"It isn't just millennials any more who aren't carrying cash and that just creates difficulties with payments for physical products," Lottery Vice President Mary Neubauer said.

Iowa Lottery players would have the option of purchasing electronic tickets while using mobile phone apps as long as they don't buy with credit cards under a proposal from state officials to the Iowa Legislature.

The lottery had a record $371 million in sales last year, but players want more convenience and cashless choices as they look to the future, Lottery Vice President Mary Neubauer told the Iowa Lottery Board on Tuesday.

"I want to be clear that the Iowa Lottery is currently in a very strong position," Neubauer said in a briefing paper. "We have introduced new products in recent years like our InstaPlay games and have enhanced and invigorated our long-term product lines to keep our game selection fresh. But no one would say that a selection of solely paper products will withstand the test of time."

She also said the Iowa Lottery has been forced to push back against illegal apps that are selling lottery products through a variety of means online. The apps re-sell lottery tickets and there is no way for anyone to be certain consumers are receiving the winnings which they are due. Beyond that, the purchases are illegal because they aren't being made through licensed retailers who have undergone background checks.

The Iowa Lottery Board didn't take any official action on the proposal Tuesday. But board members have been briefed on the issue for nearly a decade and have been supportive of informing the public about changes in the marketplace, Neubauer said.

"It isn't just millennials any more who aren't carrying cash and that just creates difficulties with payments for physical products," she said. She cited a Capital One poll from March 2018 that found 34 percent of people aged 18-35 rarely or never carry cash and that 25 percent of those over age 55 said the same.

The proposal is being drafted into a bill for consideration in the Legislature's 2019 session. The legislation will include:

• A definition of "e-ticket" to the other types of lottery tickets already listed in state law. This would allow an electronic visual facsimile of a ticket that could be available to a player on a personal consumer electronic device such as a smartphone.
•  Making it clear the Iowa Lottery could sell tickets via a personal consumer electronic device. The Iowa Code already allows the sale of lotto games online, but the Iowa Lottery has not taken that step.
•  Updating the definition of payment types to include non-deferred electronic payments through electronic wallets or mobile applications or other forms of cash-based payments as long as credit is not used.
•  The electronic wallets' reference would permit advance-deposit wagering — similar to what's already commonly used for betting on horse racing — for lottery players to establish e-wallets or electronic accounts with the Iowa Lottery.

Ten state lotteries including Illinois currently sell products online and the issue is under discussion in many other states, Neubauer said.

For example, the lottery in Michigan sells online game cards through lottery terminals and self-service kiosks in retail locations. Customers can buy game cards in increments from $10 up to $100 and use them to fund e-wallets with the Michigan Lottery.

Since online games were launched by the Michigan Lottery in August 2014, there have been double-digit sales increases in traditional instant-scratch tickets, demonstrating that the online component has complemented and helped drive sales of all games, Neubauer said.

So-called "age-gating" and "geo-gating" are used by all lotteries that offer online gaming, ensuring that players are of the legal minimum age (21 in Iowa) and that they are physically located within the borders of the state in order to play.

To guard against money laundering, e-wallet systems generally require that any money deposited into an account must be spent on lottery play, and only winnings from tickets can be withdrawn.

 https://www.desmoinesregister.com/story/news/politics/2018/12/11/iowa-lottery-e-tickets-mobile-app-payers-legislature-gambling-e-commerce-electronic-wallets/2278682002/