Online lottery sales could get the delete button

With state lottery sales on the decline, an effort was made earlier this year to boost sales by making games available online — a move that several legislators hope to stop.

Rep. Ann Lenczewski (DFL-Bloomington) brought HF2207 to the House Taxes Committee on Tuesday for discussion. The bill would prohibit the sale of lottery tickets over the Internet and at ATM-like machines. While before the committee informally, it may be part of negotiations in the taxes conference committee, scheduled to begin meeting on Thursday.

The Senate Taxes Committee Chairman, Sen. Rod Skoe (DFL-Clearbrook), asked Lenczewski, an ardent gambling opponent, to come on board in support of the provision contained in SF2726.

“We should not be addicted to gambling to fund our government,” Lenczewski said. “I think there are many reasons legislators should think through this and put a stop to it. We can pass this year that we are not going to have online gambling.”

Lottery Director Ed Van Petten defended the online sales as a way to attract new audiences, especially young adults who are more apt to participate over the Internet rather than through a convenience store.

“The lottery is not on these young adults radar but the Internet is.” He said use of the Internet is part of the evolution of how lottery sales are conducted and accused the bill sponsors of not thinking through the impact. “I think it is very popular; I think it is very safe. I don’t understand the measure. I haven’t heard any allegations of fact that this has harmed anyone or will harm anyone,” he said.

According to a Department of Revenue fiscal analysis, through February 2014, monthly lottery sales for the year are averaging nearly $44.87 million, compared to an average of $46.7 million in fiscal year 2013. Additionally, among Minnesotans between 25 and 34 years old, lottery participation declined from 62 percent in 2004 to 50 percent in 2012, a loss of 38,000 customers in this age group alone.

Rep. Michael Paymar (DFL-St. Paul) questioned whether the decline isn’t more about a reaction to the e-pull tab “debacle” that was to help pay the state’s share of funding for the new stadium to house the Minnesota Vikings. “Maybe there are not a whole lot or recruits. Maybe the people are getting smarter.”

While state statute doesn’t explicitly prohibit lottery sales, Rep. Greg Davids (R-Preston) said the move to online sales is “coming in the back door, since it is not prohibited. … This is the lottery gone wild.  This is so regressive.”

A fiscal note projects that online sales would add nearly $8 million to the state coffers over the next biennium. Without the money, state agency budgets, counting on the money, would have to be shored up from another funding source, Lenczewski said.

HF 2207 is scheduled to receive a formal hearing in the House Commerce and Consumer Protection Finance and Policy Committee on Thursday. It is expected to be amended so that language mirrors that of SF2128, sponsored by Skoe.