SENATE BILL REPORT

ESHB 26

BYHouse Committee on Commerce & Labor (originally sponsored by Representatives Wang, Patrick, Sayan, Fisch, Walker, H. Sommers and R. King; by request of  Washington State Lottery)

Changing provisions relating to the lottery.

House Committe on Commerce & Labor

Senate Committee on Commerce & Labor

Senate Hearing Date(s):March 25, 1987

Majority Report:  Do pass as amended.

      Signed by Senators Warnke, Chairman; Smitherman, Vice Chairman; Tanner, Vognild, West, Wojahn.

Senate Staff:Patrick Woods (786-7430)

                  March 26, 1987

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR, MARCH 25, 1987

BACKGROUND:

The Legislature established the state lottery in 1982.  A five member Commission, appointed by the Governor with the consent of the Senate, is responsible for adopting rules governing the establishment and operation of the lottery.  A director, also appointed by the Governor, supervises and administers the operation of the lottery, including the licensing of agents.

Not less than 45 percent of the gross annual revenue from the lottery must be paid out in prizes.  Prizes unclaimed after a 180 day claim period are to be used for additional prizes.  In 1985, the Legislature amended the original requirement that administrative costs shall not exceed 15 percent of the gross annual revenue to provide for appropriation of administrative costs.  The lottery transferred $72.2 million to the general fund in fiscal year 1986, and $273 million in the first four fiscal years of operation.

The lottery is scheduled to terminate on July 1, 1987 and underwent a performance audit by the Legislative Budget Committee (LBC) during 1986.  The LBC recommended that the lottery be continued and that any reenabling legislation contain specific legislative intent on the state's participation in any multi-state lottery.

SUMMARY:

The lottery is reauthorized for an additional five years, until July 1, 1992, and the Legislative Budget Committee is required to evaluate the effectiveness of the agency six months prior to termination.

Approval of the Legislature is required before the Commission may enter any agreement with other state lotteries to conduct shared games.

A person under 18 directly purchasing a ticket is guilty of a misdemeanor.

The requirement that the lottery pay out not less than 45 percent of the gross annual revenue in prizes is changed to a requirement that the lottery offer 45 percent in prizes.  Prizes remaining unclaimed after the claim period shall be transferred to the general fund.

Fiscal Note:      available

Revenue:    This bill has a revenue impact.

Effective Date:The bill contains an emergency clause and takes effect immediately.

SUMMARY OF PROPOSED SENATE AMENDMENT:

Unclaimed prize monies are transferred to the housing trust fund.

The Director is required to study the operation of additional games for the benefit of a particular purpose.

Senate Committee - Testified: Evelyn Sun, State Lottery; Scott Milne, State Lottery