Meeting Packet - Gaming Control Subcommittee, HB 991 Lottery Games (January 27, 2020)

Summary

A meeting packet for the Florida House of Representatives Commerce Committee Gaming Control Subcommittee, Monday, January 27, 2020, with a meeting notice, an agenda and a staff analysis of HB 991, Lottery Games, by Robinson, dated 1/22/2020. The analysis summary says the bill directs the Lottery to contractually require vendors to place the message "PLAY RESPONSIBLY" on all lottery tickets, expressly prohibits a player's use of electronic devices in playing lottery games, and prohibits a lottery game in which the winner is chosen on the basis of the activities or outcomes of one or more sporting events. It also says the bill requires an annual allocation of $500,000 from the Lottery's Operating Trust Fund toward preventing compulsive and addictive gambling, with an effective date of July 1, 2020.

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Gaming Control Subcommittee
Monday, January 27, 2020
1 :00 PM - 3:00 PM
Webster Hall (212 Knott)

Meeting Packet

Jose Oliva David Santiago
Speaker Chair
Committee Meeting Notice
HOUSE OF REPRESENTATIVES

Gaming Control Subcommittee

Start Date and Time: Monday, January 27, 2020 01:00 pm

End Date and Time: Monday, January 27, 2020 03:00 pm

Location: Webster Hall (212 Knott)
Duration: 2.00 hrs

Consideration of the following bill(s):

HB 991 Lottery Games by Robinson

Pursuant to rule 7.11, the deadline for amendments to bills on the agenda by non-appointed members shall
be 6:00 p.m., Friday, January 24, 2020.

By Request of Chair Santiago, Gaming Control Subcommittee members are asked to have
amendments to bills on the agenda submitted to staff by 6:00 p.m., Friday, January 24, 2020.

NOTICE FINALIZED on 01/23/2020 4:13PM by Harrell.Lindsey

Leagis ® Page 1 of 1
01/23/2020 4:13:04PM
The Florida House of Representatives
Commerce Committee

Gaming Control Subcommittee
Jose Oliva David Santiago
Speaker Chair

Meeting Agenda
Monday, January 27, 2020
1:00 pm - 3:00 pm
Webster Hall (212 Knott)

I. Call to Order / Roll Call

II. Opening Remarks

Ill. HB 991 Lottery Games by Robinson

IV. Closing Remarks

V. Adjournment

317 House Office Building, 402 South Monroe Street, Tallahassee, Fl 32399-1300
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: HB 991 Lottery Games
SPONSOR(S): Robinson
TIED BILLS: IDEN./SIM. BILLS: SB 1318

REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF

1) Gaming Control Subcommittee Barry

2) Government Operations & Technology
Appropriations Subcommittee

3) Commerce Committee

SUMMARY ANALYSIS
Gambling is generally prohibited and illegal in Florida. However, in 1986, Florida voters adopted a
constitutional amendment authorizing the creation of the Department of the Lottery (Lottery). Since that time,
the Florida Lottery has grown into one of the largest state-run lotteries in the country, with annual sales
exceeding $7.1 billion in fiscal year 2018-2019. Lottery tickets can be purchased at over 13,000 retail locations
throughout Florida.

Current law does not require the Lottery to inform customers who purchase lottery tickets of the risks
associated with gambling, including the potential for compulsive or addictive behavior. However, the Lottery
encourages customers to "Play Responsibly" and widely advertises a toll-free phone number for a referral
service to assist people with gambling problems.

The bill amends current law by directing the Lottery to contractually require vendors to place the following
message prominently on all lottery tickets: "PLAY RESPONSIBLY." The bill requires the Lottery to provide the
same message in all advertisements or promotions of lottery games, including those on television, the Internet,
print, and the radio.

The bill expressly prohibits the player's use of electronic devices in playing lottery games. The bill prohibits the
Lottery from conducting a lottery game in which the winner is chosen on the basis of the activities or outcomes
of one or more sporting events. The bill requires $500,000 annually from the Lottery's Operating Trust Fund to
be allocated toward preventing compulsive and addictive gambling.

The bill may have a fiscal impact on state or local government.

The bill provides for an effective date of July 1, 2020.

