Lottery exploring options for fantasy sports and other online games

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STATE HOUSE — The Massachusetts Lottery formally began the process of gathering information on the online lottery industry on Tuesday as it looks to assert itself in the burgeoning world of online fantasy sports.

In a request for information, the Massachusetts Lottery Commission said it is inviting organizations to “submit proposals for the development, implementation, operational support, and maintenance of a Massachusetts Lottery iLottery System … and the development and integration of digital versions of existing and new lottery games (‘iLottery Games’), including but not limited to social gaming and daily fantasy sports options.”

The Lottery is also interested in information about “gaming systems that allow for cross-pollination between online applications and physical retailer space and any other progressive gaming opportunities that may be available.”

In particular, the request for information (RFI) states that the Lottery Commission is interested in knowing how player account registration, management and authentication would work, as well as how a web-based wagering and payment system would operate. The RFI also asks for thoughts on how the Lottery could implement “responsible gaming controls” and how it could integrate its retailers, so as to not harm the roughly 7,500 small businesses that rely on Lottery sales commissions and Lottery-based foot traffic.

Since the daily fantasy sports industry exploded into the mainstream public consciousness this fall, the Lottery has talked about creating its own online sports-based game.

“We believe the introduction of a fantasy sports platform at Mass. Lottery would help to embrace an emerging market while continuing to protect our retail partners,” Lottery Executive Director Michael Sweeney told the News Service in November. “This particular type of game would not cannibalize our existing products. It would obviously be a new product. It would help us to engage what we would refer to as a ‘next-generation’ player and hopefully it would also help Lottery to create a new revenue source as opposed to eroding or maintaining existing offers.”

Sweeney said the daily fantasy sports industry is “the biggest challenge” facing the Lottery, citing the industry’s use of technology, its appeal to younger players and the ease with which people can take part in games.

Earlier this month, Treasurer Deborah Goldberg cautioned lawmakers that the recent string of record-level Lottery sales will not continue unless the Lottery adapts to compete with the state’s growing casino gaming industry and daily fantasy sports contests.

Goldberg has touted the idea of a Lottery-run fantasy sports game, which she said would attract a younger audience that favors playing on mobile devices, particularly 25-to-45-year-old males “who are not Lottery players (and) who are extremely excited by sports-related fantasies.”

To stay competitive in the future, Goldberg said, the Lottery must become less dependent on scratch tickets and Keno, which she said accounted for more than 87 percent of Lottery sales last fiscal year.

Responses to the RFI are due by 5 p.m. on Feb. 26, and submissions are for informational purposes only. The Lottery Commission may use the information to develop more specific requests in the future, the RFI said.

— Written by Colin A. Young

Copyright State House News Service