As casino gambling expands in Massachusetts, the Commonwealth has made protecting the state lottery a priority. On April 9, 2020, Mark Nichols, PhD, Professor of Economics at the University of Nevada Reno, presented results of the SEIGMA team’s analysis of the impact of the opening of MGM Springfield on lottery sales to the Massachusetts Gaming Commission. As Dr. Nichols mentioned in his presentation, lottery revenues are the largest source of local aid for communities in Massachusetts. In fiscal year 2019, lottery sales in Massachusetts totaled $5.5 billion with a net profit of $1.1 billion; the city of Springfield received over $40 million in local aid. Find his presentation here.
With the cooperation of the Massachusetts Lottery, Dr. Nichols, and the SEIGMA team at the UMASS Donahue Institute’s Economic and Public Policy Research Group, were able to analyze detailed sales data that allowed an assessment of the impact of the casino on lottery sales over time and at different geographic levels of resolution. The Massachusetts Lottery provided Dr. Nichols and the SEIGMA team with agent-specific lottery sales by game type and by fiscal year. This allowed for an analysis of changes in lottery sales at several levels, including statewide, in the host and MGC-designated surrounding communities near the casino, and for agents as various locations around the casino. Dr. Nichols and the SEIGMA team found that lottery sales have increased statewide during the first year after MGM Springfield opened in August 2018. However, the analysis shows that lottery revenues for agents in Springfield decreased during this time.
Specifically, the key findings in this report were:
o Lottery sales statewide increased 6.50% in the first year after the opening of MGM Springfield compared to the year before.
o Over fiscal years 2003-2019, lottery revenue has increased at a 1.70% annual rate; recent growth is above the historical average.
o The Lottery generated $1.1 billion in profit (the key source of local aid) in fiscal year 2019; an all-time record.
o Total lottery sales in Springfield decreased 3.05% in the first year after the opening of MGM Springfield compared to the year before.
□ Surrounding Communities
o Total lottery sales in the designated surrounding communities decreased 0.38% in the first year after the opening of MGM Springfield compared to the year before.
o Lottery sales increased in five of the designated communities in the first year after the opening of MGM Springfield compared to the year before.
o Lottery sales decreased in three of the designated communities in the first year after the opening of MGM Springfield compared to the year before.
o Total lottery sales increased in Chicopee (0.16%), Longmeadow (2.03%), Ludlow (1.90%), West Springfield (0.72%), and Wilbraham (7.81%).
o Total lottery sales decreased in Agawam (-2.68%), East Longmeadow (-2.37%), and Holyoke (-3.08%).
The research team will continue to monitor lottery sales to determine if the first-year results reflect longer term trends and whether the addition of the resort-style casino in Everett will have a similar or different impact on lottery sales in the Commonwealth.
Read the full report here.