California State Lottery Faces New Audit

The state Legislature has ordered a state audit into whether the California State Lottery gives the legally required amount of lottery revenue to school districts.

The lottery has been under scrutiny since the media reported on senior executives partying at bars, and the state controller identified inappropriate spending on travel. Lottery Director Hugo Lopez resigned in June.

The new audit was requested by Orange County Republican Senator Ling Ling Chang, who said state lottery revenue “skyrocketed” to $7 billion over the last 10 years, but the agency hasn’t kept up with the law’s guarantee to schools. Chang cited data that 10 years ago the lottery made $3 billion in revenue and gave $1 billion to schools. Last year, with $7 billion in revenue, the agency increased its contribution to $2 billion.

State Lottery spokesman Russ Lopez said that revenue and the amount given to schools both increased after the state changed lottery laws 10 years ago to allow more flexibility for prize expenses. “We think a better way to look at this is to consider the total amount sent to schools rather than as a percentage of sales,” Lopez said.

The state auditor estimates that the audit will be released in February. (Source: The Sacramento Bee, July 30.)

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