Louisiana Lottery History

Interested in learning about the Louisiana lottery history?  The Louisiana Lottery Corporation (LLC) is a government-run lottery that is used to generate revenue without increasing taxes. The proceeds of the Lottery go to the Minimum Foundation Program that funds public education in Louisiana. The daily activities involved with running the cooperation are handled by the president of the Louisiana Lottery Cooperation. The president is under the supervision of the Lottery’s nine-member governing board of directors.

The Lottery offers full and part-time employment in a total of 6 different cities in the State of Louisiana. Over half of the Lottery sales are for prize expenses. Not only does the government receive revenue from the Lottery, but businesses do as well. The minimum age to purchase a ticket is 21 years olds. However, to sell or receive a Lottery ticket there is no minimum age.

All drawings are conducted at the Lottery headquarters in downtown Baton Rouge using automated drawing machines, and they are videotaped. Drawings happen every evening (excluding some holidays). The LLC uses three methods to choose random numbers for each of the Lottery’s games. Before each drawing, the drawing method and machine are selected randomly. There are a total of 7 in-house games that could be played. Winners that are U.S. citizens are subject to Louisiana income tax withholding and can also have federal tax withheld if winnings are $5,000 or more.

Louisiana Lottery History

The Louisiana Lottery Corporation (LLC) began in 1991, after the 1990 Louisiana legislature proposed a government-run lottery (ACT 1045) as a way to generate revenue without increasing taxes. Due to the Lottery’s unique operations, the Legislature recognized a corporate structure would suit it best.

Voters also liked the idea, passing a constitutional amendment in 1990 creating the LLC by a 69% to 31% margin. In 2003, voters passed another constitutional amendment to dedicate Lottery proceeds to the Minimum Foundation Program that funds public education in Louisiana.

Today’s Lottery is not the first in Louisiana; in 1868, a group of entrepreneurs began a private business, the Louisiana State Lottery Company. It promised to donate $40,000 annually for 25 years to Charity Hospital in New Orleans in exchange for the hospital not having to pay taxes. Tickets were sold nationwide to make it the largest lottery in the country. After charges of corruption, it moved to Honduras, ending 22 years later.

The president of the Louisiana Lottery Corporation handles the daily activities involved with running the corporation under the supervision of the Lottery’s nine-member governing board of directors. Board members are appointed to staggered terms from each of Louisiana’s seven congressional districts; one member is chosen from a list of five candidates submitted by the Louisiana Oil Marketers and Convenience Store Association; and one member is appointed at-large. Each member is appointed by the governor and confirmed by the Louisiana Senate before beginning a four-year term. Louisiana’s treasurer serves as an ex-officio board member.

Operations

To ensure the highest level of accountability, the following have varying degrees of oversight over the corporation, including its budget, drawings and administrative rules.

Governor of Louisiana
Joint Legislative Committee on the Budget
Senate Judiciary B Committee
House Committee on Administration of Criminal Justice
Attorney General
Board of Directors
In addition to an annual “clean bill of health” from the Legislative Auditor, the LLC continues to receive national recognition for excellence in financial reporting. The LLC ranks first among jurisdictional lotteries for percentage of revenue transferred to its government. Operating solely from self-generated revenue, the Lottery contributes more than $100 million yearly to the Minimum Foundation Program that funds public education in Louisiana.

Staffing and offices

The Lottery employs a total of about 140 people (full-time and part-time) in its downtown Baton Rouge headquarters, distribution center, as well as in its regional offices in New Orleans, Lafayette, Alexandria, Shreveport, and Monroe. Regional staff process and pay winning tickets and support Lottery retailers, including training, monitoring product inventory and point-of-sale opportunities, assisting with in-store promotions resolving problems, explain new games and changes, and ensuring compliance with Lottery rules. Operational management functions, including sales, accounting, auditing, marketing, public relations, human resources, security, and information systems, are conducted from the Lottery’s corporate headquarters. The Lottery’s distribution center oversees inventory management and instant ticket order fulfillment.

Distribution of monetary funds

More than half of Lottery sales are reserved for prize expenses. Prizes not claimed are returned to winners in the form of increased payouts on scratch-off tickets. Players have won more than $2.8 billion in Lottery prizes since the Lottery’s inception.

The Lottery statute mandates that 35 percent of all Lottery revenue be transferred to Louisiana’s treasury. Effective July 1, 2004, the Louisiana constitution provides that Lottery proceeds be earmarked for the Minimum Foundation Program, which funds public education in Louisiana. In addition, the first $500,000 in annual Lottery proceeds are earmarked for the Louisiana Department of Health and Hospitals-Office of Addictive Disorders to fund problem gambling programs.

As of July 2009, the Lottery has transferred over $2 billion to Louisiana’s treasury. In fiscal year 2009, more than $135.9 million was transferred, which is the highest amount since 1993. The LLC ranks first among U.S. lotteries in percentage of revenue transferred to its government.

More than 2,700 businesses in Louisiana earn a 5 percent commission on the sale of Lottery products as licensed retailers. In addition to revenue from commission, retailers earn an incentive of up 2 percent for cashing winning tickets up to $600. Retailers are also paid a selling bonus of up to 1 percent on the sale of top-prize winning tickets for Lotto, Easy 5, or Powerball (1% of Louisiana’s contribution to the jackpot’s cash value; for Powerball, a minimum bonus of $25,000). Retailer commission and incentives totaled $19.7 million in fiscal year 2009.

The Lottery retains less than 10 percent of its revenue to fund operations, including its headquarters, five regional sales offices where players claim winning tickets, technology for generating tickets and conducting drawings, ticket printing, advertising, promotions, and staffing.

The US and Louisiana governments consider winnings from all forms of gaming to be income for tax purposes. By law, the LLC must report winnings from each ticket with a prize value over $600 to the Internal Revenue Service, and the Louisiana Department of Revenue and Taxation.

Income tax regulations require the LLC to withhold 25 percent federal taxes, and 5 percent Louisiana taxes, from prizes of more than $5,000. A gambling income statement, W2-G, is mailed to the claimant by January in the year following the payment of the prize. The W2-G is mailed to the address entered on the claim form unless the Lottery is notified of an address change before the W2-G is issued.

Minimum purchasing age

According to Louisiana law, Lottery ticket purchasers must be at least 21 years old. Individuals who sell tickets are required to obtain proof of age through a valid current drivers’ license, ID card, passport, or military/federal ID containing a photo and date of birth.

Individuals who are at least 21 can give Lottery tickets to a person under 21 as a gift, although minors must be accompanied by a legal guardian or a family member who is at least 21 to claim a Lottery prize. Underage people can sell Lottery tickets if they meet the minimum employment age of 14, and are employed by a licensed Lottery retailer.

The 21 minimum age requirement to purchase Lottery tickets was changed from 18 in 1998 to coincide with the age requirement for most other forms of gaming in Louisiana, which is one of only four jurisdictions (Arizona, Iowa and Mississippi are the others) that requires ticket purchasers to be at least 21.

Now you know all about the Louisiana lottery history!