2023-04-20 00:00:00 - Joint Committee on Consumer Protection and Professional Licensure
2023-04-20 00:00:00 - Joint Committee on Consumer Protection and Professional Licensure
SHOW NON-ESSENTIAL DIALOGUE
Good morning or afternoon, welcome to the Joint Committee and Consumer Protection Professional licensure. This is our first hearing of this legislative cycle and our first in person hybrid hearing So welcome to everyone here. At this moment, I like to first introduce the House and Senate members. I would introduce house members and my colleague, Senator John Cronin, was set introduced to senate members. To my right,38 I'm not praying favorites. To my right is a representative Warrell. Followed by vice chair, representative Keith, representative machino, representative of Ray's, and representative Levoff, On screen through Microsoft Teams, we have a representative Shod and representative Howard Way for the audience, please. So we know So Adi knows which one's you, and send her a call in if you would. Thank you joining us on Teams is my colleague, senator, Ed Kennedy from Lowell. Senator. Good to see you.
So today's topics is relative to the lottery and racing. And we have required that people online to sign up in80 advance to speak. And we're also allowing walk ins because we're now hybrid. If you walk in, you can sign up to speak, but you must sign it upfront when you do. We are limiting testimony to 3 minutes still. If you have something to read, don't read it. We can read. So feel free to pass paper along or email the committee who have paper documents. The chair has enormous discretion regarding a testimony. We always can extended if the chair desires. And of course, for some of the new members there before us today, if you have a question or a comment, please direct it to the chair. And that's how we do this. So holding to custom, we do take legislators and government officials out of turn first and not seeing any legislators testifying at the moment. We're going to take Mark Bracken for the mass lottery commission, executive director, out of turn first. Mister Bracken,
MARK WILLIAM BRACKEN - MASSACHUSETTS STATE LOTTERY COMMISSION - HB 255 - SB 170 - HB 256 - SB 169 - Good afternoon, Chairman Chan, Chairman Cronin, members of the committee, and legislative staff. My name is Mark Wayne Bracken, I am the interim executive director of the Massachusetts State Lottery Commission. Thank you for your opportunity. I'm going to provide testimony on four bills today,161 House Bill 255, and its companion Bill, Senate Bill 170, which is the online lottery Bill, as well as House Bill 256 and its companion Bill, Senate Bill 169, an act to modernize lottery operations. We appreciate the committee's consideration of these incredibly important matters. I'd like to start off the conversation by reinforcing the mission of the Massachusetts state lottery which is to provide revenue generating gaming entertainment throughout the state through the sale of innovative lottery products and directly benefiting our communities, this is a mission we take very seriously. On another note, the lottery recently celebrated a historic milestone as many of you are aware, we celebrated our 50th anniversary. Since our first ticket went on sale in 1972, we have sold over $143,000,000,000 in tickets, we've paid out over $100,000,000 in prizes, we have generated over 31,000,000,000 dollars in unrestricted local a to our 351 towns and cities across the commonwealth, and we have paid out over $8,000,000,000 in commission and bonuses to our agent and retail partners and more specifically, more than $300,000,000 a year in each of the last235 five fiscal years, eclipsing last fiscal year, a record over $335,000,000 paid to our agents.
As we all know, the gaming and entertainment environment has changed significantly since the Lauder's inception in 1972. A growing number of states have recognized this competitive advantage of engaging customers on multiple platforms, both online and in stores. In fact, of the 45 states that offer retail lottery products, a dozen of those states, allow for online lottery sales. These states have seen their retail and traditional lottery products perform better than retail and traditionally lottery products in states without online lottery. The rollout of in person and mobile sports wagering should also give us some pause in a sense of urgency to place the lottery online. While I'm pleased that the legislature has explored new ways to generate sustainable revenue for the state, we must work to provide the lottery an equal playing field. We have all seen the deluge of advertising by sports betting companies blanketing303 our airways. Sports wagering is projected to generate around $60,000,000 a year. By contrast, the lottery produced approximately $1,100,000,000 in revenue for the Commonwealth last year, that does not count the $30,000,000 in tax revenue that the lottery also brought in.
Every single penny of the lottery's profit are distributed to communities throughout the state for the benefits of those who live here. Sports betting in casinos, meanwhile are a for profit business. In order for the lottery to continue to meet and exceed its goals, we need to operate like any other 21st century company. We need to make our products available online, allowing the lottery to modernize, and to compete in a dynamic and competitive field will enhance our ability to continue generating unrestricted local aid for every community throughout the state, it would also enable us to appeal to new players. As a 50 year old operation, we have to modernize our methods over time including how we attract new customers. Expanding the lottery player base is essential to our long term viability. Our player base is the strongest in the nation, we have the most successful lottery in the country and the second most successful lottery in the world behind Singapore when looking at our rate of per capita spending.
