Liz Farmer is a GOVERNING finance writer.E-mail: email@example.com
After a record year for the Massachusetts lottery, a state task force has called online gaming “inevitable” and is recommending the agency take steps toward offering it to consumers.
The report, issued Thursday, notes that if the lottery doesn’t enter the online marketplace, other entrants – such as casinos, commercial gaming companies, and other states – will likely fill the void to the detriment of the lottery and the revenue it generates.
Last fiscal year, the lottery generated a record $4.75 billion in sales in the last year and posted a $984 million profit. The sales averaged roughly $720 per capita, the highest rate in the nation.
"Given the high per capita spending now and the fact that personal incomes are growing modestly at best," the report said, "the inevitable consequence would be that those new entrants would cannibalize Lottery sales, putting at risk local aid."
Massachusetts Treasurer Steven Grossman said in a statement that the state needed to move forward “strategically and thoughtfully” and in a way that protects the 7,400 lottery agents.
"We cannot ignore the fact that online gaming products are going to become a reality, and it is important for us to act now to ensure that local aid to 351 cities and towns is protected,” he said.
Current Massachusetts law bans online lottery sales. The report recommends enacting legislation that would authorize the lottery to enter the online market and initiate pilot programs to test the market including development of a mobile app.
The report also repeatedly notes that steps should be taken to protect the state’s bricks and mortar lottery retailers and that the state should invest in programs for problem gambling.
Other recommendations included exploring licensing rights to run an online, intra-state poker game and the launch of an online social game
The task force was made up of state legislature representatives, the governor, retail community, Massachusetts Gaming Commission, Massachusetts Mayors Association, the Lottery Commission, state treasury and other stakeholders. It was formed after a December 2011 decision by the U.S. Department of Justice that let states decide how or if to allow online gambling with the exception of sports betting.