Massachusetts legislative committee advances online lottery bill

The state of Massachusetts made a move toward the online wagering environment this week when the state Legislature’s Joint Committee on Consumer Protection and Professional Licensure voted to advance Senator Jennifer Flanagan’s bill S.151, which gives the state lottery authority to take its products into the online and mobile business space.

Lawmakers reacted favourably to the lottery management’s argument that such a move is essential if the lottery is to maintain and grow revenues which contribute to state coffers.

The co-chair of the committee, Sen. Barbara L’Italien, spoke in support of the amended Flanagan bill, saying:

“Since millennials and other younger players have grown up with access to technology at their fingertips, they are less likely to purchase lottery tickets in the traditional marketplace and we need to find an alternative way to engage them.

“Massachusetts is highly reliant on lottery revenues for local aid, and in order to sustain the high revenues to which we are accustomed, we need to diversify our offerings to engage younger players and continue to have one of the strongest lotteries in the state.”

Convenience store owners, who rely on the Lottery to attract foot traffic to their stores, have strongly opposed the lottery’s initiative to expand into online and mobile wagering.

In addition to requirements that the Lottery verify all online players are at least 18 years old and in Massachusetts at the time of purchase, the committee attached eight conditions to the Lottery’s online venture.

Any winnings between $200 and $599 would have to be claimed by the winner in person at a Lottery retailer, and winnings of $600 or more would have to be claimed in person at the Lottery’s office. The committee also gives the Lottery the ability to withhold payout until it has determined the winner does not have outstanding child or spousal support payments or other state debt.

The committee’s amended version of the bill also calls for daily, weekly and monthly maximum limits on how much players could deposit online for Lottery products, and requires that players have the ability to lower those limits themselves. It also would require players to be able to withdraw any and all winnings at any time and bar deposits directly from a bank account to an online Lottery account.

To mollify the convenience stores lobby, the conditions include a provision allowing players to purchase from retailers an “online game card” that could be used to add funds to an online Lottery account. However, the bill prohibits the use of credit or debit cards when purchasing Lottery tickets at physical retailers.

In preparing for a positive outcome on its request for permission to go online, lottery officials issued a request for information in December last year, inviting suitable companies to submit proposals for development, implementation, operational support and maintenance of an online lottery system. The RFI attracted 20 responses.

State Treasurer Deborah Goldberg has suggested that the Massachusetts State Lottery might also enter the daily fantasy sports sector in order to attract a younger demographic to its products.

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