Minnesota Lawmakers Move To Stymie Online Lottery Expansion

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Tuesday, May 6th, 2014 | Written by Lucy Brown

While the state of Minnesota has had an online lottery for several years, various interest groups are now seeking to put an end to the practice, whilst hoping movement on the issue could also serve as a preemptive ban on other types of internet gambling in the Midwestern state. The bill (HF 2207) introduced by Representative Ann Lenczewski initially received a green light from the Minnesota House Commerce Committee to enter the Minnesota statehouse, but must still clear a number of future hurdles before any potential future vote is held.

Online “Scratch-Off” cards raises heckles

Minnesota has permitted residents to buy lottery tickets via the internet since 2010, with the Minnesota Lottery imposing a $50 weekly limit on state customer. Nevertheless, many activist groups have opposed online lottery sales in the past and have recently moved to a more proactive stance on the issue since new online scratch-offs were added to the gambling mix in February.

Many lawmakers have since expressed their concern over potential online gambling expansion in Minnesota, with State Representative Greg Davids (R-Preston), stating: “This is not the online lottery. This is online crack. This is addictive, and this is going to destroy families.”

Games too easy to access

Causing further consternation amongst opposition groups is the increasing availability of online lottery games at ATMs and gas stations throughout Minnesota, while The Minnesota Lottery has also been rolling out its product via the increasingly important medium of mobile devices. This had lead opponents to protest that such games are now just too easy to access, with Jake Grassel of Citizens Against Gambling Expansion, stating:

“We’re going to now have gambling in every smart phone. Every iPhone. Every school, every library, every Starbucks across the state.”

Such arguments have already found considerable support amongst legislators, not least The Minnesota Senate which recently voted overwhelmingly in favour of banning all internet lottery sales.

Minnesota Lottery sales shrunk in 2013

Minnesota Lottery sales contracted by 2.8% last year, with declining interest amongst young adults of particular concern. This has prompted the organization to recommend increasing availability via cellphone and tablets, with Lottery Director Ed Van Sletten, explaining that “if something does not exist on the Internet, it doesn’t exist.”

In spite of several senators expressing sympathy with the Minnesota Lottery’s over its declining growth, as legislators they said their priority was to ensure gambling didn’t continue expanding into Minnesota homes. As Sen. Rod Skoe, commented:

“We just don’t think Minnesotans voted for this in 1989. We all know people and families who have been hurt from problem gambling. How can any good come of this?”

Governor Dayton believes bill may pass

State Governor Mark Dayton has expressed his belief Bill HF 2207 may be more about state lottery competitors trying to protect their interests, such as business owners or the Minnesota Indian Gaming Association, rather than those of the consumer. However, Dayton also said he thinks he may not be able to prevent the bill from passing.

While Governor Dayton said he did not support the bill, even his veto power would not be sufficient to stop legislation passing if it manages to garner enough support in the House. Nevertheless, Dayton did request that the bill gives the Minnesota Lottery sufficient time to wind down its operation and fulfill its commitments to players and vendors, alike.

“Like many things in this session, it’s being rushed through without the forethought it deserves,” explained Dayton.

Potential economic impact of ban

Online scratch cards may only have generated just $170,000 in revenues since first becoming available in February this year, but estimates by the House Commerce Committee suggests a proposed blanket online lottery ban could cost Minnesota around $2.5 million each year in lost sales. That figure, however, could be as much as $8 million according to Lottery Director Ed Van Sletten, who cited “unknown ramifications” and the fact 8,500 state residents have already prepaid for their online lottery tickets.

Van Sletten also indicated he believed the Minnesota Lottery had unfairly been singled out on account of their marketing efforts, commenting: “If we are going to legislate against marketing to young adults, I think you need to get a lot of the energy drink companies – Mountain Dew, for one – in here and talk to them, too.”