The Massachusetts Lottery has been given the green light to pursue iLottery.
While that’s been exciting news for the organization, not all in the state are as open to the idea.
Since Gov. Maura Healey signed the fiscal year 2025 budget that included Massachusetts joining the states with online lotteries, retailers have expressed their concern about the matter.
Fear of lost sales and commission are their focus as the state begins a 16-month process to launch online purchases.
However, state legislators attempted to stay ahead of those concerns, while also looking at other state’s data that shows those worries may not be accurate.
Retailers fear online lottery eating into sales
With an online lottery signed into the FY25 budget, the Massachusetts Lottery is now projecting that it will need 16 months to get it off the ground. That would put the launch in late 2025, very likely to be part of FY26.
Though originally reported to be focused only on online purchases of lottery draw games, the door is open for a full library of game options. Massachusetts will pursue the development of instant-win games online.
Executive Director of the state lottery, Mark William Bracken, had been pursuing iLottery for many months as a counter to mobile sports betting. Bracken felt that sports betting was cutting into lottery sales. Despite that, the state reported a record year of lottery revenue this week.
While Bracken and the organization are excited about the future, retailers in the state are concerned.
Jack Lank, President of the United Regional Chamber of Commerce in Attleboro, told The Sun Chronicle that the move will take away from community members:
“I have spoken to several of our members. This is a money grab from the state. Expanding to online sales will hurt the local small businesses such as mom-and-pop variety stores, convenience stores, local bars and liquor stores. Expanding into instant reveal/electronic scratch tickets will have a negative impact on jobs in our communities.”
David Glantz, owner of Buckeye Brothers Smoke Shop in Springfield, has been selling lottery tickets in his store for decades. He told Western Mass News that he understands the move, but is worried about loss of income:
“Obviously, the No. 1 thought would be it’s taking away from mom-and-pop stores, you know, the retailers. But, considering everything is online now; you’ve got sports betting, you can order your food online, you know, bing bang boom. Everything’s online, so, it was only a matter of time before the lottery caught up with, you know, online betting.”
NECSEMA worked with lawmakers to offer retail protection
During the process of bringing iLottery to Massachusetts, lawmakers collaborated with the New England Convenience Store and Energy Marketers Association (NECSEMA) to include multiple protections for retail locations.
The goal was to safeguard the brick-and-mortar stores with a new format being rolled out.
According to the National Association of Convenience Stores, the following protections were noted:
- The creation of a stakeholder “Lottery Modernization Committee,” which will include several industry representatives, including a member of NECSEMA and a licensed sales agent from a brick-and-mortar store.
- Allowing brick-and-mortar stores to accept debit card payments for lottery.
- Requiring all iLottery apps to include a search function to point customers to local stores.
- Requiring strict age verification for iLottery.
- Requiring the lottery commission to implement promotional activities to encourage the purchase of lottery tickets, games, or shares through licensed sales agents.
These provisions were critical for iLottery advancement, according to NECSEMA Executive Director Peter Brennan:
“Simply moving the State Lottery online without any consideration for the impact on local store owners would have been catastrophic. We are grateful that the Legislature included these vital protections to help our store owners remain competitive in the face of evolving technologies.”
Other iLottery states show retail sales holding up
The concern for retail lotteries is understandable, but there is data from other states to show that their fears may not pan out.
In North Carolina, the state was seeing minimal dips in retail sales while its online sales were taking off.
Through 11 months of FY24, the state had $3.92 billion in sales outside of its Digital Instant games, which had sold nearly $1 billion at that point.
The non-eInstant sales endured only a 2% drop when compared to a year prior. Overall, total sales for North Carolina were up 21.4%.
For FY25, the North Carolina online lottery is budgeted for $2.2 billion in sales for its Digital Instants. That puts the remaining total at $4 billion, right in line with previous years.
New Hampshire had a record year of sales in FY25. While that was sparked by a new best of $47.2 million from New Hampshire online lottery sales, retail sales were up over $10 million, as well. This past year produced $521.1 million in non-online sales, compared to $511 million in FY23.
The Michigan online lottery saw its net win in FY23 drop by 5%. Despite that, overall revenue was up $27.6 million.
Massachusetts will have to address potential problem gambling
One other area of concern about bringing iLottery to Massachusetts is the threat of problem gambling.
Legislators hoped to curb some of those worries by raising the minimum age limit for online lottery purchases to 21. It also spelled out advertising limitations for the iLottery products upon launch.
Still, those familiar with gambling addiction see this new platform as a red flag. The instant games provided online are similar to that of a casino slot machine. Lotteries typically offer a number of games with a large variety of price options, ranging from 10 cents to $50 or more.
Les Bernal of the Stop Predator Gambling organization told WHDH 7 News Boston he’s disappointed by the state’s decision:
“You have a whole generation of people that are addicted to online sports gambling. This is online casino gambling that they’re going to bring into every home, every bedroom, every dorm room, any place that has a smartphone internet connection. As a government program.”
The Massachusetts Lottery has received “verified” status under the NASPL/NCPG Responsible Gaming Standard. It partners with the Massachusetts Department of Public Health and its Problem Gambling Services.
On its website, the state lottery offers a toll-free helpline to call for RG awareness and concerns. It also links to helpful information about gambling addiction and problem gambling services available within the state.
As the road to iLottery draws closer, the Massachusetts Lottery will have to spell out how it hopes to address these concerns.
RG tools could include spending limits, cool-off periods, and self-exclusion options for online play.
Strict verification efforts could go a long way, too. The lottery will need to implement technology that can ensure players under the age of 21 aren’t using the product.
Photo by Seth Perlman / AP
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