Losing The Lotto: How A Massachusetts Gas Station Is Eating Into NH’s Education Funding

Amanda Loder / StateImpact New Hampshire

Business is booming at Ted's Stateline Mobil in Methuen, Massachusetts

Recently, we’ve been checking-in on the health of the New Hampshire lottery.  (You can read our previous posts here, here, and here.)  And in the world of state-sanctioned gambling, the lotto is a big deal.  It funds New Hampshire’s public education system, and revenues have been dipping over the past few years.  A number of sources who have talked to StateImpact (we’ll name names in a later post) have noted that part of New Hampshire’s problem is its southern neighbor, Massachusetts.

First, there’s the obvious issue of population.  Massachusetts has a lot more people than New Hampshire, so there’s a deeper pool of lottery players available to bring up revenues–and jackpots. But the crux of the problem, however, appears to be this: The Bay State gives a greater portion of its lotto revenue back  in prizes than the Granite State does.  In FY 2009, Massachusetts gave back nearly 73 percent of sales as prize money, compared to just over 59 percent return to players from New Hampshire.

In terms of population and payout, then, if you like playing the odds on state lottery games, Massachusetts is the place to be.

And there’s no place quite like Ted’s Stateline Mobil in Methuen.

So StateImpact decided to go and have a look for ourselves.

At first, looking at it straight on, from the front, there’s nothing spectacular about Ted’s.  It’s a standard, well-kept Mobil gas station.  But if you spend a few seconds really looking at the place, some things will start to stand out.  There’s a large sign out front advertising the Mass Millions game.  There are some tall, bright blue Keno banners adorning the lawn.  And if look a bit to the left, it gets weirder.

First, there’s the stone marker set up on the patch of lawn in front of Ted’s, which is situated on a busy corner.  Getting up closer, you can make out the worn letters–an “M” for Methuen on one side, and an “S” for Salem on the other.  This gas station really is about as close to the New Hampshire/Massachusetts border as you can get.

On an adjoining patch of lawn sits a large Bank of America ATM kiosk.  A casual look at the signage and buildings surrounding Ted’s reveals three larger bank branch outposts: Sovereign Bank, People’s United Bank, and TD Bank.

So for many customers, quick cash is just a few steps away.

Then, there’s the parking lot.  It’s big, at least for a convenience store.  A lot of the time, it’s full–and a cursory count of license plates shows that lot of the customers are from New Hampshire.  (We’ll have more on that a bit later.)

As you make your way to the side entrance, you can see a tarp-covered smokers’ shelter.  There’s a knot of people sitting at a picnic table who alternate between hunching over and staring at a pair of monitors hooked-up to the outside of the building.  Periodically, someone will pick up a golf pencil and scratch something onto a card.

Amanda Loder/StateImpact New Hampshire

Ted's Stateline Mobil generally entertains a steady stream of customers from 5 am to close at 9 pm

And once you open the side door, you’re confronted with what can probably best be described as a  small, quasi-casino.  A long table with bar stools dominates the room.  Along its center are stacks of Keno cards and other numbers games.  Ceiling-mounted monitors flash numbers at patrons, and there’s a constant stream of traffic in and out.  Electronic ticket-scanners dot various counter tops for the self-serve crowd, and workers at five stations take orders for scratch tickets.

Watching people thread in and out of the gas station, it’s hard to get a bead on the customer base.  Ted’s Mobil owner Tony Amico agreed, “It’s hard to estimate,”  he said.  But, “We have over a thousand people a day, coming and going.”

And how much of that is New Hampshire business, we wondered?

It didn’t take Amico long to answer.  “Because we’re on the borderline of New Hampshire and Massachusetts, probably better than 50 percent of our customers are probably from New Hampshire.”

He was also quick to note, “Statistic-wise, we are the number one agent in the state of Massachusetts…and we are the luckiest agent, according to statistics.”

Amanda Loder / StateImpact New Hampshire

Tony Amico owns Ted's Stateline Mobil, and does a booming business in lotto sales

Looking at the back wall, covered with large photos of happy “big money” lottery winners who got their tickets from Ted’s, it’s not hard to believe.  Amico ticked-off the most recent round of big wins, “Our last winners were two Mass Cash winners, for $100,000 a piece.  But at the end of last year, we had two $1 million winners, one in August, one in April.  So we have a lot of million dollar winners.”

Counting the photos lining the wall, we asked, “Ten or twelve, at least?”

“I can’t even count ’em!” Amico responded, “On scratch tickets, we’ve had two $4 million winners.  We’ve had multiple $1 million winners.  We’ve had a couple of Mega Million winners.  Those were big, big jackpots.  and a couple of people who came in second place in Mega Millions, and that was like $125,000 and $150,000.”

A lot of winners adds up to a lot of commissions for lottery agents like Ted’s Mobil.

When we asked about how much the store rakes in for lotto sales and commissions, however, Amico simply responded, “Money-wise?”

“Yeah.”

A pause, then a light chuckle, “A lot.”

“You’re not comfortable saying?”

“No.”

Luckily for StateImpact, however, Paul Sternburg, Executive Director of the Massachusetts State Lottery, wasn’t so shy about sharing numbers.

“This year, he’ll probably do somewhere between $12 and $13 million dollars in sales,” Sternburg said.  “So you have to assume some of that is cross-over.  I mean, I can’t quantify how much, but…our border retailers do very, very well.”

Of course, this all begs the question, if Ted’s is the top agent in Massachusetts, and border sales are generally well above average, what does your average Massachusetts lottery agent’s business look like away from the border boom towns?

“The average retailer, the average commission rate is around $37,000,” Sternburg said, “You’d say the average retailer does about $750,000 in sales.”

Crossover traffic, indeed.