Massachusetts Lottery Has Record Year

STATE HOUSE, BOSTON, JULY 23, 2019.....It was a record-setting year for the Massachusetts Lottery, which pulled in a record $1.092 billion in profit and paid out a record $3.987 billion to players during fiscal 2019.

In addition to setting its high-water mark for net profit and prizes paid out, the Lottery also set new records for highest total revenue at $5.499 billion, highest scratch ticket sales at $3.673 billion, highest Keno sales at $1.055 billion and highest total commissions and bonuses paid out to retailers at $314.4 million.

The Lottery's previous record for annual profit was $1.039 billion, set in the 2017 fiscal year. Fiscal year 2018, which saw the Lottery generate $997 million in profit, is now the agency's third most profitable year.

"Another net profit record is a proud achievement for the Lottery. We continue to perform at the highest levels even as we face mounting challenges in today's retail environment," Treasurer Deborah Goldberg, who chairs the Lottery Commission, said. "This profit generates local aid, critical to every community across the Commonwealth."

The fiscal 2019 numbers will still need to be audited, but the Lottery said it "does not expect them to change substantially" by the time the audit is completed in September.

Lottery Executive Director Michael Sweeney detailed the Lottery's fiscal year, which ended June 30, at a meeting of the Lottery Commission on Tuesday morning. He pointed out that the record-setting year for the business side of the Lottery coincided with significant changes for employees and retailers, like the move to a new headquarters and the launch of new in-store Lottery terminals.

"Setting records across the board, while simultaneously executing multiple major operational transitions, is a testament to the devotion of our team and the cooperation of our dedicated retail partners," he said.

The Lottery's administrative costs for the year accounted for 1.9 percent of overall revenues, which the Lottery said is the lowest of any lottery in the country.

The Lottery's sales were up $212.3 million or 4 percent over the previous year. Two of the Lottery's nine product types -- All or Nothing and the Megabucks Doubler -- saw sales decline during fiscal 2019.

Sweeney said jackpot-driven sales of Mega Millions, continued growth in Keno sales and consistent performance from instant tickets contributed to the growth. Mega Millions sales were up 73.6 percent over fiscal 2018, which the Lottery said was "largely fueled" by a series of drawings in the fall that culminated in jackpots of $1 billion and $1.6 billion.

Keno sales, which have been a point of emphasis for Goldberg, were up 5.8 percent and exceeded $1 billion for the first time since Massachusetts launched the game in 1993.

The Lottery said 72.5 percent of its annual revenue was returned to players in fiscal 2019, setting a record at $3.987 billion. The Lottery noted that prize payouts fluctuate year to year based on the schedule or rate at which players cash winning tickets, but said Lottery players won 202 prizes valued at $1 million or more, including 26 prizes valued at $2 million or more, in fiscal 2019.

The strong revenue performance for the Lottery was also good news for the retailers who sell Lottery products. The Lottery said the $314.4 million it paid in commissions and bonuses averaged out to more than $41,000 in additional income for each of its 7,500 retail partners.

Goldberg and the Lottery have been attempting to secure legislative authority to sell Lottery products online. Online lottery supporters have been arguing for years that the Lottery's profits are not sustainable without the ability to compete with various online gaming options for younger players.

In the time since Goldberg and Sweeney have been pushing for online authority, the Lottery has posted its three most profitable years.

"The Massachusetts State Lottery is at a pivot point and we need to have some serious conversations about technology and how we engage consumers because consumers have already radically changed," Sweeney said at a hearing on the online lottery bill earlier this month. "We'll do a billion in profit this year for our cities and towns, but more than 99 percent of that was brought in by cash ... therein lies the problem."

Information from State House News Service