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Bill to expand casinos at racetracks stalls in New Mexico Legislature

Walter Rubel
Southern New Mexico Journalism Collaborative
Horses race at Ruidoso Downs Racetrack and Casino.

LAS CRUCES - A bill seeking to bolster the Lottery Scholarship Fund by allowing sports betting and table games at the state’s horse racing tracks was likely doomed the evening before The Feb. 8 meeting of the House Education Committee.

In the fiscal impact report on House Bill 101 delivered to legislators Sunday evening, officials from both the state Attorney General’s office and the State Gaming Commission said the proposed expansion would be a violation of the state’s gaming compacts governing tribal casinos, and would result in the forfeiture of its share of the revenue.

The bill will be held in committee at the request of sponsor Rep. Ray Lara, D-Chamberino. That is essentially the same as tabling, but did not require a vote by the members.

Committee members Derrick Lente, D-Sandia Pueblo, and Patricia Roybal Caballero, D-Albuquerque, both alleged that the bill wasn’t really about helping college students. It was just a ploy to allow out-of-state corporations to expand their gambling operations in New Mexico. And, both said they resented being placed in a position to have to vote against college students.

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Lara and cosponsors Phelps Anderson, R-Roswell, and Randall Pettigrew, R-Lovington, all strongly denied the allegation.

“I don’t appreciate some of the comments that were made about me and my integrity,” Lara said. “The point of this was, I wanted to help more kids in my district, and throughout the state, be able to go to college.”

The bill would have allowed the state lottery to issue licenses for private companies to operate sports books and table games at existing casinos connected to horse racing tracks, which are now limited to just electronic games.

Sponsors argued that the bill would generate about $40 million a year for the state, enough for the fund to provide full scholarships again, and have money left over for the state General Fund.

District 34 State Representative Ray Lara

Fred Heinrich, general counsel for the Sunland Park Racetrack and Casino, said while the state’s gambling compact with the tribes does prohibit the ability of racetracks to offer table games and sports betting, there is an exemption for the lottery.

“Nothing restricts the types of games the lottery can offer,” he said.

Tribal leaders and their attorneys said the intent of the compact was clearly to allow the lottery to come up with new lottery games, not to allow for craps tables and roulette wheels. Both the state Attorney General’s Office and the gaming control board agreed.

The state received more than $75 million from the tribes in 2019, according to the board. That revenue would be lost if the compact were violated.

Beyond the issue of lost revenue, there would also be a loss of trust if the state were to violate its agreement, tribal leaders said.

“When the tribes entered into negotiations with the state, we made a promise to one another. The state agreed to allow Indian tribes the exclusive right to offer Class B gaming opportunities, and in exchange the tribes agreed to share with the state,” said John Antonio, governor of Pueblo of Laguna. “This will trigger an end to our revenue-sharing agreement. The state will lose millions of dollars that are predictable. It’s a terrible deal for both sides.”

The public comments on the bill lined up predictably, with college officials and students on one side, and tribal officials on the other. There was no disagreement as to the need to boost the scholarship fund, only on how to do it.

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The Lottery Scholarship Fund was started in 1996, and for several years was able to provide full-tuition costs for qualifying New Mexico high school graduates. More than 128,000 students have been helped by the fund, many of them the first in their family to attend college.

But the number of students seeking assistance has grown faster than lottery proceeds, and the fund is now only able to cover part of the cost of a student’s tuition. Ricardo Rel, of the NMSU Office of Government and Community Relations, said the fund only provides about 70 percent of the cost for a scholarship.

Tracey Bryan, president and CEO of The Bridge of Southern New Mexico, said students will need to have some kind of college credential to compete in a changing workplace. Many of the low-skilled jobs of the past aren’t coming back, she said.

Tribal leaders agreed with the need to bolster the scholarship fund. They suggested that instead of expanding horse-track casinos, the state should take a percentage of what it collects each year from the tribes and devote it to the scholarship fund. Lente said he would introduce a bill to that end in the coming days.

Lara offered his support to the effort, but predicted there would be stiff competition for any money taken from the General Fund, and there were no assurances that Gov. Michelle Lujan Grisham would sign a bill if it passed.

The governor has her own plan to address the shortfall. Her Opportunity Scholarships bill, Senate Bill 135, was scheduled to be heard Monday in the Senate Education Committee.

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Walter Rubel can be reached at waltrubel@gmail.com.