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SUMMARY

Synopsis of Bill

This bill, introduced for the Lottery Oversight Committee (LOC), eliminates the LOC, a joint interim legislative committee, and creates a new joint interim legislative Gaming Oversight Committee (GOC). The GOC would consist of eight members, four appointed from each house of the legislature, including two members from each of the major political parties from each house. There is no limit on the number of terms members may serve on the GOC. Vacancies would be filled by the appointing authority to serve until the end of the interim in which the succeeding member is appointed.

The bill prohibits GOC members from 1) serving on the GOC if they have an ownership interest in an entity operating gaming activities in New Mexico or supplying services or personal property to an entity operating or regulating gaming activities in the state, 2) receiving anything of value directly or indirectly from a person who operates gaming activities in this state or elsewhere, has a current contract with any person who operates gaming activities in New Mexico or elsewhere, is a potential or actual bidder for provision of services or personal property to a person who operates or regulates gaming activities in New Mexico or elsewhere, or is an organization or other entity that includes persons described above, or 3) accept a campaign contribution exceeding $25.00 in a primary or general campaign from persons described in 2) above.

The GOC will be responsible for:

• continuously reviewing the operations of all state agencies involved in the operation of or regulation of gaming activities in New Mexico;



• during the interim, making advisory recommendations to the executive branch for appropriate actions to improve the operations and regulation of gaming activities;

• making and publishing an annual report of its activities prior to the end of each interim.

The GOC may also investigate the operations and regulation of gaming activities within the state, require persons to appear and testify before it, and take other actions to fulfill its responsibilities. The Legislative Council Service (LCS) would provide staff support to and funding for the GOC. The bill also amends portions of the Lottery Act by substituting "Gaming Oversight Committee" for "Lottery Oversight Committee." The bill includes an emergency clause.

Significant Issues

According to the Lottery analysis of the identical bill introduced in 1998, there is a potential conflict between the interests of the Lottery and the interest of gaming entities. The lottery is a quasi-governmental organization unlike the other gaming entities and, as such, should be handled separately.

The prohibitions on acceptance of gifts or contributions from individuals with interests in operation and regulation of gaming should reduce the potential for conflict of interest for GOC members and help enhance the integrity of GOC deliberations. Some of the prohibitions here are quite broad and might be difficult to obey. For example, it would be difficult for a legislator to identify all individuals who are "potential or actual bidders, offerors or contractors for the provision of services or personal property to a person who operates or regulates gaming activities in this state or elsewhere" so as not to accept anything of value from these individuals. Presumably, this would include anyone who provides or can potentially provide office supplies, utilities, or a host of other services (mowing lawns, babysitting, etc.) to any person who operates or regulates gaming activities.

FISCAL IMPLICATIONS

In 1998, LCS anticipated an additional cost of about $20.0 due to the greater number of committee members. As the GOC has a broader mandate than the LOC, it is possible there would be additional costs for contractual services.

In 1998, the Lottery and Regulation and Licensing Department (RLD) anticipated no measurable fiscal impact.

ADMINISTRATIVE IMPLICATIONS

In 1998, no substantial administrative impact was anticipated by the Lottery or by LCS.

OTHER SUBSTANTIVE ISSUES

In 1998, the Lottery reiterated its concern about a potential conflict of interest. Its analysis pointed out that the Lottery has other statutory responsibilities to the State of New Mexico that the gaming entities do not, such as being subject to the Open Records Act. The additional powers of the GOC are not necessary for its relationship with the Lottery. According to the Lottery, this concern is similar to that of the majority of LOC members that the Chairman of the Lottery Board should not also be a member of the Gaming Control Board. The Lottery offered an alternative to this bill which would leave the LOC intact and create a separate GOC with oversight of gaming entities and the Gaming Control Board.

DH/njw