Massachusetts reconsiders online lottery as sales plummet, threatening $22m aid from Brockton

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BROCKTON — The Massachusetts Lottery faces “a significant threat of becoming somewhat obsolete” as the COVID-19 pandemic accelerates industry-wide shifts toward online and cashless interactions, the Lottery Executive Director Michael Sweeney at a recent Lottery Commission meeting that raised concerns about a key source of municipal funding.

Neighboring states including New Hampshire and Rhode Island have allowed some or all of their lottery business to move online during governor-ordered business shutdowns during the coronavirus pandemic, but Massachusetts continues to run its state-run lottery exclusively in person cash sales.

While many liquor and convenience stores that sell lottery products remained open in April, overall sales fell $22.5 million that month from last year’s numbers, a Sweeney told the Lottery Commission.

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Before the virus hit Massachusetts, the lottery had been on track for a strong year, trailing last year’s record profits of $1.09 billion by a narrow margin, according to data presented by Sweeney . Profits could decline by more than $100 million this fiscal year compared to 2019, according to Sweeney.

It’s a mix of social distancing protocols, financial hardship and disruptions to the lottery delivery system that have reduced lottery sales in Brockton, according to interviews with multiple store owners and managers.

At Brockton’s R&K Food Mart on Legion Parkway, owner MD Hosain said he used to have a constant crowd of customers sitting in his store playing lottery games during certain parts of the day.

“It was busy at first when everyone got their stimulus checks, but that was it,” Hosain said. “I’m selling less than half the tickets than before.”

Other lottery retailers in Brockton like Sam’s Food Store and M&M Seafood have reported weekly lottery deliveries have slowed to once every two weeks, meaning tickets sometimes sell out before owners company can restock.

For Brockton, the significant drop in statewide sales could take a significant chunk out of the $22 million the lottery sent in unrestricted government assistance to City Hall last fiscal year. . Lottery assistance represents approximately 5% of Brockton’s municipal budget.

Massachusetts State Treasurer Deborah Goldberg, who has urged lawmakers to allow online, cashless lottery operations, said on Tuesday lawmakers could have an “immediate impact” to mitigate losses – and generate revenue. additional revenue to support a stretched state budget – bringing the system in Massachusetts more in line with its peers.

“Everyone is asking: where are we going to get our income from? ” she said. “We have to note, and I said this at the last meeting, but it has only continued, that states that have an online lottery have had incredible increases in sales. One day in March in the Michigan, it wasn’t $1 million gross, it was $1 million net.”

Rhode Island began offering instant games and online Keno this month, which Sweeney described as “the only logical business model to follow in this world.” In Massachusetts, Keno declines have been particularly steep as restaurants and bars that host games are closed.

Even if business activity begins to pick up in Massachusetts, Sweeney, the lottery’s director, said consumer behavior will likely continue to favor cashless, contactless purchases that don’t pose COVID-19 transmission risks. 19 – a trend that could leave the lottery behind.

“I think we face a significant threat of becoming somewhat obsolete, especially as other gaming opportunities continue to take advantage of existing technology, from DraftKings to other areas including casinos,” Sweeney said. “We are getting what I would characterize as a significant amount of business from the states that border us, especially New Hampshire and Rhode Island. It would make sense if those two lotteries were online, there will be some level of decrease ( in Massachusetts).”

Governor Charlie Baker included language in his fiscal year 2021 budget proposal that would allow players to purchase lottery products using smartphone apps for cashless payment or with debit cards, but not online or with credit cards. Baker’s budget remains in the House Ways and Means Committee.

Goldberg’s office introduced a standalone bill (H 37) in January 2019 to create an online lottery system, but lawmakers haven’t acted on it since holding a July hearing in which some retailer groups have expressed concern about the impacts on small businesses of shifting sales to the Internet.

Information from the State House News Service was used in this report. Managing Editor Ben Berke can be reached at bberke@enterprisenews.com.

Gas Depot on Main Street in Brockton is one of many gas stations that saw a drop in lottery ticket sales on Friday, June 5, 2020.
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