Massachusetts State Lottery officials already knew the exploding popularity of online sports gambling, which allows people to place their bets without leaving the comfort of home, was going to eat into their bottom line.
And while a hugely popular $50 scratch-off ticket helped shore things up last year, officials say the only way to stop the bleed is to allow the Lottery to compete on the same online playing field.
“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,” Lottery Director Mark William Bracken told MassLive this week.
Data reported by Bracken during Tuesday’s Lottery Commissioner’s meeting underlined the gravity of the challenge facing the Lottery, whose proceeds are returned to the 351 cities and towns in the state for their own unrestricted local aid.
First, the good news:
The Lottery saw its net profits rise by $83.1 million, or 2%, in fiscal 2024, with sales totaling $4.2 billion over the same eight months last year. The agency reported a monthly estimated profit of $101.4 million, compared to $95.3 million last year.
Now, the bad news:
The $478.3 million in sales the Lottery reported in February was a decrease of $35 million, or 6.8%, compared to February 2023. The lottery’s year-to-date net profit of $777.9 million was an estimated decrease of $28.4 million from last year, Bracken said.
And scratch-off tickets, a franchise player that accounts for about 65% of the Lottery’s total sales, dipped by $41.1 million last month, compared to the $363.8 million it brought in sales for February 2023 when the agency introduced its first $50 scratch ticket game.
“As we’ve always said, we’re not anti-sports betting,” he said. “But the issue that we’ve talked about many times, is the sports bettors can offer that convenience of being able to play on your phone.”
Bracken said this drop for scratch tickets is a reiterated “concern,” an issue the lottery has “been saying for a couple years now,” and for a number of reasons — sports betting being the largest, as he’d previously warned in March 2023.
DraftKings’ acquisition of lottery courier Jackpocket for $750 million last month is also realizing Bracken’s previously-stated “biggest concern” for the lottery as it loses its footing within its own gaming realm.
“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… they’re not selling it, they’re carrying it, but it is what it is,” 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,” Bracken continued.
“And me being the ticket printer — the home of the ticket — I’m still not going be able to do it.”
In July 2023, Bracken discussed how the success of “Billion Dollar Extravaganza,” the lottery’s first $50 scratch ticket, with a $25 million grand prize, and introduced five months earlier, was papering over the longer-term concerns the lottery has over keeping sales afloat without an online lottery.
The $50 ticket was the best-selling scratch ticket in the country in 2023, and fortified the lottery’s major sales with instant tickets accounting for 66.2% of gross sales to solidify its estimated net profit of $1.176 billion — the highest since its creation in 1972.
The lottery introduced a second $50 scratch ticket this February called “Lifetime Millions,” which offers a top prize of $1 million a year for life — but the buzz around this year’s $50 ticket was a little more low-key, as evidenced by this February’s decreased sales.
Another stab at customer satisfaction produced a “Jaws”-theme instant ticket game on March 26, which offers a top prize of $1 million — and the chance to win a Martha’s Vineyard trip.
The lottery also invited customers to its headquarters in Dorchester on the release day, enticing around around 250 people to the building with “Cash Wheel Live” drawings, special promotional tickets and the chance to get shark lotto swag.
Bracken said the lottery is still trying to figure out what the next step is to help scratch ticket sales, now that “we see the trend and… what the factors are out there,” but stands by the statement that the Massachusetts State Lottery puts out some of “the best instant tickets in the country.”
“It gives us time to say, ‘Alright, what can we do? And I don’t know that instant tickets is the answer, where we start making up sales information,” he said, adding it’s “not really possible” to put out better scratch tickets than the lottery’s already been producing.
Bracken said the lottery is looking at an additional monitor game to “compliment ‘Keno’ and ‘Wheel of Luck,’” and some other drawing game changes.
Additionally, the lottery wants to expand its customer reach and “tap into non-traditional lottery agent places to be able to get out tickets out there.”
But it all circles back to the lack of an online lottery, Bracken said — efforts of which are still pending in the State House in Boston, according to the Milford Daily News.
“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’… [What we call] the ‘instant’ ticket really isn’t instant anymore,” the director said.
