The Massachusetts Lottery, which says it needs internet sales to stay alive is colliding with retailers who claim internet sales will kill them.
The Joint Committee on Consumer Protection is mulling a bill filed by Treasurer Deborah Goldberg, who oversees the Lottery, that would grant the Lottery the authority it seeks to sell scratchers, draw games, Keno etc.
Goldberg has said that the Bay State’s Lottery is “a sitting duck” because so many lotteries of surrounding states are going with online sales.
It would give the Lottery Commission the job of writing regulations that would protect minors, limit online sales to Bay State residents and set a maximum deposit limit.
Retailers say that foot traffic is their bread and butter, and that being able to buy tickets online will cut down on the number of people who shop with them.
Lottery Executive Director Michael Sweeney told lawmakers “The Massachusetts Lottery should position itself to be where the consumers are.” He added, “Increasingly, the consumers are online and mobile.”
The retailers, made up of a coalition of six retail associations who have banded together as Save Our Neighborhood Stores, told legislators that physical stores help drive Lottery sales. They claimed that online sales would harm small businesses and the Lottery itself.
In testimony before the committee the coalition claimed “Convenience owners develop strong and unique ties to their customers and to their neighborhoods. However, the reality is that these retailers will not be able to sustain any more hits to their profits and dark, empty store fronts could soon replace our friendly, familiar neighborhood store.”
The coalition also presented results of a telephone survey of 550 “frequent voters” in which 12 percent supported online Lottery sales and 69 percent opposed them.
Scott Bowen, a former commissioner of the Michigan Lottery, who ran the lottery there when online sales were introduced said that such sales do not hurt the Lottery.
“iLottery is not a threat to retail lottery sales, in fact it enhances it,” he said. Online sales attract younger players and are from a demographic unlikely to buy the tickets in a store.
Sweeney promised that the Lottery will do everything it can to help retailers, which it considers to be the backbone of ticket sales. He supports measures that Michigan employed to protect foot traffic such as selling cards for $25 in online play at a discount in retail stores.
Lawmakers were also intrigued by the idea of requiring players to go to a retail location to buy a card that could be used to play online.
The coalition said that wouldn’t help since players would only visit stores once or twice a week. “It’s not a viable solution,” said Ryan Kearney, general counsel for the Retailers Association of Massachusetts.
Senate President Stanley Rosenberg says any action on online sales will probably have to wait until next year.
When asked his stance on the proposal by reporters, Governor Charlie Baker said, “I think it depends to some extent on the nature of the program model and how it would work and what the consequences would be for retailers and others here in the Commonwealth, and I think there are now a number of states that have run online lotteries for a while and we have real-life experience in other states.”
