This refusal to listen to any evidence continued. In one hearing, the lottery brought in two lottery experts to testify: David Gale, director of NASPL, and Chuck Strutt, then the head of MUSL. They were officially on the agenda. But neither was allowed to testify.
On the other hand, the casino lobbyists never testified themselves. But that didn’t stop them from telling legislators behind closed doors that internet instant tickets were going to ruin both charitable and casino gaming. They etched into legislators’ minds that people would just stay in their homes and gamble online.
They also implied that selling e-instants was illegal under the Federal Wire Act. “I found out later that the lobbyists filed a letter of complaint with the US Attorney’s Office. I heard the Attorney’s Office laughed them out of the building.”
But that did not stop many legislators from reiterating the lobbyists’ argument that it was illegal. “Whenever I heard this, I would always respond, ‘If any of these parties truly believed what we are doing is illegal, we would be in a courtroom having this discussion, not a legislative hearing,’” Van Petten said. “No one ever argued that point.”
In 2014, the Minnesota legislature passed a bill banning the Minnesota Lottery from using online instant tickets. The governor, however, vetoed the bill. But because the veto happened at the end of the session, the legislature had no time to overturn it. The casinos blamed house and senate leadership for not getting the bill passed sooner in the session. To get the point across, the casinos apparently made no contributions to their political parties for the next election.
In 2015, the bill came up again, but this time it happened very early in the session. To no one’s surprise, it passed quickly and the governor didn’t veto the bill. With that, the Minnesota Lottery had to turn off internet sales at the end of the summer. Interestingly enough, what the legislature did was illegal. Both the United States Consitution and the Minnesota State Consitution have what is referred to as a contract clause. It says, in layman’s terms, that no legislator can enact legislation that infringes on an existing, lawful contract. Despite being informed of this, leadership gave no indication they cared and passed the law anyway. This set the state up for a potential lawsuit. Scientific Games documented a loss of seven million dollars in damages in direct expenses they incurred. They didn’t calculate potential loss of profit. This was a significant loss of money. Scientific Games, fully aware of the Minnesota Lottery’s predicament, settled for only $3.5 million dollars.
Internet gaming would have helped the Minnesota General Fund significantly over the next decade. Instead, the state lost: $3.5 million. The lottery lost: a tool to reach out to new audiences. The players lost: a fun new way to support their state. So who won? The lobbyists. They won despite never presenting one fact to support their position. They won despite never testifying in a hearing. They won using only fear and innuendo, and they did it all behind closed doors.
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