The head of the New Mexico Lottery Authority is advocating for a reduction in the portion of sales the agency is required to allocate toward a state scholarship fund.
Currently, the lottery must send 30 percent of gross sales to a fund that pays partial tuition costs for in-state higher education students.
CEO David Barden in a Legislative Finance Committee hearing Tuesday said that threshold should be lowered, which he said would allow the lottery to pay out more in prizes. That, he added, would lead more people to play the lottery and ultimately generate more revenue for the scholarship fund.
“Our product — the people who play it love it, but some people have played and haven’t won and had a bad experience,” Barden said. “Until we change their experience, they’re not going to play anymore. So, what we’re trying to do is get people back.”
At 61.1 percent, New Mexico’s lottery has the lowest average payout among U.S. states listed in a 2019 fact sheet published by La Fleur’s, a publication specializing in lottery data.
The Legislature would need to pass a bill in order to change the requirement, and Barden said he was not expecting legislation to be introduced in the session starting in January He added that he has not met with the office of Gov. Michelle Lujan Grisham on the matter in the lead-up to next session.
The Governor’s Office said Wednesday it did not have a comment on the lottery’s remarks about removing the requirement.
Still, some lawmakers at the Finance Committee hearing agreed with Barden’s assessment.
“When you increase your volume and your customer count, then your gross income goes up and then your net is improved,” said Sen. John Arthur Smith, D-Deming and the chair of the Senate Finance Committee. “We haven’t been able to convince anyone that the lottery has a similar function.”
Organizations such as Think New Mexico have historically opposed removing the requirement.
In the last session, Senate Bill 283 would have removed the requirement but did not become law.
Barden also said the lottery wants to be able to make transfers to the scholarship fund on a yearly basis rather than monthly, which is the current requirement.
Barden was criticized by the Governor’s Office and think tanks earlier this year when the board that oversees the lottery gave him a 26 percent raise to $220,000 a year.