Recently, StateImpact’s been taking an up-close look at the New Hampshire Lottery. In our first post, we traced the gradual decline in lotto revenue transfers to the state’s education system. After peaking in FY 2006 at nearly $80.4 million, transfers have gone down every year. In FY 2011, the Lottery Commission transferred only about $62.2 million to the state for funding schools. (You can read that post here.)
Lower transfers to the state’s education fund means declining state lottery revenue overall. According to reports provided by the Lottery Commission, while the agency raked in nearly $264 million in 2006, by 2011, that figure was about $229 million. And although the economy could certainly be playing a role in this downturn, we’ve also reported that competition from Massachusetts is putting a dent in New Hampshire lottery sales. (You can read those posts here and here.)
But StateImpact wanted to find out how much this competition is really hurting New Hampshire’s revenues, and what, if anything, the state can do to offer stiffer competition. So we talked with New Hampshire Lottery Director Charlie McIntyre.
“I’d estimate about two percent of lottery sales in Massachusetts are from New Hampshire citizens,” McIntyre said. “So it’s about $90 million gross a year…Net is more likely about $20 million. And one of the major parts of that is that Keno is sold in Massachusetts but not New Hampshire.”
At this point, McIntyre looked like he was on a roll, but quickly interrupted himself, “Do you know the game Keno?”This particular StateImpact reporter did not, in fact, know much about Keno. So, on the off-chance that some of you don’t either, we’ll let McIntyre explain.
“It’s a game that’s done mostly in bars, where there’s a TV monitor in the corner and you, as a player, would say, place a wager that say three or four or five numbers are going to come out of 20 balls shown. So if you win, you win, say, $30, $40, $50. And it’s more of a social game in an adult setting, like a bar.”
So why is this important? “About 2.5 percent of Keno sales in Massachusetts is New Hampshire citizens,” McIntyre said. “So that’s sort of one of the key aspects of how that money flows out, it’s folks playing games that we don’t offer. We just don’t offer Keno right now.”
Keno is actually part of a much larger discussion about expanded gambling in New Hampshire that we’ll be keeping an eye on when the legislature convenes this winter.
In the meantime, we’ve generated the chart below, based on Massachusetts and New Hampshire game revenue numbers for FY 2011. Generally, we’ve shied away from comparing raw numbers data between the two states. After all, Massachusetts has a much larger population than New Hampshire does, so they’re much more likely to have higher sales numbers. But, for the sake of determining how important Keno actually is to Massachusetts…we thought it would be an interesting exercise.
And as you can see below, Keno is second only to instant games in providing revenue to the Mass Lotto–to the tune of more than $768 million. That represents a little more 17 percent of the Bay State’s $4.4 billion lottery revenue in FY 2011 (which also includes various licensing and service fees along with ticket sales). Meanwhile, instant games make up nearly 68 percent of revenues in Massachusetts. So while Keno is certainly profitable for the Bay State, it’s also a distant second as a revenue stream.
But, if McIntyre’s estimate that 2.5 percent of New Hampshire residents are playing Keno in Massachusetts is correct, that would mean Granite Staters spent roughly $19.2 million playing Keno across the border in FY 2011.
Amanda Loder, StateImpact
*The Instant Games figure for Massachusetts includes pull-tab games
**MUSL stands for “Multi-State Lottery Association.” The association runs a number of online, or drawing-style games, the most well-known of which is probably Powerball (which is played in both Massachusetts and New Hampshire). Mega Millions is another MUSL game with presence in both states.
***The New Hampshire game revenue figures included the category “Other.” It amounted to a total of $289,000 revenue, which doesn’t show up in this chart, thanks to the relatively small scale of that revenue category.