California State Lottery
The California State Lottery began in October 1985 after voters authorized it in Proposition 37, the California State Lottery Act of 1984. It offers a range of games including number draws, scratchcards and a mock horse race. The earnings provide supplementary funding for public education.
Lottery Act
The Lottery Act was intended to provide more money to schools without imposing extra taxes. Accordingly, the Lottery was required to provide at least 34% of its revenues to public education, supplementing other funds provided by California. Another 50% of its revenues must be paid to the public in the form of prizes, making a mandated minimum of 84% of all funds that must be given back to the public in the form of prizes or funds for public education. The remainder, a maximum of 16%, was to be spent on administration, such as salaries and running the games.On April 8, 2010, Governor Arnold Schwarzenegger signed into law . Amending the Lottery Act, this bill reallocates Lottery revenues "so as to maximize the amount of funding allocated to public education." As an urgency statute, this bill took effect immediately. The new allocation increased to at least 87% the portion of Lottery revenue returned to the public, and correspondingly decreased to a maximum of 13% the amount spent on administration. It then specified that "not less than 50% of the total annual Lottery revenues, in an amount to be determined by the commission, be returned to the public in the form of prizes." This leaves "the commission to establish the percentage to be allocated to the benefit of public education at a level that maximizes the total net revenues allocated to the benefit of public education." It also imposed requirements "to ensure continued growth in Lottery net revenues allocated to public education", with annual procedures that would, "in any one of the first 5 full fiscal years after the enactment of this measure,... provide for the repeal of the changes made by this measure on the following January 1, and the prior law to be restored", if those requirements were not then met. This bill follows the practice of "other large state lottery systems, including Texas, North Carolina, and Florida, which have shown an increase in revenue through similar changes."
Commission
The Lottery Act mandates a five-member commission, appointed by the governor, to "oversee the Lottery and the Director" and make quarterly reports "to the Governor, the Attorney General, the Controller, the Treasurer, and the Legislature." Annually the commission selects a chairperson. Regular meetings of the commission are held at least quarterly and are open to the public. On January 29, 1985, Gov. George Deukmejian appointed the first Lottery commissioners: William Johnston, Laverta Montgomery, John Price, Howard Varner, and Kennard Webster. Deukmejian appointed the first director, Mark Michalko, formerly Ohio Lottery legal counsel, in May 1985. On 12 March 2012, Governor Jerry Brown appointed Gregory J. Ahern to the commission, who was also elected as Sheriff of Alameda County in 2006.History
The Lottery Act of 1984 was presented to voters in November of that year as a ballot proposition, Proposition 37, and passed with 58% of the vote. On January 29, 1985, Gov. George Deukmejian appointed the first Lottery commissioners: William Johnston, Laverta Montgomery, John Price, Howard Varner, and Kennard Webster. The Act mandated an extremely tight timeline for establishing the Lottery and bringing it to operational status. To comply, the state government immediately built the Lottery's original headquarters in only three months in the Richards neighborhood of Sacramento. Governor Deukmejian appointed the Lottery's first director, Mark Michalko, formerly Ohio Lottery legal counsel, in May 1985. The first lottery games were Scratchers; sales began on October 3, 1985. A weekly Lotto game began a year later on October 14, 1986. Games hosted by the California Lottery include MEGA Millions, Super Lotto Plus, Fantasy 5, Daily 4, Daily 3, Daily Derby, and Scratchers.In 1996, as a result of a lawsuit by a pachinko parlor and an association of owners and trainers of race horses, the Supreme Court of California unanimously struck down the lottery's implementation of keno, ruling that it was a house-banked game, not a lottery game, which at that time was illegal anywhere in California. In her opinion for the court, Associate Justice Kathryn Werdegar explained that the California Penal Code and case law interpreting the Penal Code have traditionally distinguished between a "lottery" and a "banked game" or "banking game", and it was the intent of the state electorate in enacting the Lottery Act to allow only a "lottery". In a true "lottery", the players play against each other; in a "banked game", they play each other and against the house. The critical distinction between the two is that a bank in a "banked game" can be broken based purely upon whether each of the individual bets is won or lost; the house unconditionally promises to pay prizes on all winning bets with no maximum ceiling. The high court explained that while this definition of a lottery does not prohibit fixed-prize lotteries, such lotteries are valid only if the total prize amount and the maximum number of fixed prizes to be won are fixed before the draw. Subsequently, California Attorney General Dan Lungren also ruled that Daily 3, which at the time had fixed payouts, also was illegal because it created an interest on the part of the state that fewer people should win, contrary to a lottery where the operator has no stake in the outcome of the draw. In response to these rulings, the Lottery modified Keno and created Hot Spot, which has a pari-mutuel payout format, and modified Daily 3 to a pari-mutuel format where payouts vary depending on the number of individuals who picked the winning numbers.
