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New Mexico's multimillion-dollar bet on legal gambling

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About the cover

  D e s e r t   E x p o s u r e   January 2009

Crap Shoot

Who really wins — and who loses — in New Mexico's multimillion-dollar bet on legal gambling?

By Jeff Berg

Odds are that you have participated in some form of legal New Mexico-style gambling. Everyone has at one time or another at least sampled one of the options, perhaps at an American Indian-owned casino or by buying a Powerball ticket or a "scratcher."

Inn of the Mountain Gods in Ruidoso, home to a casino operated by the Mescalero Apache, will host a conference on problem gambling this month.

I have a friend who lives in suburban Denver who collects "scratchers." These, of course, are the little game cards that you can buy in any convenience store in New Mexico, ranging in price from $1 to $20, with each offering a different way to win a prize and different spots to scratch off with a coin to see how many times you didn't win. Once in a while they throw in a reward, such as a New Mexico-size truck, but mostly cash or another card are the prizes.

My friend's collection, which I enable by buying him three of any new New Mexico scratchers that come out, includes 50,000 different scratchers from around the US. He is within a dozen of having every scratcher ever printed in recent years by state lottery commissions from coast to coast. And the most eyebrow-raising part of his collection is that it may contain zillions of winning cards — he'll never know. One of each game card goes into his collection without being scratched.

At any given time, there are about 20 different "scratch-and-win" cards for sale in New Mexico. Each is available for about 15 months. All employ a theme of sorts or a play on words involving money.

There are 1,100 lottery retailers around the state of New Mexico. According to Linda Hamlin, communications manager for the New Mexico Lottery, sales were actually down in 2008 — which seems odd given the severe economic downturn.

"It is down seven percent from last year at this time," Hamlin says. "Last year, sales were $65.6 million, and as of yesterday (Dec. 11, 2008) they were at $60.8 million."

Hamlin confirms that scratchers are the best sellers of all state-sponsored games of chance. She says 50 to 60 new cards are issued each year, about half of which are created in-house by several young graphic designers who work for the lottery office. "Others are already designed, but we like to retain a regional flavor on others, more appropriate for New Mexico."

Gov. Gary Johnson signed Senate Bill 853, creating the New Mexico Lottery Authority, in 1995. In April 1996, the first scratchers were issued around the state, with 60 percent of the proceeds going for capital outlay and 40 percent going to the Lottery Tuition Fund. It didn't take long for the state to turn a tidy profit from gamblers; by August, $6.2 million was turned over to the state in net profits. A minimum of 50 percent of the money has to be returned to players as winnings, and Hamlin says that the figure is actually over 60 percent now.

Two months after the first scratcher was rubbed off, Powerball was launched, with Johnson buying the first ticket. The first loser.

In January 1997, $7.2 million in lottery profits was divided among 23 state school districts. Things have blossomed from there, with the state being the big winner — although more than 40,000 New Mexico students have received Legislative Lottery Scholarships, totaling more than $360 million. Prizes paid out in all lottery games reached the billion-dollar mark in mid-2008. The lottery reported record profits in June 2008, before the worst of the economic crisis, totaling $40.8 million. In fiscal year 2007, the New Mexico Lottery posted $148 million in sales, its second-best year since start-up in 1996, according to the lottery website (www.nmlottery.com)

Just last month, Las Cruces resident Sharon Hartford claimed a $200,000 Powerball prize from the New Mexico Lottery. Every week, Hartford buys Powerball tickets for her husband — always two wagers for $2. After the Dec. 3 drawing, her husband said his ticket matched five of the six winning numbers, but he had no idea what the prize might be. Hartford went to the lottery's website where she learned that matching the winning numbers of 16, 17, 21, 25 and 55 would pay $200,000. After teasing her husband — "I told him, 'I buy the tickets so it's my ticket now because it's a big winner'" — she now says the couple plans to save their prize for a more comfortable retirement.

Winning the lottery prize makes the Hartford family multiple winners, a lottery press release notes: Three of their grandchildren attend New Mexico State University on Legislative Lottery Scholarships, the college-tuition program are funded from the sale of lottery tickets.

