New Mexico Lottery to Offer Games Based on Sports Events

The New Mexico Lottery is set to launch a new game based on the results of real-world sporting events. State lottery officials describe a game that sounds like parlay sports betting in which players predict the outcomes of multiple games and receive payouts for getting all their picks correct.

Lottery officials say they’re still working out the details, but the Santa Fa New Mexican reported “the game’s total payout to winning players will be 58% of the total amount wagered by all players.”

This sounds a lot like parimutuel betting in which prizes are determined by collecting all the money wagered on an individual lottery game and then splitting the money among all the winners. If the new sports lottery game does indeed use the parimutuel model, then betting action will determine the payouts just as it does in horse racing betting.

The 58% takeout is a tough pill to swallow for traditional sports bettors or horseplayers, but that’s about average for state-run lotteries. This game will undoubtedly draw the ire of dedicated sports bettors, but we should remember lottery games target a different demographic: people who are just looking to gamble it up, have some fun and aim for a big payout without taking it too seriously.

Intralot CEO Antonios Kerastaris put it this way: “What we’re offering here is a more engaging lottery game.”

Intralot, by the way, has been contracted to manage the new sports lottery game for the NM Lottery. Intralot also runs the lottery’s drawing games such as Powerball and Roadrunner Cash.

New Mexico Lottery CEO David Barden told the Santa Fe New Mexican the game should launch within the next four to six months.

The new lottery game will not be New Mexico’s first brush with sports betting. Last month, the Santa Ana Star Casino & Hotel launched its own sportsbook despite the state not passing any legislation to offer sports wagering.

The Santa Ana Star Casino is operated by the Pueblo of Santa Ana and they claim existing state-tribal gaming contracts allow the tribe to operate sports betting. The Office of the Attorney General has so far decided not to challenge decision. In fact, a statement from the AG’s office said they would “monitor” the situation and work with the legislature to ensure responsible gambling and integrity.

Now, the state lottery is getting in on the action. Although the new lottery game does not constitute traditional sports betting, the fact that winning outcomes are based on real-world games places it firmly in sports betting territory.

This begs the question of whether or not the state lottery even has the authority to offer such a game without the state legislature getting involved. According to the Santa Fe New Mexican, attorneys representing the lottery said earlier this week they believe the lottery can legally offer this game under the same provision in NM gambling law that allows the lottery to operate numbers games.

On the other hand, Chairman of Stop Predatory Gambling New Mexico Guy Clark told the paper that he believes the lottery cannot offer these games without new legislation.

New Mexico and Kentucky Both Exploring Sports Lottery Games

New Mexico’s proposed lottery game looks similar at first glance to a game set to launch in Kentucky next year managed by a startup called EquiLottery. Both games involve the players making multiple picks and both have outcomes based on real-world sporting events, but both are fundamentally different from a legal perspective.

The game designed by EquiLottery for the Kentucky Lottery will be based on horse racing and will have players buy tickets with the names and numbers of horses printed on their tickets. Winners are determined by the outcomes of those races, so it looks and feels a lot like traditional horse racing betting.

EquiLottery has also alluded to introducing similar games based on other sports. One can imagine, for example, EquiLottery launching a baseball-themed lottery game that is based on the results of MLB games rather than horse races.

However, the key difference between what EquiLottery is planning in Kentucky and what Intralot is planning in New Mexico is that EquiLottery picks players’ horses at random. At no point do EquiLottery players actually make their own picks. This keeps EquiLottery firmly in lottery territory because it is still completely out of the player’s control.

Randomness makes all the difference when it comes to legal issues surrounding both games. Whereas traditional lotteries introduce randomness to the game by picking numbers at random, EquiLottery introduces randomness at the point of purchase by making players’ horse or sports picks at random. It may still be based on sports, but it’s still a random lottery-style game.

This difference places both games on very different trajectories despite their similarities. EquiLottery should have an easier time expanding into other states if it proves popular while Intralot’s New Mexico sports lottery will be limited to states where sports betting is already legal. However, the game offered by Intralot may have wider crossover appeal due to the sense of control it offers.

It will be interesting to see how both games compare in terms of popularity and revenue. For what it’s worth, David Barden estimates the new game will generate $30 million a year in revenue with $9 million of that going to support education in New Mexico.