Kansas Legislators Question Legality of New E-Lottery

A first-of-its-kind Internet-enhanced lottery game launched May 3 by the Kansas Lottery has caught the ire of legislators in that state.

Designed to appeal to a younger, more tech-savvy consumer base, "eScratch" combines computer-generated tickets with the excitement of playing games online.

Purchasers can scratch the tickets immediately or visit a Web site where they can enter a special code giving them access to 18 computer games. Users play the games to find whether they've won.

All sales are conducted at retail outlets--not online--and the outcomes are not determined online by random number generators. Nevertheless, the game has some legislators asking questions, in part because it was launched while the legislature was out of session.

Ed Van Petten, the executive director of the Kansas Lottery, spent much of last week explaining to regulators, as well as state and federal policymakers, that eScratch is a marketing ploy and not an Internet lottery.

Van Petten was called to testify Wednesday before the Legislative Coordinating Council after the council received inquiries from policymakers regarding the new game. He insisted that there was no intention of slipping the game in under the radar.

Senate Majority Leader Lana Oleen, R-Manhattan, was nevertheless skeptical. "There's been a habit … that these things happen when the Legislature isn't around," Oleen said.

Van Petten pointed out, however, that the game was mentioned in testimony before the Senate Confirmations Oversight Committee during the last legislative session as well as in a May 7 news release. The game was rolled out with little fanfare, he said, mainly because of numerous delays and missed deadlines as GTECH, the game's creator, tweaked and finalized the system.

Van Petten also pointed out that the Governor and Lottery Commission approved the game earlier in the year on the condition that sales and game play were not conducted on the Internet. He said the games on the site are designed to generate more interest in the lottery and bring younger players to the site by using the games.

He added that both GTECH and the Kansas Lottery conducted ample research to ensure that the site was legal.

Tickets for the game can only be purchased through a Lottery retailer and range from $1 to $50. The buyer can check immediately on the site to see whether the purchased ticket is a winner or play the games online for entertainment purposes only.

The Internet games look like video lottery, slots and other games. Players can reveal small increments of the ticket at a time so that play continues for several minutes on the same ticket.

The target audience is young professionals in the 25-to-35 age range. So far, Van Petten said, the game hasn't attracted much interest, although the lottery hasn't promoted it much yet and won't start a large-scale ad campaign until the system is fine-tuned and debugged.

Daily sales have averaged around $3,000--far below the lottery's goal of $20,000 per day.

"It hasn't been wildly successful," Van Petten said, "but we are supporting it and hoping it will grow."