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https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=14223
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: March 4, 2014 02:12 PM
From: Representative Kerry A. Benninghoff
To: All House members
Subject: Amend State Lottery Law
 
In the very near future, I will be introducing legislation that will amend the State Lottery Law to reduce the statutorily mandated rate of return.

As a little history, Act 53 of 2008 granted a temporary relief from the mandate of 30% and gave the Lottery the ability to update product offerings to meet consumer demand and increase profits. Act 53 set the rate of return at 27% for 3 years; this rate was extended by Act 23 of 2011 and is now set to expire June 30, 2015. As the Lottery system continues to try to increase ticket sales to increase revenues available for senior programs, they have requested an additional reduction of the statutorily mandated rate of return to 25% beginning in Fiscal Year 2016. Additionally, the Lottery has requested we make the reduction of the statutorily mandated rate of return permanent.

Some may question why we need to change the statutorily mandated rate of return now if the change in the mandated rate of return does not take effect until Fiscal Year 2016, the answer is simple. The Lottery strategically sets the game payouts based on the statutorily mandated rate of return 18 months in advance. By changing the mandated rate of return now, it provides the Lottery with the ability to prepare for this reduced rate.

I believe that this change is important in order to maintain industry best practice standards within Pennsylvania’s lottery system and ensure that the Lottery has enough revenue to continue to fund necessary programs benefiting a dramatically growing population of older Pennsylvanians.



Introduced as HB2110