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11/14/2019 07:23 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20190&cosponId=28547
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House of Representatives
Session of 2019 - 2020 Regular Session

MEMORANDUM

Posted: February 27, 2019 10:34 AM
From: Representative Thomas P. Murt
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.

Act 201 of 2014, most recently reduced the mandate from 27% to 25% giving the Lottery the ability to update product offerings to meet consumer demand and increase profits. 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 beginning in Fiscal Year 2019. My legislation would reduce the rate at 23% on a temporary basis for the next 3 fiscal years until June 30, 2022.

Although it seems counterintuitive that lowering the percentage increases the funding for senior programs, it allows them to increase profits by not binding the lottery on how much they can sell of certain games, especially high profit games like scratch-offs. The Lottery strategically sets the game payouts based on the statutorily mandated rate of return months in advance. By changing the mandated rate of return now, it provides the Lottery with the ability to prepare the future game portfolio to maximize profits.

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 HB956