Lottery Reform

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2017 Legislative Update

For the third year in a row, the multinational gaming corporations that contract with the lottery are pushing a bill to remove the lottery’s accountability to students and reduce the dollars going to scholarships. Senate Bill 192 would repeal Think New Mexico’s 2007 reform law requiring the lottery to deliver at least 30% of revenues to students. This reform has resulted in an additional $9 million a year going to students.

Last year, the bill to repeal the 30% minimum proposed replacing it with a requirement that the lottery deliver at least $41 million to students. Thanks to the opposition of hundreds of New Mexicans like you, that bill was defeated – and thanks to the 30% requirement, students received $46 million this year, $5 million more than they would have if that bill had passed.

Think New Mexico is opposing Senate Bill 192 and also working to pass House Bill 250, which would increase the accountability of the state lottery and send more lottery dollars to scholarships.

House Bill 250, sponsored by Representative Jason Harper (R-Rio Rancho) and Representative Javier Martínez (D-Albuquerque), would send unclaimed prize dollars (which average $2-3 million a year) to the scholarship fund rather than putting them back in the prize pool. It would also align the interests of the lottery’s managers with the interests of students by requiring that that any bonuses paid to the lottery CEO and outside vendors be calculated based on increases in dollars to scholarships, rather than just total dollars bet on the lottery, as they are currently calculated. Finally, the bill would ban the lottery from expanding into highly addictive video lottery gaming.

Contact your legislators and the governor and ask them to SUPPORT House Bill 250 and OPPOSE Senate Bill 192!

2015-2016 Developments

Lottery ReformBefore Think New Mexico’s 2007 law established the requirement that the lottery must deliver at least 30% of revenues to scholarships, only about 23% of lottery revenues were reaching students (with the rest going to prizes and overhead costs like contracts with outside vendors). In the years since our reform law was enacted, the 30% requirement has resulted in lottery scholarship students receiving an additional $9 million a year over and above what they would have received without the law.

In July 2014, the CEO of the New Mexico Lottery announced that he would bring legislation to repeal the 30% requirement. That legislation was introduced as Senate Bill 355 in 2015, and Think New Mexico worked hard to defeat it. We succeeded thanks to the support of the student governments at the University of New Mexico, New Mexico Tech, Highlands University, Santa Fe Community College, and San Juan College, among others. Read more about this issue in our opinion editorial from March 2015.

Unfortunately, in 2016 another bill was introduced to repeal the 30% requirement. Think New Mexico again collaborated with other stakeholders to defeat Senate Bill 180.

Both bills were pushed by teams of well-connected lobbyists for the three multinational gambling companies that would be the primary beneficiaries of rolling back the 30% minimum to students, and we expect that they will be back in 2017. Think New Mexico will continue working to ensure that the lottery fulfills its statutory purpose of maximizing dollars to scholarships.

Issue Summary

lotterybillsign

Governor Richardson signs the lottery reform bill into law.

The New Mexico Lottery was created to “provide the maximum amount of revenues” for full-tuition scholarships at public colleges and universities in New Mexico, according to state law. These “Lottery Success Scholarships” have sent over 38,000 of New Mexico’s best students to college.

Unfortunately, in 2006 the Higher Education Department projected that the scholarship fund faced an $18 million deficit in 2011, when the cost of the scholarships would exceed lottery revenues and current cash reserves would be depleted.

Under that scenario, the eligibility requirements for the scholarship would have to be raised so that many deserving students would no longer qualify for Success Scholarships, or the value of the scholarship would have to be cut for all students, increasing the financial burden on already stretched New Mexico families.

In September 2006, Think New Mexico proposed a different strategy for making Lottery Success Scholarships sustainable: cut the disproportionately high operating and administrative costs at the New Mexico Lottery and re-allocate those savings to scholarships. The New Mexico lottery’s operating and administrative costs were the fifth highest in the nation in 2005, and were very high even when compared to other states that have relatively low populations, rural populations, and low ticket sales.

Think New Mexico released a policy report describing its “30% solution” for making the scholarships sustainable: require that the lottery deliver 30% of every dollar to the scholarship fund, just as state law already required 50% be returned to players as prizes. At the time, only 24 cents of every dollar bet on the lottery went to scholarships, while nearly 20 cents were used for operating and administrative costs.

