HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 715 Compensation of Lottery Ticket Retailers
SPONSOR(S): State Administration & Technology Appropriations Subcommittee, Mooney
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 14 Y, 1 N Thompson Anstead
Subcommittee
2) State Administration & Technology 11 Y, 2 N, As CS Helpling Topp
Appropriations Subcommittee
3) Commerce Committee 18 Y, 0 N Thompson Hamon
SUMMARY ANALYSIS
Gambling is generally prohibited and illegal in Florida. However, in 1986, Florida voters adopted a
constitutional amendment authorizing the creation of the Florida Lottery (Lottery). Since that time, the Lottery
has grown into one of the largest state-run lotteries in the country, with annual sales exceeding $9 billion.
Lottery tickets can be purchased at over 13,000 retail locations throughout the state.
The Department of the Lottery (Lottery) is charged with supervising and operating the lottery in accordance
with the provisions of the Florida Public Education Lottery Act. Gross revenues from the sale of lottery products
are distributed to prizes, Lottery expenses, and transfers to the Educational Enhancement Trust Fund (EETF).
The Lottery contracts with retailers (e.g., supermarkets, convenience stores, gas stations, and newsstands) to
provide adequate and convenient availability of lottery tickets, and is authorized to adopt rules to establish the
manner and amount of compensation of retailers. Prior to Fiscal Year 2022-2023, compensation for retailers
was set at 5 percent commission for tickets sold and 1 percent commission for paying prizes up to $600.
However, during the 2022 Legislative Session, the Legislature authorized, for the 2022-2023 fiscal year only,
effective July 1, 2022, the commission for Florida Lottery ticket sales to be 5.75 percent of the purchase price
of each ticket sold or issued as a prize by a retailer. Prize payment commissions were excluded. Effective July
1, 2023, the compensation for retailers will return to 5 percent.
The bill establishes a permanent 6 percent commission to retailers for the purchase price of each ticket sold or
issued as a prize by a retailer. The bill limits any additional compensation to funding provided in the General
Appropriations Act.
The bill increases the estimated commission paid to Florida lottery retailers by $37.8 million, compared to the
estimated 5 percent commission that would be provided in Fiscal Year 2023-2024. See Fiscal Analysis and
Economic Impact Statement.
The effective date of the bill is July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
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 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.
In 1987, the Legislature created the Florida Public Education Lottery Act,12 which established a state
lottery system intended primarily to generate revenue for public education of the state. 13 The
Department of the Lottery (Lottery) is charged with supervising and operating the lottery in accordance
with the provisions of the Florida Public Education Lottery Act and rules adopted pursuant thereto.14
In 1988, the Lottery began offering lottery games with a $1 weekly drawing. 15 Since then, the Lottery
has grown to include approximately 80 different scratch-off games available at over 13,000 retailer
locations, with lottery ticket prices ranging from $1 to $50. 16
Lottery Revenues
In sum, for Fiscal Year 2021-22, the Florida Lottery:
Prizes totaled $6.245 billion;
Retailer commissions totaled $523.1 million;
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.
7 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.
10 S. 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 Ss. 24.101 to 24.124, F.S.
13 S. 24.102, F.S.
14 S. 24.105(2), F.S.
15 Florida Lottery, History, http://www.flalottery.com/history (last visited Feb. 24, 2023).
16 Florida Lottery, Scratch Offs, http://www.flalottery.com/scratch-offs?amount=30 (last visited Feb. 24, 2023).
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Ticket sales totaled $9.325 billion;
Transfers to the EETF totaled $2.33 billion; and
Ranked the highest among U.S. lotteries in total sales and sixth highest among U.S. lotteries in
per capita sales.17
Gross revenues from the sale of lottery products are distributed to prizes, Lottery expenses, and
transfer to the Educational Enhancement Trust Fund (EETF).18 The Lottery determines the variable
percentage of the gross revenue from the sale of draw and scratch-off tickets that is returned to the
public in the form of prizes in a manner designed to maximize the amount of revenue earned to
enhance education. Gross sales revenue also is used to pay the expenses associated with running the
Lottery, including the cost of its retailer network, draw and scratch-off game vendors, advertising
vendors, and its in-house operation. The remainder of gross sales revenue is transferred to the
EETF.19
Lottery Retailers
The Lottery contracts with retailers 20 (e.g., supermarkets, convenience stores, gas stations, and
newsstands) to provide adequate and convenient availability of lottery tickets. 21 Lottery retailers receive
support from the Lottery in the following ways, at no cost to the retailer: 22
In-store full service from a Lottery Sales Representative.
Point-of-sale material.
Ongoing training.
In-store promotional opportunities.
A dedicated Retailer Hotline for quick assistance.
The Lottery is authorized to adopt rules to establish the manner and amount of compensation of
retailers.23 A five percent sales commission was established in 198724 and remained until July 1, 2022.
