Walk into any convenience store in a low-income neighborhood in Roswell, Española, Albuquerque's South Valley, or Gallup. Past the energy drinks and the phone chargers, next to the register, is the lottery terminal. Scratch-offs fanned out in a rack. A Powerball sign overhead. A screen showing the jackpot. It's always there. It's always open. And the people buying those tickets — disproportionately Hispanic, disproportionately working-class, disproportionately the same people New Mexico has left behind in every educational ranking for a generation — are the engine behind one of this state's most celebrated public programs.
The New Mexico Lottery has raised more than $1 billion for education since its founding in 1996.¹ That number appears in press releases. It appears in campaign mailers. It is the rhetorical shield every elected official reaches for when the education system's failures become too embarrassing to ignore.
But a billion dollars raised over thirty years in a state that ranks dead last in the nation in reading, math, and child well-being is not a success story.² It is an indictment.
This is the story of where that money comes from, where it actually goes, who benefits, who gets left behind, who in Santa Fe decided to keep it that way — and what genuine leadership would do about it.
Part One: The Machine and the Myth
The New Mexico Lottery Authority reported $170 million in total ticket sales in fiscal year 2024. Of that, approximately $93 million was paid out in prizes, and a record $51 million was returned to the scholarship fund — a number the Lottery Authority celebrated in a public announcement.³ The rest covered operating costs, vendor contracts, and administrative overhead.
The Lottery also announced, with considerable fanfare, that cumulative education transfers since 1996 had crossed the $1 billion milestone.¹
Read that number in isolation and it sounds like a triumph of civic engineering. Read it alongside the state's education data and it sounds like something else entirely.
New Mexico has had a lottery-funded scholarship program for three decades. In that same period, it has produced some of the most consistently catastrophic academic outcomes of any state in the country. The 2024 National Assessment of Educational Progress — the NAEP, widely regarded as the gold standard of K-12 measurement — ranked New Mexico dead last in every single category:²
- 4th grade reading proficiency: 20%
- 4th grade math proficiency: 23%
- 8th grade reading proficiency: 19%
- 8th grade math proficiency: 14%
Those are not just bad numbers. They are historic lows — the worst scores New Mexico has ever recorded in multiple categories.² The state also ranks #50 overall as the worst state to live in, #50 in child well-being, and #49 in high school graduation rate.⁴
A billion dollars. Thirty years. Dead last.
The math doesn't work — unless you look at where the money actually goes.
Part Two: The Map They Don't Show You
The New Mexico Lottery's public communications are built around one number: how much has been raised. What those communications never show is a map.
A 2022 investigation by the Howard Center for Investigative Journalism, published in partnership with Searchlight New Mexico, used cell phone location data to document exactly who patronizes lottery retailers and where those retailers are located.⁵ The findings were not subtle. Lottery retailers in New Mexico, as in virtually every state in the country, are disproportionately clustered in lower-income, higher-Hispanic-population neighborhoods. The customers who visit them come from those same communities.⁵ This is not accidental. It is structural. Retailers apply to operate lottery terminals. The Lottery Authority approves those applications. The result — confirmed by location data, zip code analysis, and decades of academic research — is a retail infrastructure optimized for revenue extraction from communities with limited economic alternatives.
High school dropouts nationally spend four times more per year on lottery tickets than college graduates. Black Americans spend nearly five times as much as white Americans on average.⁵ Nationally, lottery advertising disproportionately targets lower-income and minority communities with messaging that emphasizes life-changing jackpots while minimizing the statistical reality of losing.⁶
Here is the test that strips all the rhetoric away:
Move every lottery terminal to Whole Foods and Tiffany's. See how many tickets get sold.
Those stores will never open in a low-income neighborhood — because that is not who they serve. The lottery knows exactly who its customer is. The question is whether New Mexico is willing to say out loud what it is doing with their money.
Part Three: The Scholarship Doesn't Go Where the Tickets Are Sold
The New Mexico Legislative Lottery Scholarship does one thing: it pays tuition at a state public college or university for any recent high school graduate who enrolls full-time immediately after graduation. No income test. No academic merit threshold beyond graduation. Just enrollment.
