Salary

The Director shall receive the salary provided for by Chapter 6 (commencing with Section 11550 of Part 1 of Division 3 of Title 2. The Director shall devote his or her entire time and attention to the duties of his or her office and shall not be engaged in any other profession or occupation.

The director shall, subject to the approval of the commission, perform all duties, exercise all powers and jurisdiction, assume and discharge all responsibilities, and carry out and effect all purposes of this chapter. The director shall act as secretary of the commission and executive officer of the lottery. The director shall supervise and administer the operation of the lottery in accordance with this chapter and the regulations promulgated by the commission. In addition, the director shall have access to criminal history information pursuant to Sections 11105 and 11105.01 of the Penal Code. In all decisions, the director shall take into account the particularly sensitive nature of the California State Lottery and shall act to promote and ensure integrity, security, honesty, and fairness of the operation and administration of the lottery. In decisions relating to advertising and promotion of the lottery, the director shall ensure that the lottery complies with both the letter and spirit of the laws governing false and misleading advertising, including Section 17500 and following of the Business and Professions Code.

Power to Hire

The Director shall hire, pursuant to the approval of the Commission, such professional, clerical, technical and administrative personnel as may be necessary to carry out the provisions of this Chapter.

Deputy Directors

Upon recommendation of the Director, the Governor shall appoint up to four deputy directors. The Director shall supervise each deputy director’s activities. The Commission shall determine the compensation of each deputy director.

The director shall confer as frequently as necessary or desirable, but not less than once every quarter, with the commission, on the operation and administration of the lottery. The director shall make available for inspection by the commission, upon request, all books, records, files, and other information and documents of the lottery, advise the commission and recommend any matters as he or she deems necessary and advisable to improve the operation and administration of the lottery.

Study of Lottery Systems; Recommendations for Improvement

The Director shall make an on-going study of the operation and the administration of the lotteries which may be in operation in other states or countries, of available literature on the subject, of Federal laws which may affect the operation of the Lottery, and of the reaction of citizens of the State to existing or proposed features in Lottery Games, with a view toward recommending improvements that will tend to serve the purposes of this Chapter. The Director may make recommendations to the Commission, Governor, and Legislature on any matters concerning the secure and efficient operation and administration of the lottery and the convenience of the purchasers of tickets and shares.

The director shall make and keep books and records that accurately and fairly reflect each day’s transactions, including, but not limited to, the distribution of tickets or shares to lottery game retailers, receipt of funds, prize claims, prize disbursements or prizes liable to be paid, expenses and other financial transactions of the lottery necessary so as to permit preparation of financial statements in conformity with generally accepted accounting principles and maintain daily accountability.

The director shall provide a monthly cumulative sales report to the commission and the Controller within 15 days after the end of each month. The report shall include cumulative lottery sales by product, compared to the commission-approved budget and the estimated administrative expenses for the current fiscal year.

The director shall provide the following informational reports to the Department of Finance, the Joint Legislative Budget Committee, and the budget committees of the Legislature:

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Demographic Study of Lottery Players

After the first six months of sales to the public, the Director shall engage an independent firm experienced in demographic analysis to conduct a special study which shall ascertain the demographic characteristics of the players of each Lottery Game, including but not limited to their income, age, sex, education, and frequency of participation. This report shall be presented to the Commission, the Governor, the State Controller, the State Treasurer, and the Legislature. Similiar studies shall be conducted from time to time as determined by the Director.

Study of the Effectiveness of Lottery Communications

After the first full year of sales to the public, the Director shall engage an independent firm experienced in the analysis of advertising, promotion, public relations, incentives, and other aspects of communications to conduct a special study of the effectiveness of such communication activities and make recommendations to the Commission on the future conduct and future rate of expenditure for such activities. This report shall be presented to the Commission, the Governor, the State Controller, and the State Treasurer. Until the presentation of such report and action by the Commission, the Commission shall expend as close to 31/2% as practical of the projected sales of all lottery tickets and shares for advertising, promotion, public relations, incentives, and other aspects of communications. Similar studies shall be conducted from time to time after the first such study as determined by the Director.

After the first nine months of sales to the public, the Commission shall engage an independent firm experienced in security procedures, including, but not limited to, computer security and systems security, to conduct a comprehensive study and evaluation of all aspects of security in the operation of the Lottery. This study shall include, but not be limited to, personnel security, Lottery Game Retailer security, Lottery Contractors security, security of manufacturing operations of Lottery Contractors, security against ticket counterfeiting and alterations and other means of fraudulently winning, security of drawings, computer security, data communications security, data base security, security controls and physical security, security in distribution, security involving validation and payment procedures, security involving unclaimed prizes, security aspects applicable to each particular Lottery Game, security against locating winners in Lottery Games having preprinted winners, and any other aspects of security applicable to the Lottery and its operations. The portion of the report containing the overall evaluation of the Lottery in terms of each aspect of security shall be presented to the Commission, the Governor, the Controller, the Treasurer, the Attorney General, and the Legislature. The portion of the report containing specific recommendations shall be exempt from public disclosure and shall be presented only to the Commission, the Attorney General, the Controller and the Governor. Upon request, all materials and data used in the production of the report shall be made available to the Commission, the Attorney General, the Controller, and the Governor. Similar audits of security shall be conducted every two years after the completion of the first audit.