New England News
6:25 pm
Wed July 25, 2012

Record Profit For Lottery Means More Local Aid Possible

The Massachusetts State Lottery this week reported record sales and net profit. It means more money should be available for future distribution to cash strapped cities and towns across the state.  WAMC”s Pioneer Valley Bureau Chief Paul Tuthill reports.

Murphy’s Pop Shop in Springfield’s East Forest Park neighborhood is one of the top lottery sales agents in Massachusetts.  Owner Patrick Murphy said his business was off  due to the natural disasters that befell Springfield, but he’s not surprised lottery sales statewide during the last  12 months hit a record.

The Massachusetts State Lottery grossed $4.74 billion in gross sales and recorded a net profit of $981 million, breaking the previous record set six years ago by $30 million. Officials credited  new games that led to an increase in instant ticket sales, strategic marketing and good management.

Massachusetts pays out 72 percent of its lottery sales revenue  as prizes.  By comparison, the pay out in New York is 58 percent.

Lottery profits are  the largest source of local aid to the state’s 351 cities and towns according to State Representative  Stephen Kulik of  Worthington, who is vice chair of the House Ways and Means Committee.

The lottery promotes that its profits fund things like fire departments and local street repairs, but the lottery dollars  actually flows into the state’s general fund, according to  Andrew Bagley, director of research and public affairs for the Massachusetts Taxpayers Foundation.

The legislature, has in the past, diverted lottery money to fund other parts of state government, much to the chagrin of  Geoffrey Beckwith, executive director of the Massachusetts Municipal Association.

State lottery sales are likely to drop when casinos and a slot parlor open in Massachusetts in three to five years. Studies predict lottery sales will fall by as much as 4 percent.  But the combined revenue the state will collect from casinos and the lottery will be greater than what it takes in just from the lottery. A portion of the casino revenue is to go to local aid.

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