A state House of Representatives committee on Friday unanimously scuttled a proposal to loosen regulations on the New Mexico Lottery, a plan that lottery officials said would allow them to boost prizes but one which critics argue would have amounted to a blank check.
The lottery in recent years has pushed to get rid of a requirement that it turn over 30 percent of its revenue to a fund that helps in-state college students pay tuition. Lottery managers argue that they could rake in more scholarship money if they could use a bigger share of the revenue to entice more players.
While the proposal passed the state Senate last week, it has met with skepticism from lawmakers in both parties who raised concerns that the move would amount to a gamble with a program that has become vital to New Mexico students and colleges.
Lottery officials have raised alarms about declining sales of scratch-off tickets, which brought in about $87 million in revenue during fiscal year 2008 but dropped to $70 million in fiscal year 2014. Sales rebounded in the following few years. But as tuition demands have risen, the lottery has argued that it must try to boost sales and address the strain on the state’s scholarship fund. About 29,000 students received scholarships funded by the lottery in fiscal year 2016.
Legislators have already pared back the portion of a student’s tuition that is covered by lottery scholarship funds.
“If we don’t find a way to try to maximize the effectiveness of the program, we’re not doing the best for our students,” said Rep. Bill McCamley, a Democrat from Las Cruces who co-sponsored Senate Bill 192.
McCamley argued that allowing the lottery to pay a bigger share of its revenue as prize money is a proven way to boost ticket sales.
Members of the House Appropriations and Finance Committee expressed skepticism on Friday, however, with some asking for greater certainty that the lottery could boost sales in order to make the move worthwhile.
The lottery was not always required to turn over a certain amount of its revenue to the scholarship fund. The Legislature only imposed the requirement starting in 2008. Prior to that, the lottery turned over an average of 24 percent of its revenue to support students and schools.
“That’s what we would be going back to,” Fred Nathan, executive director of the policy center Think New Mexico, told lawmakers in a committee hearing early this week.
The bill had faced mounting resistance. It passed the Senate with opposition from 17 senators, including Majority Leader Peter Wirth, D-Santa Fe. When the bill reached the House Education Committee on Wednesday, Majority Leader Sheryl Williams Stapleton, D-Albuquerque, blasted the idea as a gamble. That committee advanced it without recommendation by a vote of 7-5.
In a bid to address some of the criticism, McCamley offered changes to the bill that would ensure the current 30 percent requirement would go back into effect after five years, or sooner if the lottery turned over less than $35 million in a single year. Since the 30-percent requirement was put in place, the lottery annually has turned over at least $40 million.
The House Appropriations and Finance Committee’s unanimous vote to table the measure effectively killed it.