HomePublicationsNewsletter ArchiveNewslettersVolume 21Issue 5Legislation Introduced for Lottery Privatization

On January 27, 2015, legislation was introduced in the Michigan House of Representatives that, if passed, would amend the McCauley-Traxler-Law-Bowman-McNeely Lottery Act of 1972 (“Lottery Act”) to clarify that the Commissioner of the State Lottery (“Commissioner”) is authorized to contract with a lottery management services company for the operation of the lottery. The legislation, House Bill 4077 (“HB 4077”), was introduced by Rep. Earl Poleski (R-Jackson County). In addition, an identical bill Senate Bill 75 (“SB 75”) was introduced in the Michigan Senate by Sen. Wayne Schmidt (R-Traverse City) on February 3, 2015.

Under HB 4077 and SB 75, the Commissioner would be required to request bids from either a lottery management services company or from advertising firms. The current language of the Lottery Act only requires the Commissioner to seek bids from advertising firms for the purpose of promoting the State Lottery.

According to the 2014 State Lottery Annual Report for the fiscal year ending September 30, 2014, the State Lottery generated a total operating revenue of over $2.6 billion in 2014, a $117.8 million (4.7%) increase over fiscal year 2013 revenues. The Annual Report notes that ticket sales increased for a variety of games, including instant games tickets, Mega Millions, club games (Club Keno, Pull Tabs, etc.), among other games. As of September 30, 2014, the State Lottery had a total of 174 employees. In addition, the State Lottery spent a total of $17.6 million on promotion and advertising over the course of its last fiscal year.

HB 4077 has been referred to the House Committee on Commerce and Trade. SB 75 has been referred to the Senate Committee on Regulatory Reform. For more information on the legislation, including the full text of each bill, please visit the Michigan Legislature’s website, here: http://www.legislature.mi.gov  


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