Bill would give lottery panel control over its own games

DENVER — The Colorado Lottery Commission would have direct control over itself under a bill approved in the Colorado Senate on Tuesday.

The measure, SB126, introduced by Sen. Steve King, would take the commission that oversees the state’s scratch-off games out from under the Department of Revenue.

Doing so would allow the five-member commission to operate the lottery more efficiently and hire a director who better knows how to boost sales, the Grand Junction Republican told fellow senators, who approved the bill on a 28-7 vote.

The measure is a response from the Legislative Audit Review Committee, which King is chairing this year, after a scathing audit in October that revealed the agency was paying too much in prizes and administrative costs — including $400,000 in employee bonuses — and not enough to beneficiaries of lottery profits, such as Great Outdoors Colorado, the Conservation Trust Fund and Colorado state parks.

“In looking at those past audits, I, quite frankly, have run out of patience with the Department of Revenue in the fact that I don’t think our lottery receives the attention and focus that it deserves,” King said.

“Even as most state workers between 2009 and 2012 were enduring pay cuts and freezes, bonus payments to lottery employees ballooned nearly 500 percent. That is a business problem in my book,” he said.

Last year, the lottery had about $566 million in sales and paid out about $345 million in prizes. Only about $135 million went to beneficiaries, which includes money to local governments to pay for parks and recreation projects.

Last fall’s audit showed that in each of the past three years, the lottery paid about $10.3 million more in prizes than ticket sales justified, which King said should have gone to the beneficiaries.

Opponents of the bill didn’t question the problem, just the solution, which came from the four Republicans and four Democrats on the legislative audit committee.

“Yes, there are issues that were uncovered in the audit of the lottery division, and yes, the things (King) said about bonuses that were being paid out are all true,” said Sen. Pat Steadman, D-Denver. “But is granting the lottery commission type-one status and increasing their independence from the administration and the executive director, the governor’s Cabinet member that oversees the (lottery), is that the right response to make sure we have accountability in this program? I don’t think so.”

The bill heads to the House for more debate.


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