Minnesota Governor Mark Dayton announced, unlike last year, he will not veto a bill that will end sales of instant-play lottery tickets online and at gas pumps and ATMs. Instead, Dayton said he will allow the bill to become law without his signature. The law will take effect this week and the games will be required to stop in four months.
Approved with overwhelming majorities in both the House and Senate, lawmakers felt lottery officials abused their authority by launching the games in February 2014 without legislative approval. At the time, Minnesota was the first state to sell instant-play games online, in addition to a subscription service for draw games like Powerball. Online instant-play customers may buy up to $50 in tickets per week as long as they are located within the state and can prove their age.
State Senator Barb Goodwin said, “I hope the lottery has learned a lesson from this because this is an expansion of gambling that should not have happened.”
When he vetoed last year’s bill, Dayton said the lottery was acting within the bounds of the 1988 constitutional amendment that established it, that it was taking proper steps to modernize and stay viable. He also noted opposition to online lottery sales was coming from people “who have a very lucrative piece of this gambling business and don’t want to give any of it up.”
Lottery Director Ed Van Petten has said online sales, about $850,000 in the first 10 months of this fiscal year, have been minor compared with the standard tickets sold at gas stations and other retailers. About 70 gas stations around the state sell lottery tickets at the pumps.
The four-month window is designed to allow the lottery time to get out of its contracts with certain vendors. Senators defeated an amendment to give the lottery until 2018, when its contracts expire, to end online ticket sales.
Senators also paid little attention to state Senator Sandy Pappas’ request to give the three more years to wind up its online activity. “What kind of message does this send to vendors who in good faith go into a contract with the state and then find the legislature throwing the contract out? Are they going to hesitate to want to engage into a contract with the state?” she asked.
Van Petten noted, “It’s not just turning off a switch. We’ll have to work with our vendors on that issue and determine what is and what isn’t possible.” He said the state could face lawsuits and owe up to $12 million in early termination damages.
The bill would let ticket sales for draw games continue online, which has brought in $1.5 million in sales in this fiscal year. But Van Petten said those ticket sales also could be jeopardized since they’re managed by some of the same vendors as the instant-play games. “I can’t imagine our vendors would continue the contract if we breach part of it,” Van Petten said.
