Some State Lotteries Are Continuing To Struggle Due To COVID-19

Posted on July 28, 2020

As the coronavirus continues its decimation of the US economy, one industry seeing mixed results are state lotteries. Some are reliant on gambling revenue to fill budget gaps while others use them to fund special programs like education and veterans affairs.

It’s no secret once stay-home-orders were mandated, forcing businesses that sell lottery tickets to close, sales would dip. But as states continue to released revenue data, there are some seeing the highs and others seeing the lows.

Retail-only lottery states see large revenue decline

According to the Associated Press, states like Massachusetts saw sales drop a combined 53% from March through May. As a result, the state reported a 5% drop in sales for the fiscal year.

Massachusets lottery sales since March:

  • 13% drop in March
  • 30% drop in April
  • 10% drop in May 

“This pandemic has dramatically exposed the limitations and vulnerabilities of the Lottery’s all-cash, in-person business model,” Massachusetts Treasurer Deborah Goldberg told lawmakers in April.

Considering Massachusetts does not have an online lottery, the industry was hit relatively hard. As the pandemic descended upon the East Coast, the state temporarily closed roughly 1,500 locations that sold lottery tickets.

Delaware was in a similar situation. According to state data, lottery sales were off by $40 million due to casino closures. Over on the West Coast, the decline in revenue also had budgetary implications. In Oregon, the parks and recreation department was forced to lay off 47 employees and close over a dozen parks. The drop in lottery revenue caused a $22 million project budget shortfall.

“We got used to the lottery as a constant companion supporting the system,” Chris Havel, a spokesman for the Oregon parks and rec department, told the AP. “It was a gut punch to realize we don’t have the time to react.”

Not all state lotteries are seeing shortfalls

While some lottery revenues were crippled by the coronavirus, others in Texas, Arkansas, and Montana saw the reverse effect. In those states, sales increased as residents dumped their money into scratch-off tickets.

Texas reported lottery sales increased by more than $155 million. According to Gary Grief, executive director of the Texas Lottery Commission, scratch-off tickets played a significant role in the increase of sales. With 20,000 retail locations deemed essential business, ticket sales increased 10% over the last fiscal year and 22% over sales from 2018.

Up in Montana, the state reported similar results. Lottery sales increased upwards of $16 million, much of it due to, surprise — scratch-off tickets.

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A look at state lotteries across the US

An overall view of the US lottery landscape shows only five states, Alabama, Alaska, Hawaii, Utah, and Nevada do not have some form of a state lottery. But while traditional lottery games like PowerBall and Mega Millions have been around for a few years, the rest of the industry has failed to catch up to modernized gaming.

Of the 45 states with lotteries, only six have an online lottery.

  • Georgia — GA online lottery
  • Illinois — IL online lottery
  • Kentucky — KY online lottery
  • Michigan — MI online lottery
  • New Hampshire — NH online lottery
  • Pennsylvania — PA online lottery

With an industry so dependent on customers going into physical locations, hopefully, more states can look at online lottery games as an alternative. Last year, online lottery legislation was introduced in Connecticut, Hawaii, New Jersey, and Massachusets. Unfortunately, none of the bills were able to get passed.

Nicholaus Garcia Avatar
Written by
Nicholaus Garcia

Nick has had stints in Chicago, writing about local politics, and in Washington, D.C., covering the expanding gambling industry. Now back in Chicago, he continues to write about the emerging sports betting market with a focus on the Midwest. Originally from West Texas, he graduated from Texas Tech University and completed his master's degree in journalism at Columbia College Chicago.

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