Posted: July 31, 2020, 10:10 a.m.
Last update on: July 31, 2020, 1:25 a.m.
Maryland Lottery Director Gordon Medenica told the state Ways and Means committee this week that online gambling is “inevitable” to the agency’s future success.
Nine states have operational online lotteries, including neighboring Maryland, Pennsylvania, and Virginia. Medenica says that while traditional in-store lottery sales have rebounded well since the coronavirus shutdown for the first time, iLottery would only help more.
Unfortunately, in Maryland it is [internet lottery] banned, “ Medenica explained during the virtual meeting. “One of the phenomena we’ve seen with the shutdown for the past few months is that the states that offer iLottery have seen their iLottery sales absolutely explode.”
Medenica also added that these increased sales did not hurt physical sales. “It’s very important because our retailers continue to be our main source of sales,” he continued.
Pain for income
All six of Maryland’s casinos were forced to shut down in March by order of Governor Larry Hogan (R). They were allowed to reopen on June 19.
Maryland casinos, which are regulated by the Maryland Lottery and Gaming Commission, are subject to some of the highest gambling taxes in the United States. The state takes between 40% and 60% of gross gaming revenue from slots and 10% from table games.
Medenica explained that monthly casino tax revenues averaged around $ 60 million before the coronavirus. But that number fell below $ 30 million in March and to $ 0 in April and May. Gaming taxes totaled $ 14.6 million in June. The coronavirus has resulted in $ 194 million less in casino taxes for the state of Maryland.
The Lottery and Gaming Director said the state should brace for and prepare for lower contributions from casinos for long-term projections.
Call it a comeback
In the first few weeks of COVID-19, when Maryland closed non-essential businesses, Medenica says lottery sales suffered. Sales fell almost 30% in the week ending March 29.
However, since early May, sales have actually increased compared to the same periods in 2019. Sales have increased by more than 20% since mid-June, which Medenica attributes to the lack of other entertainment available.
There really isn’t any other place people can spend discretionary entertainment dollars, ”he explained. “Strange as it may be, the lottery started to pick up, and certainly in May we were doing extremely well. And in June we were up 20%. It really is a remarkable recovery.
Another area that is noteworthy – albeit in a negative light – is the sales of Mega Millions and Powerball, the national multi-state raffle games that come with the headlines that make the headlines.
“On the domestic jackpot games, last year these games were down 40-50% from the all-time high the year before. We used to talk about jackpot fatigue. I think now the expression might be jackpot exhaustion. We may have gone to the goose that lays the golden eggs on the jackpot games, ”said Medenica.
However, in terms of the Maryland Lottery, Powerball and Mega Millions make up less than 10 percent of its revenue.