LANSING – With a recent federal rule interpretation now allowing it, Michigan Lottery Director Scott Bowen told the House Regulatory Reform Committee on Wednesday that his agency was considering selling lottery tickets online as a way to boost sales.

But that effort could see some legislative push-back based on responses from particularly Republican members.

Bowen said the Lottery Bureau had been looking at the issue for “some time” since the U.S. Department of Justice ruled last year that lottery ticket sales did not violate federal law. The agency had found that the Federal Wire Act applied only to sports betting.

“We think we must look at this now to maintain our viability,” Bowen said.

But it will take some technology work. Bowen said the system would not only have to verify that those buying tickets were who they said they were, but that they were of legal age and they were physically located in Michigan at the time of the purchase.

The system would also have to allow people to exempt themselves from purchasing tickets or to place limits on how much they can spend on tickets.

And the system has to be designed in a way that does not pull business from those already selling lottery tickets.

“We have 10,000 business partners,” Bowen said. “Our retailers are our business partners. We have to somehow involve them in the process.”

He said studies in other countries had shown that opening Internet sales of lottery tickets had not hurt sales at traditional outlets and had boosted sales by as much as 25 percent.

“It’s essentially the accretive younger customers that weren’t playing” increasing the sales, he said.

And he said traditional retailers could be involved at a minimum by requiring online winners to bring in their winning tickets for redemption.

Republican legislators were also concerned that they would not be involved in the process.

Bowen said, in response to questions, that he was working with the Department of Attorney General to determine if there would be any legislation needed to move to online ticket sales.

And he said the bureau would, under the Constitution, but limited to selling only the games the Lottery already offers. Under a 2004 amendment, any new electronic gaming facilities have to be approved by statewide referendum. Internet lottery games have been interpreted to fall under that provision.

Rep. Ed McBroom (R-Vulcan) wanted to go further than having right of approval. “Can we write legislation to prohibit you from doing it?” he said.

The Lottery would not be losing business by not offering the online sales, said Rep. Ray Franz (R-Onekama). “These purchasers weren’t going someplace else,” he said. “So we’re not going to lose these people except to their ability to further throw their money away.”

Bowen acknowledged that not selling online would not mean losses in sales, but he said it was his job to try to maximize revenues to the Lottery and so to the School Aid Fund.

“What we’re trying to pick up is to make our business more convenient to our customers,” he said.

Rep. Tom McMillin (R-Rochester Hills) said the Lottery should be sure the new sales system, and any system, does not make it easier for those who can least afford to lose money, like those on public assistance, to purchase tickets. “The studies I’ve seen show it’s skewed heavily toward the poor,” he said of lottery purchasers. “I think we should look at what it’s doing to folks on assistance before we look at expanding.”

Bowen said the Lottery had studies that show tickets are purchased by a representative cross section of the population, not by any particular income group.

He said he would be willing to conduct a study on lottery ticket purchases by the poor and welfare recipients, depending on the cost of the study and the source of the funds.

Rep. Mike Shirkey (R-Clarklake) said the increase in lottery ticket sales would not, in the end, mean an increase in school funding. “Frankly, it’s a zero sum game, so it’s a bit disingenuous to use that as a lever to increase sales,” he said of Mr. Bowen’s argument that his goal was to increase the contribution to the School Aid Fund.

Bowen said it was his responsibility to maximize the return of the Lottery, within the best interests of the state (officials noted later that is a statutory responsibility), and that any offsets of that money in the School Aid Fund to other programs are “beyond my control. You guys decide what to do with what I turn over.”

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