Minnesota’s pioneering use of online lottery scratch-off tickets could be headed for the ash-heap of history after a state House committee voted to ban the product. The Minnesota State Lottery made history in February by becoming the first US state lottery to offer online scratch-off tickets. While other state lotteries had offered online ticket sales – Illinois even offers a mobile app to purchase tickets – Minnesota pushed the envelope in February by offering an online version of their Spicy 7’s scratch-off tickets, which critics believe mimic slot machine gambling.
The Spicy 7’s have produced $170k in sales since their Feb. 6 online debut. Outraged politicians accused the Lottery of overstepping its mandate yet director Ed Van Petten insisted that the online scratchers were more of a promotional tool and pointed to increased sales at the state’s 3,100 lottery retailers as proof that the plan was working. Van Petten was also keenly aware that the average lottery player was skewing older and that changes were needed to keep the Lottery relevant in a digital age.
Unconvinced, legislators in both the House and Senate introduced legislation to take Spicy 7’s offline. The House Tax Committee held a hearing on Tuesday which featured a representative of the Joint Religious Legislative Coalition taking a page out of Las Vegas Sands VP Andy Abboud’s book by holding up his smartphone and suggesting voters didn’t want to see it transformed into a lottery terminal. The not at all hysterical Rep. Greg Davids took this argument to its illogical conclusion, saying; “This is not the online lottery, this is online crack.”
Van Petten told the committee that he remains convinced the Lottery was within its legal mandate to launch the product while reminding everyone that killing the product could cost the state $2.5m if a key lottery vendor launched a breach-of-contract suit. An unsympathetic Rep. Ann Lenczewski, who chairs the Committee and sponsored the House legislation to kill off the Spicy 7’s, suggested that any financial damages wouldn’t be the state’s liability. “The lottery can eat that.”
On Thursday, the House Commerce Committee voted in favor of the legislation banning the online scratchers. The bill, which also seeks to shut down online sales of national lottery tickets as well as the Lottery’s ‘pay at the pump’ gas station pilot program, now heads to the House rules committee. Assuming it passes muster there, the next stop is a vote on the House floor.
Similar legislation is pending in the Senate and Majority Leader Tom Bakk has expressed confidence that it will pass. Gov. Mark Dayton has expressed concerns that legislators may be micromanaging the Lottery’s operations but has yet to express a firm opinion one way or the other on the issue.
On a cheerier note, last week marked the 25th anniversary of the Lottery’s birth. To celebrate, the Lottery unveiled a new logo, the first revamp the logo has undergone since its 1989 debut. The new logo features a variation of the loon on the old logo, but given the attitudes of state legislators, perhaps a whole bunch of certifiable loonies would have been more appropriate.