In a press release dated May 16 and picked up by several local news outlets, including the Boston Globe, a group fighting against online lottery in Massachusetts stated this:
“Massachusetts voters are overwhelmingly opposed to expanding the Massachusetts Lottery to include internet games according to a state-wide poll sponsored by the Save Our Neighborhood Stores Coalition.”
The Save Our Neighborhood Stores Coalition represents:
- New England Convenience Store & Energy Marketers Association
- Retailers Association of Massachusetts
- Massachusetts Package Store Association
- New England Service Station & Auto Repair Association
- Boston Convenience Store Owners Association
- Massachusetts Food Association
Although legal Massachusetts online lottery and gambling appear to be off the table until next year, the group and its claims still warrant a closer look.
Polling results too good to be true
The group listed the following polling results to emphasize its point:
- 95 percent view local retail businesses as being important to the Massachusetts economy.
- 80 percent oppose expanding the Massachusetts Lottery to the internet. They believe that people who want to play currently have enough access.
- Of the 20 percent who support expansion, 80 percent change their view if expansion to the internet would negatively impact their neighborhood store.
- 90 percent oppose allowing people to pay for internet games with their credit cards or via direct electronic transfers from a personal bank account.
- 65 percent believe internet lottery would be less effective in safeguarding against youth access to gambling compared to the current age verification checks conducted by brick-and-mortar retailers.
- 55 percent believe the Massachusetts gambling market is already over-saturated. Further expansion would have a negative impact on businesses, jobs and revenue supported by the current market.
Missing from the press release is any sort of methodology or the precise phrasing of the questions, which can be used to influence the results. Requests for additional information and further comment from the group have gone unanswered.
In addition to suspect polling, there are a few dubious claims in the press release.
Claim No. 1: Online will cannibalize lottery retailers
The press release focuses on what has become a common refrain for online gambling opponents: cannibalization.
“Massachusetts has the most successful lottery in the country, thanks in large part to the 7,500 local businesses who partner with the lottery to sell its products,” said coalition member Jon Hurst, president of the Retailers Association of Massachusetts. “Abandoning the current system for a model which has yet to be proven successful anywhere in the country is simply bad policy.”
First of all, the idea that online lottery is untested or “yet to be proven” is an alternative fact. Georgia, Illinois, Michigan, and Kentucky sell various lottery products online. Illinois and Georgia have for several years.
So far the sky hasn’t fallen in any of those four states. To the contrary, they have found the situation on the ground to be the opposite of the coalition’s concerns.
“There is no indication that the online games are affecting sales at our 11,000 retailers,” Jeff Holyfield, the director of public relations for the Michigan Lottery stated: “In fact, we continue to see sales growing in all channels.”
What Holyfield is saying is something the casino industry has known for several years. The customers who purchase tickets online and the customers who purchase tickets at retail locations are simply different. Where there is overlap, existing customers tend to become more engaged, playing on both channels.
In a 2015 Boston Globe column, Holyfield took these comments a step further, saying, “There is zero indication that the online games have taken away sales from others. The indication is that it’s exactly the opposite.”
Fears of cannibalization are commonplace in gambling. Even online lottery advocate State Treasurer Deb Goldberg has cited concerns that non-lottery online gambling will cannibalize the lottery.
Thanks to the results in the four states with legal online lottery sales, and in New Jersey where lottery sales have increased every year since the introduction of legal online gambling, we can basically put these cannibalization fears to bed.[i15-table tableid=20717][i15-table tableid=20704]
Claim No. 2: Online will lead to an increase in underage access
The press release’s second unsubstantiated claim has to do with another common talking point: underage access.
“Respondents also fear that Internet Lottery will make it easier for underage children to gamble,” the release says, “with 65 percent of respondents stating that age verification checks by brick-and-mortar retailers under the current system is the safest way to protect children from illegal gambling.”
Again, this fear has never become a reality.
Online gambling and online lottery sites use stringent player verification processes. The verification process requires a Social Security number. Players’ identities are cross-checked with public and private databases. Online lotteries also require players to claim larger prizes in person. So if a minor did gamble, they would have a hard time collecting their winnings.
The only potential concern would be an adult registering an account and handing it off to a minor. This also exists offline, as minors use “buyers” to procure everything from cigarettes to alcohol to scratch tickets.
Claim No. 3: Use of credit cards will lead to personal debt
The final claim from the poll: Credit cards could lead people going into debt playing the lottery.
According to the press release: “Youth access as well as personal debt concerns also resulted in 90 percent of respondents opposing the use of credit cards and direct electronic transfers from bank accounts as payment methods for online lottery games.”
The idea that online lottery would lead to more personal debt is nonsensical.
People may not be able to buy lottery tickets with a credit card at retail locations in Massachusetts. But most of these stores do have ATM machines, or one is not too far away. Basically, anyone could take a cash advance from one of these machines and buy lottery tickets. And usually, credit card cash advances have higher interest rates than charges for POS transactions.
Another reason this argument doesn’t hold water is because online lotteries put strict deposit limits in place. Massachusetts’ bill calls for both deposit and play limits.
Per the Massachusetts online lottery bill:
“… establish maximum limits for account deposits and transactions of lottery tickets, games or shares conducted online, over the internet or through the use of a mobile application and allow players to reduce their own deposit or transaction limit at any time;”
Retail shops do not employ these types of limits. Anyone can walk in and buy scratch cards to their heart’s content.
Pointing to retail locations disallowing credit cards for lottery transactions is a bogeyman argument.
The use or prohibition of credit cards is nothing more than a “feel-good” regulation that does little to nothing to curtail problem gambling.
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