Bill would bring craps tables, sportsbooks to racetracks

LAS CRUCES – New Mexico’s college scholarship program has been funded by gambling revenue ever since the Lottery Scholarship Fund was started in 1996.

With that fund no longer able to cover full tuition costs for students, Rep. Ray Lara, D-Chamberino, is sponsoring a bill that would boost revenue by converting the “racinos” at the state’s horse racing tracks to full-service casinos, with live poker, blackjack, craps and a sportsbook.

The change would generate an estimated $40 million a year, with $15 million of that going into the scholarship fund, and the rest to the General Fund. Lara argued during a recent news conference that the bill would have the dual benefit of helping more students and boosting the economy through increased tourism.

The Sunland Park Racetrack and Casino is on the outskirts of El Paso. Lara said 85 percent of its revenue comes from out of state.

“I truly believe this is a winwin for the state as a whole,” he said. “This is going to benefit our young people. This is going to bring jobs. This is going to bring additional revenue to our communities and to our state.”

New Mexico’s five racetracks, in Farmington, Hobbs, Ruidoso, Albuquerque and Sunland Park, all have casinos attached to them. Along with slot machines, they also offer poker, blackjack and roulette, but not with live dealers, cards and spinning wheels. Only the video versions are available. And sports bettors are now limited to just horseracing.

Under the proposal, the new casinos would be managed and operated by the New Mexico Lottery,

Bill cosponsor Sen. Bill O’Neill, D-Albuquerque, said that along with bolstering the Lottery Scholarship, it would also bring millions of dollars to the General Fund at a time when lawmakers are looking for new revenue sources.

“We really need to diversify our revenue stream, and that’s going to be a big theme in the upcoming session,” he said. “We’re looking at a lot of different strategies to not be at the mercy of the boom and bust of oil and gas.

“We’re all looking at these different potential sources of revenue,” he said. “The legalization of marijuana is going to be a big focus this coming session, and tax reform is going to be a big focus. So thematically, I think it’s good timing for the bill.”

Like the legalization of marijuana, the expansion of gambling may have hidden costs. A 2006 study by the Responsible Gaming Association found that there were as many as 19,400 New Mexicans who were classified as “pathological gamblers,” another 19,400 who were “problem gamblers” and as many as 95,600 were “at-risk gamblers.”

New programs have been put in place since then to help compulsive gamblers, and Lara said legislators are well aware of the problem.

“The good thing is all of our racetrack casinos have 20-plus years of experience with this,” he said. “They already have good infrastructure in place that helps identify and prevent this kind of thing.”

Opposition to the bill will likely come from tribal casinos. The Inn of the Mountain Gods Casino near Ruidoso opened its sportsbook in 2019.

Lottery Scholarship

The Legislature has long heralded the Lottery Scholarship Program as one of its most successful initiatives, allowing thousands of young New Mexicans to be the first in their families to attend college. More than 128,000 New Mexico high school graduates have been helped by the fund.

The popularity of the scholarship has grown steadily through the years, going from 7,377 students receiving assistance in 2000 to 24,274 last year. But, the number of lottery players has not risen at the same rate.

At the same time, boards of regents throughout the state raised tuition and fees to compensate for a loss of state support following the recession of 2008. The combination of more students and higher costs means the fund can no longer cover full tuition costs for all eligible students.

Gov. Michelle Lujan Grisham attempted to solve the problem last year with her Opportunity Scholarships plan, which would take money from the General Fund to fill in what was needed after the Lottery Scholarship and federal assistance fell short.

The proposal died when its funding was stripped from the budget by the House Appropriations and Finance Committee. There were concerns about the so-called “last dollar” approach, in which all federal assistance needed to be tapped first.

The governor’s office said they are reworking the bill, and the new version will be one of her top priorities in the upcoming session.

Lara said he does not see his bill as competing with the governor’s, but rather working to strengthen her bill.

“This will enhance it and make it so that it can stand on its own,” he said. “Instead of pulling from existing funds, this will be a new revenue stream that will supplement, and even eventually cover, the whole scholarship.”

O’Neill said he was a cosponsor of both bills, and there was no conflict.

Rep. Phelps Anderson, R-Roswell, another co-sponsor, noted that the governor had talked about the need for a “moonshot” on education in her first state of the state address.

“This moonshot has been thwarted by COVID-19, but there will be another side,” he said. “And when we get there, I think this can be the next stage of fuel to feed the moonshot New Mexico needs.”

The Legislature will meet in a 60-day session starting Tuesday, Jan. 19, in Santa Fe. The governor’s state of the state address will be streamed Tuesday afternoon on the Legislature’s website, along with all floor sessions and committee meetings throughout the 60 days. Attendance inside the Roundhouse will be limited because of the pandemic.

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