March 25, 2019

Lottery's place uncertain in expanded gambling debate

While lawmakers weigh whether to further expand gaming to allow sports betting and to authorize gambling to legally spread online, the head of the Massachusetts Lottery this week proposed that current regulations applied to physical casinos should also apply online.

When they legalized casinos in 2011, the Legislature sought to protect the central source of the local aid payments that are lifeblood to cities and towns: the Lottery. As they pursued new gaming revenue, lawmakers built into the law requirements that casinos make Lottery products available on-site, like making Keno available in bars and having scratch ticket vending machines, so as to not cannibalize the Lottery's business.

Now the gaming conversation revolves around sports betting and the online or mobile application components that could make placing a wager on the Red Sox as easy as buying a coffee. The Lottery, which remains a cash-only and in-person business despite its attempts to be allowed to sell products online, wants to make sure it gets a piece of the action.

"As we continue this discussion about other types of pathways for gambling, particularly sports betting if the commonwealth does go in that direction and if it particularly offers an online or mobile aspect to the sports betting, I think it would be fair for the Lottery, as well as fair to our casino partners, that those new providers have a similar requirement," Mass. Lottery Executive Director Michael Sweeney said Wednesday.

The 2011 expanded gaming law, Chapter 23K, begins with 10 value statements from the General Court. The fourth on the list, ahead of the importance that the gaming industry create jobs in the state, is the Legislature's belief that "enhancing and supporting the performance of the state lottery and continuing the commonwealth's dedication to local aid is imperative to the policy objectives of this chapter."

Sweeney spoke at the University of New Hampshire as part of a conference on the future of regulated sports betting and the role of state lotteries in the burgeoning industry. On a panel that also featured Sen. Brendan Crighton, Rep. Daniel Cullinane and Mass. Gaming Commissioner Gayle Cameron, Sweeney proposed a few ways that online operators -- whether it be companies like DraftKings or FanDuel or casinos like MGM Springfield -- could promote the Lottery online.

Gaming companies could share email addresses of customers with the Lottery for promotional purposes, he said, and the Lottery would like to have access to data analytics from online gaming platforms. When Lottery jackpots swell to a certain size, Sweeney suggested, betting apps could notify their players with push alerts or pop-ups of another chance to win.

"That's the requirement that the state placed on casinos in a physical location, and again I think it would be fair if we're doing a mobile application to have similar requirements apply in the cyberspace world as we do in the physical world," he said.

Crighton, vice chair of the committee expected to vet sports betting bills this session, said the sports betting bill he's filed (S 201) would not put the Lottery in charge of wagers, but said he thought about making the Lottery part of his legislation. He said his committee could pursue "the track to providing iLottery as well as cashless Lottery, give them those assets and really help them grow that way."

"Obviously, we depend greatly on the revenue that comes from the Lottery, we don't want sports betting at all to make a dent into that," he said. "I certainly think you'll see some energy from the Legislature to pursue both of these at the same time."

For several years, Treasurer Deborah Goldberg has been pitching the Legislature on the idea of allowing the Lottery to sell its existing products over the internet, arguing that it cannot continue to generate nearly $1 billion a year for local aid unless it is allowed to compete with daily fantasy sports and other online gaming for new and younger customers who prefer to do things online and on mobile devices.

The Legislature has been cool to the treasurer's plans, even as she warns that Lottery profits will remain stagnant next fiscal year if there is no expansion. Now, about a dozen bills pending before the Legislature would open a new frontier for gambling.

"If sports betting is available online, the Lottery must be available online also," Goldberg said earlier this year. "That's the issue moving forward."

Sweeney also said this week that it "is really critical" that any law allowing sports betting include provisions similar to those in the casino gaming law that require funding for responsible gaming initiatives and gaming-related law enforcement efforts. And as is the case for Lottery prizes, he said the state should check whether anyone who wins a bet on a sporting event has outstanding child support or other payment due before they are given their winnings.

"I think that's an added benefit that sports betting also potentially adds, sweeping those other types of delinquent accounts that otherwise would not get addressed," he said.

Whatever the legislation looks like if and when Massachusetts passes legalized sports betting, Sweeney said he thinks the state should take the opportunity to address the rest of the gaming world in a holistic way to make sure state law and regulations make sense across various gaming forms and platforms.

"For me, it's an opportunity perhaps to examine both issues, to get the right language, integrity, transparency and responsible gambling aspects right across a very significant platform and work in cooperation between the Gaming Commission, the Lottery and the state Legislature, to really perhaps iron out the wrinkles better than any other state has to date in the country," he said in New Hampshire.

Back on Beacon Hill, Cullinane said there is a lot of interest and activity among lawmakers around the various sports betting proposals on the table.

"It's a very fluid conversation right now as everyone is doing their due diligence," he said.

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