California State Lottery Act, Proposition 37 (1984)

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2011 logo of the California State Lottery
California Proposition 37, also known as The California State Lottery Act of 1984, was on the November 6, 1984 statewide general election ballot in California as a combination initiated constitutional amendment and initiated state statute, where it was approved.

Proposition 37 amended the California Constitution to authorize the establishment of a statewide lottery in California. It simultaneously amended the constitution to prevent gambling casinos from being built in California along the lines of the casinos one would expect to find in Nevada or Atlantic City, New Jersey.

In addition to amending the state's constitution, Proposition 37 enacted a statute establishing a California State Lottery Commission with broad powers to oversee the California State Lottery.

Under Proposition 37, public sales of lottery tickets were ordered to commence no later than April 1985.

Election results

Proposition 37
Approveda Yes 5,398,096 57.9%

Constitutional changes

California Constitution
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Proposition 37 amended Section 19 of Article IV of the California Constitution as follows, with new text in italics.

SEC. 19. (a) The Legislature has no power to authorize lotteries and shall prohibit the sale of lottery tickets in the State.
(b) The Legislature may provide for the regulation of horse races and horse race meetings and wagering on the results.
(c) Notwithstanding subdivision (a), the Legislature by statute may authorize cities and counties to provide for bingo games, but only for charitable purposes.
(d) Notwithstanding subdivision (a), there is authorized the establishment of a California State Lottery.
(e) The Legislature has no power to authorize, and shall prohibit casinos of the type currently operating in Nevada and New Jersey.

Statutory changes

Proposition 37 added Chapter 12.5 of Division 1 of Title 2 to the California Government Code.

Ballot summary

Proposition 37's official ballot summary said, "Amends Constitution to authorize establishment of a state lottery and to prohibit casinos. Adds statutes providing for establishment of a state-operated lottery. Of the total lottery revenues, requires that 50% be returned as prizes, not more than 16% be used for expenses, and at least 34% be used for public education. Requires that equal per capita amounts of the funds for education be distributed to kindergarten-through-12 districts, community college districts, State University and Colleges, and University of California. Contains numerous specific provisions concerning the operation and administration of lotteries and funds. Summary of Legislative Analyst's estimate of net state and local government fiscal impact: The effect of this measure on state revenues cannot be predicted with certainty. Once full range of games is operational, estimated yield would be about $500 million annually for public education. Yield for first two years would be less. Estimated 80% of yield would go to K-12 schools, 13% to community colleges, 5% to California State University, and 2% to University of California."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office said:

"The effect of this measure on state revenues cannot be predicted with certainty. It would depend upon:
1. Which lottery games the commission decides to operate;
2. The amount of time it takes for each of these games to become operational; and
3. The volume of lottery sales in California for each type of game.
Based on the experience of other states -- especially other western states -- we estimate that lottery sales in California would be about $50 per capita, once a full range of lottery games is operational. (This is less than the average sales per capita in the east and midwest where, unlike California, numbers games have been popular for decades.) This per capita volume of sales would yield $500 million in annual revenues for public education in California.
The additional revenues produced by a state lottery in 1984-85 and 1985-86 would be less than $500 million per year, for two reasons. First, if approved by the voters, the lottery would be operational for less than a full year in 1984-85. Second, it would take time to fully implement an array of lottery games and realize their revenue potential. Consequently, the full ongoing revenue impact of the measure probably would not be felt until 1986-87.
Under the measure, we estimate that approximately 80 percent of the state's share of the lottery revenues would go to K-12 schools, 13 percent would go to community colleges, 5 percent would go to the California State University, and 2 percent would go to the University of California."


Lawsuits involving Proposition 37 include:

  • Rumsey Indian Rancheria of Wintun Indians v. Wilson
  • Western Telcon, Inc. v. California State Lottery
  • Western Telcon, Inc. v. California State Lottery
  • Western Telcon, Inc. v. California State Lottery Comm'n.
  • Aguimatang v. California State Lottery
  • Horan v. State
  • City of Gilroy v. State Bd. of Equalization
  • City of Gilroy v. State Bd. of Equalization

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