The Idaho Lottery dates back to 1986, when the voters of Idaho first approved it via a statewide initiative. The Idaho Supreme Court later declared the initiative unconstitutional and prohibited an amendment of the Idaho Constitution. In 1988, the Idaho Legislature authorized a statewide vote on the lottery question in the next general election. In November 1988, the voters passed a constitutional amendment repealing the constitutional prohibition on lotteries. The Lottery opened for business less than seven months later and sold its first scratch ticket on 19 July 1989.
The 1988 Lottery legislation also established a Lottery Commission, which is responsible for Lottery regulations and overseeing Lottery operations. The Commission has five members, appointed by the Governor; each member serves a four-year term.
The Idaho Lottery transfers lottery revenue – less prizes, retailer commissions and administrative costs – to the State as a dividend. Lottery dividends were originally given to Idaho's Public School Building Account and the Permanent Building Fund for the care of buildings such as Idaho state offices and college campuses. However, a change in the law effective in 2009 diverted a portion of Lottery funds (the amount over $34 million in dividends) for the Bond Levy Equalization Fund, to assist districts with their bond obligations. Parts of the lottery distribution mechanics were due to expire in 2014. But in April 2014, the governor signed into law a sunset provision for lottery statutes.
The Lottery offered the first draw game, Lotto America, for sale on 1 February 1990, after Idaho was accepted as a member state of the Multi-State Lottery Association (MUSL), which operated Lotto America. Later that same year, the Lottery offered its first exclusive in-state cash lotto game, Idaho Fantastic 5. In 1992, Lotto America was replaced with Powerball. The Mega Millions game Megaplier was launched in 2010.
By law, at least 45% of Lottery revenues must be returned to players in the form of prizes. However, many games return much more than the minimum. TouchTab tickets have the largest prize return of slightly less than 80%, and draw games, like Powerball, have the lowest at 50%. The annual raffle returns about 60% of ticket sales revenue back to players in prizes. Winning tickets may be claimed for up to 180 days after the draw date for draw games and 180 days from the end date for scratch games before the prize money reverts back to the Lottery as unclaimed prizes and is used for future prize expenses. Pull-tab tickets must be redeemed on the day they were purchased. Prize tickets of more than $600 must be redeemed at the Lottery office. Winning tickets of less than that amount are paid by the retailer who sold the tickets.
There are approximately 1,100 licensed retailers statewide. More than half of licensed Lottery retailers are located in convenience stores, with the rest at grocery stores, variety stores, bowling centers, restaurants and bars. Retailers receive a commission of 5% of their ticket sales and may receive a discretionary bonus of up to 1% as well. In addition, retailers selling a winning draw or scratch ticket with a prize amount of $500 or more receive a bonus of 10% of the prize amount, up to a predetermined limit. New retailers must pay a one-time installation charge of $200 for installation of the physical connection to the Lottery's central computer system and a weekly communications fee of $12.50.
From November 2010 to June 2011, the Lottery initiated a pilot project to introduce a new paperless TouchTab dispensing device to retailers. After achieving successful results, the pilot program was extended to 73 locations across the state. Tickets on TouchTabs offer the same games and have the same number of pre-programmed tickets and the same prize structure as the paper version. The major difference between the traditional, break-open style of pull-tabs and the TouchTabs is how they are played. The paperless TouchTabs are dispensed by a touch-screen monitor where players open windows electronically to reveal winning and non-winning combinations. Pull-tab tickets are sold mainly in restaurants and bars.
On 2 March 2013, the House voted 44-23 to approve HB120, a bill that prohibited the use of credit cards to buy lottery tickets. It later passed the Senate and was signed by the governor on 11 April 2013. The measure was opposed by retailers and convenience store owners citing that government was telling them how to run their business. The bill was effective on 1 July 2013.
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