That sounds egalitarian. It is not.
New Mexico Voices for Children published a detailed analysis of who receives lottery scholarship dollars.⁷ The findings dismantle the program's public narrative:
- 1 in 3 Lottery Scholarship dollars goes to students from families earning over $90,000 per year — placing them in the top 15% of New Mexico income earners.⁷
- Only 31% of New Mexico's total state financial aid is need-based, compared to a national average of 76%.⁷
- 52% of all New Mexico public college students attend 2-year community colleges — the institutions most accessible to low-income, first-generation, and working students. Yet only 5% of Lottery Scholarship funding flows to those schools.⁷
- The scholarship disproportionately flows to 4-year research universities — UNM, NMSU, New Mexico Tech — where students from higher-income, better-prepared households are far more likely to enroll full-time immediately after high school.⁸
The mechanism is not complicated. Poor families buy the tickets. The scholarship rewards full-time enrollment at 4-year universities. Affluent students are far more likely to meet that condition. The money moves up the income ladder and calls it education policy.
Think New Mexico, the nonpartisan research and advocacy organization that has spent years on lottery reform, frames it plainly: the scholarship as currently structured does not efficiently target the students with the greatest financial need.⁹ It is a universal benefit financed by a regressive tax.
Part Four: The Double Tax on Already-Stressed Communities
If the lottery scholarship were actually reaching the community colleges that serve New Mexico's most economically vulnerable students, the story might end here. It is not. And so the communities that fund the lottery are being asked to pay a second time.
Eastern New Mexico University – Roswell placed a 2.5-mill levy on the November 2025 ballot, asking Chaves County property owners — already among the lower-income communities in the state — to raise their own property taxes.¹⁰ The levy was projected to generate approximately $1.35 million annually to fund career and technical education expansion.¹⁰
Northern New Mexico College, serving one of the most economically distressed regions in the state — the Española Valley and surrounding communities — did the same with a 2-mill levy in November 2024.¹¹
These are institutions that serve exactly the students the lottery scholarship was ostensibly designed to help. First-generation college students. Working adults. Students who cannot leave their communities to attend a research university four hours away. Students whose parents bought the scratch-offs.
The scholarship program that was supposed to lift them sent most of its money somewhere else. And now their local colleges are asking them to reach into their own pockets — through property taxes on homes and small businesses in communities with some of the highest poverty rates in New Mexico — to fill the gap the lottery left.
This is the double tax. Buy the ticket. Pay the levy. Receive nothing from either.
Part Five: The Lobbyists, the Hearing That Never Happened, and the Senators Who Let Them Win
The most clarifying moment in the history of New Mexico lottery reform did not happen on the House floor. It happened in a committee room where nothing happened at all.
House Bill 441 proposed two straightforward reforms:⁹
- Redirect unclaimed lottery prize money — averaging $2 to $3 million per year that currently flows back into the prize pool — into the scholarship fund.
- Restructure lottery executive bonuses to reward scholarship outcomes rather than ticket sales volume.
The bill passed the full New Mexico House of Representatives 68 to 0. Unanimous. Bipartisan. Not a single member of the House voted against it.⁹
It was referred to the Senate Finance Committee. It never received a hearing. It died.⁹
That is not legislative gridlock. That is a decision. Someone — or a small number of someones with the power to control a committee calendar — chose not to schedule the hearing. And the most likely explanation sits in the Santa Fe lobbying disclosures.
The multinational gaming corporations that hold New Mexico's lottery vendor contracts — Intralot, Scientific Games (now Everi), and International Gaming Technologies — employ paid lobbyists in Santa Fe specifically to protect those contracts from structural reform.⁵ Scientific Games alone earns a percentage commission on every ticket sold in New Mexico.⁵ Their financial interest in maintaining the current prize pool structure — which keeps unclaimed money in the system rather than redirecting it to students — is direct and measurable.
For four consecutive years, separate bills were introduced in the Legislature to gut the 30% revenue guarantee — the statutory floor requiring the Lottery Authority to deliver at least 30% of revenues to the scholarship fund — and replace it with a flat dollar amount that would have cost students millions annually.¹² Every year, advocates had to fight simply to hold the line.⁹
The pattern is consistent. When reform reaches a committee with the power to kill it quietly, reform dies quietly. No floor vote. No recorded opposition. No accountability.
