With e-commerce at our fingertips and sports betting on the horizon, the Massachusetts State Lottery should be allowed to go online.
Our lottery is the most efficient in the country. Through sound management, we have reduced administrative costs to less than 2 percent of revenues, allowing the lottery to exceed the billion-dollar profit mark for the first time in its history.
The lottery is high performing and well positioned in an increasingly competitive environment. Our team is prepared and ready now to take on the next challenge – but we cannot do it alone.
Simply stated, our growth has not kept up with inflation because we have been limited in our ability to modernize operations. For example, we are only allowed to accept cash. In today’s world, people simply do not carry cash, particularly not millennials or Generation X. We are also limited to sales in brick-and-mortar locations. Yet we all know the Internet has changed the way customers shop.
The lottery, unlike its competitors, is not a private, profit-driven entity. It is a mission-driven organization with a proud history of delivering resources to the communities throughout the state. Since 1972, it has provided more than $26 billion in critical local aid.
As a former local elected official, I know firsthand how important the lottery’s unrestricted funding can be. It pays for such services as extra plowing in a tough winter snowstorm, aides in the classroom, nurses in elementary schools, and additional police officers and firefighters.
Even while sales of many product lines have decreased over the last few years, through reorganization of business operations, the lottery has been able to do more with less. But a business can only do that for so long.
Without an online option, our 7,500 retail partners, small convenience store and gas station owners, will also be at risk. Many rely on the lottery for traffic flow and commissions from sales. Cashless transactions will enable retailers to accommodate their customer’s needs. And experience has shown that when other states went online, as lottery sales grew retailers experienced the same growth.
Online gaming is not new in Massachusetts. In 2016 the Legislature temporarily authorized Daily Fantasy Sports to operate over the Internet and on mobile applications. As part of last year’s budget, the Legislature made its legality permanent. Consumers have been able to legally place wagers on horse racing online or over the phone since 2002. In fact, one Massachusetts racing licensee reported over $90 million in mobile wagers placed in 2016.
The lottery should be provided with the same advantages. While we have effectively responded to consumer trends as best we can, we cannot reach customers who do not use cash or prefer to play online. This will continue to translate into lost business and lost revenue.
Our team has the expertise and infrastructure necessary to implement the lottery online. Several sports betting bills were filed with the Legislature earlier this month, including language that would authorize online opportunities to maximize revenues to the state. We have the ability, in partnership with Massachusetts Council on Compulsive Gambling, to institute safeguards for players to place limits on daily, weekly, or annual spending or even exclude themselves completely. Moreover, providing a legal option will help end the omnipresent unregulated illegal online gambling sites.
We must level the playing field in the expanding Massachusetts gaming industry, ensuring that we stand strong for our local communities and our retail partners. Together, I have no doubt that we will continue to provide critical resources to the 351 communities throughout our state.Deborah Goldberg is the treasurer of Massachusetts.