As I stood in line to buy the newest scratchers for my slightly crazed Denver friend, I noticed a disheveled man in front of me, perhaps 25 or so years old, with a small lad in tow, taking part in a number of the different forms of gambling offered at the store — Powerball ticket, some $2 scratchers, lotto. But he didn't have any cash. Patting his pockets and looking in his empty wallet didn't do him much good. Fortunately for him (or not), the store also was home to an ATM, where he ran to get the needed cash. I guess this wouldn't have been so unusual, except he seemed rather frantic, and totally ignored his young charge during the five minutes that this scenario played out. It looked and felt odd and vaguely creepy as he dished out nearly $40 to get all of his numbers and scratchers.

Gambling is sometimes referred to as a voluntary tax on the poor. People of most economic strata are always going to be inclined to hope for the big ticket out of their everyday lives (no matter what the consequences, if one reads about the misfortunes of those who find themselves suddenly flush with cash). But the poor might be stereotyped as being gamblers instead of looking for more logical (and more expensive, such as higher education) ways to increase their capital.

By the Numbers

  • In fiscal year 2007, New Mexico Lottery revenue was $148,080,254, down 1.3 percent from 2006.

  • A total of $320,939,044 was transferred from the state lottery to the state of New Mexico from April 1996 through June 2007.

  • $34.8 million of lottery profits went for public education in FY2007

  • $35,213,295 was made from instant ticket (scratcher) cards in FY2007, out of a total $91,366,360 spent on "scratchers."

  • Retailer commissions were down 1.1 percent, to $9,754,742, from FY2006 to FY2007.

Gambling of course has existed throughout history. According to the American Gaming Association website, dice have been found in Egyptian tombs, and many early cultures played games of chance as far back as 2300 BC.

New Mexico almost became famous for gambling about 60 years ago. Stories abound about the army of mobsters who were checking out the land of entrapment for a spot to set up a city that would eventually instead be Las Vegas — the one in Nevada, not New Mexico. The murder of a young waitress in Las Cruces in 1949 might have marked the beginning of the end for the wide-open behavior in these wide open spaces (see "Unsolved Murders," April 2008). Young Cricket Coogler was murdered and dumped in the desert, after which a courageous grand jury blew the whistle on lots of illegal activities condoned by local officials. Coogler's murder, which has never been solved, is well documented in two recently published books, Cricket in the Web by Paula Moore and Murder at the Crosses by Pete Sandman. A documentary film about Coogler and her underworld connections will be screened again on Jan. 17 at the Fountain Theatre in Mesilla at 10 a.m.

Nonetheless, New Mexico today is rife with legal gambling. Besides the lottery and Indian gaming, five "racinos" are scattered throughout the state, in Farmington, Sunland Park, Albuquerque, Hobbs and Ruidoso. A sixth will open late this year or in 2010 in Raton, which beat bids from Las Cruces, Lordsburg, Tucumcari and Pojoaque Pueblo, which wanted to reopen the long-closed Santa Fe Downs.

The five tracks/casinos that are currently operating reported combined gross revenue of nearly $245 million last year, with $63 million of that going to the state. Just under 55 percent of all of the revenue stays with the racino operator. The state uses the funds for the general fund and, perhaps ironically, "problem gambling treatment." Racinos employ more than 1,600 people.

These emporiums of gambling, which include slot machines and horse racing, also offer a potpourri of other things to keep their guests inside and numb: food, drink, simulcast racing, and the hosting of other events such as concerts or car shows.

Other smaller venues, such as fraternal and veterans organizations, are also allowed to promote games of chance on a small scale.

On the illegal side, of course, there are untold numbers of dogfights, cockfights and other out-of-sight forms of gambling.

New Mexico, along with several other states, hopped on the betting bandwagon only after the legalization of gambling for all 562 federally recognized American Indian nations in the US in 1988. That's when the US Congress passed the Indian Gaming Regulatory Act, after years of court battles that started with the Seminole people of Florida, who opened a high-stakes bingo parlor in 1979.

Tribal gaming is broken into three classes. Class I is "traditional and social" gaming, with minimal prizes, and no regulation beyond tribal government. Class II involves games played against other players, and not the "house" (casino), including but not limited to bingo and poker. If these activities are legal elsewhere in the state where they take place, then they are legal on tribal lands, which are legally seen as sovereign nations. Class III is the biggest, and covers playing against the casino: slot machines, blackjack, craps and roulette, for example. These activities require a compact with the state where the tribe is located.

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