Record profit for Massachusetts lottery as casinos loom

BOSTON Tue Jul 24, 2012 4:09pm EDT

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BOSTON (Reuters) - Record sales for the Massachusetts State Lottery in fiscal 2012 will make almost $1 billion available for aid to cities and towns in a possible final surge before the state embraces casino gambling.

The state lottery said on Tuesday that net lottery profits of $981 million were up $87 million from the previous year and $30 million above the previous record of $951 million set in fiscal 2006.

Lottery sales for the year were $44.74 billion, $31 million higher than the previous record set in fiscal 2007.

State Treasurer Steve Grossman tied the improvements to "new game introductions, strategic marketing and prudent management," and said sales in the first few weeks of fiscal 2013 are running five percent above a year ago.

An especially large jackpot of over $650 million for one lottery game in 2012 delivered an additional $16.5 million in profit for the state, Grossman told Reuters.

More broadly, though, Grossman said the lottery benefits from a large and loyal network of agents - 7,400 across the state, in gas stations, liquor stores, convenience stores and so on - that keep the lottery "omnipresent" in residents' lives.

The state's payout of 72 percent of sales as winning tickets is also "the highest in the country," Grossman said.

The Pew Center on the States said recently that Massachusetts residents spent an average of $675 per capita on lottery tickets in fiscal 2011 - far above Washington DC, which was second at $385 per capita. The latest state figures suggest per capita spending rose to $679 in 2012.

Figures from LaFleur's World Lottery Almanac for fiscal 2010 showed that the state's prize percentage payout was not only significantly higher than in bordering New England states, but the highest in the United States.

The payout in New Hampshire, for example was 59 percent, in New York 58 percent and in Rhode Island 60 percent.

"Because of this drastic difference, we get a high volume of what we refer to as 'border play' - residents of the state crossing over into nearby Massachusetts communities to buy lottery tickets," said lottery spokeswoman Beth Bresnahan.

Lottery profits are the biggest source of unrestricted local aid available to Massachusetts's towns and cities, and are used for things like funding fire departments and schools and maintaining roads.

Grossman said that if the lottery were a publicly traded entity "it would be the ninth most profitable company in Massachusetts."

The lottery, which just concluded its 40th year, could be enjoying a final growth spurt before casino gambling comes to the state.

Gov. Deval Patrick signed a bill legalizing casino gambling in late 2011. As many as three casinos and one slot machine parlor could be built in the next few years.

"It is fair to say that when we have casino gambling in Massachusetts and all the casinos have opened, it will have an impact on the lottery," said Grossman.

"It's hard to estimate how much. But the net total profit of casinos and the lottery will be greater than for the lottery alone."

(Reporting By Ros Krasny; Editing by Andrew Hay)

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