Governor Michelle Lujan Grisham has increased K-12 funding by 34.7% since 2019 and raised teacher pay by more than 38%.¹³ These are real investments. But the structural inequity in lottery scholarship distribution has never been confronted directly by the executive office. Spending more money into a broken distribution model does not fix the model.
Part Six: The Knowing-Doing Gap and What Real Leadership Demands
There is a concept in organizational leadership called the knowing-doing gap — the distance between understanding a problem and taking the steps necessary to solve it. New Mexico has no shortage of knowing.
The Legislative Finance Committee has produced evaluations of the lottery scholarship program documenting its inequities.⁸ NM Voices for Children has published the income distribution data.⁷ Think New Mexico has tracked the lobbying pressure and the killed bills for years.⁹ Searchlight New Mexico has mapped the retailer clustering.⁵ NAEP has delivered the verdict on outcomes two years running.²
Every report confirms the same basic architecture: a regressive revenue mechanism feeding a non-progressive distribution system in the state with the worst education outcomes in the country.
What is missing is not awareness. What is missing is the decision to act.
Genuine leadership — not press release leadership, not budget line leadership, but the kind that accepts political risk to correct a documented injustice — looks like the following six moves:
1. Income-cap the Lottery Scholarship.
The scholarship should be fully funded for families earning under $75,000 and phased out above that threshold. The program was sold to New Mexicans as a lifeline for students who could not otherwise afford college.⁷ One in three dollars currently going to households in the top 15% of state income earners is not what was promised. A leader puts the money where the promise was made.
2. Fix the community college gap immediately.
52% of New Mexico public college students attend 2-year schools. 5% of scholarship dollars follow them.⁷ That ratio is indefensible and fixable by policy directive without requiring new legislation. A governor who has increased K-12 spending by 34.7% has the credibility and the mandate to demand that the Higher Education Department correct this allocation. Community colleges in Roswell, Española, and Grants should not be going to property tax ballots to fund what the scholarship program abandoned.¹⁰¹¹
3. Redirect unclaimed prize money to students.
$2 to $3 million per year in unclaimed prize money recirculates into the prize pool.⁹ This benefits gaming vendors, not students. HB 441 passed 68-0.⁹ The Governor should publicly demand the Senate Finance Committee schedule the hearing, name the members responsible for its continued burial, and make clear that this is a priority for the current session. When a unanimous House vote cannot get a Senate hearing, voters deserve to know why.
4. Restructure executive compensation.
No lottery CEO in the state that ranks last in the nation in education should receive performance bonuses calculated on ticket sales growth.⁹ That metric has one effect: it incentivizes selling more tickets in the neighborhoods that can least afford them. Tie every executive performance metric to a single number — scholarship dollars delivered per eligible student. That is what institutional alignment looks like. Everything else is window dressing.
5. Require zip-code-level public reporting.
The Lottery Authority should be required by statute to publish an annual public report mapping lottery ticket revenue by zip code alongside scholarship disbursements by zip code. The contrast between where the money comes from and where it goes is the entire story. Transparency does not fix the problem, but it makes the problem impossible to hide, ignore, or explain away with a billion-dollar cumulative total. Leaders do not protect institutions from accountability. They build accountability into the institution.
6. Make the scholarship last-dollar.
Apply the Lottery Scholarship only after all need-based aid — federal Pell Grants, the state Opportunity Scholarship, institutional grants — has been exhausted. This requires no new funding. It requires only a policy directive.⁷ The result: the same scholarship dollars stretch further for students who actually need them, instead of subsidizing students whose families already maintain 529 college savings accounts. This is the single highest-leverage, lowest-cost reform available to any governor willing to sign the directive.
