BILL ANALYSIS Ó
SB 817
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Date of Hearing: June 12, 2013
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
SB 817 (Committee on Governmental Organization) - As
Introduced: March 14, 2013
SENATE VOTE : 34-0
SUBJECT : California State Lottery: drawings
SUMMARY : Allows the California State Lottery (Lottery) to
provide for witnessing of out of state lottery drawings via live
audio and video feed. Specifically, this bill :
1)Permits the independent lottery contractor to witness drawings
in person or via live audio and video feed, and the equipment
used in the drawings to be inspected in person or via live
audio and video feed by the independent lottery contractor and
an employee of the Lottery both before and after the drawings.
EXISTING LAW
1)The California State Lottery Act of 1984 (Act), an initiative
measure, authorizes the California State Lottery and provides
for its operation and administration by the California State
Lottery Commission and the Director of the California State
Lottery, with certain limitations.
2)The Act provides that none of its provisions may be changed
except to further its purpose by a bill passed by a 2/3 vote
of each house of the Legislature and signed by the Governor.
3)Requires that, except for computer automated drawings, lottery
drawings shall be witnessed by an independent lottery
contractor, and that any equipment used in the drawings is
inspected by the independent lottery contractor and an
employee of the lottery both before and after the drawings.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill : The State Lottery is sponsoring this bill
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in an effort to operate more efficiently without compromising
security and integrity. According to the Lottery, having the
option to witness and inspect via live audio and video feed
would serve the same purpose as having Lottery representatives
physically present at the draws, but without the expense and
unnecessary duplication of efforts and repetitive reporting.
The Lottery states that security measures and written draw
procedures for multi-state games have been fully reviewed and
vetted to ensure their compliance with California's strict
standards. In addition, out-of-state draws are conducted by
highly skilled and professional employees of the state lottery
where the draw occurs, along with an independent contractor that
oversees draws and inspects all draw equipment. The Lottery
plans to continue to have its own statistician analyze all
pre-tests and draws to ensure that the numbers are selected
randomly.
The Lottery further states that this bill will put California on
par with other state lotteries' draw procedures. It notes that,
with the exception of California and Texas, all the other 42
jurisdictions that participate in the Mega Millions and
Powerball do not require the physical presence of their own
employees and independent contractors at out-of-state draws.
The State Lottery believes that the bill would save the State of
California about $140,000 annually.
Background : The State Lottery currently requires Lottery
employees and independent contractors to personally witness each
draw and to inspect draw equipment both before and after each
draw.
In compliance with current law, the Lottery employs two
part-time intermittent employees and independent contractors who
witness and inspect out-of-state draws for Mega Millions, a
multi-state lottery game where draws are conducted in Georgia
two times a week. These employees are Georgia residents.
The Lottery Commission recently approved California entering a
second multi-state game, Powerball, which conducts draws two
times per week in Florida. Strictly speaking, the Lottery is
therefore required to hire additional employees and another
independent contractor, who reside in Florida, to witness draws
and inspect equipment in Florida.
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State Lottery Act of 1984 : The Lottery was created by a ballot
measure, Proposition 37, which was approved by 58 percent of
voters on Nov. 6, 1984. The Act gave the Lottery a clear
mission: to provide supplemental funding for public schools and
colleges.
Initially, the Act capped administrative expenses at 16 percent
of sales and required that 34 percent of sales go to education.
In April 2010, the Legislature passed Assembly Bill 142
(Hayashi), which changed the Lottery's funding formula to follow
best practices. AB 142 limits administrative expenses to 13
percent of sales, while requiring that 87 percent of sales go
back to the public in the form of prizes and contributions to
education. The law gives the Lottery the flexibility to pay out
a higher percentage of its revenues in prizes than it has in the
past, but only if it does so in a way that increases the total
amount of money that goes to public schools and colleges.
The Act specifies that the Lottery is to be operated and
administered by a Commission appointed by the Governor. The
Legislature has the authority to amend the Act if, by doing so,
it furthers the purposes of the Act.
REGISTERED SUPPORT / OPPOSITION :
Support
California State Lottery (Source)
Opposition
None
Analysis Prepared by : Felipe Lopez / G. O. / (916) 319-2531
SB 817
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