According to one industry expert, an online lottery in Massachusetts is more likely than not.
Victor A. Matheson, a College of the Holy Cross professor of economics who specializes in gambling, believes online sports betting could be the springboard needed to get an online lottery going in the Commonwealth.
“I think (an online lottery) is probably inevitable,” Matheson told PlayMA. “Mainly because with the advent of online sports betting, it’s going to be pretty irresistible for the lottery to have an online product as well.”
In late May, the Massachusetts Senate rejected a proposal to include an online lottery in the annual budget. The House wants an online lottery, as does Treasurer Deb Goldberg and Gov. Maura Healey. Negotiations now go behind closed doors, as lawmakers from the Senate and House will attempt to reach an agreement.
Online sports betting in Massachusetts launched in March, and it could pave the way for an online lottery.
But what would that entail? Let’s take a closer look.
A step in the right direction
According to Matheson, the Massachusetts Lottery is one of the more popular lotteries in the country, selling more tickets per person than just about any other state.
And that money goes back to Massachusetts. According to the lottery’s website, for every dollar spent, 73 cents goes back to the players. Then, 19 cents goes toward local aid, and 6 cents goes toward commission and bonuses for lottery retailers. The remaining 2 cents goes toward administrative expenses.
In the 2022 Fiscal Year, $1,105,437,864 in net profit went back to the Commonwealth.
Legalizing an online component to the MA Lottery could be a step in the right direction for Massachusetts, keeping up with the latest technology push.
Can online lottery co-exist with MA’s other betting options?
“It hasn’t been easy to determine whether these things are complements or substitutes,” Matheson said. “(Will) we see one type cannibalize another?”
Matheson added that his question stems from the decline of horse race betting in Massachusetts and across the country. While betting on horse racing is still popular in certain areas, it’s not what it once was. That drop started when other alternative, legal gambling options came up.
Massachusetts casino gambling is another competitor that Matheson had questions about.
“A nice study in West Virginia showed sports gambling actually reduced total gambling revenues in the state, as people switched from relatively high-taxed casino gambling to relatively low -taxed sports gambling,” he said. “And that’s the same thing that could happen here.
“That is a huge revenue piece.”
What are the biggest hurdles?
Step one is actually legalizing an online lottery in Massachusetts.
State lawmakers are currently negotiating a compromise to potentially include an online lottery in the state budget after the Senate rejected a previous proposal in May.
“Seeing how long it took to legalize sports gambling in the state, that’s not necessarily going to happen overnight,” Matheson said.
But he noted that other hurdles include engineering an online lottery app and advertising.
“Making a nice, easy, quick, convenient app that people like to use and is safe and secure doesn’t happen automatically,” he said.
Matheson said that if he was the Massachusetts Lottery, he would already be lining up IT vendors, even with no laws in place to legalize an online lottery.
When could MA residents see a legal online lottery system?
This isn’t something that is going to pop up overnight.
Again, Massachusetts needs to legalize the online lottery before we can begin to speculate on a timeline.
“Legalizing it is first,” Matheson said. “And Massachusetts has shown with gambling that it’s not wildly quick. So I don’t think we’ll see this instantly, but I will say, I think we will see this eventually.”
Convenience plays a major factor
Now more than ever, customers want to engage from the comfort of their homes. And sports betting is a perfect example.
“Even in Las Vegas — which of course is the casino capital in the United States — over two-thirds of sports bets are made online versus in the casinos,” Matheson said. “Even in Vegas, people know you do things by the app.”
One of the lottery’s biggest strengths, according to Matheson, is its convenience. If you’re stopping for gas or need a snack at a convenience store, there’s plenty of lottery options to choose from.
But that’s subject to change.
“We’re in a world where fewer people are commuting,” Matheson said. “(An online lottery) is another way, at least long-term, to protect your product if people aren’t going to gas stations and convenience store the same way they used to.”
Lottery’s payouts a major draw compared to casinos, sports gambling
At a sportsbook or casino, you can’t turn $2 into $100,000,000. Not unless you’re concocting the largest sports-betting parlay known to man.
The lottery, though, gives customers the chance at life-changing payouts for a minuscule cost.
“The lottery has offered convenience and it has offered what’s called skew — massively high payouts at the very high end,” Matheson said. “Of course they can still do that, but that gigantic convenience they’ve had over every type of gambling has eroded super rapidly.”
Lottery games are also easier to play compared to sports betting in the sense that it’s random. You don’t need to be an expert or read up about how certain teams cover the spread. But anyone can pick random numbers and hope they win.