Massachusetts State Lottery Commission Meeting

Executive Director’s Report

Delivered by: Michael R. Sweeney June 23, 2020 to start selling tickets online this July By WHSV newsroom, Jun 15, 2020

• Beginning July 1, Virginia Lottery will be launching an iLottery platform. • Play MegaMillions, , and new instant-win games on any phone, tablet or computer • Virginia Lottery Executive Director Kevin Hall: “We feel it’s important to continue to meet Virginia consumers where they already are, and where they expect to find us: online.” • The new online option offers a social distancing-friendly, remote way to play. • “Online lottery is not just convenience. Updating the way we deliver our products will help support our responsibility to generate additional resources for Virginia’s K-12 public schools.”

2 Weekly Sales Since March 1

All Games Instant Tickets Keno

$115 $110 $105 $100 $95 $90 $85 $80 $75 $70 Sales $65 $60 (in millions) $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0

Week Ending

3 Sales Comparison

2019 2020

$3,000,000 $530 $2,750,000

$2,500,000

$2,250,000 $475 Advertised Jackpot amount (in millions) $444 $2,000,000

$1,750,000 Sales $1,500,000 $418 $393 $410 $367 $1,250,000 $339 $316 $295 $378 $1,000,000 $252 $273 $356 $336 $313 $750,000 $298 $266 $274 $231 $248 $500,000 $200 $215 $250,000

$0

Drawing Dates (2020)

4 Current Lottery Operations • Beginning Wednesday, June 24: o Braintree, Dorchester, New Bedford and Worcester claim centers will be open for prize claims of $5,000 to $99,999 in the following manner: . Each day will be limited to prize claims by individuals whose last names begin with designated letters of the alphabet o Springfield and Woburn offices will be processing claims of $5,000 to $99,999 by appointment only. • Processing prize claims of $100,000 and above by appointment • Processing mail-in prize claims (up to $50,000) • Extending expiration date for tickets due to expire between March 19 and September 29, 2020 to September 30, 2020 • Essential personnel (Computer Operations, Security, Drawing staff) • Distribution: split shifts Monday through Friday • Telecommuting for all employees who are able to work from home

5 Processing Prize Claims

5000

4500 Since March 22, more than 4000 8,600 prize claims totaling 3500 $72 million have been processed. 3000 Number of 2500 claims processed 2000

1500

1000

500

0

Week Ending

6 Warehouse/Distribution

April 336,078 Books of Instant Tickets shipped: May 532,356 June 1-15 216,114

7 Claim Center Signage

Dorchester New Bedford

8 Social Media

9 Lottery Sales Update – May • Overall unadjusted sales for May of 2020 were down $56.5 million from May 2019.

Figures for the month of May 2020 • Estimated May 2020 net profit and prize payout figures do not include accruals for prizes won that have not yet been paid. o Due to the overall decrease in sales, and in-person prize claims limited to prizes of $10,000 and above by appointment only (reducing the amount of prizes over $600 being claimed and cashed): . Estimated net profit for May 2020 was $112.9 million compared to $119.4 million in May 2019, resulting in an estimated $6.5 million decrease in net profit. . Estimated prize payout for May 2020 was 68.99 percent, as compared to 70.53 percent in May 2019.

Figures for Fiscal Year 2020 • Our estimated FY20 year-to-date net profit and prize payout figures both include accruals for prizes won that have not yet been paid. o Due to a combined $185.1 million decrease in overall sales in the months of April and May and a combined $137.7 million decrease in Mega Millions and Powerball sales in the first eleven months of FY20 compared to the first eleven months of FY19 (Mega Millions: $76.8 million decrease, Powerball: $60.9 million decrease) as a result of smaller jackpots: . Our estimated year-to-date net profit for the first eleven months of FY20 is $924.9 million compared to $1.045 billion for the first eleven months of FY19. After adding a 1-day average net profit figure of $2.8 million due to a shift in the calendar that resulted in 1 less day being included in the net profit figure for the first eleven months of FY20, the adjusted year-over-year change for the first eleven months of FY20 vs. the first eleven months of FY19 is an estimated $117.3 million decrease in net profit. . Our estimated year-to-date prize payout for the first eleven months of FY20 is 73.44 percent, as compared to 72.17 percent for the first eleven months of FY19.

