Minnesota lottery tries to get players online

Management at the Minnesota State Lottery is taking flak over a year-long initiative to get more Minnesotans to play online which was launched without publicity or an official announcement, reports the StarTribune newspaper.

The lottery is apparently trying to get more state residents to gamble online through a lottery subscription service, despite the state’s record of turning away gambling expansion proposals and online gambling ventures in the past.

The newspaper describes the efforts to increase online penetration as a potentially “massive shift to Internet lottery action” as state lottery management seeks to use the Internet to boost sales, which have declined in the face of the convenience of online activity.

Last year a lottery official told a seminar that the decline in traditional lottery sales channels had been rapid and was continuing, necessitating a strategy to win back players lured away by Internet competition.

Many lawmakers are reportedly less than pleased with the revelation that internet expansion had been initiated by what they see as “secret, aggressive tactics” that had circumvented legislative approval.

“It’s reprehensible,” said Assistant Senate Majority Leader David Hann, a Republican who tried to abolish the lottery six years ago. “We are spending a lot of taxpayer money to lure people into throwing money down the toilet so we can spend it on something that we think is more important.”

Hann called for advice on whether the state lottery has the legal authority to sell tickets online. “To me it seems like they are exercising some latitude they might not have,” he said.

The newspaper reports that state Gov. Mark Dayton’s administration learned about the online ticket-buying service only late last week. A spokesman for the governor told the newspaper that the practice started before Dayton took office and that they have not yet looked into it.

State Rep. Ryan Winkler, agreed with Rep. Hann, saying that the lottery’s decision should “absolutely” be reviewed by legislators.

“I certainly want to find out if they have the authority to do it,” said Winkler, who sits on committees that review gambling issues. “It looks like they are trying to avoid public attention.”

On the other side of the argument, lottery management claims that it does not need legislative approval, saying that the online subscription service, which allows players to gamble no more than $50 a week, is akin to electronic commerce, not Internet gambling.

Management also claims that there was nothing secretive about the initiative, which had been pursued cautiously as a “soft launch” to avoid “spooking” traditional retailers.

Almost 7,600 residents had so far signed up for the service despite the lack of serious marketing, with subscription sales making up $607,000 of the lottery’s $500 million business, lottery officials revealed.

The online subscription service allows Minnesotans to buy tickets for most lottery games around the clock.

Minnesota is one of only a few states to offer online lottery ticket sales, but legislators in other states such as New Jersey are considering it. North Dakota and New Hampshire offer similar online lottery subscription services, and neither lottery obtained legislative approval first.

When North Dakota moved to its online ticket-buying system in 2005, the state’s attorney general signed off on the plan, Randy Miller, director of the North Dakota Lottery, told the StarTribune.
The Minnesota attorney general was never asked to review the online subscription idea, said a spokesman for the AG’s office. “No one has requested it and no one has given any advice from our office,” he said.

Approached for a statement by the StarTribune, a spokesperson for the U.S. Department of Justice declined to comment on the legality of online ticket sales.

Lottery management said that the Internet ticket subscription tactics are part of a bolder long-term online strategy to “slowly introduce interactive Internet games” in order to revitalise flagging sales in a changing market.

Political tides surrounding gambling are shifting rapidly and things that are forbidden now could soon be legal, management noted.