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New Mexico Lottery officials said Wednesday that less money will be transferred to the state’s lottery scholarship program this year and they’ve blamed legislative changes aimed at shoring up the struggling financial aid program.

A total of $37.8 million in proceeds earned during the 2017 fiscal year will be going to the scholarship fund. That presents an $8.5 million decline from the previous year.

“This news is very troubling for both students and lottery players as it not only represents a decline in scholarship assistance, but also resulted in less winnings for players,” Lottery CEO David Barden said in a statement.

Barden contends that opportunities for generating more revenue have been hampered by an increase in contract fees as well as a requirement that calls for 30 percent of proceeds to be funneled each year to the scholarship fund.

Barden said New Mexico has one of the lowest prize payouts in the nation for Scratcher games and that interest in games such as Powerball and Mega Millions has waned due to what he called jackpot fatigue — all resulting in fewer ticket sales and less revenue.

“Players want games that have winning experiences and failure to increase prizes in Scratcher games will get students similar results every year,” he said. “Change is inevitable. It is clear we need to rethink everything.”

Lottery officials have proposed making changes in the distribution of ticket proceeds in an effort to offer higher prize payouts to boost sales.

Critics have said removing the 30 percent distribution requirement to the scholarship fund would risk further reductions in funding for financial aid.

The lottery-funded scholarships help pay tuition for about 26,000 students at public universities and colleges around the state. The amount of financial aid available through the program has been declining since lottery revenues have not kept pace with increases in tuition and student enrollment.

Initiated in 1996, the scholarship covered 100 percent of average tuition rates until 2014. This coming school year, state higher education officials say the scholarships will cover only 60 percent of tuition costs.

The transfer of the $37.8 million announced Wednesday is far short of the $68 million needed to pay for full tuition.

While several states have lottery scholarships, New Mexico’s program does provide a steep discount at one of the most affordable public college networks in the country.

In all, lottery officials say the year’s net sales totaled $126 million, down more than 18 percent from last year. From net sales, players won $67.2 million and retailers earned $8.2 million for selling tickets and cashing prizes.

All but three of the games offered through the lottery — Hot Lotto, Pick 3 and Quicksters — saw declines in net sales during the last fiscal year. Powerball dropped by nearly 40 percent to net $26.3 million in sales, while Pick 3 sales increased by almost 10 percent, bringing in more than $5.3 million.