May 2020 sales breakdown With the exception of the Numbers Game ($2.5 million increase), all products experienced sales decreases in May of 2020 compared to May of 2019 • Compared to May of 2019, Keno sales were down $35.0 million, Instant Ticket sales were down $12.1 million, Powerball sales were down $6.5 million (high jackpot of $127.3 million compared to $327.3 million in May 2019), Mega Millions sales were down $4.5 million (high jackpot of $336 million compared to $444 million in May 2019), Mass Cash sales were down $238,700, sales were down $237,380, Megabucks Doubler sales were down $235,045 (high jackpot of $1.8 million compared to $2.4 million in May 2019), and All or Nothing sales were down $201,241.

10 5 Year Comparison Prize Payout as a % of Sales Through May 2020 (May 2020 Estimated) 77.0%

76.1% 76.0%

75.2% 75.0% 74.7%

73.9% 74.0% 73.9% 73.9% 74.0% 73.7% 73.8% 73.8% 73.8% 73.6% 73.9% 73.7% 73.6% 73.6% 73.5% 73.3% 73.3% 73.5% 73.4% 73.2% 73.4% 73.4% 72.8% 73.1% 73.0% 73.1% 72.9% 73.3% 73.2% 73.0% 73.0% FY20 72.6% 72.4% 72.3% FY19 72.3% 72.0% 72.3% 72.4% 72.3% 71.9% 72.2% FY18 72.0% 72.0% % 71.7% 71.6% 71.6% 72.0% FY17 71.5% 71.9% 71.4% 72.0% 71.2% 71.2% 71.4% 71.4% 71.6% FY16 71.4% 71.0% 71.0%

70.1% 70.0%

69.0%

68.0%

67.0% July-P1 Aug-P2 Sept-P3 Oct-P4 Nov-P5 Dec-P6 Jan-P7 Feb-P8 Mar-P9 Apr-P10 May-P11 June-P12

Period

11 May Sales

MSLC Gross Sales Results MAY FY20 vs. FY19 Unadjusted Non Fiscal Year ($ millions) Through May 30, 2020 FY20 % of Total FY19 % of Total $ Change % Change

Instant Tickets $352.9 73.5% $365.0 68.0% -$12.1 -3.3% Mega Millions $8.6 1.8% $13.1 2.4% -$4.5 -34.3% Powerball $5.0 1.0% $11.5 2.1% -$6.5 -56.3% Keno $67.3 14.0% $102.3 19.1% -$35.0 -34.2% Mass Cash $8.4 1.7% $8.6 1.6% -$0.2 -2.8% All or Nothing $0.6 0.1% $0.8 0.1% -$0.2 -26.0% Lucky for Life $2.1 0.4% $2.3 0.4% -$0.2 -10.2% Numbers Game $33.9 7.1% $31.4 5.9% $2.5 8.0% Megabucks Doubler $1.4 0.3% $1.6 0.3% -$0.2 -14.5% Total $480.2 100.0% $536.7 100.0% -$56.5 -10.5%

Instant Tickets $352.9 73.5% $365.0 68.0% -$12.1 -3.3% Draw Games $59.4 12.4% $68.6 12.8% -$9.2 -13.4% Monitor Games $67.9 14.1% $103.1 19.2% -$35.2 -34.2% Total $480.2 100.0% $536.7 100.0% -$56.5 -10.5%

Unadjusted Month Month 4/28/19-6/1/19 5 weeks 35 days

12 FY 2020 Sales through May

MSLC Gross Sales Results YEAR-TO-DATE FY20 vs. FY19 Unadjusted Non Fiscal Year ($ millions) Through May 30, 2020 FY20 % of Total FY19 % of Total $ Change % Change

