New Mexico lottery CEO seeks cut to scholarship payments

David Barden, CEO for the New Mexico Lottery, speaks at the state Capitol in 2018. Barden said in a legislative hearing last week that the lottery should spend less money on the scholarship fund and more on prizes. Gabriela Campos/New Mexican file photo

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.

Reporter

Jens Gould covers politics for the Santa Fe New Mexican. He was a correspondent for Bloomberg News in Mexico City, a regular contributor for TIME in California, and produced the video series Bravery Tapes.

(6) comments

Khal Spencer

Well, it is a balancing act of promoting gambling for the greater good, right? So if we are going to use the lottery to fund scholarships, why stop there? We should legalize prostitution and drugs and manage their sales out of a state office as well. Think of all the money that could go to scholarships; the smile on your face after a satisfying trick with your favorite lady of the evening would be shared by the smile on the face of a newly funded undergrad. For that matter, I suspect the newfound legal job of prostitute would provide better pay for work study than working in the library or campus dining center, so this would help student employees make more money in less time, freeing up time for study.

Finally, the decriminalization would free up prison space for housing corrupt politicians and government bureaucrats! A win-win for all of us!

Scott Smart

Barden is a clown. If his advice is followed the results will be catastrophic.

Mike Johnson

Oh oh, here they go again Fred, go get 'em!

Chris Mechels

New Mexico should consider making the scholarships "needs based" as is the norm in states using lottery scholarships. Since most who play the lottery come from lower and middle income groups, we have a case of the poor subsidizing students who really don't "need" the support. Also, the current scholarship rules discriminate against working students and part time students. It appears the whole structure needs to be revisited, as the whole purpose has been compromised. BTW, the lottery administration seems in need of effective oversight, which the Lottery Board isn't providing. I would suggest major reforms, or elimination, of this program.

Scott Smart

Chris why do you believe that the lottery discriminates against working students? Is it because of the requirement that the student attend full time?

John Balog

I vote no.

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