The Massachusetts State Lottery is upgrading its fiscal year 2021 profit projection by $45 million as its sales defy expectations formed earlier in the pandemic, echoing a trend that has emerged in recent months with state tax collections as well.
Rather than providing $940 million for the state to use as local aid this budget year, the Lottery now expects that it will be able to provide $985 million by the time the fiscal year ends in June. That would be about the same amount as the Lottery generated in fiscal 2020, $986.9 million, and the $45 million upgrade is greater than the projected amount of annual revenue the state could get in a full year from legal sports betting.
Through the first seven months of fiscal year 2021, all of which were affected in some way by pandemic-related restrictions and consumer patterns, the Lottery has seen a 4.5% increase in total sales and a 10.1% increase in net profit compared to the same seven months just before the pandemic began, Executive Director Michael Sweeney said last week.
From July 2020 through January 2021, the Lottery sold $3.36 billion worth of scratch tickets, draw games numbers and more which helped turn an estimated profit of $672.7 million. From July 2019 through January 2020, the Lottery had sold a little more than $3.21 billion worth of its products and generated an estimated $611 million profit.
"Even as we have continued to be impacted by the pandemic, the Lottery team has exceeded expectations while adapting operations to keep people safe. We recognize, especially now, how important lottery resources are to the 351 cities and towns and will continue to meet our mission of helping communities all over the state," Treasurer Deborah Goldberg said.
Though the Lottery has seen an overall increase in sales and profit this fiscal year, pandemic-related business restrictions have dealt a blow to one of the Lottery's most important products. Keno, which is most often played by people seated inside bars and restaurants and usually accounts for about 20% of the Lottery's overall sales, has seen an 11.3% decline in sales so far in fiscal year 2021.
Last week, Sweeney pointed out that the Lottery's current fiscal year performance could soon look even better in comparison to the last one because March was the first month that the Lottery took a major hit last year.
"March last year was a period of significant shutdown both in the Lottery and the commonwealth in general with businesses," he said during a Lottery Commission meeting. "And so those are the numbers that we will be going up against over the next months, which should lead to an additional boost of some of our numbers here hopefully."
Despite sales that collapsed in March and April as the pandemic closed many businesses and changed consumer habits, the Massachusetts Lottery had its third-best year in terms of revenue in fiscal year 2020 and generated a net profit of $986.9 million for the state to use as local aid.
"I commend our team members for their outstanding performance while adapting to the workplace dynamics that have become necessary as a result of the pandemic," Sweeney said.
The Lottery's experience through more than half of fiscal year 2021 mirrors what the Department of Revenue has seen with state tax collections.
Through January, DOR and Massachusetts state government had collected $764 million more in taxes from people and businesses than they did during the same seven pre-pandemic months of fiscal year 2020. The Baker administration has twice upgraded its revenue projection for this fiscal year, boosting it by a cumulative $1 billion to $29.09 billion.