Massachusetts Lottery earns 3rd largest profit in history despite coronavirus shutdown
Despite a sizable three-month decrease in sales of scratch tickets and Keno due to the coronavirus shutdown, the Massachusetts Lottery in fiscal 2020 had the third largest revenue pot in its 49-year history.
The Lottery earned $5.252 billion in revenues in the fiscal year ending June 30. Its record was set in the previous fiscal year, when it earned $5.5 billion, according to an announcement from state Treasurer Deb Goldberg, who oversees the Lottery.
The Lottery netted a $979 million profit after expenses and winning payouts for fiscal 2020. In the previous record-setting year it netted $1.1 billion, she said.
“It is shocking. I didn’t expect it to be that high,” said state Rep. Carlos Gonzalez, D-Springfield, who is a member of the House Ways and Means Committee. “The news is a great sign to see for the recovery.”
Lottery profits are distributed to all 351 cities and towns in the state as unrestricted aid. For this fiscal year, for example, Springfield received about $44.1 million in aid, Chicopee received $12.2 million, Holyoke received $10.7 million, Westfield received $6.6 million, Northampton received $4.6 million, West Springfield received $3.8 million and Agawam received $3.9 million.
Among some of the smaller Western Massachusetts towns, Southampton received $676,000, Granby received $937,000 and Granville received $170,000.
The money will help local communities struggling with decreased revenues from the coronavirus-related shutdown of restaurants, retail stores, hotels and most other businesses. Many are reopening now, but income to cities and towns continues to be reduced, Gonzalez said.
“I hope it means people have some disposable income,” he said.
The Lottery did see a dramatic decline in sales starting in March and through April and May. The biggest drop-off was in Keno sales, since the game is most often played in restaurants and bars. Under the state’s reopening plan, bars are set to remain closed until a coronavirus vaccine is available.
Keno sales for this fiscal year totaled $979 million, a drop of $76.2 million from the previous year, Goldberg said.
But strong lottery sales in the early part of the fiscal year and a rebound in June, when more businesses reopened, allowed the lottery to recoup some of the losses from the spring.
“From the early stages of the pandemic, the Lottery has been committed to operating within the guidelines recommended by state and federal officials, taking significant measures to create a safe environment for our lottery team,” said Michael Sweeney, executive director of the lottery. “More important than setting records across the board last year, we faced significant operational challenges and overcame them.”
Instant ticket sales for this fiscal year totaled $3.646 billion, a $27.2 million decrease from the previous year.
Sales of the multistate draw games, Mega Millions and Powerball, decreased by $141 million from the previous year. Some of the decline was also due to smaller jackpots, Goldberg said.
“It is good news, but it is a small part of the state’s budget,” said Sen. Eric P. Lesser, D-Longmeadow, a member of the Senate Ways and Means Committee.
Revenue from sales and income taxes are expected to decline rapidly for the next fiscal year, and there is concern that the $600 additional payments that came with weekly unemployment benefits will end this month, Lesser said.
The state has also received none of the expected income from the three new casinos in the state since they were shut down in mid-March. The casinos reopened this month.
“I think it is an encouraging data point but we are not out of the woods yet,” Lesser said.
Though the Lottery produced more in profit for the state than it had been projecting, Sweeney said the Lottery is hampered by being primarily a cash-only and in-person business. Goldberg and Sweeney have for years been calling on the Legislature to authorize the Lottery to sell its products online, but lawmakers have been cool to the idea and it has not gained significant traction on Beacon Hill.
This session, the Joint Committee on Consumer Protection and Professional Licensure sent bills related to online lottery sales to a study.
“Nothing is close to back to normal yet, particularly for a business that cannot avail itself of direct online sales,” Sweeney said.
Gov. Charlie Baker included language in his fiscal year 2021 budget proposal that would allow players to purchase Lottery products using smartphone apps for cashless payment or with debit cards, but not online or with credit cards. Baker’s budget remains in the House Ways and Means Committee and neither the House nor Senate has produced its own budget plan yet.
A finalized accounting of the Lottery’s fiscal year 2020 performance is expected to be completed by the middle of September.
Material from the State House News Service was used in this report.Massachusetts Lottery earns 3rd largest profit in history despite coronavirus shutdown Despite a sizable three-month decrease in sales of scratch tickets and Keno due to the coronavirus shutdown,
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