The Minnesota Lottery is spicing up its product line via this week’s launch of online scratch-off instant-win tickets, which function much like online slot machines. The Spicy 7’s game is an online version of an existing tic-tac-toe-style scratch-off ticket available in stores, but its launch marks the first state lottery in the US to begin offering instant win games of this sort online. Illinois became the first state to sell lottery tickets online in March 2012 after the Department of Justice decided in Dec. 2011 the Wire Act applied only to sports betting. Last month, Illinois launched a mobile app that allows customers to purchase tickets and check winning numbers.
The Spicy 7’s online game is only available in Minnesota, but state visitors may also avail themselves of the online entertainment. Online players are limited to a maximum weekly spend of $50. The Lottery launched the product without great fanfare, due to what executive director Ed Van Petten said was an abundance of caution, wanting to make sure there were no technical glitches before opening the floodgates.
Even now, there’s no mention of the product on the Lottery website’s home page and the actual game is buried several layers deep. Van Petten told the West Central Tribune that the product was “working perfectly” and had sold 964 $1 tickets on its first day of availability. The Lottery plans to introduce several similar games in coming months.
The Lottery decided to offer the online scratch-offs in a bid to lower the median age of the average Lottery player. Sales fell 2.8% in 2013 and the number of non-geriatric Lottery players has halved over the last decade. Van Petten said the Lottery “definitely don’t want” to see online sales outstrip retail sales “but we would like to initiate more contact with more individuals on the internet.”
Gambling critics say the Lottery lacked the legislative blessing to take this step, but Van Petten insists everything is above board. Anti-gambling types aren’t the only ones protesting the Lottery’s online move. In October, John McCarthy, executive director of the Minnesota Indian Gaming Association, told MPR News that the online scratch-off plan showed “how desperately [the Lottery] want to be players in … the casino gambling game.” McCarthy said the state’s 18 tribal casinos were also keen to take their action online and didn’t understand why the Lottery was being given preferential treatment.
Van Petten has answered “absolutely not” when asked previously about whether the Lottery plans to offer full-fledged online casino product, but state lotteries are becoming increasingly assertive over their right to expand their online horizons. They have banded together to express opposition to federal legislative proposals that would have cut them out of the online mix in favor of Nevada-based casino giants. Late last month, Massachusetts state Sen. Jennifer Flanagan filed a bill that would allow the state lottery to sell tickets online and possibly expand into online poker and other forms of gambling, as Delaware’s lottery has already done (albeit without great success).
It remains to be seen how lucrative the Minnesota Lottery’s online experiment will prove, and the state is wisely making no projections it may later be forced to walk back. The state’s experiment with electronic pulltab games – launched to help pay for the Minnesota Vikings’ new stadium – was originally supposed to bring in around $34m in annual revenue, a figure that was subsequently cut in half before being downgraded to just $1.7m. Similar shortfalls came from the e-tab introduction at the state’s airports, which was supposed to generate $3m in annual revenue but ultimately produced just $50k over its first eight months.
