In early spring 2020, as COVID-19 emergency orders closed bars and restaurants and stay-at-home notices kept many customers away from convenience stores and gas stations, Massachusetts Lottery sales shot up. did something unusual: they declined. Revenue in March, April and May was down about $ 240 million compared to the same period a year earlier.
As the disruption grew, it was little more than a hiccup – about 4% of the more than $ 5 billion the lottery racked up in sales each year. But state treasurer Deborah Goldberg has seized the refusal to pressure the legislature for one of her favorite causes: allowing the lottery to offer its games and products online and accepting card payments. of debt.
“This pandemic has significantly exposed the limitations and vulnerabilities of the in-person and cash lottery business model,” Goldberg told lawmakers. “The ability to process cashless payments and sell our products online would no doubt have helped mitigate our losses. “
But it turned out that the lottery had no trouble mitigating its losses without playing online. In July, the pandemic drove sales up. Lottery executive director Michael Sweeney, who testified at a hearing of the legislature’s joint committee on consumer protection and licensing on Monday, said dollars that would normally have been spent on others. forms of entertainment “have been reoriented towards lottery products”. The result, as the commission announced in a press release last summer, was that revenue for fiscal 2020 was estimated at $ 5.25 billion, the third highest total in 49 years. history of the lottery.
Yet even as the money poured in, Goldberg continued to push for authority to grow in digital sales.
“An online lottery in Massachusetts is not just about convenience,” she said. “It is a necessity.” She and Sweeney continue to insist the lottery is doomed to fail unless lawmakers let them switch to online gambling – her fate, the director likes to say, will be like the Titanic meeting the iceberg.
The legislator is still not convinced. The Massachusetts Lottery, like its counterparts in almost every state, has not been allowed to put its games online. The only way to spend money on Keno, Megabucks, Powerball, or any of the countless other games in the Lottery is to do so in person, in cash only.
Goldberg and Sweeney may get annoyed at being limited to such a low-tech method of separating clients from their dollars, but those dollars keep coming in relentlessly. By the time the current fiscal year ends on June 30, the Lottery will have broken a new profit record: forecasting nearly $ 1.1 billion in profits on unprecedented sales of $ 5.6 billion. This will be the seventh year in a row that revenues have surpassed $ 5 billion.
State lotteries have been described as a tax on people who are not good at math. What does this say about Massachusetts? The average American spends $ 288.06 on lottery tickets annually, but in Massachusetts, per capita lottery spending is $ 933.33 per year.
This is more than triple the national average. In no other state do residents spend so much money for almost desperate chances of hitting a jackpot. The Rhode Islanders, in second place, spend an average of $ 626.11 per year.
At the most basic level of dollars and cents, therefore, the legislature’s refusal to let the lottery operate online has not hurt sales. America’s most successful state lottery remains extraordinarily lucrative.
Would it be even more lucrative if it were allowed to offer Mass Cash, Mega Millions or the Numbers Game via smartphones and laptops? It’s not at all clear – opening the door to online and cashless betting could simply displace in-person sales from convenience and package stores. This explains why Massachusetts retailers are so strongly against online lottery proposals.
They also oppose legislation that would force them to accept debit card payments; the bank’s “swipe fee” charged for each debit transaction would reduce their lottery commission to pennies.
However, expanding the Massachusetts Lottery to include online gambling is not just financially unhelpful. It is also morally indefensible.
Iniquity is inherent in state-run gambling. Researchers have repeatedly confirmed that poor and low-income people are much more likely to spend money on lottery tickets. A 2018 study, for example, found that 28% of households nationwide in the lowest income bracket bought lottery tickets every week, much more often than households in the higher income brackets.
Those earning $ 75,000 and over spent, on average, $ 105 per year on lottery tickets compared to $ 412 per year for those earning $ 30,000 or less. Likewise, communities with more poverty and unemployment tend to have higher lottery sales per capita. It’s no secret that lottery tickets are most often bought by the people least able to afford them. Too often, these sales are fueled by hopelessness, despair, or bad judgment.
And in a small but significant number of cases, they are also fueled by a gambling addiction. According to a 2017 University of Massachusetts survey, up to 135,000 adults in Massachusetts can be classified as “problem gamblers” and four times as many are “gamblers at risk”. Online and cashless lottery games are said to exacerbate the temptation faced by problem gamblers, making it easier than ever for Massachusetts to lure them into bets they are almost certain to lose.
One of the very few states to experiment with online lotteries, Minnesota, shut down digital sales after realizing it was a mistake. “This is not the online lottery,” Minnesota lawmaker, State Representative Greg Davids, told reporters. “It’s crack online. It’s addicting, and it’s going to destroy families.
The Massachusetts Lottery does not recognize that it is about responding to the vices and weaknesses of people.
Rather, it is presented as a vehicle for raising funds “to help towns and villages with the things they need most”, to quote a lottery advertisement. It is true that the Lottery disburses approximately $ 1 billion in local aid each year to communities in Massachusetts. But this money is morally tainted by the way it is collected.
After half a century of successful operation, the Massachusetts Lottery is here to stay. He is making more money than ever before and his popularity shows no signs of abating. This may not satisfy Treasurer Goldberg, but lawmakers should resist her urges to fix what isn’t broken. For good reason, Beacon Hill has always said no to an online lottery. It’s a bad bet that he should continue to avoid.