CITING FLAT LOTTERY PROFITS, GOLDBERG AGAIN SEEKS ONLINE WAGERING [+AUDIO]
By Colin A. Young
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, DEC. 5, 2018.....Treasurer Deborah Goldberg on Wednesday renewed her call for the Legislature to allow the Massachusetts Lottery to sell its products online, telling state budget writers to expect the Lottery's profits to remain stagnant next fiscal year if there is no expansion.
The treasurer has for more than two years been advocating for an online shift for the Lottery, arguing that it cannot continue to generate nearly $1 billion a year for local aid unless it is allowed to compete with daily fantasy sports and other online gaming for new and younger customers who prefer to do things online and on mobile devices. She said the Lottery, which offers scratch tickets and numbers-based draw games, has done as much as it can with the authority it already has.
"As you are aware, the landscape of the gaming industry has shifted in Massachusetts and across the country," she said. "To the extent possible within our current statutory constraints, our team at the Lottery has adapted to the changing marketplace."
Goldberg told the Joint Ways and Means Committee that her office projects the Lottery will generate $966 million in net profit during the current fiscal year and about $967 million in fiscal year 2020, which will begin July 1.
After raking in a record $1.035 billion in fiscal 2017, annual Lottery profits -- which are always eyed by lawmakers and local officials for annual local aid increases -- dipped in fiscal 2018 to $997 million.
Goldberg and others have previously cautioned lawmakers that Lottery profits will not hold at their current levels without being able to sell products over the internet, but the Legislature has not embraced the idea.
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In 2016, the Senate voted 22-17 to give the Lottery the authority to move online but the matter was never taken up in the House. This session, Goldberg's pitch for online Lottery got put on the back burner while legislators studied legalizing and regulating fantasy sports, eSports and non-Lottery online gaming.
"Even as we continue to deliver strong numbers, growth has not kept up with inflation nor met increasing needs at the local level. To me, that's simply not good enough," Goldberg said. "The landscape has shifted and technology has transformed every aspect of our lives. I am confident that our Lottery will continue to maximize its performance, maintain current revenues, and meet the need for unrestricted local aid -- but all of us as partners must take the next steps together."
She said that 11 of the 44 states that have a lottery have begun to offer games online, including nearby New Hampshire, which she said generated more than $1.3 million in net revenue from online sales in their first 12 weeks.
Goldberg pointed to Michigan as comparable to Massachusetts and said that state's lottery retailers have not seen significant harm to their businesses, regulators can better track and deal with problem gambling and the state has generated revenue.
"If we want to uphold our commitment to supplying reliable local aid to our cities and towns, we have no choice but to respond proactively to these challenges," Goldberg said.
And the competition isn't just coming from other state lotteries, Goldberg said, but also from daily fantasy sports, eSports, and horse racing. And lawmakers have already expressed an interest in legalizing sports betting early in the next session.
"The Legislature has authorized Daily Fantasy Sports to operate over the internet and on mobile applications. And since 2002, Massachusetts consumers have been able to legally place wagers on horse racing online or over the phone. Since the introduction of smartphones, consumers have also been able to place these wagers on mobile applications," she said. "Imagine what our Lottery could do and what that could mean for our local communities."
Goldberg last month again filed an online lottery bill for the Legislature to consider when the new session begins in January.
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