Instant Tickets $3,326.2 69.3% $3,380.3 66.9% -$54.1 -1.6% Mega Millions $68.9 1.4% $145.7 2.9% -$76.8 -52.7% Powerball $66.2 1.4% $127.0 2.5% -$60.9 -47.9% Keno $916.7 19.1% $972.9 19.3% -$56.2 -5.8% Mass Cash $80.8 1.7% $81.7 1.6% -$0.9 -1.1% All or Nothing $6.9 0.1% $8.3 0.2% -$1.4 -17.3% Lucky for Life $21.4 0.4% $22.5 0.4% -$1.1 -4.9% Numbers Game $296.5 6.2% $299.9 5.9% -$3.4 -1.1% Megabucks Doubler $18.2 0.4% $15.4 0.3% $2.8 17.9% Total $4,801.6 100.0% $5,053.8 100.0% -$252.1 -5.0%

Instant Tickets $3,326.2 69.3% $3,380.3 66.9% -$54.1 -1.6% Draw Games $551.9 11.5% $692.2 13.7% -$140.3 -20.3% Monitor Games $923.5 19.2% $981.2 19.4% -$57.7 -5.9% Total $4,801.6 100.0% $5,053.8 100.0% -$252.1 -5.0%

Unadjusted Year Year 7/1/18-6/1/19 48 weeks 336 days

13 Recent News Stories

“New retail habits from Coronavirus ‘ingrained’ in shoppers” By Hannah Miller, CNBC, June 11, 2020

• Consumers will stick to shopping habits developed during the pandemic • Going towards online and curbside pickup • Preference for contactless payment methods will continue

-Hal Lawton, CEO Tractor Supply Company

14 Recent News Stories

48% of restaurants nationwide that had to close because of C-19 believe their closure will now be permanent. -Justin Norman VP, Data Science Yelp

US retail sales up a record 17.7% in a partial rebound By Josh Boak and Anne D‘Innocenzio, AP Business Writers, ABC News, June 16, 2020

• U.S retail sales jumped a record 17.7% from April to May

• Followed record setting plunges of March (-8.3%) and April (-14.7%)

• U.S. retail sales down -6.1% compared to last year.

15 Recent News Stories

“Coronavirus may sway regulators to allow casinos to say good-bye to cash” By Contessa Brewer, CNBC, June 16, 2020

• Digital payments not allowed on casino floors – Nevada and elsewhere

• Casinos seeking permission from various Gaming Commissions for digital payments

• CDC recommends “tap and pay to limit handling of cash” to help in prevention of COVID-19

• 59% of customers who visited casinos reported being less likely to use cash in everyday transactions because of Covid-19

16 Instant Ticket Games Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $400,000,000

$350,000,000

$300,000,000

$250,000,000

$200,000,000 MonthlySales $150,000,000

$100,000,000

$50,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $282,832,521 $268,757,579 $340,078,018 $273,487,773 $279,500,273 $359,684,132 $302,269,008 $371,719,929 $286,218,557 $272,931,268 $218,645,898 $352,903,559 June18-May19 Monthly Sales $278,911,892 $269,195,152 $335,134,078 $265,495,312 $275,157,130 $341,445,200 $303,760,717 $355,448,873 $278,551,848 $293,058,540 $298,061,483 $365,018,233 June17-May18 Monthly Sales $272,201,069 $269,014,241 $336,603,290 $260,549,479 $265,713,468 $327,135,114 $278,942,942 $326,729,624 $272,342,241 $299,683,864 $300,520,215 $368,184,652

Month Ending

17 Keno Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $120,000,000

$100,000,000

$80,000,000

$60,000,000 MonthlySales

$40,000,000

$20,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $79,527,920 $78,190,978 $100,769,762 $81,510,030 $89,431,169 $108,014,239 $85,157,027 $105,528,115 $85,715,982 $72,868,926 $42,163,643 $67,316,070 June18-May19 Monthly Sales $77,960,158 $76,449,245 $98,856,161 $78,296,530 $82,031,406 $100,113,694 $83,234,832 $101,949,430 $83,327,938 $83,719,826 $82,605,955 $102,326,582 June17-May18 Monthly Sales $70,195,149 $70,200,002 $88,375,116 $71,304,919 $73,036,564 $94,907,202 $80,024,061 $93,795,926 $80,282,794 $82,733,382 $80,117,255 $101,256,429

