The Lottery was created by a ballot measure, Proposition 37, which was approved by 58 percent of voters on Nov. 6, 1984. The Lottery Act gave the Lottery a clear mission: to provide supplemental funding for public schools and colleges.

Initially, the Lottery Act capped administrative expenses at 16 percent of sales and required that 34 percent of sales go to education.

In April 2010, the Legislature passed Assembly Bill 142, which changed the Lottery’s funding formula to follow best practices. Those practices have helped lotteries throughout the nation increase sales and earn more money for their beneficiary.

AB 142 limits administrative expenses to 13 percent of sales, while requiring that 87 percent of sales go back to the public in the form of prizes and contributions to education. The law gives the Lottery the flexibility to pay out a higher percentage of its revenues in prizes than it has in the past, but only if it does so in a way that increases the total amount of money that goes to public schools and colleges.

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.