Dayton vetoes bill to limit online lottery sales

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MINNEAPOLIS (AP) - Gov. Mark Dayton vetoed a bill Friday that would have done away with online instant-play lottery games and barred sales of tickets via gas pumps or ATMs.

His decision ends suspense over a bill that passed with big bipartisan majorities on the final day of the legislative session. The Democratic governor confessed to being torn over the strong message sent by lawmakers and his fear that the legislation was partly motivated by other gambling interests looking to protect their turf.

Dayton said in his veto letter that the Minnesota Lottery has taken steps to modernize operations in response to changes in technology. He said that voters approved the creation of a state-run lottery in 1988, and the Legislature created a statute that gives the lottery broad powers.

“With all due respect … the authorization for the Lottery stems directly from the people of Minnesota,” Dayton wrote, later adding, “It appears to me that the Executive Director is operating within the scope of his legislatively-established authority.”

The Minnesota Lottery launched its first online games in 2010, but drew the ire of lawmakers when it took the scratch-off franchise to the Internet this winter. Legislators say they should have been consulted first and feared it would make gambling too impulsive.

“In effect what the governor is saying is, it’s OK for his lottery director, without consent of the Legislature … to sell lottery tickets anywhere, anyhow in the state of Minnesota,” said Rep. Joe Hoppe, R-Chanhassen. “I don’t think that’s right, and I think an overwhelming majority of the Legislature agrees with me, and this will not stand.”

In his letter, Dayton urged the lottery director to re-establish relationships with lawmakers before the next Legislative session.

The bill wouldn’t have done away with all Internet sales. The lottery would have been permitted to continue online subscription sales of tickets for draw games such as Powerball and Mega Millions. Still in their infancy, the electronic scratch-off sales have brought in small sums compared with the paper version sold in convenience stores and other brick-and-mortar locations.

Lawmakers wrote the bill so the lottery would have until late October to shut off the virtual sales. But a key lottery vendor said it would contemplate suing the state for breach of contract.

Lottery officials argued the games are an important branding tool and a way to market tickets to a younger audience accustomed to doing everything on their tablets, mobile phones and computers.

The ease of access is what troubled some legislators, who said the lottery was greatly expanding its scope. Lottery profits are split among environmental program accounts and the state’s general treasury, so lawmakers built potential losses from the restrictions into their recently enacted budget.

Hoppe predicted the governor’s decision will lead to a strong anti-lottery bill next session. Because the Legislature has adjourned, lawmakers can’t attempt a veto override.

“We were more measured and more moderate, and now the governor has thrown all that out the window,” he said.

Among those watching the bill were charities that sell pull-tabs and American Indian tribal casinos that voiced alarm over where the lottery might go next.

The curbs on sales at gas pump terminals and ATMs were pushed by some gas station owners out of concern that customers wouldn’t bother coming into the store for snacks, beverages and other goods if they could buy tickets straight from the pump.

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