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ST. PAUL, Minn. (FOX 9) - An audit into the Minnesota State Lottery found a wide range of weaknesses related to oversight of its retailers, and its preparedness for any security-related incident.
What we know
Minnesota’s Office of the Legislative Auditor (OLA) conducted performance audits of the Minnesota State Lottery from July 1, 2021, through Dec. 31, 2023, detailing its findings in a 66-page report released on Nov. 21.
The Minnesota State Lottery is responsible for operating Minnesota’s lottery system, and its duties include adopting rules and lottery game procedures, contracting lottery retailers to sell lottery products, and publishing advertising and promotional materials, among other requirements.
Audit results
In its findings, the OLA found the Minnesota State Lottery allowed retailers with expired contracts to continue selling lottery tickets, and failed to verify if retailers had been convicted of crimes that would have disqualified their eligibility to sell them.
The lottery also did not comply with state laws when it declined to charge retailers for lost or stolen scratch game tickets.
The office went on to recommend increasing internal controls to ensure retailer contracts are renewed, and proper background checks are conducted in accordance with state laws.
Lottery security
The audit also found that the lottery had not adequately documented or trained staff on its procedures to respond to significant incidents, while also noting it did not have adequate separation of duties among key information technology administrators.
The audit recommended the lottery develop incident response procedures based on potential scope, likely impact and resource availability.
The lottery should also ensure its third-party retailers are included in disaster recovery planning and training in the event an incident should occur, according to OLA recommendations.
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Background
The Minnesota Legislature established the Minnesota State Lottery in 1989, and the following year voters opted to dedicate "not less than 40% of the net proceeds from any state-operated lottery" to the Minnesota Environment and Natural Resources Trust Fund.
That dedication of funding was extended this past election through Dec. 31, 2050.
The lottery launched its first scratch game in 1990, and offers lottery tickets through two types of games: Lotto games (such as Gopher 5, Mega Millions, Pick 3, and Powerball) and scratch games, with more than 3,000 retailers, such as gas stations and grocery stores selling them.
The combined lottery offerings generate revenue through the sale of lotto and scratch games, and in Fiscal Year 2023 contributed $105.7 million to the state’s General Fund, sent $88.9 million in Minnesota’s Environment and Natural Resources Trust Fund, and paid $1.5 million toward responsible gambling programs.
The Lottery’s headquarters are in Roseville, Minnesota, with regional offices located in Detroit Lakes, Owatonna, and Virginia.
The Source: FOX 9 reviewed the Office of the Legislative Auditor's findings for the information contained in this report.