MINNEAPOLIS, Minn. — A quiet revolution in gambling is under way in Minnesota.
Without a single press release or announcement, the Minnesota State Lottery is nearly a year into an experiment to get more Minnesotans to gamble online through a subscription lottery service.
Private online gambling is illegal in Minnesota, and the state's elected leaders have turned back various gambling expansion proposals and online gambling ventures.
But in the waning months of Gov. Tim Pawlenty's administration, the Minnesota State Lottery took the first steps toward what could become a massive shift to Internet lottery play. They are looking at the Internet to boost sales as more Minnesotans reject traditional lottery tickets and become more comfortable playing games and buying goods online.
Interim Lottery Director Jenny Canfield, at a lottery seminar last year, said that "We are seeing that decline, and it's happening very rapidly. We have to react quickly to grab back our players, to build up our player base again."
The move has taken some gambling critics by surprise. Several, including legislators, said they were deeply troubled by what they see as secrecy, aggressive tactics and a bypassing of legislative approval.
"It's a terrible idea. It's reprehensible," said Assistant Senate Majority Leader David Hann, an Eden Prairie, Minn., Republican who tried to abolish the lottery six years ago. "We are spending a lot of taxpayer money to lure people into throwing money down the toilet so we can spend it on something that we think is more important."
Hann said he wants to explore whether the state lottery has the legal authority to sell tickets online. "To me, it seems like they are exercising some latitude they might not have," he said.
Gov. Mark Dayton's administration learned about the online ticket-buying service only late last week. Dayton spokesman Bob Hume said the practice started before Dayton took office and that they have not looked into it.
State Rep. Ryan Winkler said it should "absolutely" be reviewed by legislators.
"I certainly want to find out if they have the authority to do it," said Winkler, who sits on committees that review gambling issues. "It look like they are trying to avoid public attention."
Lottery officials say they don't need legislative approval. They liken their online subscription service, which allows players to gamble no more than $50 a week, to electronic commerce, not Internet gambling. "It's within our guidelines," Canfield said.
Minnesota is one of only a few states to offer the online lottery ticket sales, but legislators in other states like New Jersey are considering it. North Dakota and New Hampshire offer similar online lottery subscription services, but neither got legislative approval. When North Dakota moved to the online ticket-buying system in 2005, the state's attorney general signed off, said Randy Miller, director of the North Dakota Lottery.
In Minnesota, the attorney general was never asked to review the idea, said Ben Wogsland, a spokesman for the attorney general. "No one has requested it, and no one has given any advice from our office," he said.
Laura Sweeney, spokesperson for the U.S. Department of Justice, declined to comment on the legality of online ticket sales. The department has shut down numerous online gambling operations around the country.
Lottery officials say there was nothing secretive about the subscription service. They intentionally staged a "soft launch" since they anticipated only a tiny fraction of Minnesotans would use the system and they didn't want to spook retailers who make a commission selling lottery tickets.
"We had to be sensitive," Canfield said.
Right now, just 7,599 Minnesotans are signed up for the online service. Subscription sales made up just $607,000 of the $500 million businesses. There is no advertising campaign for the service, which can be found by clicking Buy Online on the lottery's home page.
"Some people just feel more comfortable online," Canfield said. "Some more affluent people prefer it."
The online subscription service allows Minnesotans to buy tickets for most lottery games around the clock.
Players can select a length of subscription from six weeks to a year for a half dozen lottery games, playing $2 to a maximum of $50 per week. Once an online purchase is made, the same numbers must be played for the duration of the subscription. Customers cannot change the numbers or cancel a subscription before the subscription runs out. The lottery can suspend a subscription if the customer's bank account runs out of money, but penalties will be assessed. The lottery does not accept credit cards and requires that subscriptions be paid by direct access to a checking or savings account.