In addition, prior to Fiscal Year 2022-2023, retailers also received a separate one percent commission
for paying prizes of less than $600.25
For the 2022-2023 fiscal year only, effective July 1, 2022, the Florida Legislature adopted a specific
commission for Florida Lottery ticket sales of 5.75 percent of the purchase price of each ticket sold or
issued as a prize by a retailer. Any additional retailer compensation is limited to the Florida Lottery
Retailer Bonus Commission program appropriated in Specific Appropriation 2759U of the 2022-2023
General Appropriations Act.26 The commission does not include the one percent commission for paying
prizes.
According to the Lottery, the 5.75 percent is a flat sales commission on both draw and scratch-off ticket
sales. Lottery retailers sell scratch-off tickets on consignment. Retailers receive full books of scratch-off
tickets at no cost, and after selling the tickets, receive a commission for selling those tickets to players.
After tickets are sold, the retailer reconciles the book of tickets through the Lottery terminal, which then
charges their account, less a 5.75 percent commission. Draw game ticket sales are automatically
registered on the Lottery terminal and retailers are charged according to what they sell, less a 5.75
17 Office of Program Policy Analysis and Gov’t Accountability, Review of the Florida Lottery, 2022, Report No. 23-02, (Jan. 2023),
https://oppaga.fl.gov/Documents/Reports/23-02.pdf at page 1, (last visited Feb. 24, 2023).
18 S. 24.121(1), F.S.
19 Office of Program Policy Analysis and Gov’t Accountability, Government Program Summaries, Department of the Lottery, 2022,
https://oppaga.fl.gov/ProgramSummary/ProgramDetail?programNu mber=2090 (last visited Feb. 27, 2023).
20 S. 24.103(5), F.S., defines “retailer” as “a person who sells lottery tickets on behalf of the dep artment pursuant to a contract.”
21 S. 24.105(16), F.S.
22 Florida Department of the Lottery, Agency Analysis of House Bill 715, p. 2 (Mar. 3, 2023).
23 S. 24.105(9)(i), F.S.
24 R. 53ER87-44, F.A.C.
25 Id.
26 Id.
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percent commission. There is no cap on the amount of sales commissions a retailer can receive, the
more a retailer sells, the more they receive in commissions.27
According to reports, the top 10 lottery-selling locations for the 2019 fiscal year, including total net
sales, included the following:28
State Line Gift Shop, McDavid: $5,505,257.50
Fortune Liquors, Campbellton: $5,384,016.50
Friendly Mini Mart, Bonifay: $4,577,112
Mercado Miami, Miami: $4,289,590
Flora Bama Liquor, Pensacola: $3,558,104.50
Publix, Clearwater: $3,503,670
Edgewood Shell, Jacksonville: $3,484,808
Circle K, Pensacola: $3,445,720.50
Publix, West Palm Beach: $3,403,995.50
Publix, Loxahatchee: $3,367,386.50
Proposed Changes
The bill establishes a permanent 6 percent commission to retailers for the purchase price of each ticket
sold or issued as a prize by a retailer. The bill limits any additional compensation to funding provided in
the General Appropriations Act.
SECTION DIRECTORY:
Section 1: Amends s. 24.105, F.S., relating to powers and duties of the department.
Section 2: Provides an effective date.
II. 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:
27 Florida Department of the Lottery, Agency Analysis of House Bill 715, p. 2 (Mar. 3, 2023).
28 Dan Sweeney, Where do the most Florida Lottery tickets get sold? Bet you can’t guess., (Mar. 13, 2020), https://www.sun-
sentinel.com/news/sound-off-south-florida/fl-ne-sosf-florida-lottery-retail-sales-20200313-v m4qu7ovyne4vgunovkhl4cyji-story.html
(last visited Mar. 26, 2023).
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Lottery retailers would see an increase in commissions for lottery ticket sales.
D. FISCAL COMMENTS:
Based on the February 21, 2023, Lottery Revenue Estimating Conference’s projected ticket sales, the
bill would increase the commission paid to retailers by $37.8 million in Fiscal Year 2023-2024, $38.0
million in Fiscal Year 2024-2025, and $38.4 million in Fiscal Year 2025-2026. This is the estimated
increase over the 5 percent ticket sale commission, including the one percent for cashing prizes, that
was authorized in Fiscal Year 2021-2022.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
According to the Lottery, it would need to amend a current rule to account for the increased sales
commissions. The Florida Public Education Lottery Act provides sufficient rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On April 12, 2023, the State Administration & Technology Appropriations Subcommittee adopted one
amendment and reported the bill favorably as a committee substitute. The amendment limits any
additional compensation for retailers to funding provided in the General Appropriations Act.
This analysis is drafted to the committee substitute as passed by the State Administration &
Technology Appropriations Subcommittee.
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DATE: 4/18/2023