This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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DATE: 1/22/2020
FULL ANALYSIS

I. SUBSTANTIVE ANALYSIS

A. EFFECT OF PROPOSED CHANGES:
Current Situation

General Overview of Lottery in Florida

In general, gambling is illegal in Florida. 1 Chapter 849, F.S., prohibits keeping a gambling house, 2
running a lottery, 3 or the manufacture, sale, lease, play, or possession of slot machines. 4 Certain
exceptions have been authorized, with restrictions on permitted locations, operators, and prizes,
including penny-ante games, 5 bingo, 6 cardrooms,7 charitable drawings, 8 game promotions
(sweepstakes), 9 and bowling tournaments. 10 In addition, Chapters 550 and 551, F.S., respectively,
authorize pari-mutuel wagering on certain live events at licensed facilities and slot machine gaming at
specified locations.

Section 7 of Article X of the Florida Constitution provides, "Lotteries, other than the types of pari-mutuel
pools authorized by law as of the effective date of this constitution, are hereby prohibited in this state." 11

In 1986, Florida voters approved an amendment to the Florida Constitution to allow the state to operate
a lottery. Section 15 of Article X of the Florida Constitution provides as follows:

Lotteries may be operated by the state .... On the effective date of this amendment, the
lotteries shall be known as the Florida Education Lotteries. Net proceeds derived from
the lotteries shall be deposited to a state trust fund, to be designated The State
Education Lotteries Trust Fund, to be appropriated by the Legislature. The schedule may
be amended by general law.

Chapter 24, F.S., was enacted by ch. 87-65, L.O.F., to establish the state lottery pursuant to the
constitutional authorization set forth above. Section 24.102, F.S., creates the Department of the Lottery
(Lottery) and states the Legislature's intent that it be self-supporting, revenue-producing, and function
as an entrepreneurial business enterprise. Florida began offering lottery games in 1988, with a $1
weekly drawing. 12 Since then, the Lottery has grown to include approximately 60 different scratch-off
games available at over 13,000 retailer locations, with lottery ticket prices ranging from $1 to $30. 13
This growth resulted in more than $7.1 billion in total sales for the 2018-2019 fiscal year. 14

1
S. 849.08, F.S.
2 S. 849.01, F.S.
3 S. 849.09, F.S.
4 S. 849.16, F.S.
5
S. 849.085, F.S.
6 S. 849.0931, F.S.

1 S. 849.086, F.S.
8
S. 849.0935, F.S.
9 S. 849.094, F.S., authorizes game promotions in connection with the sale of consumer products or services.

105_ 546.10, F.S.
11 The pari-mutuel pools that were authorized by law on the effective date of the Florida Constitution (Nov. 5, 1968)

include horseracing, greyhound racing and jai alai games.
12 Fla. Lottery, History, http://www.flalottery.com/history (last visited Jan. 22, 2020).
13 Id.; Fla. Lottery, Scratch Offs, http://www.flalottery.com/scratch-offs?amount=30 (last visited Jan. 22, 2020).
14 Office of Program Policy Analysis and Government Accountability, Review of the Florida Lottery, 2019 DRAFT (Jan.

2020).
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lottery Warning and Problem Gambling

Currently, there is no statutory provision requiring the Lottery to inform customers who purchase lottery
tickets of the risks associated with gambling, including the potential for compulsive or addictive
gambling. However, the Lottery's website includes a "Play Responsibly" page, which states:

Florida Lottery games are designed to be a fun, low-cost form of entertainment with the
added benefit of helping to support education. While most of our players enjoy the fun
and entertainment of playing our games, for some, gambling of any kind can be a
problem.

To assist individuals and families struggling with addiction, the Florida Lottery
encourages them to contact the Florida Council on Compulsive Gambling ... Their
multilingual Helpline number is:

888-ADMIT IT (888-236-4848) 15

The Play Responsibly page also lists phone numbers and a link where one may call, text, or chat with
someone at the National Problem Gambling Helpline as well as a link to Gamblers Anonymous. 16
Phone numbers for the Florida Council on Compulsive Gambling, National Problem Gambling Helpline
and Gamblers Anonymous can also be found in "Play Responsibly" pamphlets, located next to tickets in
most retailers. 17

In addition, the following statement is found on the back of certain lottery products: "Play Responsibly -
If you or someone you know has a gambling problem, call 1-888-ADMIT-IT."18

