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

Written By Nicholaus Garcia on July 28, 2020 - Last Updated on September 13, 2020
New York Lottery

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

It’s no surprise that once stay-home-orders were mandated, forcing businesses that sell lottery tickets to close, sales dipped. But as states continue to released revenue data, it has become clear that some are seeing highs and others are seeing lows.

Retail-only lottery states see large revenue decline

For example, according to the Associated Press, Massachusetts saw sales drop a total of 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 had a:

  • 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.

Because 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.

The decline in revenue also had budgetary implications over on the West Coast. 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 projected 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 states’ lottery revenues were crippled by the coronavirus, Texas, Arkansas and Montana saw the opposite effect. In those states, sales increased as residents dumped their money into scratch-off tickets.

Texas reported that its 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. With 20,000 retail locations deemed essential businesses, 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 upward of $16 million, much of it due to — surprise — scratch-off tickets.

A look at state lotteries across the US

An overall view of the US lottery landscape shows that 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 to 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 passed.

Nicholaus Garcia Avatar
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Nicholaus Garcia

Nick Garcia is a senior reporter for PlayUSA. Garcia provides analysis and in-depth coverage of the gambling industry with a key focus on online casinos, sports betting and financial markets. Garcia has been covering the US gambling market since 2017. He attended Texas Tech University as an undergrad and received a Master of Arts in Journalism from Columbia College Chicago.

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