ST. PAUL – The state lottery narrowly escaped being reined in last session, and lawmakers are pushing again this year to stop the games’ expansion into online and other venues.
Legislation passed the House Commerce and Regulatory Reform committee Wednesday that would require the lottery to end online scratch-off games as well as ticket sales at gas pumps and ATM machines.
A bill with those restrictions passed both chambers of the Legislature last May with wide margins but was vetoed by Gov. Mark Dayton. The veto came after the Legislature adjourned, meaning lawmakers didn’t have a chance to override it.
They didn’t waste much time bringing it back this session.
A stand-alone bill containing the restrictions from Rep. Greg Davids, R-Preston, and a larger one containing similar provisions from Rep. Tim Sanders, R-Blaine, were advanced to the State Government Finance committee.
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“I think we have the lottery-gone-wild here,” Davids told committee members. “They need to have authorization.”
Lottery executive director Ed Van Petten appeared chastened Wednesday after the battles of last spring.
“We learned our lesson,” he told the committee. “I want to work with this Legislature.”
Van Petten said he opposes the proposed bills, stressing they would jeopardize money the lottery provides for environmental and other state programs and risk the possibility of litigation if the state breaks existing contracts.
But he offered compromise language that would make it clear in statute that the lottery director cannot offer new delivery methods for lottery ticket sales without legislative authorization. That essentially would freeze lottery activity where it is now and require approval for further steps.
But Sanders said he and others “have a problem with where the lottery is right now” as an online retailer.
Part of what bothered some lawmakers last session was the sense that the lottery was overstepping its authority.
The proposed bills would leave in place the online versions of lotto-style games like Powerball and MegaMillions that have been available since 2010. Those games haven’t been controversial.
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It was the lottery’s implementation in February 2014 of online scratch-off games that sparked the backlash.
Opponents said e-scratchoffs would be more addictive than the lotto-style draw games – where players enter numbers and find out later if they’ve won – and some lawmakers said the Legislature needed to sign off on any such changes.
Convenience-store owners, charitable-gaming representatives, tribal casino interests and others objected as well.
Dayton has said he believes the lottery has acted within its authority and that the Legislature needs to stop micromanaging the executive branch. He’s said he’s concerned some of the push for restrictions is coming from lottery competitors who fear encroachment on their turf.
Because of the governor’s veto, the ATM, gas-pump and online scratch-off options have remained in effect.
The ATM and play-at-the-pump options were launched in late 2012. Currently, the ATM option is available at 135 non-bank locations and the pump option at 58 locations, Van Petten said. He said that together they’ve generated about $50,000 in sales this fiscal year.
Overall, online sales account for about 1 percent of total lottery sales, said Van Petten.
He said the lottery generated $127 million last year for public programs
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