Massachusetts state treasurer disappointed House jobs bill excludes online lottery

in Lottery

BOSTON - The economic development bill the House is expected to debate early this week would allow gamblers to place legal wagers on sporting events from a phone or on the internet but does not allow the Massachusetts Lottery to expand online - and the omission doesn’t sit well with Treasurer Deborah Goldberg.

“It is disappointing that the House Ways & Means Committee did not include authorization of online Lottery as part of their most recent economic development bill, despite authorizing sports betting. As gaming and retail commerce both continue their rapid shift to online and mobile transactions, it is vital that the Lottery be able to sell products using these methods to keep pace with consumer preferences and demands,” Goldberg said Friday. “An online Lottery in Massachusetts is not just a matter of convenience. It is a necessity in order to uphold our commitment to supply reliable local aid to our cities and towns and to avoid layoffs for teachers and first responders.”

The Massachusetts Lottery has been watching the Legislature’s moves around expanded betting with great interest. For years, Goldberg and Lottery officials have argued that the Lottery needs the ability to sell its products online in order to compete with casinos, daily fantasy sports and, possibly soon, sports betting, and still generate north of $900 million a year for local aid.

“If sports betting is available online, the Lottery must be available online also,” Goldberg said last year. “That’s the issue moving forward.”

Goldberg wrote to Rep. Ann-Margaret Ferrante and Sen. Eric Lesser, co-chairs of the Joint Committee on Economic Development and Emerging Technologies, in late June when that committee was reviewing the bill to ask that they include authorization of an online lottery as part of the economic development bill, citing the money such a program could bring in during a time of underwhelming state tax collections.

“Total Lottery sales for the months of March, April, and May fell by $244 million when compared to the same period in FY2019. The ability to sell Lottery products online would have undoubtedly helped to mitigate losses. A robust online Lottery program would have generated an estimated $70-80 million for these three months alone,” Goldberg wrote, citing figures from the National Council of Legislators from Gaming States.

Goldberg’s three-month revenue estimate of between $70 million and $80 million is at least twice as much as others have predicted the state could expect in sports betting revenue for an entire year. When Gov. Charlie Baker proposed legalizing sports betting, he counted on about $35 million in annual revenue. When Ferrante’s committee released its own sports betting bill in February, she said it would generate about $20 million in annual revenue for Massachusetts.

“Facing revenue shortfalls, other states recognize this trend and have encouraged their lotteries to move online. 10 of the 44 states with a lottery now offer an online component,” Goldberg wrote to Ferrante and Lesser. “Here in New England, New Hampshire and Rhode Island have launched iLottery programs. We expect that Connecticut will soon follow.”

Though authorization for an online lottery was not included in the economic development bill when it came out of the House Ways and Means Committee, lawmakers might still have a chance to vote on the matter. Rep. Daniel Cahill of Lynn filed an amendment to the bill to allow the Lottery to move online.

Despite sales that collapsed in March and April as the pandemic closed many businesses and changed consumer habits, the Massachusetts Lottery had its third-best year in terms of revenue in fiscal 2020 and projected last week that it will return $979 million in profit to the state to use as local aid.

But Lottery Executive Director Michael Sweeney has said that the Lottery’s current financial picture doesn’t tell the whole story.

“We have been doing very well, but what I like to remind people is that the night before the Titanic hit the iceberg, it was setting a new record for crossing the Atlantic Ocean,” he said last year.

Online lottery is not a new issue on Beacon Hill. Former Treasurer Steve Grossman appointed a task force to look into it, and Goldberg made her intentions known early in her term, when one branch signaled its approval for the idea.

By a narrow 22-17 vote, the Senate approved an amendment to a 2016 jobs bill that would have allowed the state to sell online lottery products, but that provision did not survive negotiations with the House. It has not gained significant traction since.

Baker included language in his fiscal 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 and neither the House nor Senate has produced its own budget plan yet

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