Massachusetts Lottery Revenue Sliding Amid Economic Woes, Gaming Expansion

Massachusetts Lottery officials say sales and income have declined in recent months, prompting an urgent need to develop ways to reverse the alarming trend.

Massachusetts Lottery sales revenue sports betting gambling
Massachusetts Lottery sales revenue sports betting gambling
A smattering of Massachusetts Lottery scratch-off tickets. Officials at the Massachusetts Lottery are concerned with declining sales and revenue, as gaming continues to expand across the northeast. (Image: Boston Herald)

Lottery sales in August dropped more than 6% year-over-year, a reduction of nearly $36 million in revenue. Massachusetts Interim Lottery Executive Director Mark William Bracken told the state Lottery Commission this week that the lottery needs to find ways to “adjust to the current market.”

That current market includes considerable economic unease. Bracken thinks some lottery players have reigned in their spending due to high inflation and associated financial uncertainties.

The ongoing expansion of gaming in the northeast, including in Massachusetts where the state is finalizing the regulations that will govern sports betting both in-person and online, might also be hurting lottery sales, Bracken believes.

The Massachusetts Lottery generated a net profit of $1.1 billion in its 2022 fiscal year. That was about flat compared with 2021.

Back to Drawing Board

Established in 1971, the Massachusetts Lottery benefits the commonwealth’s 351 cities and towns by providing local aid each year. Since its inception, the lottery has provided more than $28 billion in unrestricted local financial government assistance.

Bracken says the state must figure out ways to keep the lottery growing — not retracting.

“It is concerning that our sales are decreasing, especially given the type and quality of products we’re putting out in the market. But I will say that this is a trend that the entire country is seeing with the lottery,” Bracken explained.

I think everyone is aware of what’s going on in the world financially with inflation and stuff, and so we’re going to be looking at some ways to see if we can make some changes to adjust to the current market structure,” he added.

Bracken says the lottery is conducting focus groups to learn more about how certain games are perceived. Most of the state’s draw games have remained unchanged for decades, and Bracken imagines that could be resulting in a bit of apathy among players.

Deborah Goldberg, treasurer and receiver general for the Massachusetts Lottery, says updating the lottery’s games is important, but so is the state authorizing the lottery to sell tickets over the internet. Several other states that have legalized online sports gambling additionally allow their state-run lotteries to sell tickets remotely.

“There are a couple of options here: that we had a great 50-year run and that this is all the expectations that there are on the part of those who make these decisions, or we can continue to have an operation whose mission is getting resources back to all the local communities,” Goldberg said Tuesday. “And that decision lies with the Legislature.”

iLottery Doesn’t Hurt Retailers

Some opponents to allowing lottery sales online have voiced concerns that the state’s brick-and-mortar lottery retailers might suffer in lost revenue. But Bracken says states like Pennsylvania, New York, and New Jersey that already have iLottery have not experienced a negative impact on retail sales.

“Every state that has iLottery, their retail and traditional lottery product is performing better than the states that do not have iLottery,” Bracken revealed. “So, even in this climate, states that have iLottery, their retail sales are doing better.”

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