BOSTON — Lottery officials are making a renewed push to offer online sales amid concerns that an outdated system is jeopardizing a much needed source of money for cities and towns.
A pair of proposals filed by the state treasurer's office, which must be approved by the Legislature, would set up a cashless Lottery and allow consumers to use debit cards to make purchases of MegaMillions tickets and other products.
Michael Sweeney, the Lottery’s executive director, said like any business it needs to modernize and employ new technologies.
"We face a significant threat of becoming obsolete if we don't avail ourselves of the technology that's out there," he said in a recent interview.
Sweeney said the proposal to authorize online sales wouldn't allow the use of credit cards. It would include other safeguards, he said, such age verification and allowing consumers to self-restrict their online purchases.
Gov. Charlie Baker also supports the effort to modernize the Lottery and included language in his preliminary budget to authorize online sales.
Baker administration officials say authorizing debit card Lottery sales could drum up $35 million in the coming fiscal year. The governor's budget anticipates another $35 million in revenues from legalized sports betting.
Lawmakers have filed dozens of bills to allow online Lottery sales and other proposals to modernize the system.
At least six states including New Hampshire have authorized their lotteries to sell online products, according to the National Conference of State Legislatures.
The push for online Lottery sales in Massachusetts comes as lawmakers consider plans to allow sports betting at racetracks and casinos, or by mobile platforms such as DraftKings, while establishing a system to tax and regulate the industry.
The Massachusetts Lottery, which drummed up a record $1.1 billion in profits in fiscal 2019, is a vital source of dedicated funding for schools and local governments.
Treasurer Deborah Goldberg, whose office oversees the Lottery, said concerns about business lost to online gaming platforms were validated last year, when many retails stores closed to prevent spread of COVID-19 and the Lottery's sales plunged.
Sales of Lottery products for a three-month period from March to April dropped by $244.6 million from the same period a year earlier.
Goldberg said the pandemic "brought unprecedented changes in consumer behavior," and she expects the shift to continue even after the health crisis subsides.
"More and more retailers have also made the shift to e-commerce," she told lawmakers during a live-streamed budget hearing on Tuesday. "Now that consumers have experienced the ease and security provided by these types of transactions, for most, there is no going back."
The Lottery's critics say it has social costs, and shifting sales online will make the problem worse, especially at a time when so many people are desperate.
"There's absolutely no public demand for online lottery sales, and state lotteries are preying on people at time of crisis," said Les Bernal, executive director of the Washington, D.C.-based nonprofit Stop Predatory Gambling. "By doing this, Massachusetts would be fueling a new epidemic of youth gambling."
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