Addiction is characterized by the "inability to consistently abstain, impairment in behavioral control,
craving, diminished recognition of significant problems with one's behaviors and interpersonal
relationships, and a dysfunctional emotional response." 19 Opponents of gambling contend that
participants in gambling are particularly susceptible to addiction, specifically in an attempt to overcome
the anxiety brought on by the gambling lifestyle. 20 Gambling studies indicate that games of chance
present the illusion of quick and effortless financial gain yet can often lead to financial loss due to the
statistical improbability of winning a prize. 21 Researchers describe a cycle in which the gambler
believes she can win back her losses, with the cycle continuing until she is forced to seek rehabilitation
to break her habit. 22

Personal Electronic Devices

The percentage of Americans who own a cellphone has increased significantly, from 62% in 2002 to
96% in 2019. 23 Smartphone ownership has also increased dramatically from 35% in 2011 to 81% in
2019. 24 Tablet computers were introduced in 2010 and as of June 2019, roughly half of U.S. adults own

15 Fla. Lottery, Where to Play, http://www.flalottery.com/whereToPlay (last visited Jan. 22, 2020).
16 Fla. Lottery, Play Responsibly, http://www.flalottery.com/playResponsibly (last visited Jan. 22, 2020).
17 Document on file with the Gaming Control Subcommittee.
18 Document on file with the Gaming Control Subcommittee.
19 Am. Soc'y of Addiction Med., Quality and Practice, http://www.asam.org/quality-practice/definition-of-addiction (last

visited Jan. 22, 2020).
20 See Psychguides.com, Compulsive Gambling Symptoms, Causes and Effects,

http://www.psychguides.com/guides/compulsive-gambling-symptoms-causes-and-effects/ (last visited Jan. 22, 2020).
21 Id.
22 See Natasha Dow Schull, Addiction by Design: Machine Gambling in Las Vegas, 225 (2012).
23 Pew Research Center; Mobile Fact Sheet, http://www.pewinternet.org/fact-sheeUmobile/ (last visited Jan. 22, 2020).

24 Id.
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DATE: 1/22/2020
one. 25 American ownership of desktop and laptop computers has experienced slight fluctuation over the
past 10 years, with ownership remaining around 75%. 26

Currently, there is no explicit statutory provision related to the use of such devices in relation to lottery
tickets or games. However, given the wording of several statutes and their enactment prior to the
advent and proliferation of smartphones, the Lottery's authorizing statutes appear to contemplate the
authorization of lottery games in paper form only. 27

Recent Developments

Sports betting has become largely popular over the past three decades. In 1992, the federal
Professional and Amateur Sports Protection Act (PASPA) was enacted into law. PASPA made it
unlawful for a governmental entity or person to sponsor, operate, advertise, promote, license, or
authorize a lottery, sweepstakes, or other betting, gambling, or wagering on professional or amateur
sports. In May 2018, the U.S. Supreme Court held that the PASPA provision prohibiting state
authorization of sports gambling violated the anti-commandeering rule and was therefore
unconstitutional. 28 As of January 2020, 15 states have legalized sports betting. 29

In November 2018, Florida voters passed a constitutional amendment entitled Voter Control of
Gambling in Florida, substantially reducing the Legislature's authority to authorize "casino gambling." 30
The Florida Lottery, tribal gaming, and pari-mutuels are exempt from the amendment.

Effect of Proposed Changes

The bill requires that beginning January 1, 2021, all advertisements and promotions of lottery games
include the following message: "PLAY RESPONSIBLY." If the advertisement is shown on television, the
internet, or another electronic medium, the message must appear in black font on a white background
and occupy at least five percent of the surface area of the advertisement or promotion. If the
advertisement is in print, including a newspaper, magazine, or billboard, the message must appear in
prominent text and occupy at least five percent of the total surface area of the advertisement or
promotion. If the advertisement is on the radio, the message must be audibly announced at the
conclusion of the advertisement or promotion.

The bill requires that beginning January 1, 2021, all contracts for the printing of lottery tickets specify
that tickets printed on or after January 1, 2022, must include the following message: "PLAY
RESPONSIBLY." The message must appear in prominent text on the front of each ticket and occupy at
least five percent of the total surface area of the ticket.

The bill prohibits the use of electronic devices to play lottery games. 31 The bill also clarifies that the
Lottery may not conduct any lottery game in which the winner is chosen based upon the activities or
outcomes of one or more sporting events.