The Editorial Verdict
New Mexico has collected more than $1 billion from its citizens through a lottery system that targets its poorest communities with its retail infrastructure, returns that revenue through a scholarship program that disproportionately benefits its wealthiest students, ranks dead last in education outcomes by every available measure, and then asks those same overburdened communities to raise their own property taxes to keep their local colleges open.¹²³⁴⁵⁷⁸⁹¹⁰¹¹
The money is not the problem. The money exists. **$51 million went to scholarships in fiscal year 2024 alone.**³
The education is the problem. And the education is a problem because the money is aimed at the wrong students, protected by the wrong lobbyists, buried in the wrong committee, and managed by executives incentivized to sell more tickets rather than produce more graduates.
This state does not need another commission. It does not need another study or another legislative report confirming what every previous legislative report already confirmed. It needs elected officials who are willing to treat 20% fourth-grade reading proficiency as the emergency it is — and to follow the money all the way from the convenience store register to the scholarship check to the Senate Finance Committee calendar to the lobbying disclosure forms.
Dead last is not a talking point. It is a generation of children.
The lottery terminal is always on. The scholarship keeps missing them. And the leaders who could fix it keep letting the hearing get cancelled.
New Mexico deserves better. The question is whether it will demand it.
Endnotes
¹ New Mexico Lottery Authority, "New Mexico Lottery Announces $1 Billion Has Been Raised for New Mexico Education," August 2023. https://www.nmlottery.com/2023/08/31/new-mexico-lottery-announces-1-billion-has-been-raised-for-new-mexico-education/
² NM Kids Can, "New Mexico Ranks Dead Last Again on National Assessment of Educational Progress," January 28, 2025. https://nmkidscan.org/press-releases/new-mexico-ranks-dead-last-again-on-national-assessment-of-educational-progress/
³ New Mexico Lottery Authority, "New Mexico Lottery Returns a Record $51 Million to the Scholarship Fund," August 14, 2024. https://www.nmlottery.com/2024/08/14/new-mexico-lottery-returns-a-record-51-million-to-the-scholarship-fund/
⁴ Los Alamos Study Group, "Failing State: How New Mexico Ranks," 2025. https://www.lasg.org/FailingState/NewMexicoRankings2.pdf
⁵ Searchlight New Mexico / Howard Center for Investigative Journalism, "State Lotteries Transfer Wealth Out of Needy Communities," August 9, 2022. https://searchlightnm.org/state-lotteries-transfer-wealth-out-of-needy-communities/
⁶ Word In Black / Howard Center, "State Lottery Advertising Tells Players Half of the Story," July 25, 2022. https://wordinblack.com/2022/07/state-lottery-advertising-tells-players-half-of-the-story/
⁷ New Mexico Voices for Children, "NM's Lottery Scholarship Is Not Targeted to the Students Who Need It Most," February 2018. https://www.nmvoices.org/wp-content/uploads/2018/02/Lottery-scholarship-factsheet-2-2018.pdf
⁸ New Mexico Legislative Finance Committee, "Program Evaluation: Opportunity and Lottery Scholarships," August 22, 2023. https://www.nmlegis.gov/Entity/LFC/Documents/Program_Evaluation_Reports/Program Evaluation Higher Education Financial Aid.pdf
⁹ Think New Mexico, "Lottery Reform," thinknewmexico.org. https://www.thinknewmexico.org/lottery-reform/
¹⁰ Eastern New Mexico University – Roswell, "2.5 Mill Levy Proclamation," 2025. https://www.roswell.enmu.edu/25-mill-levy-proclamation/
¹¹ Northern New Mexico College, "Mill Levy Fact Sheet and FAQ," November 2024. https://nnmc.edu/_document_repository/branch_community_college/nnmcbcc/Mill-Levy-Fact-Sheet-and-FAQ-final.pdf
¹² NM Political Report, "Lottery Scholarship Bill Deadlocks in Committee," February 8, 2018. https://nmpoliticalreport.com/2018/02/08/lottery-scholarship-bill-deadlocks-in-committee/
¹³ Pete Dinelli, "2025 New Mexico Legislative Update: Governor MLG Recommends $10.9 Billion Budget," January 20, 2025. https://www.petedinelli.com/2025/01/21/2025-new-mexico-legislative-update-governor-mlg-recommends-10-9-billion-as-nm-legislative/
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