The Massachusetts Lottery made history with the fiscal year just ended by topping the billion mark in net profits for the first time ever, with a total of .035. This came in spite of declining sales for instant tickets and Powerball.
The total sales for the fiscal year that ended June 30 was $5.093, compared to $5.233 the year before. The Lottery’s keno sales were also record-setting: $915 million, which it credited to the continuing increase in the number of vendors selling the tickets.
Powerball sales declined by $47.2 million from last year and instant ticket sales declined 2.7 percent to $3.5 billion. A game introduced this year, All or Nothing, added $18.8 million in sales. The sales amounted to around $935 for every adult resident of the Bay State.
The record high in profits also meant record highs in revenue sharing to municipalities, which are the major beneficiaries of the lottery.
Treasurer Deborah Goldberg, who oversees the Lottery, commented, “During uncertain times, we were able to increase unrestricted local aid to the cities and towns throughout the Commonwealth.”
Although profits were at an all-time high, payouts declined from last year to this year, from $3.842 billion last year to $3.668 billion this year, said Executive Director Michael Sweeney at a Lottery Commission meeting last week. He added that the increase in sales does not keep up with inflation.
Because of declining sales, the Lottery has sought to persuade the legislature to authorize online sales—so far without result. The ad hoc commission that just released its report on online gaming was specifically not tasked by the legislature with discussing that issue.
Comptroller Thomas Shack’s remarks reflected the concern and lack of foreknowledge about how the growth of high tech will affect the Lottery. “In this era where revenue projections are not being met, we really don’t know what’s going to happen,” he said. “If we gut the lottery, which we could see if we don’t take action and don’t evolve, we could be creating a significant amount of pressure on our towns and cities that otherwise, there’s no other resource.”
Sweeney warned that neighboring New Hampshire is preparing to unveil its online lottery.
He told the commission, “We know a significant amount of our revenue is derived from New Hampshire residents who are crossing into Massachusetts, mostly for work but also for some shopping activity and some vacation activity.” He added, “This is a significant market segment for us. It’s going to be interesting to see how this new online development in sales advances in New Hampshire.”
Sweeney noted how the addition of new games helped soften the blow from declines in ticket sales. “The successful launch of the All or Nothing game and the growth of our KENO to-go product, both of which are complemented by a mobile app that allows players to watch drawings on a smartphone or tablet, played a significant role in offsetting the decreases in instant ticket and Powerball sales and helping us return an unprecedented level of profit.”
Another factor that helped was savings in operating costs, which, Sweeney said, are the lowest of any lottery in the U.S.: less than 2 percent of revenues.