The proportion of revenues going to scholarships could be increased by such strategies as re-negotiating the state’s overly expensive, sole source online gaming contract with multinational corporation GTech.

Eleven other states had already successfully implemented this strategy, and several other small lotteries delivered over 30% to their beneficiaries in 2005, including North Dakota (33.5%), Washington D.C. (30.4%), New Hampshire (30.2%), and West Virginia (30%).

In 2007, Think New Mexico’s lottery reform legislation was passed by the legislature and signed into law by Governor Richardson.

News Coverage

newspapericon-smallRead Think New Mexico’s opinion editorial opposing the Lottery’s proposal to cut the requirement that 30% of revenues go to scholarships, which has been published in the Albuquerque Journal, the Alamogordo Daily News, the Carlsbad Current-Argus, the Edgewood Indpendent, the Farmington Daily Times, the Grant County Beat, the Hidalgo County Herald, the Hobbs News-Sun, the Las Cruces Sun-News, the Las Vegas Optic, the Los Alamos Daily Post, the Rio Grande Sun, the Rio Rancho Observer, the Roswell Daily Record, the Ruidoso News, the Santa Fe New Mexican, the Silver City Daily Press, the Silver City Sun-News, the Taos News, the Truth or Consequences Herald, and the Union County LeaderJanuary-March 2015

radioicon-smallListen to an interview with Fred Nathan on Richard Eeds Show on KVSF Santa Fe about Think New Mexico’s work to protect lottery scholarships • February 11, 2016 (mp3, 24:38)

tvicon-smallWatch KRQE News 13 story about the New Mexico Lottery’s attempt to repeal the requirement that 30% of revenues be dedicated to scholarships • February 4, 2015 (2:20)

newspapericon-smallRead Daily Lobo articles about student opposition to the lottery’s proposal to reduce the percentage of lottery revenue dedicated to scholarships • November 24, 2014, February 26, 2015, and March 6, 2015

newspapericon-smallRead Las Vegas Optic editorial opposing the effort to reduce the percentage of lottery dollars dedicated to scholarships
• July 14, 2014

newspapericon-smallRead Rio Grande Sun editorial opposing the proposal to reduce the percentage of lottery dollars dedicated to scholarships
• July 16, 2014

newspapericon-smallRead Albuquerque Journal article about the lottery delivering a record high percentage of revenues to the scholarship fund in 2010
• August 14, 2010

newspapericon-smallRead Associated Press article on the initial results of the lottery reform Legislation
• June 13, 2008

newspapericon-smallRead Santa Fe New Mexican article on how the New Mexico Lottery saved $35 million by rebidding its sole-source contract with Gtech
• July 27, 2007

newspapericon-smallRead front page Albuquerque Journal article on passage of the lottery reform bill • March 12, 2007

newspapericon-smallRead Think New Mexico’s opinion editorial on lottery reform • March 2007

newspapericon-smallRead Santa Fe New Mexican editorial in support of lottery reform legislation • January 25, 2007

radioicon-smallListen to KSFR Santa Fe Public Radio report on lottery reform • January 16, 2007 (mp3, 5:30)

newspapericon-smallRead New Mexico Business Weekly article on Think New Mexico’s lottery reform initiative • November 3, 2006

newspapericon-smallRead syndicated columnist Jay Miller’s columns on Think New Mexico’s lottery initiative • November 23, 2006October 8, 2006
and his follow-up column on the impressive initial results of the reform September 28, 2007

newspapericon-smallRead Albuquerque Journal editorials endorsing lottery reform • October 30, 2006September 5, 2006

newspapericon-smallRead Las Vegas Daily Optic editorial endorsing lottery reform • September 26, 2006

newspapericon-smallRead Deming Headlight editorial in support of lottery reform • September 13, 2006

newspapericon-smallRead Santa Fe New Mexican editorial endorsing lottery reform • September 10, 2006

newspapericon-smallRead Hobbs News-Sun editorial in support of lottery reform • September 9, 2006

newspapericon-smallRead Las Cruces Sun-News editorial in support of lottery reform • September 7, 2006

Saga of the Lottery Lobbyist

Just before the 2007 legislative session, the Albuquerque Journal learned that the New Mexico Lottery had hired a lobbyist for $32,000, most likely to fight reform efforts. The paper published a front-page story and editorial on the subject, and Governor Richardson ordered the lottery to cancel the lobbyist’s contract.

 

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