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Pandemic continues to batter state lotteries and programs

Jul 13, 2020, 5:01 pm

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While some states see sales increases, others bear the economic brunt

By Kate Northrop

Unsurprisingly, the ongoing COVID-19 pandemic continues to batter state programs and lotteries as lottery revenue streams take a hit. While some state lotteries saw unprecedented sales increases within the past few months, diminished sales in other states leave others in a realm of uncertainty, looking for ways to make up for the deficits.

Sales for nationwide draw games and state lottery games alike saw an expected downturn as retailers, restaurants, and bars closed their doors due to stay-at-home orders. Delaware took a sizable hit, with sales down nearly $40 million in May compared to the previous fiscal year. Virginia's sales were down over $45 million in March as opposed to last year — that's a drop of 21%.

Lottery corporations are the first to feel the impact of the sales hit, but what does this mean for state-funded programs that rely on lottery revenue?

As a result of limited funds from the lottery, many of these programs receiving money downstream from the lottery and state treasuries must adapt.

For example, in Oregon, money from the state's lottery is often allocated toward programs that benefit education, the environment, and veterans. Although revenue from the lottery does not make up a relatively large portion of the entire state budget, losses in lottery revenue can seriously affect those programs that are routinely supplemented by lottery sales.

"We got used to [the] lottery as a constant companion supporting the system, and it was a gut punch to realize we don't have the time to react," spokesperson Chris Havel said on behalf of Oregon Parks and Recreation.

By June 30, the Oregon Parks and Recreation Department had laid off 47 full-time employees and withdrew its decision to hire 338 seasonal staff members for the upcoming year. The move comes after a budget shortfall of $22 million, which would normally have been supplied by three main sources: camping and parking fees, RV registration fees, and Oregon Lottery funds.

Another state lottery impacted by sales decreases is Massachusetts, where more than 1,500 retailers were forced to shut down. While this does not mean that it was impossible for players to buy tickets at some locations, the stay-at-home order and closure of retailers definitely made it harder for players to spend their money.

Massachusetts' sales drop was at its lowest in April when sales dipped 30%. Things looked like they were beginning to rebound in May with sales down 10%.

Massachusetts Municipal Association's Executive Director Geoff Beckwith addressed the concerning decline and emphasized that the next step is to prioritize specific programs and areas.

"Declining state tax revenues and Lottery proceeds are a serious budget concern," he said in a statement. "Yet the Massachusetts Municipal Association firmly believes that the state's future depends on protecting local aid and K-12 education funding."

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