State Lottery Commission
Agency Contact Information
Arizona State Lottery- State Lottery Commission
Authority
The State Lottery Commission was established by initiative petition, approved at the November 4, 1980 general election. Legislation was enacted in 1981, placing the language of the initiative in the Arizona Revised Statutes as Title 5, Chapter 5, Article 1.
In 2010, the Lottery was reauthorized and its statutory provisions were renumbered as A.R.S. Title 5, Chapter 5.l, Article 1 (Revenue Bonds) and Article 2 (General Provisions). See Laws 2011, Chapter 14, Section 2 which describes the State Lottery reauthorization and transfer.
Current statutory authority is found at A.R.S. §§5-531 through 5-575.
Function
The Arizona State Lottery Commission oversees the Arizona State Lottery and consists of five members, appointed by the Governor. The Governor also appoints an executive director to administer lottery operations. The Arizona Department of Public Safety is authorized to investigate violations of lottery statutes.
The Lottery administers both instant ticket games and games based on drawing numbers. Monies raised by the Lottery that exceed the administrative costs and prize payout are allocated to various state programs and distributed in a specified order as outlined in statute (See A.R.S. §5-555 and §5-572).
After 180 days, a portion of unclaimed lottery prize money is transferred to the State Lottery Prize Fund for use as prize money in future games and the remaining portion is directed to other programs.
History
In November 1980, Arizona voters approved Proposition 200, an initiative measure providing for a state lottery to generate revenue for various Arizona programs. The initiative also created the Arizona State Lottery Commission, established the position of executive director, and outlined distribution of revenue.
In 1981, the Legislature adopted legislation to place the language of the initiative in A.R.S. Title 5, Chapter 5, Article 5 entitled “State Lottery.” The Commission consisted of five members appointed by the Governor to staggered terms. The executive director, appointed by the Governor, was charged with supervising and administering the operation of the lottery. The State Lottery Fund was established, consisting of revenues received from sales of lottery tickets and other monies received, except for the payment of prize monies. The State Lottery Fund was used to cover operating expenses and any remaining monies were deposited into the state general fund. The State Lottery Prize Fund was created as a separate fund, not subject to appropriation by the Legislature. See Laws 1981, Chapter 245.
Laws 1983, Chapter 305 modified the frequency of drawings for various lottery games, revised the apportionment of revenues from the sale of lottery tickets, limited the amount of prize money paid to a minor, addressed taxation and withholding for lottery and other gambling winnings and provided for confidentiality of bids.
Laws 1988, Chapter 4 allowed twice-a-week lottery drawings and apportioned 32.5 percent of revenues from the sale of lottery tickets to the State Lottery Fund.
Laws 1989, Chapter 203 required the Commission to establish two special instant games, in addition to other existing instant lottery games. The measure also established the Commerce and Economic Development Commission to develop comprehensive long-range strategic economic plans for the state, created the Commerce and Economic Development Commission Fund and allocated a percentage of revenues from the sale of lottery tickets to the Fund. Monies for prizes, operating expenses and payment to the Commerce and Economic Development Commission Fund were required to be accounted for separately from other lottery monies. See also Laws 1989, Chapter 260.
Laws 1993, Sixth Special Session, Chapter 3 authorized the Commission to establish multistate lottery games and allocated monies derived from the revenues of multistate lottery games for prizes, operating expenses, and for payment to the Local Transportation Assistance Fund and the state general fund. The measure was conditioned on the passage of HB 2001, an air quality measure enacted to comply with air quality control measures required by the federal Clean Air Act Amendments of 1990. (HB 2001 passed and was enacted as Laws 1993, Sixth Special Session, Chapter 1.)
Laws 1995, Chapter 171 modified qualifications for membership on the Commission by requiring one member, rather than two, to have experience in law enforcement and adding a requirement for one member to have experience in marketing or advertising. The measure also eliminated the restriction prohibiting any lottery game with a bingo theme, required game drawings to be witnessed by an independent observer rather than an independent certified public accountant, and modified requirements regarding security operations.
Laws 1996, Chapter 143 revised responsibilities of the Commission and the executive director regarding operation of the lottery. The measure also outlined limitations on the sale or purchase of tickets, and revised the process of payment of prizes by lottery agents. A second measure enacted that year modified qualifications to serve on the Commission by requiring one member to have experience in convenience store, minimart or grocery retailing. See Laws 1996, Chapter 227.
Laws 1997, Chapter 214 modified the minimum required percentage distributions of lottery revenue for several funds, including the State Lottery Fund, the Local Transportation Assistance Fund, the Arizona Clean Air Fund, and the Commerce and Economic Development Commission Fund. The measure also provided for an amount of lottery revenue to be deposited into the Area Health Education System, Teenage Pregnancy Prevention Programs, Health Start Pilot Program, Disease Control Research Fund, and the Federal Women, Infants and Children Food Program.
Laws 2000, Chapter 326 required the Commission to establish penalties for unauthorized sale of lottery tickets, raised the minimum age to purchase a lottery ticket from 18 to 21 years of age, and required specific information on obtaining assistance with gambling problems to be printed on each lottery ticket.
