Colorado's Lottery Division is Constitutionally required. When Colorado voters approved a state lottery in 1980, the General Assembly created a Lottery Division in the State Department of Revenue to administer the program. The Lottery Division is set to expire in 2024 unless extended by the General Assembly, which will consider the extension during its 2018 session.
In 1992, Coloradans voted to distribute profits from the sale of Lottery products according to this formula: up to 50 percent to the Great Outdoors Colorado (GOCO) Trust Fund (against a cap that today is roughly $65 million), 40 percent to the Conservation Trust Fund, and 10 percent to Colorado Parks and Wildlife. Funds that exceed the GOCO cap go to the Colorado Department of Education, Public School Capital Construction Assistance Fund called BEST. Learn more about these proceeds partners.
We are proud that our predecessors had the foresight to dedicate Lottery dollars to protecting and improving what makes our state great—our parks, trails, rivers, wildlife, and open spaces. It is our responsibility to continue Colorado’s tradition of taking care of them so all Coloradans, for generations to come, receive the benefits of our state's beautiful, working landscapes and the outdoor recreation opportunities we enjoy today.
In addition, profits from Lottery ticket sales support retail businesses, including local, independently owned shops all across the state.
The reauthorization of the Colorado Lottery Division during the 2018 legislative session will allow Colorado Lottery's proceeds partners to continue to plan proactively, manage budgets effectively, and put Lottery dollars to great use.
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It seems strange to consider the fact that the Colorado Lottery is run by a temporary agency, its future subject to something like the luck of the draw. But an upcoming sunset provision raises the question about whether to maintain the status quo or find new ownership.
We think Colorado needs permanent a lottery division to implement the voter-approved games that generate millions of dollars every year for meaningful land conservation projects, parks and recreation programs and other state outdoors projects.
Letting the program sunset in 2024, as will happen without a change to the law, would be the height of folly, the equivalent of shutting down a profitable business by firing all its employees. Thankfully, so far, no one is calling for such a drastic measure.
But there is a push through an orchestrated Keep it Colorado campaign to pass a bill this year that would not only reauthorize the lottery division but make it a permanent fixture of state government not subject to sunset review. State Sens. Leroy Garcia and Jerry Sonnenberg introduced Senate Bill 66 to that effect this month.
We see much sense in making the lottery division permanent. Voters have twice spoken on the issue, first in 1980, authorizing a state lottery, and then in 1992, directing that profits from the lottery be distributed largely to outdoors programs. Up to 50 percent of lottery proceeds go to Great Outdoors Colorado (GOCO), 40 percent to the Conservation Trust Fund and 10 percent to Colorado Parks and Wildlife.
The Conservation Trust Fund and Parks and Wildlife are funded first and then all remaining proceeds up to an inflation-adjusted cap go to GOCO. Any remaining funds go to the Building Excellent Schools Today program that mostly funds rural school construction and rehabilitation projects.
Colorado is unique in allocating lottery profits almost exclusively for the benefit of our outdoors programs. It’s a wonderful fit for this great state of outdoor recreation and tourism.
Still, it’s been five years since the state’s lottery division was audited, and the 2013 audit raised some legitimate concerns about whether the division was operating at its most optimal level to ensure our parks programs are getting as much money as possible while the lottery continues to operate an effective and efficient system.
Much can change in five years and we’d look forward to seeing any suggestions in the 2018 performance audit. Not that every audit warrants a change in state statute. To the contrary, most problems in audits are administrative matters that are resolved in a matter of months.
Even if SB 66 passes this year, ensuring the division will never expire, that wouldn’t prevent lawmakers from returning next year after the audit is released and implementing statutory changes to address any shortcomings.
The 2013 audit found that while operations at the Colorado Lottery had improved, there were “further improvements that the Lottery can make to help reduce costs and therefore increase the amount of proceeds available to distribute to beneficiary agencies.” Some of the improvements were related to reducing management costs of various lottery games, but other suggestions included revisiting the bonuses awarded to sales and marketing staff. Lottery staff said it would address both concerns in short order.
But the overall concern was whether the division was giving away too much in prizes and spending too much on administration while shortchanging beneficiary agencies. It’s a complex balancing act the division must perform. Without adequate marketing and sales and tempting prize awards, revenues will decline, but every dollar spent on administration and prizes is money not going to parks.
We’re eager to see how state auditors rate the lottery division’s performance in balancing those needs, but hope lawmakers make it a permanent fixture.