The Massachusetts Lottery is looking at developing a daily fantasy sports game to embrace the market while protecting the state’s lottery.
Massachusetts Lottery executive director Michael Sweeney said that it is the lottery’s obligation to look at daily fantasy sports’ potential until it becomes clear that DFS is illegal.
In Sweeney’s presentation to the state’s lottery commission, he said that the biggest current challenge facing the lottery is the DFS industry, which is why embracing the DFS industry was key to protect and to ensure the growth of the lottery.
The lottery remain the single largest source of local aid for the 351 cities and towns in Massachusetts, generating a total of $985m in net profit for the 2015 fiscal year.
“The introduction of a fantasy sports platform to the Mass. Lottery embraces an emerging market while protecting the Lottery’s 7,500 retailers,” said Sweeney.
Should the lottery decide to pursue the DFS market, Sweeney noted that the first step is to issue a formal request for information in December to further understand the technology and the market.
“There are a lot of moving parts,” Sweeney said. “We’ll try to cover as much of the gamut as possible. We’ll ask about products that are completed and ready to go and products in development. We’ll ask about various aspects of consumer protection, like location services, securing bank transactions and age verification.”
By adding a DFS product, the lottery will be creating a new revenue source by engaging a “next-generation players” without cannibalizing the existing products, said Sweeney.
The current lottery-playing population mostly consists of an older demographic. According to UMass “Social and Economic Impacts of Gambling in Massachusetts (SEIGMA)” survey, two groups that were significantly more likely to be lottery players were adults age 35 to 64 and males, while 66% of fantasy sports players are male, with an average age of 37.