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Mass. Lottery officials concerned about big revenue dip

Massachusetts LotteryMassachusetts Lottery: Mass. Lottery officials concerned about big revenue dip

The highly successful Massachusetts State Lottery experienced a $71 million decline in revenues in the first five months of the fiscal year, according to figures filed with the governor's office, sparking concern among municipal officials.

Most lottery money is funneled back to the state's communities.

"The lottery right now is extraordinarily important to cities and towns," said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association. "We're hoping that the lottery sales rebound. It's something we're watching very closely."

Sales through November were down for all lottery games except Keno, which was up 3.5 percent from the same time last year. The steepest decline was in Mega Millions sales, which were off nearly 48 percent.

Sales of instant scratch tickets, the lottery's biggest seller, were down 3.6 percent, or about $46 million. The Numbers Game was down 1.2 percent and Mass Cash was down 6.3 percent.

Sales slipped to $1.801 billion from $1.872 billion through the first five months of the fiscal year, a 3.8 percent decline, compared to the year-ago period.

A week after the November figures were released, State Treasurer Timothy Cahill changed leadership at the lottery.

Many communities are already counting on this year's lottery aid, but Beckwith said the towns shouldn't assume the lottery will continue to grow indefinitely.

"The lottery is one of the most successful, if not the most successful, in North America," Beckwith said. "I don't think we can continue to count on it ranking number one and always hitting its growth target.

"This is one of the reasons we're advocating for diversified local aid, for example, a local options meals tax and revenue sharing," he said.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, called declining lottery sales "a serious short- and long-term problem facing the state and cities and towns."

Massachusetts trailed only New York in total lottery sales in each of the past three years and was fifth in per capita sales in the last fiscal year, according to the North American Association of State and Provincial Lotteries.

The decline in lottery revenues comes at a time when Gov. Deval Patrick is trying to close an estimated $1 billion deficit in the next fiscal year's budget.

AP

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6 comments. Last comment 10 years ago by JAP69.
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Litebets27's avatar - power
Maryland
United States
Member #10465
January 14, 2005
6065 Posts
Offline
Posted: January 19, 2007, 12:59 pm - IP Logged

Maybe they should add pick 3.

litebets

Feeling,  PRICELESS!!!Banana

Come on Jackpot!!!

    Avatar
    California
    United States
    Member #46824
    October 1, 2006
    270 Posts
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    Posted: January 19, 2007, 1:31 pm - IP Logged

    One of the most interesting parts of this article was the following: “The steepest decline was in Mega Millions sales, which were off nearly 48 percent. 

    (Note: The timeframe under discussion is the first five months of the state’s fiscal year, which would be July through November.)

    Looking back at the size of jackpots:

           2005        $315 million
                            $250 million
                            $170 million (last 7 draws for this run)
                            $35 million

            2006      $163 million
                            $75 million
                            $55 million
                            $49 million (last 4 draws for this run)
                            $40 million
                            $31 million
                            $15 million
                            $12 million

    It shows how much large jackpots, $250 million and $315 million in this instance, can have a huge impact in sales.  In early 2006 there were two large jackpots, $270 million and $265 million, which if the jackpots do not grow in early 2007 to $270 million or higher, sales will continue to be below the previous year.  Does anyone know if this trend is true with all Mega Millions states?  I would imagine there has to be some fall off, but 48% seemed like a lot.

    Even with the shortfall in Mega Millions, the real driver of sales is the instant scratch tickets.  They were off 3.6%, which was worth about $46 million in revenue or nearly 65% of the shortfall.

      Avatar

      United States
      Member #972
      December 30, 2002
      465 Posts
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      Posted: January 20, 2007, 12:26 am - IP Logged

      I'm from MA. I have a Mega Millions season ticket on my desk in front of me, but that's all the MA lottery gets from me every year now. With increased train fare, increased property taxes, high gas prices, etc. I want to be in the game, but I don't want to spend more than $100 a year. The state has to realize that the lottery is an entertainment item that can and will be dropped when money gets tight.  If they increase train fare $50 a month, people have to cut down somewhere else.  I personally feel I need a good savings account in case some other big expense or increase hits and I've gotten 1 raise in the past 28 months - not the best mindset for wasting money on lottery tickets or anything else.  

      I  agree that huge jackpots would catch people's attention, but $200 million plus jackpots havn't been happening for a while. 

        dvdiva's avatar - 8ball

        United States
        Member #2338
        September 17, 2003
        2063 Posts
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        Posted: January 20, 2007, 1:27 am - IP Logged

        Wow, Megamillions has the worst odds and the lowest prize/odds of any large jackpot game. Must be some rocket scientists working there. You can tell they never worked in a small business. They would have figured out the difference right away. Maybe they should check out Powerball's sales as a comparison.


          United States
          Member #379
          June 5, 2002
          11296 Posts
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          Posted: January 20, 2007, 10:37 am - IP Logged

          Wow, Megamillions has the worst odds and the lowest prize/odds of any large jackpot game. Must be some rocket scientists working there. You can tell they never worked in a small business. They would have figured out the difference right away. Maybe they should check out Powerball's sales as a comparison.

          It sounds like the lack of a cash option in MA Megabucks and in many of its scratch games finally is catching up to MA. While only NY has higher sales, MA actually needs to look at other states' cash/annuity policies.

          I beg to differ with dvdiva that MM has the "lowest prize/odds of any large jackpot game." The overall odds of winning in MM is 1:40, and its smallest prize is $2. NY has a game with overall odds (per $1) of 1:46, and its smallest prize is one dollar.

            JAP69's avatar - alas
            South Carolina
            United States
            Member #6
            November 4, 2001
            8790 Posts
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            Posted: January 20, 2007, 11:07 am - IP Logged

            I'm from MA. I have a Mega Millions season ticket on my desk in front of me, but that's all the MA lottery gets from me every year now. With increased train fare, increased property taxes, high gas prices, etc. I want to be in the game, but I don't want to spend more than $100 a year. The state has to realize that the lottery is an entertainment item that can and will be dropped when money gets tight.  If they increase train fare $50 a month, people have to cut down somewhere else.  I personally feel I need a good savings account in case some other big expense or increase hits and I've gotten 1 raise in the past 28 months - not the best mindset for wasting money on lottery tickets or anything else.  

            I  agree that huge jackpots would catch people's attention, but $200 million plus jackpots havn't been happening for a while. 

            I Agree!

            I also think that lower tier prizes are horrible for scratchers and jackpot games. That could also discourage playing.

            MAGA