The bill requires the Lottery to make an annual payment of $500,000 for services related to the
prevention of compulsive and addictive gambling. The Lottery must contract for such services, which
must include an advertising program to encourage responsible gambling practice and a publicized

25 /d.
26 fd.
27 S. 24.112(13), F.S.; S. 24.105(6), F.S.; S. 24.108(2), F.S. (1987).
28 In 2012, New Jersey enacted a constitutional amendment making it lawful for the legislature to authorize sports

gambling. The National Collegiate Athletic Association brought suit, ultimately leading to a ruling by the U.S. Supreme
Court invalidating PASPA. Murphy v. NCAA, 138 S.Ct. 1461, 1471 (2018).
29 Dustin Gouker, Legislative Tracker: Sports Betting, Legal Sports Report (Jan. 11, 2020),

https://www.legalsportsreport.com/sportsbetting-bill-tracker/ (last visited Jan. 22, 2020).
°
3
FLA CONST. ART. X. §30.
31 This does not apply to Lottery vending machines under s. 24.112, F.S.
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telephone help line. Any contract for these services must include accountability standards, which must
be met by a private provider. Failure by the private provider to meet any material terms of the contract,
including the accountability standards, will result in a breach of contract or grounds for nonrenewal. The
annual payment would be made from the funds remaining in the Operating Trust Fund after transfers to
the Educational Enhancement Trust Fund.

8. SECTION DIRECTORY:
Section 1: Amends s. 24.105, F.S., relating to powers and duties of the Department of the Lottery.

Section 2: Amends s. 24.107, F.S., relating to advertising and promotions of lottery games.

Section 3: Amends s. 24.111, F.S., relating to vendors; disclosure and contract requirements.

Section 4: Amends s. 24.121, F.S., relating to allocation of revenues and expenditure of funds for public
education.

Section 5: Provides an effective date.

11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT

A. FISCAL IMPACT ON STATE GOVERNMENT:

1. Revenues:
See fiscal comments.

2. Expenditures:
See fiscal comments.

B. FISCAL IMPACT ON LOCAL GOVERNMENTS:

1. Revenues:
None.

2. Expenditures:
None.

C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.

D. FISCAL COMMENTS:
The bill may have a fiscal impact on state government to the extent that there are costs associated with
compliance or there is any reduction in lottery sales as a result of the message required by this
legislation. However, the bill has not yet been reviewed by the Revenue Estimating Impact Conference.

111. COMMENTS

A. CONSTITUTIONAL ISSUES:

1. Applicability of Municipality/County Mandates Provision:
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DATE: 1/22/2020
Not applicable. The bill does not appear to affect county or municipal governments.

2. Other:
None.

B. RULE-MAKING AUTHORITY:
None.

C. DRAFTING ISSUES OR OTHER COMMENTS:
None.

IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES

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DATE: 1/22/2020
FLORIDA H O U S E 0 F REPRESENTATIVES

HB 991 2020

1 A bill to be entitled
2 An act relating to lottery games; amending s. 24.105,
3 F.S.; prohibiting an electronic device from being used
4 by a player to play any lottery game; prohibiting the
5 department from authorizing the operation of a
6 specified lottery game; amending s. 24.107, F.S.;
7 requiring the Department of the Lottery to include a
8 specified warning in all advertisements and promotions
9 of lottery games; providing an exception; providing
10 requirements for such warning; amending s. 24.111,
11 F.S.; requiring all contracts between the department
12 and a vendor to include a provision that requires the
13 vendor to place or print a specified warning on all
14 lottery tickets; providing an exception; providing
15 requirements for such warning; amending s. 24.121,
16 F.S.; requiring certain funds in the Operating Trust
17 Fund to be used for a specified annual payment for
18 services relating to the prevention of compulsive and
19 addictive gambling; requiring the department to
20 contract for such services; providing contract
21 requirements; providing an effective date.
22
23 Be It Enacted by the Legislature of the State of Florida:
24
25 Section 1. Paragraph (a) of subsection (9) of section

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FLORIDA H O U S E 0 F REPRESENTATIVES

