Article 5 - Lottery Game Retailers

California Government Code — §§ 8880.47-8880.55

Sections (10)

Amended by Stats. 2024, Ch. 41, Sec. 34. (SB 164) Effective June 29, 2024. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37 (the California State Lottery Act of 1984).

Allocations for education:

The California State Lottery Education Fund is created within the State Treasury, and is continuously appropriated for carrying out the purposes of this chapter. The Controller shall draw warrants on this fund and distribute them quarterly in the following manner, provided that the payments specified in subdivisions (a) to (f), inclusive, shall be equal per capita amounts.

(a)(1) Payments shall be made directly to public school districts, including county superintendents of schools, serving kindergarten and grades 1 to 12, inclusive, or any part thereof, on the basis of an equal amount for each unit of average daily attendance, as defined by law and adjusted pursuant to subdivision (k).
(2)For purposes of this paragraph, in each of the 2008–09, 2009–10, 2010–11, 2011–12, 2012–13, 2013–14, and 2014–15 fiscal years, the number of units of average daily attendance in each of those fiscal years for programs for public school districts, including county superintendents of schools, serving kindergarten and grades 1 to 12, inclusive, shall include the same amount of average daily attendance for classes for adults and regional occupational centers and programs used in the calculation made pursuant to this subdivision for the 2007–08 fiscal year.
(b)Payments shall also be made directly to public school districts serving community colleges, on the basis of an equal amount for each unit of average daily attendance, as defined by law.
(c)Payments shall also be made directly to the Board of Trustees of the

California State University on the basis of an amount for each unit of equivalent full-time enrollment. Funds received by the trustees shall be deposited in and expended from the California State University Trust Fund or, at the discretion of the trustees, deposited in local trust accounts in accordance with subdivision (j) of Section 89721 of the Education Code.

(d)Payments shall also be made directly to the Regents of the University of California on the basis of an amount for each unit of equivalent full-time enrollment.
(e)Payments shall also be made directly to the Board of Directors of the college named in Section 92200 of the Education Code on the basis of an amount for each unit of equivalent full-time enrollment.
(f)Payments shall also be made directly to the two California Schools for the Deaf, the

California School for the Blind, and the three Diagnostic Schools for Neurologically Handicapped Children, on the basis of an amount for each unit of equivalent full-time enrollment.

(g)Payments shall also be made directly to the State Department of Developmental Services and the State Department of State Hospitals for clients with developmental or mental disabilities who are enrolled in state hospital education programs, including developmental centers, on the basis of an equal amount for each unit of average daily attendance, as defined by law.
(h)No Budget Act or other statutory provision shall direct that payments for public education made pursuant to this chapter be used for purposes and programs, including workload adjustments and maintenance of the level of service, authorized by Chapters 498, 565, and 1302 of the Statutes of 1983, Chapter 97 or 258 of the Statutes of

1984, or Chapter 1 of the Statutes of the 1983–84 Second Extraordinary Session.

(i)School districts and other agencies receiving funds distributed pursuant to this chapter may at their option use funds allocated by this chapter to provide additional funds for those purposes and programs prescribed by subdivision (h) for the purpose of enrichment or expansion.
(j)As a condition of receiving any moneys pursuant to subdivision (a) or (b), each school district and county superintendent of schools shall establish a separate account for the receipt and expenditure of those moneys, which account shall be clearly identified as a lottery education account.
(k)Commencing with the 1998–99 fiscal year, and each year thereafter, for purposes of subdivision (a), average daily attendance shall be increased by the statewide

average rate of excused absences for the 1996–97 fiscal year as determined pursuant to the provisions of Chapter 855 of the Statutes of 1997. The statewide average excused absence rate, and the corresponding adjustment factor required for the operation of this subdivision, shall be certified to the Controller by the Superintendent of Public Instruction.

(l)It is the intent of this chapter that all funds allocated from the California State Lottery Education Fund shall be used exclusively for the education of pupils and students and no funds shall be spent for acquisition of real property, construction of facilities, financing of research, or any other noninstructional purpose.

Amended by Stats. 1992, Ch. 500, Sec. 7. Effective August 17, 1992. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

The commission shall promulgate regulations specifying the terms and conditions for contracting with lottery game retailers so as to provide adequate and convenient availability of tickets or shares to prospective buyers of lottery games.

