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Wednesday, October 28, 2009
State To Add Mega Millions
By Charles D. Brunt
Journal Staff Writer
A second multistate, multimillion-dollar lottery comparable to Powerball could be coming to a retailer near you.
The New Mexico Lottery board voted in a special meeting Tuesday to move forward with plans to bring the Mega Millions lottery to the state, possibly as early as late January.
"New Mexico is projected to achieve an incremental sales increase of at least 5 percent (and) as much as 35 percent," by adding Mega Millions to its list of games, state lottery CEO Tom Romero told the seven-member, governor-appointed panel.
"It would equate to approximately $386,000 in additional net revenue for the Legislative Lottery Scholarship fund, based on five months of sales in FY 2010, which would take our return from $41.7 million to $42.1 million," Romero said.
The scholarship program, the lottery's primary beneficiary, pays tuition for eligible students attending state-funded colleges and universities.
The New Mexico lottery had gross revenues of $142.6 million last fiscal year, which generated $40.8 million for scholarships, according to lottery officials.
Romero acknowledged that cannibalization — people shifting their lottery purchases from one game to another — is a concern when a new game comes along.
"While there is evidence to suggest that the introduction of a Powerball-like game will cause traditional lotto game sales to decrease, there's also equal evidence pointing to an aggregate increase," Romero said.
Because research has focused on national impacts of having dual multistate lotteries, Romero said it's unknown how much of an impact a second mega lottery will have on the state's current lottery games, or how much overall sales might increase.
Without such details, noted board member Kenneth Hoeksema of Las Cruces, the board is left with only "guesstimates" of how Mega Millions might affect revenues.
Board members also expressed concern about neighboring states that are also considering adding a second mega lottery to their lineups. Currently, Arizona, Colorado and Oklahoma offer Powerball, and Texas offers Mega Millions.
"If we don't do this, we have Texas to contend with," Romero said. "To my understanding Arizona, Colorado and Oklahoma are all planning on moving forward" with adding Mega Millions, he said.
"Strategically, it's incumbent that the New Mexico Lottery make this move or we're going to see that the citizens of New Mexico are going to vote with their feet as they cross the borders into other states to participate in Mega Millions," board member Cliff Stroud of Carlsbad said before making the motion to adopt the new game.
His motion was amended to allow state lottery officials to spend "up to $496,000" this fiscal year, which ends June 30, 2010, to promote and support Mega Millions.
The motion passed 6-0, with board member Herman Tabet of Belen absent.
One hurdle remains before New Mexico gamblers plunk down a buck for a Mega Millions ticket.
The associations that govern Powerball and Mega Millions, the nation's two largest lotteries, agreed earlier this month to end their ban on selling both games in a state, but they have yet to work out terms.
Powerball, played in 30 states, the District of Columbia and the Virgin Islands, hit a record jackpot of $365 million in February 2006. Mega Millions, played in 12 states, had a record jackpot of $390 million in March 2007.
Since its inception in 1996, the state lottery has raised $410 million for education, and more than 54,000 students have attended college on lottery scholarships, according to the state lottery.
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