OKLAHOMA CITY (AP) - Legislators are divided on the Oklahoma Lottery Commission's proposal to seek removal of a mandated 35 percent profit that the agency is required to achieve in its third year.

Lottery Commission Executive Director James Scroggins said Wednesday that dropping the limit will allow more money to be put into prizes, which will increase sales and revenue the lottery generates for education.

“Oklahoma voters created the lottery to provide additional funds for education,” said Senate President Pro Tem Mike Morgan, D-Stillwater. “We certainly want to see those funds maximized. In doing so, we have to take into consideration the financial realities facing the Lottery Commission. Obviously, it appears we will need to assess the situation in the next legislative session and work with the commission to find the right solution.”

Gov. Brad Henry supported the creation of a lottery with proceeds going to education during the campaign for his first term in office.

“Governor Henry is open to discussing any idea that will boost funding for education,” said Paul Sund, a Henry spokesman.

But Senate Co-President Pro Tem Glenn Coffee, R-Oklahoma City, said inaccurate projections about lottery profits have created chaos in budgeting for higher education, common education and CareerTech.

Coffee said he supports putting some money aside from lottery profits for years when projections are not accurate. He also thinks the Lottery Commission needs to hire someone who can make accurate projections.

“From his first day on the job, director Scroggins has known that our schools would receive 35 percent of all lottery profits,” said Rep. Randy Terrill, R-Moore, who is chairman of the House Revenue and Taxation Committee. “If he has a problem with that, he should resign. We're not going to gut school funding to prop up the governor's failed lottery.”

Scroggins declined to respond to the criticism.

He said the lottery competes with American Indian gaming for revenue. According to the Office of State Finance, casinos' gross revenue in fiscal year 2007 was $777 million, of which $46.8 million went to the state for a return of 6.02 percent, according to the Lottery Commission.

According to a Lottery Commission position paper, other states allow sales in liquor stores. Oklahoma does not.

To cut operating costs, the agency could cut advertising and staff, but reducing advertising would be “self defeating” and the agency has a smaller staff than several other lottery states, Scroggins said.