Lottery payout proposal draws skepticism

ALBUQUERQUE (KRQE) – It sounds like a strange proposition.

The New Mexico Lottery wants to give a smaller share of its revenues to pay for scholarships for New Mexico students in hopes of giving more money to that same fund.

Lottery spokesperson Linda Hamlin explains it this way.

“The New Mexico Lottery wants to give more money to the Legislative Lottery Scholarship program,” Hamlin said. “We believe in order to do that, we need to increase our Scratcher prizes.”

Here’s how the New Mexico Lottery works. Out of every dollar spent on tickets, about 54 cents go to prizes and around 31 cents goes into the lottery scholarship fund. State law requires at least 30 percent of lottery proceeds have to go to scholarships.

But in recent years, lottery sales have stayed mostly flat despite some high profile jackpots.

The big problem has been Scratcher tickets, which provide the lottery about half of its annual sales. In fiscal year 2007, players bought $91 million worth of Scratchers. In fiscal year 2013, that number was down to just shy of $70 million. Hamlin says lottery officials think they know why sales are down.

“The New Mexico Lottery has one of the lowest Scratcher prize payouts in the US,” Hamlin said. “We need to give players more to win.”

To do that, lottery administrators are asking lawmakers to lower or get rid of that minimum 30 percent share required to be paid out to the scholarship fund. The hope is that they can then use that money to beef up the prize pool, increasing overall sales by enough to where the scholarship fund would get more money.

“When you have a healthy lottery with growing sales, everyone will win,” Hamlin said.

But there’s some early skepticism coming from the very people that need to be sold on it.

“I’m not terribly convinced,” said state Sen. Jacob Candelaria, D-Albuquerque. “Faith-based economics is always a cool thing to talk about but before I would vote on any piece of legislation I’d need to see hard data.”

According to the Albuquerque Journal, Fred Nathan with Santa Fe-based think tank Think New Mexico has pointed to data from California that suggests removing restrictions on how much the lottery is required to payout most benefits lottery players and administrators, and not the beneficiaries of the program, like students.

A bill making the changes lottery officials are pitching could come before lawmakers in January at the next legislative session.

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