In 1988 several years of debate over creation of a state lottery resulted in the legislature's decision to place the issue before the voters. A constitutional amendment to relax the constitution's ban on lotteries to allow a state-operated lottery was approved by the voters at the November 8, 1988 election with a 58 percent majority, and legislation to create the lottery was enacted the next year.
The 1989 law made the lottery a state agency but one with an unprecedented degree of autonomy. Lottery funds were established outside the state treasury and the lottery director, while still a gubernatorial appointee, was largely insulated from politics. A lottery commission was established, but its function was strictly to advise the director. The future direction of the lottery was indicated by a legislative requirement that the lottery pay out as prizes at least 45 percent of gross receipts from on-line lottery games (games such as numbers and lotto that are played with computer terminals), and at least 50 percent, eventually reaching 60 percent, of gross receipts as prizes for instant games.
The Minnesota State Lottery began selling tickets in April of 1990, starting with only instant games. In August of that year the first on-line games were added, as well as the multistate LottoAmerica game and a daily numbers game. The Minnesota-only Gopher 5 Lotto game was added in 1991, and LottoAmerica became Powerball in 1992.
(History taken from Minnesota House Research publication: The Minnesota State Lottery, 2006).