Gov. Mitch Daniels of Indiana has dropped his plan to lease the state’s lottery and direct money from it to higher-education scholarships, according to The Indianapolis Star, because the U.S Department of Justice said such long-term management of private lotteries would be against federal law.

Governor Daniels, a Republican, had wanted to lease his state’s Hoosier Lottery for 30 years and use the estimated $1-billion in immediate proceeds to enhance the state’s colleges and provide more access. He would have spent 60 percent of the revenue on merit-based aid and used the remainder to give institutions the money to attract top professors and researchers.

Some members of the state legislature, which would have had to endorse the plan for it to go into effect, had misgivings, and his Democratic opponent in the race for the governorship, Jill Long Thompson, has opposed leasing the lottery, saying it could lead to more gambling. —Heidi Landecker