Amended by Stats. 2008, Ch. 764, Sec. 11. Effective November 14, 2008. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

(a)The director shall, pursuant to this chapter and the regulations of the commission, select as lottery game retailers those persons and organizations as the director deems shall best serve the public convenience and promote the sale of tickets or shares. No person under the age of 18 years shall be a lottery game retailer. In the selection of lottery game retailers, the director shall consider factors such as financial responsibility, integrity, reputation, accessibility of the place of business or activity to the public, security of the premises, the sufficiency of existing lottery game retailers to serve the public convenience, and the projected volume of the sales for the lottery game involved.
(b)In order to allow an evaluation of the competence, integrity, and character of potential lottery game retailers, the commission may require information it deems necessary of any person, corporation, trust, association, partnership, or joint venture applying for authority to act as a lottery game retailer.
(c)No person shall be a lottery game retailer if the person is engaged exclusively in the business of selling lottery tickets or shares. A person lawfully engaged in nongovernmental business on state property, an owner or lessee of an establishment which sells alcoholic beverages, and a civic and fraternal organization may be selected as a lottery game retailer. The director may contract with lottery game retailers on a seasonal or temporary basis.
(d)The commission shall establish a formal written appeal process concerning the denial of an application for, or revocation of, a contract to be a lottery game retailer.

Amended by Stats. 1992, Ch. 500, Sec. 9. Effective August 17, 1992. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

A contract with a lottery game retailer shall not be assignable or transferable.

Amended by Stats. 1992, Ch. 500, Sec. 10. Effective August 17, 1992. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

(a)The commission shall promulgate regulations that prescribe the procedure by which a contract with a lottery game retailer may be terminated and the reasons for the termination, including, but not limited to, instances where a lottery game retailer knowingly sells a ticket or share to any person under the age of 18 years.
(b)Any lottery game retailer who employs or uses the services of any person under the age of 18 years for the sale of lottery tickets or shares shall be subject to suspension or revocation of his or her contract. However, a person under the age of 18 years may be employed or used to sell lottery tickets or shares, if that person is under the continuous supervision of a person 21 years of age or older.

Compensation for Lottery Game Retailers

Unless the Commission shall otherwise determine, the compensation paid to Lottery Game Retailers shall be a minimum of 5% of the retail price of tickets or shares. In addition, an incentive bonus may be paid to such Lottery Game Retailers based on attainment of sales volume or other objectives as specified by the Director for each Lottery Game. In the case of a Lottery Game Retailer whose rental payments for his premises are contractually computed, in whole or in part, on the basis of a percentage of his retail sales, and where such computation of his retail sales is not explicitly defined to include sales of tickets or shares in a state-operated lottery, the compensation received by the Lottery Game Retailer from the Lottery shall be deemed as the amount of the retail sale for purposes of computing his rental payment.

Amended by Stats. 1986, Ch. 55, Sec. 15. Effective April 16, 1986. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

Sales to Minors

(a)No tickets or shares in Lottery Games shall be sold to persons under the age of 18 years. Any person who knowingly sells a ticket or share in a Lottery Game to a person under the age of 18 years is guilty of a misdemeanor. Any person under the age of 18 years who buys a ticket or share in a Lottery is guilty of a misdemeanor. In the case of lottery tickets or shares sold by Lottery Game Retailers or their employees, these persons shall establish safeguards to assure that the sales are not made to persons under the age of 18 years. In the case of the dispensing of tickets or shares by vending machines or other devices, the Commission shall establish safeguards to help assure that the vending machines or devices are not operated by persons under the age of 18 years.
(b)All tickets or shares in Lottery Games shall include, and any devices which dispense tickets or shares in Lottery Games shall have posted in a conspicuous place thereupon, a notice which declares that state law prohibits the selling of a lottery ticket or share to, and the payment of any prize to, a person under the age of 18 years.

Amended by Stats. 1994, Ch. 377, Sec. 3. Effective August 29, 1994. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

No lottery tickets or shares shall be sold by a lottery game retailer unless the retailer has a certificate of authority, issued by the lottery, to sell lottery tickets.

Amended by Stats. 1986, Ch. 55, Sec. 16. Effective April 16, 1986. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

Bonding

The Director may require a bond from any Lottery Game Retailer in an amount specified by regulation or may purchase blanket bonds covering the activities of selected Lottery Game Retailers. These bonds shall be payable upon order of the Commission.

Amended by Stats. 1993, Ch. 1218, Sec. 3. Effective October 11, 1993. Note: This section was added on Nov. 6, 1984, by initiative Prop. 37.

(a)No payment by lottery game retailers to the lottery for tickets or shares shall be in cash. All payments for tickets or shares shall be in the form of a check, bank draft, electronic fund transfer, or other recorded financial instrument as determined by the director.
(b)Notwithstanding any other provision of law, the lottery may pay to lottery game retailers, by electronic fund transfer, subject to approval by the Controller’s office, any credit balances that may result from lottery activities.