In an age when more people are making purchases with plastic cards and digital devices, some Wisconsin lawmakers say it's time for lottery players to be able buy tickets via debit payment instead of strictly with cash.
"I'm thinking we need to get to the modern age with modern payment systems, which includes debit," said state Rep. Terry Katsma (R-Oostburg), one of the sponsors of a bipartisan bill that would allow debit payment for lottery tickets.
But the retailers who sell the tickets and a conservative Wisconsin group that watches for law changes it believes would be detrimental to families are telling state legislators, "Not so fast."
The cash-only requirement for tickets has been in place since the Wisconsin Lottery began in 1988.
Senate Bill 528, which was introduced recently by state Sens. Alberta Darling (R-River Hills) and Lena Taylor (D-Milwaukee), would for the first time allow debit payment for lottery tickets. Credit cards would remain taboo because state officials don't want people going into debt to buy lottery tickets.
While the convenience of debit cards — whether plastic or on mobile devices — may increase ticket sales, retailers who sell the tickets are worried that unless they are provided additional compensation for being on the front lines of the Wisconsin Lottery, they'll bear the costs of debit payment transactions. Each time a debit card is used to make a purchase, the retailer is assessed a "swipe fee" of at least 22 cents per transaction, said Brandon Scholz, president and chief executive of the Wisconsin Grocers Association. The fee varies depending on the transaction processor used by the retailer.
"The reason we're opposed is that grocers and convenience store operators — and anyone who sells lottery tickets — will lose money," Scholz said.
Retailers are reimbursed by the state lottery for being a ticket location. They receive 5½ cents for each $1 in lotto drawing tickets sold, and 6¼ cents for every $1 in scratch-off tickets sold, Scholz said. That's not enough to cover new swipe fees retailers will be hit with it they start accepting debit payment for lottery tickets, Scholz said.
"They put the equipment in, they do the training, they provide the marketing materials, but we're the vessel," Scholz said.
As for the argument that retailers who don't like the change don't have to sell lottery tickets or accept debit payments it it takes effect, Scholz said that's not practical competitively.
"The fact is, if you sell lottery tickets in your store and I'm across the street, I have to sell them, too, because you're going to draw some of my customers and maybe you're going to take some of mine away," he said.
The lobby group Wisconsin Family Action is opposed to debit payment for lottery tickets, too, but more so on moral grounds. President Juliane Appling said it would give lottery players access at once to all the money in their checking account for gambling, rather than only the cash in their wallet or the limited amount of cash they could withdraw daily at an automated teller machine.
"If there's a problem gambler who is already having trouble restricting on his own or her own the purchasing of tickets, using a debit card just makes life a whole lot simpler for them to get into serious financial trouble, taking money away from the essentials of life like paying their bills, keeping a roof over their head and taking care of the kids and putting food on the table," Appling said.
She added: "When the state is involved in gambling, the presumption is, in order for the state to win its citizens must lose."
Katsma stressed that the change still wouldn't allow for credit cards to be used for lottery ticket purchases.
"I don't think that is a good use — that we allow people to go into debt to buy lottery tickets," Katsma said. "If you're using your debit, you're just transferring the money that's certainly in your checking account right now, so it's the equivalent really of cash."
There's no question that debit payments are growing. According to Federal Reserve data, there were 37.9 billion debit transactions in the U.S in 2009. In 2017, there were 82.6 billion. Another Fed report found that cash payment is lowest among people age 25 to 44.
Katsma also noted that Wisconsin is the only state among its surrounding states that doesn't allow debit payment for lottery tickets.
"I'm sure you know a lot of millennials like I do, and they have like zero cash in their pocket," Katsma said.
He said lawmakers are meeting with stakeholders to discuss the bill.
"Our contention to the lottery and IGT (Global Solutions Corp)., the lottery's vendor in this, is that you can't expect us to lose money selling your tickets," Scholz said.