HB 991 2020

26 24.105, Florida Statutes, is amended to read:
27 24.105 Powers and duties of department.-The department
28 shall:
29 (9) Adopt rules governing the establishment and operation
30 of the state lottery, including:
31 (a) The type of lottery games to be conducted, except
32 that:
33 1. The Ne- name of an elected official may not shall appear
34 on the ticket or play slip of any lottery game or on any prize
35 or on any instrument used for the payment of prizes, unless such
36 prize is in the form of a state warrant.
37 2. Ne- Coins or currency may not shall be dispensed from

38 any electronic computer terminal or electronic device used in
39 any lottery game.
40 3. Other than as specifically provided ins. 24.112, an
41 electronic computer fie terminal or electronic device may not be
42 used by the player to p l a y ~ any lottery game which Fflay be
43 operated solely by the player \1ithout the assistance of the
44 retailer.
45 4. The department may not authorize the operation of a
46 lottery game in which the winner is chosen on the basis of the
47 activities or outcomes of one or more sporting events.
48 Section 2. Subsection (3) is added to section 24.107,
49 Florida Statutes, to read:
50 24.107 Advertising and promotion of lottery games.-

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FLORIDA H O U S E 0 F REPRESENTATIVES

HB 991 2020

51 (3) Beginning January 1, 2021, all advertisements and
52 promotions of lottery games under this chapter, excluding multi-
53 state lottery games, must include a warning that meets all of
54 the following requirements:
55 (a) If on television, on the Internet, or in any other
56 electronic medium, appear in black font on a white background
57 and occupy at least 5 percent of the total surface area of the
58 advertisement or promotion.
59 (b) If in print, including in a newspaper, in a magazine,
60 or on a billboard, appear in prominent text and occupy at least
61 5 percent of the total surface area of the advertisement or
62 promotion.
63 (c) If on radio, be audibly announced at the conclusion of
64 the advertisement or promotion.
65 (d) Contain the following message: "PLAY RESPONSIBLY."
66 Section 3. Subsection (8) is added to section 24.111,
67 Florida Statutes, to read:
68 24.111 Vendors; disclosure and contract requirements.-
69 (8) Beginning January 1, 2021, all contracts subject to
70 this section must contain a provision that requires the vendor
71 to place or print a warning on all lottery tickets sold under
72 this chapter, excluding multi-state lottery tickets. The warning
73 must meet all of the following requirements:
74 (a) Appear in prominent text on the front side of the
75 lottery ticket and occupy at least 5 percent of the total

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FLORIDA H O U S E 0 F REPRESENTATIVES

HB 991 2020

76 surface area of the lottery ticket.
77 (b) Contain the following message: "PLAY RESPONSIBLY."
78 (c) Appear on all lottery tickets printed on or after
79 January 1, 2022.
80 Section 4. Subsection (3) of section 24.121, Florida
81 Statutes, is amended to read:
82 24.121 Allocation of revenues and expenditure of funds for
83 public education.-
84 (3) The funds remaining in the Operating Trust Fund after
85 transfers to the Educational Enhancement Trust Fund shall be
86 used for:
87 ~ The payment of administrative expenses of the
88 department. These expenses shall include all costs incurred in
89 the operation and administration of the lottery and all costs
90 resulting from any contracts entered into for the purchase or
91 lease of goods or services required by the lottery, including,
92 but not limited to:
93 1.+a+ The compensation paid to retailers~r
94 ~-fle-l- The costs of supplies, materials, tickets,
95 independent audit services, independent studies, data
96 transmission, advertising, promotion, incentives, public
97 relations, communications, security, bonding for retailers,
98 printing, distribution of tickets, and reimbursing other
99 governmental entities for services provided to the lottery~; and
100 .l.:_-+et The costs of any other goods and services necessary

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FLORIDA H O U S E 0 F REPRESENTATIVES

HB 991 2020

101 to implement for effectuating the purposes of this act.
102 (b) The annual payment of $500,000 for services related to
103 the prevention of compulsive and addictive gambling. The
104 department shall, subject to competitive bidding, contract for
105 such services, which must include an advertising program to
106 encourage responsible gambling practices and to publicize a
107 telephone help line. The terms of any contract for such services
108 must include accountability standards that must be met by a
109 private provider. The failure of a private provider to meet any
110 material terms of the contract, including the accountability
111 standards, shall constitute a breach of contract or grounds for
112 nonrenewal.
113 Section 5. This act shall take effect July 1, 2020.

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