State lottery laws govern how the lottery should be operated and accounted for, how revenue should be distributed, time limits for claiming prizes, and prohibited activities (such as selling lottery tickets to minors). The purpose of state lotteries is to increase state revenue, often for a particular need, without raising taxes. California state lottery laws, for example, specifically state that the lottery is for funding public education.
More specifically, revenue from California's official lottery is directed toward a dedicated "State Lottery Fund" within the State Treasury. While the state Controller may use state lottery funds to provide loans to the General Fund (and charge interest) they otherwise must be used in the manner directed by the law.
At least half of the revenue is earmarked for prizes and no more than 13 percent of the revenue is to be used for lottery expenses. The balance -- that which is held in the State Lottery Fund -- is transferred to the California State Lottery Education Fund on a quarterly basis.
California voters passed the California State Lottery Act (Proposition 37 on the ballot) in 1984, thus establishing the state's lottery. Games opened up in 1985 but were limited to scratch-off tickets until the addition of a weekly lottery draw one year later. California joined the Mega Millions national lottery in 2005, making it the 12th jurisdiction to do so. Powerball and a number of other games are also among California lottery's offerings.
Below are the basic provisions of California's lottery laws.
| Code Section | Gov. §8880, et seq. |
| Distribution of Lottery Revenue | 87% for prizes and contributions to benefit public education; 13% expenses |
| Additional Purpose of Lottery | For the preservation of the rights, liberties, and welfare of the people to benefit education without additional or increased taxes, money should supplement, not be substituted for, public education funds |
| Lottery Prize Subject to Garnishment | - |
| Time Limit to Claim Prize/Disposition | 180 days; to benefit public purpose of education |
| Prohibited Related Activities | Sales to minors; counterfeit/altered tickets |
Note: State laws are constantly changing -- contact a California gaming attorney or conduct your own legal research to verify the state law(s) you are researching.
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