The Lottery’s bad bet

Raffle game loses at least $300,000 and sends nothing back for local aid

Massachusetts Lottery officials are trying to put a positive spin on the recent $20 raffle game that lost at least $300,000 and returned nothing to cities and towns.

It is the second bad bet on a high-priced raffle game made by the Lottery in the last five years and comes as the agency is trying to find ways to keep from losing sales when casinos and slots are up and running in Massachusetts.

The $10 Million Raffle was launched at the end of October, with sales going until midnight on New Year’s Eve. The goal was to sell 1 million tickets at $20 each with $10 million earmarked for prizes, including a $7 million lump-sum grand prize. Of the remaining $10 million, $8.5 million was to go to cities and towns and the rest for agents’ commissions and bonuses and administration fees.

According to the Lottery, 514,760 tickets were sold, grossing nearly $10.3 million. The winning ticket for the $7 million prize was sold in Millbury while a $1 million winner was sold in Plymouth and another $2 million went to $50,000 and $1,000 winners.

In addition to the $10 million prize pool, the Lottery has to pay out 5.7 percent in bonuses and commissions on gross sales, or nearly $587,000. It also spent $175,000 advertising the raffle game. All together, the Lottery spent nearly $10.7 million on the raffle game while raising only $10.3 million, resulting in a loss of about $460,000. Lottery spokeswoman Beth Bresnahan said the loss was closer to $300,000 because the advertising money came out of a separate account and would have been spent anyway.

Bresnahan said the advertising on the raffle boosted sales, with more than half of the game’s sales coming in the final nine days. She also said the high traffic during those final days helped trigger record sales of instant tickets, with $73 million in sales in the last week of the year, the highest week since December 2007. Scratch tickets, with players getting instant winnings, make up 70 percent of Lottery sales.

“While it is a personal disappointment that the 1 million ticket mark was not reached [on the raffle game], we are pleased with the response to the inaugural launch of this style game,” Bresnahan said. “It has helped generate awareness and a foundation in the marketplace for us to conduct similar style offerings, which we plan to do up to twice a year.”

While the raffle is technically different from the “Star Spangled Sweepstakes” – another losing game the Lottery ran in the summer of 2007 – both games had a $20 cost and required an exact match on a winning ticket. The “Star Spangled Sweepstakes” had a grand prize of $20 million on an expected 4 million tickets sold. The game only sold 1.3 million tickets and ended up costing the Lottery $12 million.

Neither game returned any money to local aid for cities and towns, which are supposed to receive 42.3 percent of total sales – but only if there’s a profit. Bresnahan said the lessons learned from the game and the bump in overall sales of other games makes the raffle “a net gain.”

Meet the Author

Jack Sullivan

Senior Investigative Reporter, CommonWealth

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

About Jack Sullivan

Jack Sullivan is now retired. A veteran of the Boston newspaper scene for nearly three decades. Prior to joining CommonWealth, he was editorial page editor of The Patriot Ledger in Quincy, a part of the GateHouse Media chain. Prior to that he was news editor at another GateHouse paper, The Enterprise of Brockton, and also was city edition editor at the Ledger. Jack was an investigative and enterprise reporter and executive city editor at the Boston Herald and a reporter at The Boston Globe.

He has reported stories such as the federal investigation into the Teamsters, the workings of the Yawkey Trust and sale of the Red Sox, organized crime, the church sex abuse scandal and the September 11 terrorist attacks. He has covered the State House, state and local politics, K-16 education, courts, crime, and general assignment.

Jack received the New England Press Association award for investigative reporting for a series on unused properties owned by the Catholic Archdiocese of Boston, and shared the association's award for business for his reporting on the sale of the Boston Red Sox. As the Ledger editorial page editor, he won second place in 2007 for editorial writing from the Inland Press Association, the nation's oldest national journalism association of nearly 900 newspapers as members.

At CommonWealth, Jack and editor Bruce Mohl won first place for In-Depth Reporting from the Association of Capitol Reporters and Editors for a look at special education funding in Massachusetts. The same organization also awarded first place to a unique collaboration between WFXT-TV (FOX25) and CommonWealth for a series of stories on the Boston Redevelopment Authority and city employees getting affordable housing units, written by Jack and Bruce.

“What we gained from this and what we learned in moving forward was a huge benefit for us,” she said.

The Lottery is under pressure to find ways to increase sales while facing competition when casinos and slot machines come to the state in the next several years. In addition to the raffle games, the Lottery this week began accepting debit cards for lottery purchases. Bresnahan said studies show the Lottery can withstand a hit of 3 percent to 10 percent hit on sales and still be successful. She said the changes are part of a constant review of making sure the Lottery stays relevant and profitable.

“If we don’t continue to refresh our portfolio and offer new games and innovative approaches. . . we have no ability to really increase our overall footprint,” she said. “The Lottery needs to look at new games, new ways to sell our products and that’s something we’ll be doing over the next couple years to deal with the new landscape.”