New Mexico Lottery has $2.5-$3M in unclaimed winnings each year

Where does the money go?

ALBUQUERQUE, N.M. (KRQE) – New Mexicans across the state have taken their shot at hitting the jackpot.

But as KRQE News 13 found out on Special Assignment, lots of people who do win money on the lottery never pick up their winnings. Now there’s a fight over what to do with the unclaimed prize money.

Thousands of New Mexicans take their chances on the lottery to see if they can hit the jackpot, whether it’s Powerball, Mega Millions, or spending a spare dollar on a scratcher.

“I think the most I ever won was like $10,” UNM graduate student, Jackelyn Van Buren, told KRQE News 13. She made sure to cash in that $10.

But even though anyone can be a winner, it turns out lots of lotto winners never pick up their prize.

Unclaimed prize money

KRQE News 13 asked people in Albuquerque much money they believe goes unclaimed in a year in New Mexico.

“Maybe half million?” UNM student, Joe Page, guessed.

“I don’t know, I’d probably say a few hundred thousand,” said Alison Atencio.

“Let’s see, $42,000,” another man guessed.

Van Buren guessed around $50,000. Most people who spoke to KRQE News 13 guessed way too low.

According to the New Mexico Lottery, unclaimed prizes amount to roughly $2.5 to $3 million every year.

“I wouldn’t have thought that much,” Van Buren said.

According to the Lottery, as of June 2016, unclaimed prizes amounted to $2,553,494.

“You’ll find that the bigger winners tend to make it in,” said New Mexico Lottery CEO David Barden. “Very rarely do you have a jackpot winner that doesn’t come in to claim $1 million or a $500,000 prize.”

KRQE News 13 has reported on those big winners over the years.

But what about the smaller victories? Why aren’t more of them cashing in?

“I’ve done scratchers and I’ve placed it in my car or my pocket,” said Page. “It’s gotten washed or I’ve lost it.”

“People just don’t notice that they’ve won,” Barden explained. “They lose the ticket or they put it down.”

Barden took KRQE News 13 behind the scenes of the New Mexico Lottery.

“This is sort of the heart of the lottery,” Barden said, pointing to the large warehouse in Albuquerque where workers receive, store, and ship new lottery tickets.

The lottery generates thousands of tickets to send to stores around the state, coming out with new games every week.

“These tickets cost $44,000,” Barden said, pointing to a new game he cannot put out on the market yet. “We did a 720,000 print run on these tickets that you’re seeing.”

It’s the work players don’t see that helped the lottery pull in $154.4 million in gross revenue last year.

Where does all that money go?

According to the lottery, more than half of its gross revenues, or almost $85 million last year went toward prizes.

Nearly 12 percent goes toward advertising and marketing, the cost of the product, and paying retailers their cut.

About three percent of gross revenue is spent on administrative costs.

Then there’s the scholarship fund. State law requires 30 percent of gross revenues must go into the lottery tuition fund. That was about $46 million last year.

Barden said meeting that 30 percent mandate has been difficult. He said 82 percent of the time, the lottery has to tap into the unclaimed winnings to meet the mandate.

“So we wouldn’t get to 30 percent without the unclaimed prize money,” Barden told KRQE News 13.

Lottery scholarship woes

Lawmakers recently introduced a bill they believe will boost the lottery scholarship funds by putting the millions in unclaimed prizes directly into the tuition pool.

In a non-partisan effort, House Bill 250 is sponsored by Republican Representative Jason Harper of Rio Rancho, and Democratic Representative Javier Martinez, of Albuquerque.

“That would definitely give a boost to how much money is available to cover lottery scholarship tuition,” Rep. Harper told KRQE News 13 in an interview on February 6th.

“This is about the students, this is about ensuring solvency in our scholarship lottery fund, and this is about putting students first,” said Rep. Martinez.

The bill is also aimed at changing the way the lottery authority administers bonuses and commission to employees and contractors.

Rather than being calculated on gross revenues, bonuses and commission would be based on how much money goes into the lottery scholarship fund each month. The bill’s sponsors hope this would act as an incentive to put money into the scholarship fund.

However, the lottery claims that plan won’t work. Barden argues the unclaimed prize money is better spent on growing the lottery, with better games to attract more players, higher prize points, and in turn bring in more money for students in the long run.

“Without (the unclaimed prize money), the Lottery would have to reduce our transfers to the tuition fund by at least $2.5 million each year – essentially resulting in the same or lower revenue transfers,” a spokesperson for the New Mexico Lottery told KRQE News 13 via email.

The Lottery CEO also wants to do away with the 30 percent mandate all together to invest in and grow the lottery even more.

“We need a chance to grow, I think there’s some better options out there,” Barden explained. “We’re trying to give more to the students, not less.”

Keeping the Lottery alive

“I do think it’s important and it’s the reason why a lot of students are able to go to college,” Van Buren told KRQE News 13.

Currently, the New Mexico Lottery has a $20 scratcher game with a $500,000 grand prize that Barden said he cannot put out on the market yet, since the lottery would not be able to pay that top prize.

Sales are currently down on scratchers about 12 percent, Barden said.

“Without having (unclaimed prize funds) for our operating expenses to be able to pay a prize winner, it hurts the business,” Barden added. “When it hurts the business, next year our estimates will be down.”

Still, lottery officials encourage anyone with a winning ticket to come forward.

Students in New Mexico who use the lottery scholarship have big dreams. And for all the people who play the games with dreams of winning big, collecting the cash should be the easy part.

The largest lottery winner in New Mexico who never came forward had a $1 million Powerball ticket from 2014. Lottery officials attempted to locate the winner, but the prize expired on Christmas Eve in 2014.

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