Minnesota’s Lottery Quagmire: The State Legislature’s Continued Resistance to Online Lottery Ticket Sales

By: Ifrah Law

As Minnesota’s lottery system turns 25 years old, director Ed Van Petten has sought to follow the lead of the most technologically-advanced state lottery systems in the country by expanding into the profitable market of online ticket sales. However, at a time when many states have enjoyed the additional revenue that online lottery sales can provide, Minnesota joins a small number of states that have seen legislative pushback, mostly as a result of persuasive lobbying groups with strong financial backing, including Native American tribunals, that believe that their piece of the lottery proceeds will suffer.

Championing the cause to ban web and self-service lottery sales at ATMs and gas pumps in Minnesota is Republican Representative Greg Davids.  Supporters of the ban argue that gambling has become too convenient. They also say that online sales will increase gambling addiction. Such groups have joined legislators in making accusations that the lottery has expanded into the online arena without legislative approval.  In response, the Minnesota senate passed a measure on February 6 banning Internet lottery ticket sales. Under the bill, the online sale of instant win lottery tickets would be suspended by October 30th of this year.

However, opposing these lobbying groups is Minnesota’s own governor Mark Dayton, who has vowed to veto the bill calling to ban the Minnesota Lottery’s online expansion.  This position is consistent with the Governor’s voting last May when a similar bill was passed by the Minnesota legislature.  At that time, Dayton refused to vote in favor of the legislation that would have banned online instant games. The Governor noted that the evidence does not indicate that traditional retailers would suffer a decline in ticket sales but rather that online sales provide a platform to target a younger generation, one that is more comfortable purchasing tickets online.  Many in support of the Governor’s veto  argue that lottery proceeds benefit all Minnesota residents and add funding for environmental preservation and conservation efforts.  The Governor is further considering a proposal to dedicate a portion of the lottery proceeds for school construction and college campus improvements.  Despite the benefits to his constituents, Dayton has suggested that his veto last spring would have been overruled had it not been for the adjournment of the legislature.

While a fundamental question remains as to whether the Minnesota lottery even requires legislative approval to expand into online ticket sales, this state’s dilemma sets the stage for a year in which we will undoubtedly see many states grapple with unprecedented questions relating to online lottery sales.  Although one is hard-pressed to make an argument against the additional revenue that online ticket sales would likely add to aid the citizens of Minnesota, it is likely that the well-funded interest groups will influence the legislature to seek to override a veto of the ban by the Governor.