts between DOR and lottery retailers generally must be for a period of three years. The bill increases that period to five years. Also under current law, no lottery retailer contract may be entered into with a person that has been adjudged delinquent in the payment of certain taxes or that owes certain employment payments. The bill exempts from this prohibition lottery retailers who, through an approved payment plan, are paying off the amount owed.

Under current law, the administrator of the Lottery Division is responsible for meeting statutory requirements for the payment of lottery ticket winnings. The bill creates a requirement that, unless otherwise directed and paid in a manner approved by the administrator, retailers are responsible for the payment of break open game winnings and that break open game winnings must be requested and paid to the winner on the date and at the location where the break open game ticket was purchased.