Month Ending

18 All or Nothing Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $1,200,000

$1,000,000

$800,000

$600,000 MonthlySales

$400,000

$200,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $592,982 $636,800 $884,488 $697,808 $587,099 $714,084 $555,237 $696,093 $573,257 $573,148 $378,560 $571,496 June18-May19 Monthly Sales $694,472 $759,294 $1,043,143 $828,396 $686,819 $805,907 $627,580 $810,632 $654,568 $665,798 $654,157 $772,737 June17-May18 Monthly Sales $844,782 $878,865 $1,135,981 $784,151 $699,384 $859,732 $739,477 $845,234 $715,146 $720,855 $686,928 $888,139

Month Ending

19 Numbers Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000 MonthlySales $15,000,000

$10,000,000

$5,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $24,734,262 $24,303,392 $30,603,351 $24,689,908 $24,868,308 $30,973,318 $25,033,600 $30,414,914 $24,766,610 $24,278,134 $22,639,628 $33,924,169 June18-May19 Monthly Sales $25,053,206 $24,490,722 $31,190,101 $24,731,674 $24,593,862 $31,297,451 $25,857,569 $30,316,141 $25,150,637 $25,467,058 $25,371,870 $31,425,465 June17-May18 Monthly Sales $24,649,541 $24,465,891 $30,736,469 $24,533,111 $24,874,265 $31,519,968 $25,413,240 $29,699,634 $25,259,961 $25,246,517 $25,700,710 $31,749,551

Month Ending

20 Mass Cash Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $10,000,000

$9,000,000

$8,000,000

$7,000,000

$6,000,000

$5,000,000

MonthlySales $4,000,000

$3,000,000

$2,000,000

$1,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $6,788,502 $6,707,719 $8,546,514 $6,843,642 $6,838,223 $8,482,894 $6,959,313 $8,498,961 $6,857,567 $6,636,233 $6,021,284 $8,367,504 June18-May19 Monthly Sales $6,373,279 $6,916,066 $8,447,576 $6,563,490 $6,626,481 $8,521,634 $7,022,110 $8,447,793 $6,759,616 $6,875,652 $6,888,620 $8,606,204 June17-May18 Monthly Sales $6,068,129 $5,948,156 $7,667,798 $6,226,521 $6,264,886 $7,868,552 $6,384,027 $7,798,092 $6,348,169 $6,307,946 $6,444,685 $7,994,227

Month Ending

21 Megabucks Doubler Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $3,000,000

$2,500,000

$2,000,000

$1,500,000 MonthlySales

$1,000,000

$500,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $1,341,276 $1,348,339 $1,834,899 $1,541,955 $1,609,873 $2,105,116 $2,179,411 $2,405,476 $1,816,362 $1,026,541 $951,139 $1,385,836 June18-May19 Monthly Sales $1,120,794 $1,211,549 $1,624,032 $1,314,879 $1,571,905 $1,488,294 $1,576,509 $1,580,864 $1,084,415 $1,159,927 $1,204,895 $1,620,881 June17-May18 Monthly Sales $1,342,458 $1,374,517 $1,961,802 $1,512,736 $1,551,952 $2,047,615 $2,270,338 $2,220,653 $1,146,212 $1,261,614 $1,287,612 $1,608,429

Month Ending

22 Lucky for Life Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $2,500,000

$2,000,000

$1,500,000

MonthlySales $1,000,000

$500,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $1,846,104 $1,799,132 $2,277,321 $1,819,010 $1,820,022 $2,243,969 $1,929,450 $2,268,867 $1,797,944 $1,802,006 $1,517,988 $2,093,372 June18-May19 Monthly Sales $1,828,500 $1,830,989 $2,349,164 $1,834,654 $1,958,050 $2,298,351 $1,999,681 $2,332,031 $1,816,066 $1,856,426 $1,872,616 $2,330,752 June17-May18 Monthly Sales $1,844,764 $1,841,290 $2,380,590 $1,848,784 $1,853,560 $2,232,798 $1,963,724 $2,248,644 $1,838,946 $2,020,380 $1,864,948 $2,295,146

