First, the good news: The state Lottery raked in more than $1 billion in profits for the first time in fiscal 2017. However, it accomplished this feat despite a drop in sales.
While the increase in profits is certainly something to celebrate, the decline in sales and the corresponding decrease in prize payouts could herald a troubling trend unless this cash cow for the commonwealth’s cities and towns expands the scope of its offerings.
A record rise in Keno sales ($915 million) was offset by $47.2 million less spent on Powerball, plus instant ticket sales that experienced nearly a 3 percent decrease.
Keno notwithstanding, Lottery officials have realized for some time that they have likely exhausted their ability to produce future record revenue increases under the existing rules of operation. Like many of those who play Keno and scratch those instant tickets, they’re experiencing a midlife crisis — trying to cope with a society that continually relies more on the digital world — be it smartphones, iPads, tablets or other Internet-based devices.
To their credit, Lottery officials appear ready to embrace this new reality, which now includes competing with the fantasy-sports industry, a slots parlor, and destination casinos in the near future. In fact, they’ve asked the state Legislature for the OK to sell existing products over the Internet, as well as create new games designed to specifically attract a younger audience that’s accustomed to managing all aspects of their lives online.
In fiscal 2016, the Lottery returned $989.
4 million in net profit to the commonwealth, of which $979,797,001 million in direct local aid was distributed to the 351 cities and towns. This year, that total will be slightly more.
But those annual increases won’t continue unless lawmakers allow the Lottery to extend and expand its offerings online.
Failure to meet state revenue projections in the prior fiscal year caused an approximately $400 million operating deficit that the governor had to address. Estimates for the current fiscal year have already been adjusted lower, but there’s no guarantee they’ll be met either.
The Lottery’s revenue stream has never been as important – or imperiled – as it is today.
Crying wolf? State Comptroller Thomas Shack, who serves on the Lottery Commission, doesn’t think so. He told the State House News Service the consequences of not permitting the Lottery to operate online: “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 … there’s no other resource.”
So far, lawmakers have authorized only studies of what the Lottery says it desperately needs. It’s time for our legislators to quit sitting on their hands and give the Lottery the tools required to produce the kind of unrestricted aid Massachusetts’ communities have come to expect.