Online lottery sales ban fails in House

The proposal to stop the sale of lottery tickets online has the backing of some of the most powerful legislative leaders in both chambers. Yet despite the measure’s impressive group of supporters, which includes the respective chairs of tax committees and leaders from both parties in the Senate, its fate is still uncertain.

The House took up and passed its omnibus gambling policy bill on Tuesday, approving the bill 116-13. The bill picked up a handful of noncontroversial amendments during the floor debate, but the bulk of the discussion there involved a push to retroactively prohibit the Minnesota Lottery from making its scratch ticket games available instantly through online sales.

That piece of the bill was the subject of supportive statements from a number of House members, but was eventually shot down because it did not fit into the House’s budget targets, which currently do not allow for any spending or loss of revenue in the Commerce budget sector. Tuesday’s vote leads to an eventual conference committee process, where the gaming omnibus bill’s author, Rep. Joe Atkins, DFL-Inver Grove Heights, promised to be mindful of the wishes of his fellow members.

“I heard quite loudly and clearly that there’s a desire by this body to address that in some fashion,” Atkins said. “And I give you my word that we will have that discussion in conference committee.”

Restrictions have broad support

The provision to block online gaming emerged midway through the current session but carried the weight of some of the Legislature’s biggest names, including Senate Majority Leader Tom Bakk and his minority counterpart, Sen. David Hann, R-Eden Prairie. The House version was introduced as a floor amendment from Rep. Greg Davids, R-Preston, who has been the most outspoken critic of online sales. Davids argued the online sales are an unnecessary expansion of gambling by Lottery officials, and that the games’ implementation without seeking legislative approval reflects an overstepping of boundaries.

Davids said nothing in the legislation allowing lawful gambling in this state, first approved in the 1980s, would provide for the selling of lottery tickets online, and said the availability of scratch tickets could be the first step toward moving casino-style games onto the Internet.

During Tuesday’s floor session, Davids, the Republican lead on the House Taxes Committee, brought a change to his amendment that would have banned the implementation of lottery ticket sales at “automated teller machines,” or ATMs.

That element was adopted via a voice vote, but the full amendment was immediately stricken by Atkins.

The current budget target in the House does not provide for any additional spending by the commerce committee, said Atkins, who noted that the House Ways and Means Committee had met earlier that morning. If passed, the prohibition of online gaming would come at an estimated cost of $1.5 million to the state’s general fund, said Atkins, who moved for Davids’ amendment to be ruled out of order as a violation of the budget resolution.

“There’s just no way we can square that up,” Atkins said.

Taxes chairs support restrictions

The amendment had vocal support from a number of members from both parties, including House Taxes Chair Rep. Ann Lenczewski, DFL-Bloomington, who explained that Davids was bringing back a bill that she had carried originally.

“While I know it’s not in your bill,” Lenczewski said, “I really hope we can find a way this year to end online gaming from the lottery.”

The Senate, which passed its own omnibus gambling bill in late April, had seen a similar scenario during its floor debate on the bill carried by Sen. Sandra Pappas, DFL-St. Paul. At that time, conservative Sen. Roger Chamberlain, R-Lino Lakes, advocated a floor amendment to tack on an online sales ban originally carried by Senate Taxes Committee chair Sen. Rod Skoe, DFL-Clearbrook. Skoe warned of the potential social costs of online lottery sales, which he said were aimed at young consumers who tend to gamble less than their older peers.

“They’re reaching out to these people to try to encourage more gaming by going into their homes,” Skoe said. “And his is a major difference between the current gaming that’s going on in Minnesota.”

Pappas, for her part, applauded the lottery for seeking a new and innovative revenue stream, but said it was also a “reasonable request to ask the lottery to slow down.” The amendment was adopted on a voice vote.

Reached on Tuesday, Ed Van Petten, executive director of the Minnesota Lottery, seemed accepting of the likelihood that the electronic gaming option could be struck down this year, though he said he was “disappointed” in how the process had played out in the Legislature. Though Minnesota had been the first state to enact instant online gambling as part of its lottery, similar mechanisms exist in Canada and most of Europe, and two states — Illinois and Georgia — are set to debut their own programs later this year.

“I think within the next three years, there will be eight to 10 states that have it available,” Van Petten said. “We’ve tried to communicate that, but nobody’s listening.”

Van Petten said the online gambling feature had not been used as a new outlet by compulsive gamblers, and was instead a “sampling” tool that had, so far, led to an uptick in lottery ticket sales at brick-and-mortar stores.

Gov. Mark Dayton has not taken a firm stance on the legislative push to remove online gaming. Dayton told the Associated Press he would likely not veto a gambling bill that had passed overwhelmingly — the Senate bill moved by a 55-2 vote margin — but cautioned that lawmakers should at least allow sufficient time for the unwinding of the electronic sales system.

On Tuesday, a spokesman for Dayton told Politics in Minnesota the governor “has not yet made a decision on this legislation.”