Industry Reports

Local Policymakers Fear Online Lottery Invasion in Massachusetts

The Head of the Massachusetts Lottery Commission Michael Sweeney announced that the state should focus on expanding its online gambling market in order to stay on top of the latest tendencies and attract more young players. At a hearing, the local policymakers, on the other hand, warned that such move may hurt the local retailers’ business operations and even force them to file bankruptcy under the pressure of the big commercial magnates.

Michael Sweeney, executive director of the Massachusetts State Lottery Commission explained that his agency needs to keep up with the latest tendencies on the market in order to be competitive and attractive for the new players. Local lawmakers have cautioned the members of the Massachusetts Lottery Commission that any expansion of the online gambling industry may significantly damage the local small- and medium-sized business, giving example with Benny’s stores. In September, the iconic Southern New England retail chain Benny’s announced that it is to close all of its stores, pointing to Amazon as the main reason for this.

Mr. Sweeney explained that the Legislature had approved a $20 million investment in the modernization of the online lottery, including the purchase of 8,000 new terminals for Lottery sales agents. Nevertheless, a number of retailers opposed the installation of such terminals, which is expected to happen somewhere in the next year. Rogers Bush, a Concord convenience store owner, who is in the trade for 44 years explained that this will have a negative effect on the wages as well as on the number of employees.

Apart from all these things, a survey by the University of Massachusetts Amherst School of Public Health and Health Sciences revealed that unlike the elder players, young players are more inclined to play an online lottery. Rep. Steven Howitt, R-Seekonk, a member of the committee reviewing the bill, voiced yet another concern regarding the credit cards. He explained that this may ruin the budget of many people. In an interview after the hearing, Mr. Howitt told the reporters that he realizes that the coming of the online lottery is inevitable, but this should happen in the smoothest way, protecting the interests of local retailers.

Distribution of the Gambling Money in Massachusetts

Here it is important to explain that the Lottery’s net profit together with a fair portion of the casino tax revenue is distributed among all the Massachusetts communities. The way, in which these funds are distributed is based on a special formula, which is crafted by the Legislature. Nevertheless, every community is autonomous in the sense that it is allowed to decide how to use the money on its own. According to a report published on the Lottery’s website, almost $979.8 million in total were distributed among Massachusetts’ communities for the fiscal year of 2016. Hence, State Treasurer Deborah Goldberg suggested a plan, which included an online lottery, aiming to increase the revenue. Even though the Senate gave an approving nod to the legislative piece, the House voted against it. It is yet to become clear how the lawmakers will achieve consensus on the matter, but it seems that the expansion of the online lottery is knocking on the door.