Tribe Raises Legal Issues About State Lottery Games

Walk into any convenience store, plunk down $2, and you can try for a royal flush, full house or three of a kind to win.

Or for $5, match your cards against the dealer’s in blackjack. Line up lemons or cherries on your paper card for a win. Match numbers against a picture of a roulette wheel or see if your pictured dice add up to 7 or 11.

These are scratch-off ticket games offered by the Idaho Lottery. The Coeur d’Alene Tribe says the only difference between the scratch-offs and its new Internet lottery is that the tribe’s version uses modern technology.

While the state believes the tribe’s Internet operation runs smack into Idaho’s constitutional ban against electronic imitations of casino games, the dispute appears to be opening new legal issues where the terms have never been defined.

Nowhere in Idaho law is there any definition or description of the state lottery’s instant-win scratch games.

“I don’t think they’re illegal,” said David High, the gambling law expert in the Idaho attorney general’s office.

If they were, Idaho’s state lottery could kiss its profits goodbye. Seventy-one percent of the lottery’s sales - $64 million last year out of a $91 million total - are scratch tickets.

“I think they appeal to the player in Idaho,” said Dennis Jackson, state lottery director. “You get it, you scratch it, you know immediately whether you’ve won. It’s entertaining.”

Idaho is ranked about 10th in the nation in per-capita sales of scratch tickets, Jackson said.

In a letter to the National Indian Gaming Commission last week, Coeur d’Alene Tribal Chairman Ernie Stensgar said the tribe’s Internet lottery games are identical to the state’s.

“For scratch-off games, we produce virtual rolls of tickets that reside on a computer located on the reservation,” he wrote. “A customer purchases a ticket from this roll through their personal computer, over the telephone lines.”

The symbols on the ticket are preset, just like on the paper tickets, Stensgar said.

He also wrote, “We have developed our games using familiar lottery ‘themes.”’

I. Nelson Rose, a Whittier College law professor and national expert on gambling law, said, “Paper scratch tickets are paper slot machines.”

But their legal status depends on state law, he said. And video slot machines are treated differently by federal Indian gaming law.

“This sounds like one of those cases that’s going to end up in the courts,” Rose said.

Jackson credits some of the success of the state’s scratch-off lottery tickets to their snappy, original graphics and themes.

“It’s all done right here in-house,” he said.

The way a scratch ticket works, there aren’t really that many options for the type of game, Jackson said. A series of symbols is covered with a latex material. Players scratch the material off to reveal the symbols. Either they can match symbols to each other or to something else on the ticket to win, or they can match up rows or patterns like tick-tack-toe.

“But there are unlimited kinds of graphics you can put on the top,” he said.

That’s where Sherie Wood comes in. As graphics coordinator for the state lottery, she designs games such as Bonus Bowling, Wishing Well, Aces High and Sweet Rewards.

In the lottery’s three-person marketing department, “We kind of get together once a year and brainstorm,” Wood said.

From a list of names of games developed at the brainstorming sessions, she and a freelance illustrator develop the scratch tickets.

“I try to make everything entertaining and fun and colorful,” said Wood, who keeps a set of Mickey Mouse ears atop her oversized computer monitor.

Her efforts have led to whimsical games such as “Squeaky Green,” which pictured a cartoon character in a bathtub with a rubber ducky and required players to match three bars of soap or three duckies to win. Other games have used casino themes, sports themes or holiday themes.

Said Jackson, “The real key in the marketing of these things is you need to have a variety, a selection. The game has to stay fresh and new.”

“There are people who like the casino theme, the Royal Flush, a blackjack kind of theme,” Jackson said. “But we don’t sell more of the Royal Flush, necessarily, than we do of the Cash Charmer.”

The Charmer features a cartoon snake charmer playing a bright yellow flute, with cash fluttering out of the snake’s basket. Players match three snakes or three flutes, tick-tack-toe style, to win up to $37.

In 1993, the Coeur d’Alene Tribe filed a lawsuit against the state over issues that arose when it negotiated with the state for a gaming compact. Among the issues in the case were whether the state’s casino-themed scratch-off tickets were equivalent to playing the casino games.

U.S. District Judge Harold Ryan wrote in his decision, “There is a considerable difference between a lottery ticket with a poker theme, and a live, banked card game at a casino.”

The card game would be illegal, Ryan wrote. “However, the Tribes may certainly conduct their lotteries in the same fashion as the State.”

The state’s compact with the Coeur d’Alenes specifically authorizes the tribe to have paper scratch ticket games like the state’s.

That leaves open the question of whether the computer versions are just modern equivalents, or whether they cross the line of the constitutional ban on electronic imitations of casino gambling.

Jackson, a one-time Arizona police officer who spent much of his career in management and banking, said he knows some people object to gambling, regardless of whether the lottery tickets use casino game themes or flutes, ducks or cars.

But his job isn’t to make policy, he said. It’s just to run the lottery that Idaho voters approved.

“The most successful game we have is the Bingo card,” he said. “That sells head over heels.” , DataTimes MEMO: This sidebar appeared with the story: BIG TICKET Seventy-one percent of the lottery’s sales - $64 million last year of the $91 million total - are scratch tickets.