Published: December 16, 2018

Editorial: Lottery could see net gains by selling products online

You can’t blame state Treasurer Deb Goldberg for trying.

And you can’t blame her if what she predicted comes to pass.

Goldberg, whose office oversees the state Lottery, has repeatedly asked the Legislature to allow this highly successful and profitable enterprise to expand its reach by selling its products online. Having reached the saturation point under the current system, Goldberg warned that profits will plateau and even decline unless Lottery games migrate to the Internet.

The effect on the bottom line means the state’s cities and towns — the main beneficiaries of Lottery profits — can’t count on receiving annual local-aid increases. After taking in a record $1.035 billion in fiscal 2017, annual Lottery profits dropped to $997 billion in fiscal 2018. Goldberg recently told the Joint Ways and Means Committee that her office projects the Lottery will generate $966 million in net profit in the current fiscal year and $967 million in fiscal 2020, which begins July 1.

With the increased competition for consumers’ legal gaming dollars — including fantasy sports, resort casinos, a slots parlor and the recent Supreme Court decision legalizing sports wagering in all 50 states — the Lottery no longer can afford to operate under the status quo. A Web presence also will give the Lottery an opportunity to update its offerings beyond scratch tickets and numbers-based draw games. A snapshot of Lottery activity in July indicates why that’s necessary. Only five of the Lottery’s nine products that month experienced increased sales. The four other games — Powerball, Megabucks Doubler, All or Nothing, and Lucky for Life — saw sales decline.

For two years, Goldberg has testified before legislative committees, pleading her case and asking for lawmakers’ support. The Senate has been more receptive to the treasurer’s concerns. In 2016, that body voted 22-17 to give the Lottery the authority to move online, but it never gained any traction in the House. Online Lottery momentum stalled this year, while legislators dealt with legalizing and regulating fantasy sports, eSports and non-Lottery online gaming.

With the next formal session now less than a month away, it’s high time for the Legislature to take this online step to ensure the Lottery’s continued string of healthy profits.

We understand brick-and-mortar retailers’ concerns about losing market share to the Web remains the main roadblock for many legislators. But lawmakers and store owners must realize Internet Lottery games will attract an untapped younger audience that uses mobile devices like smartphones for both business and leisure-time activities. That’s the next frontier of sales, which the Lottery has no choice but to explore.

Preventing that from happening will only contribute to the Lottery’s continued erosion of profits. Six states — including New Hampshire — already have instituted online lotteries. It’s time for Massachusetts to follow suit.

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