A ballot measure, referred by the Legislature in 2002, asked voters at the general election that year to determine whether to continue the Arizona State Lottery Commission for an additional ten years. All state agencies, including the Lottery, are subject to periodic review to determine whether to continue the agency or to allow it to terminate on a specific date. Proposition 301to continue the Lottery until July 1, 2012, was approved. See Laws 2002, House Concurrent Resolution 2012 as transmitted to the Secretary of State.
Laws 2008, Chapter 287 revised the process to distribute revenue to beneficiaries.
Laws 2009, Fourth Special Session, Chapter 3 modified the distribution of lottery proceeds and eliminated the Department of Environmental Quality’s Water Supply Development Fund and the State Land Department’s Community Protection Initiative Fund from the list of recipients of lottery fund monies.
Laws 2010, Chapter 126 authorized special instant ticket games for use by charitable organizations and outlined accounting and distribution of monies generated by the games.
There were several special sessions of the Legislature in 2010. Legislation enacted in the sixth special session that year authorized the state to issue bonds against future lottery proceeds, established the State Lottery Revenue Bond Debt Service Fund, and outlined a repayment process. The measure also continued the State Lottery and the Lottery Commission until July 1, 2035. In addition, the measure directed Legislative Council to draft language for consideration in 2011 in order to make statutory conforming changes necessary to accomplish the continuation and reauthorization of the Lottery and Commission. See Laws 2010, Sixth Special Session, Chapter 2 and Chapter 4. See also Laws 2011, Chapter 14, outlined below.
Legislation enacted in the seventh special session of 2010 modified the distribution of lottery proceeds. The measure redirected lottery distributions, previously made to the Local Transportation Assistance Fund, the County Assistance Fund and the State Parks Board Heritage Fund and repealed those funds. See Laws 2010, Seventh Special Session, Chapter 12.
Laws 2011, Chapter 14 made conforming changes to the Arizona State Lottery and Arizona State Lottery Commission statutes to reflect the transfer, continuation and reauthorization of the agency as directed by Laws 2010, Sixth Special Session, Chapter 2. The reauthorization repealed A.R.S. Title 5, Chapter 5, Article 1 and transferred all provisions relating to the lottery to A.R.S. Title 5, Chapter 5.1, Articles 1 and 2. Laws 2011, Chapter 14, Section 2 describes the State Lottery transfer.
A second measure enacted in 2011 eliminated certain reporting requirements and deleted the requirement for the Commission to obtain Joint Legislative Budget Committee approval to acquire office facilities and equipment. See Laws 2011, Chapter 83.
Laws 2015, Chapter 177 provided that the names of lottery prizewinners would remain confidential for 90 days after the award, unless specifically required to be released to the Lottery Commission or to the Department of Economic Security. Subsequent legislation enacted in 2019 allows a prizewinner who is paid $100,000 to request permanent confidentiality. The name of the winner will not be released and is not a public record. If no request is made, the prizewinner’s name will not be released for 90 days from the date of the award. The prizewinner’s city and county of residence is not confidential. See Laws 2019, Chapter 105.
Laws 2018, Chapter 72 authorized the Commission to establish multijurisdictional games.
Laws 2021, Chapter 234 allows the Commission to establish keno and mobile draw games; establishes a licensing process and limits keno to specific locations. Mobile draw games will be operated by the Commission and played statewide on mobile devices. The measure carries a conditional enactment which requires each Indian tribe with a gaming facility in Pima County and each tribe with a gaming facility in the Phoenix metropolitan area to enter into the 2021 Gaming Compact Amendment. Approval of the U.S. Secretary of Interior is also required.
Sources
- Arizona Revised Statutes §§ 5-531 through 5-575
- Session Laws
- Laws 1981, Chapter 245
- Laws 1983, Chapter 305
- Laws 1988, Chapter 4
- Laws 1989, Chapter 203
- Laws 1993, Sixth Special Session, Chapter 1 and Chapter 3
- Laws 1995, Chapter 171
- Laws 1996, Chapter 143 and Chapter 227
- Laws 1997, Chapter 214
- Laws 2000, Chapter 326
- Laws 2002, House Concurrent Resolution 2012, transmitted to the Secretary of State
- Laws 2008, Chapter 287
- Laws 2009, Fourth Special Session, Chapter 3
- Laws 2010, Chapter 126
- Laws 2010, Sixth Special Session, Chapter 2 and Chapter 4
- Laws 2010, Seventh Special Session, Chapter 12
- Laws 2011, Chapter 14 and Chapter 83
- Laws 2015, Chapter 177
- Laws 2018, Chapter 72
- Laws 2019, Chapter 105
- Laws 2021, Chapter 234
1980 Publicity Pamphlet including Proposition 200, establishing the State Lottery
Official Canvass, General Election Nov. 4, 1980
2002 Publicity Pamphlet including Proposition 301, continuing the State Lottery
Official Canvass, General Election Nov. 5, 2002
Joint Legislative Budget Committee Baseline Book 2020
Arizona State Lottery, Financial statements
Arizona Auditor General Reports
Related Collections at Arizona State Archives
- Record Group 061 – Arizona State Lottery Commission