Month Ending

23 Mega Millions Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $60,000,000

$50,000,000

$40,000,000

$30,000,000 MonthlySales

$20,000,000

$10,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $8,538,472 $5,430,334 $5,900,611 $6,306,923 $4,462,716 $8,207,584 $9,860,989 $6,732,062 $5,032,363 $4,197,316 $4,166,172 $8,601,842 June18-May19 Monthly Sales $6,465,820 $17,190,511 $6,627,342 $8,433,647 $55,366,747 $7,330,381 $10,244,884 $8,982,506 $6,889,416 $5,297,473 $6,240,244 $13,098,077 June17-May18 Monthly Sales $4,478,634 $6,227,118 $9,564,398 $3,477,126 $2,964,417 $6,105,169 $9,586,572 $10,743,128 $6,111,340 $16,711,105 $4,918,463 $5,944,453

Month Ending

24 Powerball Game Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000 MonthlySales $15,000,000

$10,000,000

$5,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $5,489,643 $5,535,944 $6,452,724 $4,413,256 $5,128,351 $6,095,155 $6,694,023 $13,615,468 $4,419,567 $5,083,438 $3,706,580 $5,034,095 June18-May19 Monthly Sales $5,300,630 $6,107,036 $7,762,706 $6,242,958 $27,940,731 $7,169,301 $7,847,786 $7,224,059 $8,516,396 $30,749,914 $5,938,577 $11,530,425 June17-May18 Monthly Sales $12,345,763 $6,949,704 $34,456,871 $5,461,592 $6,183,263 $6,882,079 $12,755,854 $14,747,567 $8,221,513 $10,991,073 $5,914,486 $9,027,129

Month Ending

25 All Games Monthly Sales Unadjusted Non Fiscal Year June 2017 through May 2020 $600,000,000

$500,000,000

$400,000,000

$300,000,000 MonthlySales

$200,000,000

$100,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $411,691,682 $392,710,217 $497,347,688 $401,310,305 $414,246,034 $526,520,491 $440,638,058 $541,879,885 $417,198,209 $389,397,010 $300,190,892 $480,197,943 June18-May19 Monthly Sales $403,708,751 $404,150,564 $493,034,303 $393,741,540 $475,933,131 $500,470,213 $442,171,668 $517,092,329 $412,750,900 $448,850,614 $428,838,417 $536,729,356 June17-May18 Monthly Sales $393,970,289 $386,899,784 $512,882,315 $375,698,419 $383,141,759 $479,558,229 $418,080,235 $488,828,502 $402,266,322 $445,676,736 $427,455,302 $528,948,155

Month Ending

26 Monthly Net Profit June 2017 through May 2020 (Estimated Figure for May 2020) $140,000,000

$120,000,000

$100,000,000

$80,000,000

$60,000,000 MonthlySales

$40,000,000

$20,000,000

$- June July August September October November December January February March April May June19-May20 Monthly Sales $52,299,780 $80,108,022 $91,692,242 $68,398,243 $85,191,129 $108,170,377 $89,745,585 $94,431,345 $83,332,562 $89,943,159 $72,099,178 $112,883,296 June18-May19 Monthly Sales $48,547,047 $80,970,105 $108,782,628 $77,459,395 $117,728,818 $109,003,023 $85,773,027 $85,234,144 $77,320,467 $94,998,625 $94,060,011 $119,429,160 June17-May18 Monthly Sales $56,808,328 $96,754,213 $108,446,664 $76,841,827 $72,258,816 $95,626,330 $98,399,359 $81,233,852 $68,602,971 $65,586,495 $87,487,165 $99,021,314

Month Ending

27