Massachusetts Sports Betting Revenue Prompting Talk of Online State Lottery

The most recent revenue report Massachusetts sports betting have confirmed what we mostly already new: The legalization of gambling has been a rousing—and lucrative—success. And as the state looks to keep pushing the bill for online sports betting in Massachusetts, they're considering another change to gaming laws.

That change? The implementation of an online lottery system.

Those outside The Bay State may not actually realize there isn't an online lottery system already in place. That makes sense. The legalization of Massachusetts online sports betting implies the inclusion of a state lottery. That's how the rollout has gone down in other locations.

However, Massachusetts is a different story. Despite numerous attempts over the years to legalize an online lottery, the concept has been met with resistance and, ultimately, disapproval. But now advocates of a Massachusetts online lottery system have both a new supporter and fresh argument on which to rest its case. 

Will any of this matter? Let's discuss.

Massachusetts Sports Continues to be a Monstrous Success

Earlier this month, Massachusetts released their first sports betting revenue report since they rolled out legal gambling. The results were...staggering. Massachusetts totaled over $568 million in total best placed throughout the state—around 96 percent of which were submitted online.

This figure blew away even the most aggressive projections. And believe us, most projections were aggressive. Officials throughout the state kept saying the Massachusetts sports betting would explode. They weren't kidding.

The number of wagers processed online is perhaps the most surprising tidbit of all. On the one hand, the majority share is on par with the rest of the country. More than 80 percent of all legal wagers are expected to be placed with one of the best online sports betting sites in the United States during the 2023 calendar year. Online sportsbooks in Massachusetts took that forecast to another level with their 96 percent legal betting share.

Granted, we could see this rate tumble in the future. Online Massachusetts sportsbooks were running abnormally attractive promotions to drum up new business at the outset of legal wagering. Those bonus programs won't last forever. We'd guess that 96 percent is the highest online betting share we'll see for a while—if not ever.

Still, we should also probably expect online wagering to dominate the Massachusetts sports betting market on a regular basis. The state only has three casinos with licenses to accept on-site sports bets. That makes it difficult for some residents to go the brick-and-mortar route if they're not centrally located. Online sports betting is easier in the first place, but it's even more convenient for almost anyone living in Massachusetts.

The Success of Sports Betting has Massachusetts Reconsidering an Online Lottery System

Overall, the general reaction to sports betting in Massachusetts has been overwhelmingly positive. But it's not without concerns. And while most worries tend to focus on the potential uptick in gambling addiction, the state lottery is also feeling the squeeze.

As of now, all Massachusetts lottery games and tickets must be purchased in-person. While that wasn't a huge issue before now, it's becoming a larger obstacle since residents have online sports betting alternatives. The governor of Massachusetts, Laura Healey, is among those who recognize these concerns and are attempting to do something about it. Here's what she said during a recent interview with Boston Public Radio (via CBS News in Boston):

"We have casinos in the state. We also have DraftKings here in the state, and a lot of money is being spent there by a lot of people. What we also have is a lottery system that right now isn't able to compete against a [place like] DraftKings. Nothing against DraftKings, but the Lottery, that's money coming back to cities and towns. The money spent on DraftKings is going to DraftKings."

This logic has resonated with a lot of other officials. Massachusetts only receives a percentage of profits from online sportsbooks and even casinos. The lottery, on the other hand, is run by the state. That means all the revenue from it goes directly back to Massachusetts. 

Will an Online Lottery Compete with Massachusetts Sports Betting?

At the moment, this is a loaded question. Massachusetts has to approve the rollout of an online lottery system before it can worry about competing with the online sports betting market.

Officials are optimistic that approval won't be a problem. The governor sets legislative agendas, so Healey's support means a great deal in this case. The argument advocates are laying out also seems pretty compelling. According to CBS News in Boston, "The House's fiscal year 2024 budget unveiled" what they're calling an "iLottery," a system that many "top Democrats say would generate $200 million in revenue toward early education and child care stabilization grants."

These terms should ensure an online lottery comes to the state in the near future. Whether the "iLottery" can compete with Massachusetts sports betting is a separate matter. The current state lottery system isn't generating more than a half-a-billion in business each month. And though they can expect lottery usage to rise with online offerings, the monopoly they have on the profits may not be enough to stack up with revenue generated from sports gambling.

Then again, it's much too early to tell. Online sportsbooks in Massachusetts are still writing off business as losses, which they're permitted to do as a result of their opening promotional programs. While some experts think the 20 percent tax rate assessed to online operators will amount to millions of dollars per month, we won't know just how much for at least another few financial quarters.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: