State Treasurer Deborah Goldberg announced this month that, for the first time in its 45-year history, the Massachusetts State Lottery surpassed the $1 billion mark in net profit for a single fiscal year, producing an estimated $1.035 billion for the Commonwealth in the recently completed 2017 fiscal year.
This is the third consecutive year that the Lottery has posted a record-setting profit, eclipsing the FY16 figure of $989.4 million by more than $46 million. The Lottery is the single largest source of unrestricted local aid for the Commonwealth’s 351 cities and towns.
For the third consecutive fiscal year, the Lottery’s estimated sales topped $5 billion. Estimated sales of $5.093 billion are second only to FY16’s $5.233 billion. The Lottery’s fiscal year commenced July 1, 2016 and ended June 30, 2017.
“This is a proud moment for the Lottery,” said Goldberg, who as Treasurer and Receiver General serves as Chair of the Massachusetts State Lottery Commission. “During uncertain times, we were able to increase unrestricted local aid to the cities and towns throughout the Commonwealth. The team achieved these goals by increasing efficiencies and creative utilization of resources, so necessary in an ever changing environment.”
The Lottery spent an estimated $97.4 million on administrative costs in FY17, 5 percent less than the $102.7 million it spent in FY16. These costs are less than 2 percent of overall revenues, the lowest of any U.S. lottery.
As an example of improved efficiency, Treasurer Goldberg cited a re-evaluation of sales routes that allowed Lottery account managers to spend additional time meeting with Lottery retailers, while reducing driving time and mileage.
The Lottery awarded an estimated $3.668 billion in prizes in FY17. With an estimated 72.02 percent of all revenue returned to players in the form of winnings in FY17, the Massachusetts Lottery maintains the highest payout percentage of any lottery in the country.
Prize payouts can fluctuate from year to year based on the schedule or rate at which players cash in their prizes. The Lottery’s network of retailers collectively earned an estimated $291.9 million in commissions and bonuses in FY17.
Instant Tickets accounted for an estimated $3.5 billion in sales, a 2.7 percent decrease from FY16’s record-setting figure of $3.615 billion. KENO sales rang in at an all-time high estimated at $915 million, a 1.1 percent increase over FY16, due in part to the continued expansion of the number of agents offering the product. All or Nothing, a new monitor game introduced early in FY17, generated an estimated $18.8 million in sales, a 755 percent increase over the $2.2 million in FY16 sales of the game it replaced, Jackpot Poker.
FY16’s record-setting sales figure was bolstered by a sequence of Powerball jackpots that culminated with a U.S. Lottery record $947.9 million jackpot, followed by a world-record jackpot of $1.586 billion. Those two drawings alone attracted over $56.8 million in sales in Massachusetts in FY16.
Powerball sales for FY17 totaled $117.3 million, a $47.2 million decrease from FY16’s figure.
“The successful launch of the All or Nothing game and the growth of our KENO to-go product, both of which are complemented by a mobile app that allows players to watch drawings on a smartphone or tablet, played a significant role in offsetting the decreases in instant ticket and Powerball sales and helping us return an unprecedented level of profit,” said Michael Sweeney, the Lottery’s Executive Director. “This achievement is the result of a collaborative effort that includes the Treasury, our commissioners, our dedicated Lottery workforce, and our retail partners throughout the Commonwealth.”
While the FY17 figures have not been formally audited, the Lottery does not expect them to change substantially once that annual review process is complete. Lottery officials anticipate completing the finalized financial statement of operations by mid-September.
The Massachusetts State Lottery was created in 1972 to generate much-needed local aid revenues for the Commonwealth’s cities and towns. Since its inception, the Lottery has returned more than $25 billion in net profit to the Commonwealth. For more information about the state Lottery, please visit www.masslottery.com.