California joined Mega Millions on June 22, 2005; it became the 12th jurisdiction to offer the game, and the last to join before the 2010 cross-sell expansion with Multi-State Lottery Association. A Mega Millions drawing was held in Hollywood to commemorate the event.
In September 2011, the California Lottery moved into a new $58 million headquarters at 700 North 10th Street right next to the old one, which was promptly demolished. Because the original headquarters was built in a frantic 90-day rush to comply with the Lottery Act, it suffered from numerous construction defects in the roof, foundation, and elevator, as well as a mold problem.
California, while initially never desiring to offer Mega Millions's rival Powerball, was briefly a member of the MUSL because an "international" lottery game that would have included a number of US lotteries was planned; however, the game never came to fruition. However, in February 2012 the California Lottery initiated an impact analysis of the Powerball game, in preparation for a recommendation in July 2012. Subsequently, the Fiscal Year 2012–2013 Business Plan included funding for a launch of Powerball within the fiscal year, with Powerball launching in California on April 8, 2013. As a result of the California Supreme Court's decision, California is the only state with variable payouts for both games.
Current draw games
In-house draw games
Daily 3
Playing Daily 3 involves picking three digits 0 through 9 and a playstyle. Bettors can choose Quick Pick to have the numbers picked randomly by computer. The playstyle choices are straight box, or straight/box. The game costs $1 per play, per draw, and the Advance Play option allows up to 14 consecutive draws. There are two draws every day, televised at 1:29pm and 6:59pm.Daily 4
A "pick 4" type game premiered on May 19, 2008. Each play costs $1 and drawings are held once per day. Playstyles, like "Daily 3".Daily Derby
Daily Derby is a mock horse racing game. Players choose three horses out of 12, one each to finish first, second and third ; players also choose a race time from 1:40:00 to 1:49:99, by marking the last three digits of the time on the playslip. Alternately, players can select Quick Pick to have the computer choose the horses, the race time, or both. Daily Derby also offers Advance Play for up to 14 consecutive draws. The game costs $2 per play, per draw; held daily at 6:35pm and televised at 6:59pm.Fantasy 5
Fantasy 5 players choose five numbers from 1 through 39. A ticket includes up to five sets of numbers; they can be played up to 12 drawings. Games cost $1 per play. Fantasy 5 is drawn evenings at 6:35pm and televised at 6:59pm. The starting jackpot ranges between $60,000 and $80,000. Players can win by matching 2, 3, 4, or all 5 numbers in any order with the numbers selected on their fantasy 5 tickets.A player who bought a $5 Fantasy 5 ticket used to get a coupon to mail in for a "second-chance" drawing to be on the Make Me a Millionaire show, or to play the Dream Machine on the first TV show, The Big Spin. That drawing was cancelled in July 2010 and now players receive a "second-chance" coupon with a twenty digit code. Players can enter those codes at www.calottery.com/fan5 to be entered into a weekly drawing for a cash prize ranging from $1,000 to $10,000.
SuperLotto Plus
SuperLotto Plus is a lotto game played in the style of Mega Millions and Powerball. SuperLotto Plus is drawn every Wednesday and Saturday. The game began in 1986 as Lotto 6/49, then changed to SuperLotto somewhere in the 90s. In 2000, the name was changed to SuperLotto Plus. Its starting jackpot is $7 million ; a cash option is available for jackpot winners. SuperLotto Plus players choose five numbers from 1 through 47, and one Mega Ball number from 1 through 27.While the cash option usually is chosen, the SuperLotto Plus annuity is graduated. The advertised annuity jackpot represents a 30-payment graduated annuity stream, with the graduated payments beginning at 1.51% of the jackpot amount and rise exponentially such that the final payout is 6.20% of the advertised jackpot amount. Prior to 2013, the first payment was 2.5% of the annuity value of the jackpot, with the second installment 2.7%. The remaining 24 payments increased by 0.1 percentage point yearly, so that the final installment represented 5.1% of the annuity.