The Massachusetts Lottery is looking for companies that could help it roll out daily fantasy sports and other digital games, hoping to reach young people who are more likely to tap on a smartphone screen than scratch off a paper ticket.
The Lottery is still in the early stages of studying the market for digital games and doesn’t plan any new contests without backing from elected state officials, Lottery director Michael Sweeney said.
But the Lottery, which supplies a key stream of revenue to Massachusetts cities and towns, needs to grapple with technological and demographic trends that could eat into its next generation of players, he said.
“We’re trying to avoid getting so far behind the changes in technology and consumer preferences that revenues and sales start to get marginalized,” Sweeney said Wednesday. “I don’t see that happening now, but I could see that happening in five to six years.”
In an information request issued Tuesday, the Lottery sought interest from private vendors of software systems, payment processing, data management, and other services that could help it offer digital games with cash prizes.
Daily fantasy sports games are among the specific games mentioned in the document, which is not a request for formal bids or business proposals.
The Lottery’s interest in daily fantasy sports reflects the sector’s fast growth in recent years into a multibillion-dollar industry backed by investors such as Google Ventures, Fox Sports, the NBA, and Wellington Financial Management.
Two companies, Boston-based DraftKings Inc. and New York-based FanDuel Inc., account for more than 90 percent of the market. The daily fantasy sector is projected to collect about $3.1 billion in entry fees this year from a player base that is overwhelmingly male and largely between the ages of 18-35, according to estimates from Eilers Research LLC.