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MA Treasurer Sounds The Alarm: Expect Lottery Revenue To Decline

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The Massachusetts Lottery’s revenue surpassed the billion-dollar mark in fiscal year 2017, but Massachusetts Treasurer Deb Goldberg warned lawmakers that lottery revenue is expected to decline in the coming years.

According to Statehouse News Service, Goldberg told the House and Senate Ways and Means Committees to prepare for lottery profits to dip to $968 million in FY2018 and $965 million in FY2019. Goldberg’s comments came during a FY2019 budget hearing on Wednesday.

Why are lottery sales expected to decline?

Based on Goldberg’s comments, some of the reasons for the reduced sales are:

  • Anticipated payments on winning tickets from previous years.
  • A continued decline of instant win ticket sales. Currently, instant win tickets make up 70 percent of lottery revenue.
  • Competition in neighboring states. New Hampshire legalized keno and online lottery sales this year.
  • Massachusetts’s failure to modernize its lottery with online sales.

Online lottery briefly discussed during the hearing

Goldberg is a vocal supporter of online lottery sales. However, she was surprisingly quiet about the need for Massachusetts to turn to online lottery sales. But the topic did come up.

During the budget hearing, Sen. Eileen Donoghue, called on Goldberg to discuss her online lottery proposal, asking if online sales would modernize the lottery and prevent the expected declines.

In response, Goldberg told Donoghue her office is still advocating for online expansion.

Further, Goldberg is trying to pull data together that will debunk the most oft-cited argument opponents of online lottery use. Namely, that online sales will cannibalize brick & mortar lottery sales and reduce foot traffic into convenience stores.

According to Statehouse News Service, Goldberg plans to show data that online games should “increase traffic” to brick-and-mortar stores. Goldberg went on to say brick and mortar lottery locations would be an integral part of the online lottery.

Massachusetts and online lottery

Online lottery has been a topic of discussion in Massachusetts for several years, dating back to Goldberg’s predecessor, Steve Grossman.

During Grossman’s time as treasurer, online lottery was in the hypothetical stage, despite his persistent calls and advocacy for the state to get out of ahead of the online gaming movement.

Under Goldberg the state has taken online lottery a bit more seriously.

Online lottery efforts really gained steam in 2016, when a bill by State Senator Jennifer Flanagan passed the Senate before it ran out of time in the House.

2017 saw a new online lottery bill by Flanagan, as well as legislation by Goldberg. Neither bill was considered this year. Instead of building on last year’s momentum, Massachusetts sat on its hand while New Hampshire passed legislation legalizing online lottery.

2018 could bring about renewed interest.

In addition to the New Hampshire situation, in May, Senate President Stan Rosenberg indicated the legislature could potentially act on an online lottery bill in 2018.

So far, the Massachusetts legislature hasn’t shown  any urgency towards online lottery, which led Lottery Commissioner Anthony Salvidio to ask back in April:

“What is it going to take for legislators to realize this, a complete collapse of the revenue of the Lottery before they get on this?”

Hopefully Goldberg’s warnings that lottery revenue will decline in the coming years will light a fire in the legislature. In the meantime, hopefully Massachusetts won’t get to the point of complete collapse.

Steve Ruddock

About

Steve Ruddock is a veteran of the poker media, contributing to offline and online publications centered on the regulated US online gambling industry. These include OnlinePokerReport.com, PlayNJ.com, USPoker.com as well as USA Today. Steve is based in Massachusetts and is also a poker player.