INDIANAPOLIS — Republican Gov. Mitch Daniels has revived a contentious proposal to lease the Hoosier Lottery to a private operator, saying the money could fund a proposed college scholarship program.

Daniels wants to create Hoosier College Promise, a program that would help students whose families earn less than $60,000 a year. Students could get two years' free tuition at Ivy Tech Community College, or up to $6,000 to use during their first two years at another Indiana public or private school.

The program is estimated to cost $50 million a year.

Leasing the lottery is one option to pay for the program, Daniels said Wednesday. He says the state could bring in at least $1 billion up front to have a private company run the lottery for the next 30 years. If a company was willing to pay a higher amount, more students from higher income brackets could be eligible.

“With the Hoosier College Promise program, we can redeem the lost promise of the Hoosier Lottery,” Daniels said. “We believe we can lower our high school dropout rate and increase our college attendance rate.”

A spokesman for Democratic gubernatorial candidate Jill Long Thompson said scholarships are a laudable goal, but leasing the lottery is no way to fund them. Campaign spokesman Jeff Harris said there are plenty of examples under the Daniels administration of failed efforts to lease state assets, including the Indiana Toll Road and the welfare system.

“Privatization has consistently failed,” Harris said.

Leasing the lottery would require approval from the General Assembly, but House Speaker Patrick Bauer, D-South Bend, is wary of the idea. Critics say a private company leasing the lottery would be making a profit on the backs of poor people, encouraging them to waste more money on lottery tickets.

“That's how you make profit in gambling — you create more losers,” Bauer said.

The state could set limits for a private company, such as prohibiting keno or banning aggressive advertising, said Daniels spokeswoman Jane Jankowski.

Daniels proposed a similar lottery leasing plan last year, when he wanted to use the proceeds for a life sciences fund and a scholarship program for college students who stay in-state after graduating.

Bauer said Hoosier College Promise sounds like a better idea because it would help students who may not otherwise attend college or complete high school. But he said there could be better ways to fund the program.