BUSINESS

Massachusetts Lottery’s flat profits further proof of need to expand online

TAGs: Lottery, Massachusetts, Massachusetts Lottery

massachusetts-lottery-online-senateThe Massachusetts Lottery is one step closer to offering online sales after the state senate approved the necessary legislation.

Last week, the Massachusetts Senate voted 39-1 in favor of S2423, an economic development bill that contained an amendment by Sen. Jennifer Flanagan which would allow the state Lottery to sell its products both online and via mobile channels.

Flanagan’s amendment was approved by a far smaller margin (22-17), reflecting concerns by both anti-gambling types and the state’s lottery retailers. The latter group fears their businesses will suffer if lottery players are no longer required to hit up the local convenience store to scratch their lottery itch.

Flanagan’s amendment would leave it up to the Massachusetts Lottery Commission to determine what types of online products the Lottery could offer. Last December, the Lottery issued a request for proposals for an ‘iLottery System’ capable of offering everything from digital lottery games to social gaming and daily fantasy sports (DFS).

S2423, which also includes language that would create a commission to study DFS, has been sent to a conference committee for reconciliation with a similar economic package passed by the state House of Representatives. The legislature is set to adjourn at the end of July.

The Massachusetts Lottery set a new revenue record in its most recent fiscal year, the fifth straight year the old record has been broken. In the 12 months ending June 30, the Lottery recorded sales of $5.23b, $217m higher than the previous year. The Lottery’s annual profit also set a record at $986.9m, around $1m more than last year.

The comparatively small profit gain was blamed on a 73.4% prize payout ratio, the highest of any US lottery. State treasurer Deborah Goldberg suggested the “flat profits and increased payout percentages” were further evidence that the Lottery needed “the authority to be able to move forward” by expanding online.

Massachusetts would be only the fifth US state to offer some form of online lottery sales. Illinois, which was the first state to launch online, currently offers only online draw ticket sales, while Georgia, Michigan and Kentucky also offer instant win online games. The Minnesota Lottery led the country in offering instant-win online games, but Luddites in the state legislature stuffed that genie back in the bottle last year.

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