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Slow Lottery Sales Threatening Scholarships

ALBUQUERQUE, N.M. — Halfway through its fiscal year, the New Mexico Lottery is struggling with declining ticket sales but still managing to reach its legislative mandate to put at least 30 percent of its revenues into college tuition scholarships.



How long lottery officials will be able to sustain that balance has lawmakers in a quandary.

Through Dec. 31, the state lottery produced gross revenues of $65.86 million — a 5.8 percent decrease from the previous year.

During that same six months, the lottery has contributed $20.27 million to the lottery scholarship fund, or 30.78 percent of its revenues. By Dec. 31 of 2009, the lottery had sent $21.28 million to the fund, or 30.45 percent of revenues.

State lottery CEO Tom Romero attributes the revenue decline to the sluggish economy, fewer jackpot run-ups in the multi-state Powerball and Hot Lotto games, a stagnant advertising budget and the closing of more than 20 retail outlets.

Powerball sales are down $8.7 million, Hot Lotto sales are down about $1 million and scratch-off ticket sales are down about $1.7 million. Some of the Powerball and Hot Lotto players shifted to the Mega Millions game, which generated about $6 million in sales, according to lottery officials.

One bright spot was the in-state Roadrunner Cash game, which saw a $1.5 million sales increase during the first half of fiscal year 2011.

Besides holding down expenses, Romero said the lottery plans to increase the number of lottery retailers by 5 percent by this summer and to boost sales of scratch-off tickets.

Romero said recent state projections — which show that the lottery scholarship fund could be depleted by 2014 if demand and tuitions keep climbing while lottery sales continue to decline — need to be addressed by the Legislature.

Legislators are grasping for solutions.

The Senate Education Committee unanimously endorsed a measure Wednesday that would shore up the scholarship program by freezing tuition for students who receive a lottery scholarship. The bill must clear two more committees before it reaches the Senate for consideration.

According to the state’s higher education department, about 19,700 students, or 26 percent of full-time undergraduates attending New Mexico’s two-year and four-year colleges, are currently receiving a lottery scholarship.

To qualify for a scholarship, which covers the full cost of tuition, New Mexico students must enroll in a state-funded public college or university the semester after their high school graduation, attend full time and maintain a 2.5 point grade-point average.

The committee tabled a measure to allow a one-year break either before or during a student’s time in college.

Since its inception in 1996, the state lottery has raised $466.4 million for education, and more than 68,000 students have attended college on lottery scholarships, according to lottery officials.