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UPDATE 10/13/2016: The Massachusetts Treasury is not seeking to offer daily fantasy sports products through an online lottery. Treasurer Deb Goldberg’s comments to the Chamber of Commerce were in regards to capturing the DFS audience.
With momentum on the side of gaming expansion, Massachusetts could authorize an online lottery, which may include fantasy sports offerings and other products, as early as 2017.
S 2351, a bill sponsored by State Senator Jennifer Flanagan, would have allowed Massachusetts to take its thriving lottery online.
Flanagan’s bill was eventually repackaged as an amendment to an economic development bill (S 2423). The amendment passed in the Senate by a slim 22-17 margin, with the bill itself receiving almost unanimous approval (39-1).
The online lottery provision was seriously considered in the House of Representatives at the end of the session. But the House ultimately decided not to act on the measure.
With 2016’s progress as a foundation, online lottery is expected to be revisited in 2017, with a bill introduced as early as this November. This, according to State Treasurer Deb Goldberg, whose office oversees the Massachusetts lottery.
On Oct. 5, Goldberg spoke in front of the Greater Boston Chamber of Commerce, where she communicated her intention to introduce a bill that would authorize online lottery sales to the city’s business leaders. The bill is expected to be introduced on Nov. 2.
As the impetus for the bill, Goldberg cited her belief that the lottery needs to be modernized.
“We must join the 21st century if this business is going to continue to thrive and meet its mission,” Goldberg told the Greater Boston Chamber of Commerce. “The internet has proved to be a lucrative and beneficial business platform.”
This modernization means not only moving into the online arena, but creating new products that will appeal to a younger demographic.
On this front, Goldberg made several mentions of daily fantasy sports, and intimated the lottery might explore adding DFS-style games to attract new, younger players, “who are not lottery players, who are extremely excited by sports-related fantasies.”
Selling the legislature on the idea that the Massachusetts Lottery Commission needs online sales to remain healthy would be a lot easier if the state lottery wasn’t setting revenue records. Or, for that matter, if the Massachusetts lottery didn’t already have more sales per capita than any other state.
However, these sales are somewhat misleading.
During the Intersection of iGaming and Lottery discussion at G2E, the three panelists noted that while sales may be up (in a number of states), the number of people participating in the lottery is shrinking. What’s more, these growth trends are not only unsustainable, but likely to reverse due to variance.
An inordinate number of nine-figure Powerball jackpots in the past year is a big part of the record sales in most Powerball states. And the continually increasing price of scratch-off tickets (scratch-off cards can now be purchased at $10, $20, and even $50 price-points) has helped hide the shrinking player base.
It’s this shrinking customer base that has lottery officials looking online, and looking to integrate new products, like fantasy sports, in an attempt to expand the lottery’s base of players, particularly younger players.
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Goldberg’s mention of DFS and other products isn’t surprising.
In December 2015, the Massachusetts Lottery Commission solicited proposals for what it called, “digital versions of existing and new lottery games, including but not limited to social gaming and daily fantasy sports options.” A number of companies responded to the MLC, including industry heavyweights like IGT, Intralot, and Amaya, as well as some DFS companies.
Flanagan’s online lottery bill built on this idea, leaving the specific products that would be available online up to the MLC. Online lottery bills introduced in the next session are expected to have the same provisions.
The Massachusetts lottery won’t be offering DFS contests as we know them.
We’re likely to see simplified DFS games largely predicated on chance, not unlike the DFS/keno hybrid product I saw at G2E this year, Scoring Frenzy. It could also be something along the lines of the horse racing lottery draw game that EquiLottery had on display at NCLGS.