On November 6, 1984, 58% of California's voters approved Proposition 37, the California State Lottery Act. The Act provides that at least 34% of the Lottery revenues must go to public education. This supplemental funding provides schools with additional resources to meet their locally determined needs.

The act specifies that the lottery is to be operated and administered by a Commission appointed by the Governor. The Legislature has the authority to amend the Lottery Act if, by doing so, it furthers the purposes of the Act.