Massachusetts treasurer reassures retail lottery outlets re online games

This week Massachusetts state Treasurer Steven Grossman posted the Massachusetts Lottery’s second-highest profit level for the last fiscal year, hauling in $952 million on record sales of $4.8 billion.

At the same time he discussed the possible addition of online games, and reassured retail ticket sellers that this would not be done at the expense of their businesses.

Profits were $25 million higher than expected, Grossman revealed, noting that from July 1, 2012, to June 30 sales topped the previous record of $4.723 billion set in fiscal 2012, when the Lottery generated $983.4 million in profits. Lottery officials had anticipated $927 million in profits for fiscal 2013.

The number of people playing the Lottery is up, with approximately 85 percent of residents in the state playing.

The State House News Service reports that Grossman characterised the state’s cut of the lottery proceeds as a “critical lifeline”.

The lottery was also the best year for retail sales agents, who rung up over $276 million in commissions and bonuses, officials said.

Grossman and lottery officials discussed threats and opportunities for the lottery at a press conference this week, acknowledging that competitive pressures in neighbouring states, and the eventual advent of land casinos in Massachusetts may cut into Lottery sales.

Grossman said the Lottery will have to make adjustments, including potentially moving the Lottery into online games, and he pointed out that state lawmakers are already considering a bill that would allow the lottery to test some online gaming models.

However, the Treasurer gave an undertaking that he would not support online gaming unless he was confident it could be done in a way to protect the 7,400 Lottery retail agents from losing sales.

“I will not support gaming online until we can protect those agents,” he said.

Officials said that last December, a state task force recommended the Lottery enter online gaming before federal legislation potentially forecloses that avenue, concluding that there is an “inevitable” shift online.

The task force recommended quick passage of enabling legislation, and then a more cautious approach toward the actual implementation through pilot programs, they said.

“One idea is to have players buy gift cards from Lottery agents for online games, with a set amount of money on the card. Along with giving retailers the sales, it would also prevent people from racking up charges on their credit cards, which could potentially lead to financial problems for some gamblers,” Grossman said.

However, he emphasised that Lottery officials have not yet worked out an online gambling model, and in any case cannot move forward with any testing until the Legislature gives its approval.

Opposition to the introduction of online games has been strong from Massachusetts convenience store owners who sell lottery tickets, fearing that the addition of online games may impact their profits by discouraging the through-traffic of customers who visit stores to buy lottery tickets.

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