Entries by Prasanna Rajasekaran

The Lottery’s Double Standard

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Last month, State Treasurer Deborah Goldberg announced a renewed push for online lottery games, hoping to pass a bill in the upcoming legislative session.  The merits of an online lottery are worth considering, but what’s interesting about the Treasurer’s latest statement is how she characterizes the Lottery’s profitability in the context of this push. At first, the Treasurer says the Massachusetts Lottery “is the most successful in the country.” But immediately after, she mentions that 2016 profits were precarious. Without the sales boost from the Powerball jackpot, Treasurer Goldberg claims she “might be reporting a lottery downturn,” especially considering the growth of Massachusetts’ casino industry. These two points – that the Lottery is at once massively profitable and facing a […]

UMass Survey Suggests over One-third of Annual Mass Lottery Sales Dependent on At-Risk and Problem Gamblers

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In May 2015, UMass-Amherst published a survey that suggests 37% of the Massachusetts State Lottery’s revenue comes from at-risk or problem gamblers. The survey estimates that 389,121 Massachusetts residents are at-risk gamblers and 86,356 are problem gamblers. At-risk gamblers spend at least $3,869 yearly on the Lottery; the number increases to $5,148 for problem gamblers. Considering the aforementioned population estimates, $1.8 billion of the Lottery’s annual revenue is attributable to these vulnerable constituencies. The survey was conducted from 2013 to 2014, so that $1.8 billion would have made up around 37% of the FY 2014’s $4.9 billion in sales. Before jumping to conclusions, it’s necessary to acknowledge a few caveats. First, at-risk and problem gambler expenditures are self-reported and may therefore […]

How much do frequent gamblers contribute to Massachusetts Lottery revenues?

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Each year, the Massachusetts State Lottery conducts an annual tracking survey of its players.  The purpose of the survey is to analyze, among other things, spending patterns, advertising awareness, and social media adoption. Pioneer Institute, through a public records request, received access to the Massachusetts State Lottery Commission’s 2016 Annual Tracking Survey PowerPoint presentation – a comprehensive summary of this year’s findings. The survey brings to light a great deal of information, but one section titled “Player Segments” is particularly compelling. Here, the Lottery describes the spending patterns of frequent Lottery players (i.e. people who play the Lottery at least once a month). Consider this: the Lottery made $5.23 billion in sales for FY 2016. According to the survey, $4.6 billion […]

Massachusetts Confounding Relationship with Lottery Advertising

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In 2015, Massachusetts State Treasurer Deborah Goldberg called for a $2 million boost in the State Lottery’s advertising budget. According to Treasurer Goldberg, the additional money is needed to counter the competitive threat posed by the state’s growing casino industry. The Lottery’s advertising budget has had a volatile history. In the 90s, it was central to an ideological debate that split Beacon Hill for years before the Senate finally slashed the budget for good. In the early 2000s, the budget was steadily restored – and now, thanks to Treasurer Goldberg’s latest push, it has reached its highest point in the last decade. But two fundamental questions – questions we’ve been asking since the 90s – remain. From the one-dimensional viewpoint […]

Why Mass Lottery’s performance is not nearly as impressive as it seems

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Over the last 5 years, the Massachusetts State Lottery and the media have made a tradition out of announcing the Lottery’s “record-breaking” sales. Here are articles – from 2016, 2015, 2014, 2013, and 2012 – that display this trend. But is this an accurate portrayal of the institution’s success? Is the Lottery actually growing, in the long-run, at such a steady pace? The Lottery’s sales – in nominal terms – have reached a new record each year for the past five years. This matches with its long-term trend of unmitigated growth for the better part of three decades. Pioneer Institute, through a public records request, received the Lottery’s financial reports for 1990 – 2010 (the reports for 2011 – 2016 […]

Shrinking Margins at the Massachusetts State Lottery

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Last week, the Massachusetts Lottery triumphantly announced that, for the fifth straight year, it set a new record for annual revenue and profit. But the details of its financials paint a different picture. For fiscal year 2016, the Lottery generated sales of $5.231 billion, up from $5.014 billion last year. Yet that led only to a $1 million increase in profit – from $985.9 million to $986.9 million. If its profit increase corresponded with its revenue increase (about 4.3%), the Lottery would have netted over $1.028 billion, $41.1 million more than its actual profit. So why the lower profit margin? The bulk of the Lottery’s expenses are prizes, which are the total winnings for all players in a given year. […]

The Mysterious World of NCAA Apparel Contracts

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The world of collegiate athletics is, besides great entertainment, a monumental cash cow. In April, the NCAA extended its March Madness TV contract with CBS by 8 years – adding $8.8 billion on what was already a $10.8 billion deal. This works out to another billion dollars per year – for about a month of basketball. The business of NCAA sports is as broad as it is profitable. On a micro level, schools with large sports programs earn huge sums of money through ticket sales, donations, and media rights. The larger sports-related industries – apparel, sports drinks, footwear – often contract with schools to provide their products at a discount, if not for free. The value of these contracts can […]