Keno sales lag near slots parlor

Lottery sales overall up 6.4%, but profit is down

STATE HOUSE NEWS SERVICE

SEVERAL WEEKS AFTER the state’s first licensed slots parlor opened its doors, state Lottery sales are up, though there has been a noticeable lag in Keno activity around the area of Plainridge Park Casino, according to the head of the Lottery.

“The sales themselves were up a healthy margin,” said Michael Sweeney, the interim executive director of the Lottery. After a Lottery Commission meeting on Monday, Sweeney said within a 15-minute drive of the new slots facility at a horse track in Plainville sales are not up as much as elsewhere around the state, “particularly” for Keno.

Keno is an electronic numbers game on offer at some restaurants and convenience stores that function as a keno lounge. With $65.6 million in sales in the first four weeks of fiscal 2016, Keno is second only to instant tickets in sales volume. Accounting for close to 72 percent of sales, instant tickets hauled in $280 million in that four-week span, roughly the month of July.

Total Lottery gross sales revenues are up 6.4 percent over last year. Officials during the meeting did not specifically discuss the performance of individual games near the slots parlor in Plainville.

Plainridge, which opened June 24 and has slots and electronic table games, also had a strong July as players poured $181.6 million into its machines that reported a 90 percent payout. Sweeney said he didn’t know whether the lag in Lottery play in the area of Plainville, on the Rhode Island border, was related to the slots facility – which is also a Lottery retailer.

“I don’t know that I could tie that directly to Plainridge,” Sweeney said.

Though sales are up, Lottery profits are down $8.4 million to $66.5 million from the same period last year largely because the payout, which fluctuates, was up in July. Last month the payout was 74.1 percent, compared to 70.9 percent a year earlier.

Sweeney said some of the higher payout could be attributed to more play on the higher-dollar tickets, which have a higher payout percentage.

“It could impact profitability throughout the year,” Sweeney said.

The state’s only other electronic monitor game aside from Keno, Jackpot Poker, has been a dud after launching two years ago to replace a horse-racing themed game. Sweeney said the game “continues to experience a sales decrease” after a strong launch, and the state is considering replacing it with All or Nothing, a Texas Lottery numbers game. Jackpot Poker was down about $50,000 in the first four weeks of fiscal 2016.

Powerball, a multi-state game that counts Massachusetts as a partner, is changing its “matrix,” which means it will be easier to win smaller prizes and harder to win the jackpot. The odds of winning the jackpot will shift from 1 in 175 million to 1 in 292 million, and the first sales under the new formula will begin Oct. 4. Sweeney said the change is an “effort to build those higher jackpots.”

When no one wins the jackpot, the size of the payout increases and as that continues the size of the jackpot can grow to attention-grabbing levels, driving sales.

Sweeney said a $50 million or $100 million jackpot no longer garners the level of interest that drives crowds to the game.

“You really need to get up above $250 million,” Sweeney said.

“That’s amazing,” said Treasurer Deborah Goldberg, the chairwoman of the Lottery Commission.

Powerball sales were down 13.4 percent over last year in the period roughly covering July.

Sweeney has also instituted a policy where senior Lottery staff will be barred from purchasing a Lottery ticket within a year of leaving their state post. He said staff has agreed to the policy in writing, but suggested a former staffer winning big in violation of the policy could lead to litigation.

“I think it makes a lot of sense,” said Goldberg, who said “any inference” that people could gain an advantage “harms our ability to operate.”