Massachusetts Ready To Take The Online Lottery Plunge

Massachusetts Ready To Take The Online Lottery Plunge
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gets all the attention, but there are other forms of online gambling, and Massachusetts could be the next state to legalize online lottery sales. 

Online lottery is a longtime ask from Massachusetts Treasurer Deborah Goldberg, but legislation allowing the nation’s top-performing lottery to take products online has never made inroads. 

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A Slow Embrace of Gambling

Since it took the plunge as a gambling state with the legalization of , the state has an unofficial policy that only one gambling topic can be dealt with at any time. 

For many years that topic was casinos. Casino gambling was legalized in 2011, but the state’s casinos didn’t open their doors until 2015, 2017, and 2019 after voters rejected a repeal effort in 2014. 

In the mid-2010s, the state also began exploring online gambling of all stripes. Still, a commission determined it would be best for the state to look at online gambling after all of its resort casinos were open for business – the 2017 report is the possible origin of the state’s unofficial policy on gambling expansion.

There was also the daily fantasy sports fiasco in 2016, ongoing turmoil with casinos (ranging from the controversial tribal casino saga in Taunton to regulators investigating Steve Wynn), the repeal of PASPA in 2018, and a global pandemic in early 2020, which put a halt to just about everything.

Signs Point to Yes 

Now that everything else has settled down, 2023 could be the year the stars align for supporters, as: 

  • Goldberg is still pushing for online lottery
  • The House has included online lottery in its recently unveiled budget
  • Gov. Maura Healey recently said she supports the lottery going online

Healey Warms to Gambling

When the topic of online lottery was broached in a recent interview, Healy said she supports the idea. “I think it’s important for us to catch up there and meet people where they are,” the new Massachusetts Governor told host Jim Braude. 

Healey’s stance on gambling has softened since she first took office in 2014 as Attorney General. Once an opponent of casinos in the state, her office helped write rules covering daily fantasy sports. It later supported the legalization of sports betting when she was running for governor in 2022. 

“Nothing against DraftKings. But the Lottery, that’s money coming back to cities and towns,” Healey told Boston Public Radio. “The money spent on DraftKings is going to DraftKings.” 

Per the Boston Globe, “The House on Wednesday unveiled a budget bill that would allow the Lottery to sell its products online, and use $200 million of revenue generated by that change to help fund increased spending on grants to child care providers known as Commonwealth Cares for Children funding, or “C3″ grants.”

Don’t Expect Smooth Sailing

There are several reasons online lottery might not happen in 2023. 

First, it’s still unclear where the Senate stands on the issue. The Senate and the House had opposed views on , and the House got its way when the two chambers went to a conference committee to hash out their differences. 

The significant concerns with sports betting were:

  • Protecting vulnerable populations.
  • Ensuring the expansion of gambling did not harm local businesses.

Both issues will reappear in the lottery discussion and will almost certainly be amplified as:

  • Research shows people in the lower income brackets are more likely to play and spend a higher percentage of their income on lottery games.
  • Brick-and-mortar lottery retailers like bars, convenience stores, and gas stations are small, local businesses and have long opposed online lottery sales – even though there is no evidence of online lottery cannibalizing brick-and-mortar sales.

Small businesses missed out on kiosks during the sports betting discussion, but they will have far more leverage in lottery discussions, given their existing partnership with the Massachusetts Lottery. That could open the door for a second round of talks on sports betting kiosks at these establishments.  

Online Lottery in the U.S.

Online lottery has quietly crept across the country. Nine states and the District of Columbia offer online lottery, with three more offering online subscriptions.

  1. Connecticut – Subscription and draw games.
  2. Georgia – Subscription, Draw, and instant win games.
  3. Illinois – Subscription and draw games.
  4. Kentucky – Subscription, Draw, and instant win games.
  5. Michigan – Subscription, Draw, and instant win games.
  6. New Hampshire – Subscription, Draw, and instant win games.
  7. Pennsylvania – Subscription, Draw, and instant win games.
  8. Rhode Island – Subscription, Draw, and instant win games.
  9. Virginia – Subscription, Draw, and instant win games.
  10. Washington D.C. – Subscription, Draw, and instant win games.
  11. New York – Two-week minimum subscription length.
  12. North Carolina – Subscription lengths range from a single draw to a full year.
  13. North Dakota – Subscription lengths range from a single draw to a full year.

The Cannibalization Myth

None of these states have expressed cannibalization concerns. In April 2022, Rob Wesley, the director of digital at the Virginia Lottery, told Jeffries University, “We’re less than two years in here in Virginia. We have seen player shifts as far as demographics. It skews slightly younger online.”

Wesley went on to say:

“As iLottery started to get more and more discussions in the U.S. industry, the biggest roadblock to overcome, the biggest opposition to that was retail. To your point, they said, “This is going to hurt our business.” At the time, the … only data we had was European data. We said, “Here’s what the European data says. The European data says when iLottery launches, the brick and mortar retail business, not only does it not get impacted negatively, it actually increases at a greater rate post-iLottery launch.”

“Each lottery that has subsequently launched since has experienced the same thing. The retail lottery growth rate after iLottery has been introduced has actually accelerated. It’s increased at a rate greater than it was prior to iLottery being there. We have not seen a single case of the retail lottery business being negatively impacted by a lottery launching online.”

We can also look at data from Michigan, one of the oldest online lotteries in the country. In the five years before the arrival of online lottery products, from 2009 to 2014, retail lottery sales grew at an 8% rate. Following the launch of the online lottery, retail sales have grown at a 9% rate (see chart below). 

The 9% growth rate is slower than the national average, but adding online lottery is a net positive for the state and helps future-proof the industry.