Operators and Retailers in Massachusetts Divided Over Online Lottery Bills

As of today, the Massachusetts Legislature is currently considering three bills which would legalize and regulate lottery ticket sales over the internet.

But while that level of legislative activity would seem to suggest online lottery sales enjoy consensus support within local communities, Massachusetts has become deeply divided over this emerging sector of the iGaming industry.

The first attempt to migrate the Massachusetts Lottery to the online marketplace was introduced in January, when state senator Jennifer Flanagan (D-Leominister) introduced Senate Bill 182. Flanagan’s online lottery proposal has been assigned to the Joint Committee on Economic Development and Emerging Technologies, where it remains under consideration.

A version of Flanagan’s bill was passed by the full Senate last year, but it eventually died off amidst inactivity in the House.

A second bill known as House Bill 135 – which essentially mirrors SB-182 – was introduced at the same time by representative Daniel Cahill (D-Lynn), and that bill currently sits with the Joint Committee on Consumer Protection and Professional Licensure.

A third effort has been championed by Deborah Goldberg, who serves as Massachusetts state treasurer. Known as House Bill 23, Goldberg’s bill was examined during a hearing of the Joint Committee on Consumer Protection and Professional Licensure on September 19.

During that hearing, Michael Sweeney – the Executive Director of the Massachusetts Lottery – expressed his support for online ticket sales:

“The Massachusetts Lottery should position itself to be where the consumers are.

Increasingly, the consumers are online and mobile.”

A coalition consisting of six statewide and regional retailer associations – known as Save Our Neighborhood Stores (SONS) – recently formed to lobby legislators and turn the tide against online lottery.

SONS’ membership includes the Boston Convenience Store Owners Association, the Massachusetts Food Association, the Massachusetts Package Store Association, the New England Convenience Store & Energy Marketers Association, the New England Service Station and Auto Repair Association, and the Retailers Association of Massachusetts.

In a written testimony submitted to the Joint Committee on Consumer Protection and Professional Licensure, the SONS coalition argued that an online lottery service would cannibalize sales from brick and mortar convenience stores:

“The introduction of iLottery will decimate foot traffic in their stores and present numerous other challenges to the already struggling business owners.

Convenience stores are the heart of communities. Convenience owners develop strong and unique ties to their customers and to their neighborhoods.

However, the reality is that these retailers will not be able to sustain any more hits to their profits and dark, empty store fronts could soon replace our friendly, familiar neighborhood store.”

Sweeney was quick to allay those fears, promising convenience store owners and other traditional lottery distributors that online migration wouldn’t occur at their expense:

“Online is not a substitute for the physical retail location.

I am confident that working with you, our elected state representatives and senators, that we can construct an online presence for the Lottery that will safeguard consumers and protect local aid while also continuing at full strength the valued and long-term relationship that we have had, do have currently and will continue to have with our retail agents and their physical locations.”

If and when the legislature eventually authorizes online lottery sales, Governor Charlie Baker would still need to sign the measure into law.

Baker recently held a meeting with Goldberg to discuss the issue, but he kept his cards close to the vest during a media session with local reporters from the Lowell Sun:

“I think it depends to some extent on the nature of the program model and how it would work and what the consequences would be for retailers and others here in the Commonwealth.

And I think there are now a number of states that have run online lotteries for a while and we have real-life experience in other states.”

Per the Council of State Governments, five states – Kentucky, Illinois, Georgia, Michigan, and New Hampshire – allow for lottery tickets to be purchased online.