Despite cash-only Wisconsin law, some merchants already accept debit payment for lottery tickets

If Wisconsin lawmakers pass a bill allowing lottery tickets to be purchased with debit cards, the move would put the state’s stamp of approval on what some ticket-buyers already are doing.

When the Milwaukee Journal Sentinel reported last week on a proposal to let merchants accept debit payment for lottery tickets instead of cash only, some readers responded on social media and in emails that they've been buying lottery tickets with debit cards for a while.

And when a Journal Sentinel reporter did a spot check over the weekend at four Pewaukee gas station-convenience stores that sell lottery tickets, he was able to buy a $2 Powerball ticket at three of four using a debit card. Only the clerk at a Mobil station at 1194 Capitol Drive denied a debit transaction, saying cash was required for lottery tickets.

Nonetheless, as it stands today, “The statute does not allow for debit cards,” state Rep. Terry Katsma (R-Oostburg), one of the main co-sponsors of the bill that would permit sales using debit cards, said this week.

The 31-year-old law that authorized the Wisconsin lottery declares: “Lottery tickets or lottery shares may be sold only for cash.”

Katsma said a “creative argument” by lottery ticket sellers over the years might be that debit payment really is the same as cash because the money automatically is transferred from a buyer's checking account. Still, he said, at least for now, “technically it’s not permitted.”

However, as more and more transactions are conducted electronically rather than with cash, it makes sense for merchants to be able to accept debit cards, Katsma said. He said the bill addresses that.

Instead of saying “only for cash,” the wording for the law under the bipartisan bill would be: “Lottery tickets or lottery shares may be sold only for cash or payment by debit card. Payment by credit card, charge card, or any similar form of deferred payment is prohibited.”

Credit card purchases are supposed to be prohibited now, and would remain so under the proposal, because state officials don’t want people going into debt to gamble.

The bill would not require lottery ticket sellers to accept debit payment. It would be optional.

Over the years, lottery officials apparently have taken a hands-off approach to policing the cash-only requirement.

Asked whether the lottery has enforced the cash-only stipulation in the law, Wisconsin Lottery spokesperson Kailey Bender noted the lottery statute spelling out “only for cash” goes back to 1988.

“At the time, debit cards did not exist. Since there is not a definition of debit in the statue, there is not a policy regarding the use of debit,” Bender said.

She said the proposed legislation “would define that debit can be used for lottery purchases and offer convenience to players.”

Although some retailers already are taking debit cards for lottery tickets, not all merchants who sell tickets like the idea. Once debit payment officially is allowed, merchants who prefer to sell lottery tickets only for cash will feel compelled to bear the per-transaction cost of debit purchases because they’ll need to keep up with competitors, said Brandon Scholz, president and chief executive of the Wisconsin Grocers Association. The per-transaction fee for debit purchases is about 22 cents for merchants.

"When you sanction the debit card, you're basically saying, 'All retailers take debit cards now,'" Scholz said, adding that if the bill passes, he wouldn't be surprised to see marketing by the lottery urging people to use debit cards

State lobbying records show the bill is opposed by the Wisconsin Grocers Association, Wisconsin Petroleum Marketing & Convenience Store Association, Kwik Trip Inc., Wisconsin Family Action and Citizens Against Expanded Gambling Inc. It has the support of IGT Global Solutions Corp., which is the state lottery's gaming technology vendor.

Katsma said state officials and retail groups are meeting to discuss the legislation, Senate Bill 528, which has been assigned to the Senate Committee on Agriculture, Revenue and Financial Institutions.

Paul Gores can be reached at  paul.gores@jrn.com.  Follow him on Twitter @pgores.