Massachusetts State Lottery‘s director say the state’s expanding sports betting market is cutting into the lottery business.
Data reported by Mark Bracken during Tuesday’s Lottery Commissioner’s meeting found that the commission’s February sales of $478.3 million represented a drop-off of $35 million or 6.8% compared to February 2023.
Through eight months of fiscal year 2024, Lottery sales are up $83.1 million or 2% over the same period in fiscal 2023. But the Lottery’s year-to-date net profit of $777.9 million is an estimated $28.4 million behind where it was at this point last year, according to Bracken.
Scratch-off tickets, at one point a lucrative offering for the Massachusetts Lottery which the Lottery estimates accounts for about 65% of its total sales, dipped by $41.1 million last month year-over-year.
Bracken attributes the downward trend in part to the rise of sports betting, which launched at retail outlets on Jan. 31, 2023, and via mobile and online platforms on March 10 last year.
“We couldn’t control that all of a sudden we had sports betting as a competitor that was doing $6 billion, $5 billion in sales. As we’ve always said, we’re not anti-sports betting. But the issue that we’ve talked about many times is that sports bettors can offer that convenience of being able to play on your phone.”
Massachusetts Lottery proceeds are returned to the 351 cities and towns in the state for their own unrestricted local aid. Bracken is concerned that a limited market penetration for the commission’s products will result in less money for the state.
Increased lottery competition
While Massachusetts Lottery tickets are still unavailable to be directly purchases online, private iGaming operators are rushing in to fill the gap.
Jackpocket, one of the biggest lottery apps in the U.S., launched in the Bay State last summer. The brand’s CEO Peter Sullivan said at that time that the state appealed to them as a new jurisdiction because it has the highest per capita spending on the lottery of any state in the country.
Jackpocket was acquired last month by betting and gaming giant DraftKings, and that’s another concern for Bracken.
“One of my competitors that I think is part of the reason for our sales dip is now going to own a company that’s gonna be selling lottery products…” Bracken said. “I’m now going to have an online sports wagering vendor that’s going to be able to facilitate the carrying of my tickets. And me being the ticket printer — the home of the ticket — I’m still not going be able to do it.”
The Massachusetts State Lottery has tried introducing new products to sustain its appeal, such as its first $50 scratch ticket, which was the best-selling scratch ticket in the country in 2023. After Tuesday morning’s meeting, the Lottery launched its new “Jaws“-themed scratch ticket, a $10 ticket that offers instant-win prizes of up to $1 million.
Instant tickets accounted for 66.2% of the Lottery’s gross sales last year and contributed heavily to the commission’s record net profit of $1.176 billion. But the latest figures suggest that consumer interest has waned amid greater competition. Another online lottery avenue, Jackpot.com, launched in the state in January of this year.
Bracken doesn’t believe the tide will change until Massachusetts Lottery can go live online itself.
“You have to physically get up, go to a brick-and-mortar [store] in order to play that instant ticket. It makes the selling of the product that much more difficult when you have a more convenient option in front of you,” Bracken said. “If we had online lottery, we’d be able to do what they call ‘electronic instant tickets’. [Our] ‘instant’’’ ticket really isn’t instant anymore.”
There has been a push to launch a state iLottery offering in Massachusetts but lawmakers shelved Sen. Paul R. Feeney’s Bill S.170 last August. Bills are still pending in the state House. In its most recent action last month, its reporting date was extended until the end of July. Bracken isn’t the only advocate for the move in the state, with Gov. Maura Healey and Treasurer Deborah Goldberg also publicly supporting it.
