As the coronavirus pandemic has gripped the US, industries across the board have taken their hits.
For state lotteries, the story is no different. Massachusetts is one example of state lotteries that have marked a significant decline in lottery revenues as a result of current events.
With state lottery sales slipping by more than a third compared with the same time last year, officials agree something has to be done or sales will slip further.
The case for online lottery sales
Looking to other states that have fared significantly better, Massachusetts State Treasurer Deborah Goldberg has made the case for boosting sales by adopting an online approach.
On the topic of retail performance in relation to COVID-19, Goldberg said, “This pandemic has dramatically exposed the limitations and vulnerabilities of the lottery’s all-cash, in-person business model.”
Stay-at-home advisories mean people who are still willing to make the trip to a local retail center where tickets are sold remain few and far between. Scratch cards and keno tickets are among the most highly impacted verticals, with the two seeing a drop in sales of about 30% and 50%, respectively.
Massachusetts State Lottery Commissioner Michael Sweeney added to the conversation, acknowledging that, “All of our daily patterns of life have changed. If a consumer would normally go into a store twice a day to purchase products, that’s not the case anymore.”
COVID’s impact on Massachusetts Lottery
To date, nearly a quarter of lottery agent locations have been shuttered, down to 5,700 from 7,500.
Here’s where the push for a modernized lottery system that includes online sales will come in to boost lagging performance. Goldberg is advocating a system with “the ability to process cashless payments and to sell our products online would have undoubtedly helped to mitigate our losses.”
The lottery is not just a lucrative source of revenue for the institution. Many social programs and public services throughout the state rely on revenue from the lottery, including road maintenance, senior programs and the parks and recreation department.
While the proponents of taking the Massachusetts Lottery online have amassed a following, some officials have expressed caution, saying the decision could affect other industries unexpectedly.
Others preach caution on online lottery
State Rep. Aaron Michlewitz, chair of the House Ways and Means Committee, doesn’t want mom and pop shops or local convenience stores to get the short end of the stick.
“The lottery is an economic driver to some of our local convenience stores and our local stores because people go in there to use the lottery and end up spending money on other things,” Michlewitz said.
While this is not the first instance of online lottery proponents making a push for legislation, current events are making the case for online sales in a big way. With weekly instant ticket sales dropping to a 15-year low, state lottery employees, officials and retailers all want to find a quick and comprehensive solution.
Goldberg laid out her case in a recent roundtable meeting on the commonwealth’s economic condition during the current public health crisis, arguing succinctly that, “This pandemic has dramatically exposed the limitations and vulnerabilities of the lottery’s all-cash, in-person business model. We have managed this crisis to the best of our abilities, within the limits of the lottery’s statutory constraints. The ability to process cashless payments and to sell our products online would have undoubtedly helped to mitigate our losses. We have seen first-time players, overall sales and online revenue increases in states that offer online purchasing options.”
Massachusetts is not the only state eyeing online ticket sales in the wake of COVID-19’s effect on retail businesses. Online expansion efforts are already materializing in Vermont and Connecticut.