Minnesotans will soon be able to scratch-off lottery tickets with a click of their mouse.
The state lottery is poised to start selling the well-known games over the Internet. Lottery officials say they need to stay competitive, but critics fear what could happen if the state begins to rely on Internet gambling.
The Minnesota State Lottery is doing a pretty brisk business, with sales up 4 percent — or $40 million — over last year, lottery director Ed Van Petten said.
But there's a problem: the number of young players dropped by nearly half between 2003 and 2012, according to state lottery research.
"The belief is that the lottery is not available where these age groups shop," Van Petten told state lawmakers today. "In fact, one research study out of Massachusetts showed that 55 percent of 18-24 year-olds report that they never go in stores where lottery is offered. Well, we know they do because they go in convenience stores."
Lottery officials are about to change the equation by bringing games to players — to their computers, their tablets and their smart phones.
The lottery started selling draw games, like Powerball, on an online subscription basis in 2010, and it only accounted for about half of one percent of draw game sales by the Minnesota Lottery last year. But Van Petten told lawmakers that gamblers could be able to virtually scratch off lottery tickets on the Minnesota Lottery website by the end of this year.
Don Feeney, the lottery's research director, noted the potential for government-sponsored online poker.
Nevada already offers the game. Delaware is launching its game Thursday, and New Jersey is expected to offer online poker next month. So far, all three states restrict the games to their residents only.
Feeney said Canadian games, which started in British Columbia in 2011, offered the clearest guidance on the potential for Internet poker.
"If I were to extrapolate the British Columbia numbers from Minnesota, we would be looking at revenues considerably less than $10 million a year," he said. "It is not anybody's idea of a financial panacea."
The lottery isn't proposing online poker, or asking the lawmakers to authorize the games.
But some members of the House Commerce Committee reacted with alarm that the state lottery is expanding online and may do yet more.
"You're proposing massive, massive expansions of gaming," said state Rep. Greg Davids, R-Preston.
State Rep. Tim Sanders, R-Blaine, wondered what might be next.
"Is it the lottery's intention to offer slot machine-type games and roulette and craps-type games over the internet through the lottery?" he asked.
"Absolutely not," Van Petten replied.
Existing gambling providers also reacted with concern.
The state's 18 tribal casinos also are interested in online gaming, said John McCarthy, executive director of the Minnesota Indian Gaming Association. He doesn't think the state lottery should get a head start.
"It just shows how desperately they want to be players in this game — the casino gambling game," McCarthy said of state lottery officials.
Lottery officials denied that. Van Petten said his agency is simply trying to make Minnesota's existing games sustainable as regulation and the Internet change the gambling landscape.
Online gaming is coming to Minnesota in some fashion or another and needs to be discussed, said State Rep. Joe Atkins, chair of the House Commerce and Consumer Protection Finance and Policy Committee.
"There are a number of other states that are pursuing it already," said Atkins, DFL-Inver Grove Heights. "And rather than sitting here in Minnesota with our head in the sand, and not know what's going on, it seemed it would be helpful to at least hear from the lottery folks about what's going on elsewhere."