While we have sought to maintain and build our customer base with our statutory constraints, and with one of the lowest advertising budgets in the country, we have unfortunately remained flat over the last couple of fiscal years. This trend is unsustainable, without the ability to address this issue, sales growth in lottery revenue will begin to drop. Online lottery is not about converting our current player base from a retail player to an online player. Online lottery is a completely different play style. Yes, online lottery will offer draw games that our players are accustomed to like megabucks and mass millions and power ball, but nationally, draw based games only account for 5% of online lottery sales, 95% of sales are done through E-instance. E-instance are not scratch tickets and in jurisdictions that have online lottery, there has been no evidence of cannibalization of scratch ticket sales. Quite to the contrary, as previously mentioned, in states that have online lottery, sales at retail have grown at a faster pace for retail stores than sales at retail stores in states that don't have online lottery.
With E-instance, the value proposition is different; the payout is different467 and the odds are different. To win new customers in order to tap into the new and emerging generations and in order to deliver on our message of raising revenue for the Commonwealth, we need to level the playing field and that is online. At the beginning of my testimony, I mentioned that over the 50 years,486 we have generated over $31,000,000,000 in revenue. That said, in the last 10 fiscal years, we have generated over $95,000,000 each year with the last two fiscal years generating over $1,100,000,000 each. With the sale of online lottery, we are projecting over $200,000,000 dollars in additional revenue to the commonwealth. The last point I want to touch upon is, I previously mentioned sales of retail agents growing at a faster pace. I want to touch on this a little further because I believe there's a belief in some circles that online lottery will negatively affect our retail partners. This is simply not true, and this is supported simply by looking at the numbers. If you look at all the fiscal periods for states with online lottery and look at the retail sales for those states, compared to the retail states and sales without online lottery, in almost all instances, you will see retail sales benefited at a greater pace in online lottery states and in fiscal periods where retails did not perform better year over year, almost all of those examples are552 from FY 20 and FY 21 and are attributed to the initial pandemic lockdown.
To say that retail sales will be affected when looking at the facts is simply not a factual statement. This is also by no coincidence, states have worked to partner with their retail agents that have online lottery to make sure that those states are included. In Michigan, the lottery employed across marketing strategy that incentivized online players to visit and play at agent locations. Michigan launched an online card game, an online game pad program, which allowed players to purchase these pods at retailers and provide the retail with a commission, just like they would receive, if the player bought a draw ticket or scratch ticket at the store. The Michigan lottery also offers regular cross promotions that drive traffic to both the lottery platform and traditional lottery retailers. Example of this would be if someone612 played $50 worth online, they would receive a $5 voucher that can only be redeemed at a retail partner store.
There are examples like this in Pennsylvania, New Hampshire, Virginia, and all the other states that also625 provide online lottery. I can say with certainty, our agents who have been the cornerstone of our lottery operations for the past 50 years will not be left behind. Lastly, I would like to briefly comment on House Bill 256 and Senate Bill 169, which are the acts modernize lottery operations. There are five small changes included in this Bill, and five sections are our statute, a couple of which I654 just want to highlight. The first, our statute bars lottery employees and lottery employees from purchasing any of our lottery products as it should but this complicates some of our investigations. Our compliance and audit and security teams do dozens and dozens of investigations each year and in some instances, we need our investigators to be able to purchase a ticket due to the underlying cause of the investigation, this would simply correct that issue.
One of the bigger complaints we hear for Section 2 is from our prospective agents and our municipalities regarding the requirement to post for new genome agents and a newspaper of general circulation, this change would allow them699 to be able to post this notification online. Section703 3 and 4, which705 affects all of your constituents, Section 3 currently says that no person shall be assigned more than one license to sell lottery, unfortunately, lottery is in violation of this almost every single day. This law effectively says, for example, that stop and shop can only have one location to sell lottery when they all do. This means that if you have a731 constituent that owns two convenience stores, they would only be able to sell at one convenience store. We are in violation of this because we look at it as the best interest of the lottery but we would like this change to allow for multiple people to be allowed under the law to hold multiple licenses.
The last thing I want to touch upon is that currently, as the state law, is written, any immediate family member of any federal, state, municipal, or county employee may not hold the lottery license and when you look at the definition in the statute as referenced of762 immediate family member, this would mean that, say John in Springfield766 who works for the DPW, his daughter, Donna, who lives in Plymouth, could not get a lottery license. This would mean that if Kristen, who works for the IRS, up in Andover, her brother who lives in Worcester, who owns a bar, would not be able to get a keto license. This means that if you're a firefighter in Quincy, and I only use Quincy in the office of the chair, but because I am from Quincy, if you're a firefighter in Quincy and you own a bar with a bunch of partners, your bar cannot get a keto license. Now, again, we are in violation of this because we have up until 2019 issued these licenses. Since 2019, we have grandfathered them in, but we have begun to deny licenses not because we want to, but because we have to, so this would allow for a change in that law. So, with that said, I thank you for your time. SHOW NON-ESSENTIAL DIALOGUE
Treasurer Goldberg and myself, Treasurer Goldberg apologized that she's not able to make it today due to a previous conflict. We look forward to working with the committee, and I make myself available for any questions.
Thank you, mister Bracken. For But to be honest,836 you know, we have senator Timothy has joined us as well as vice chair, senator Moran, is on the screen. Just remind all the members, the mics are live all the time. I've been informed by LIS, and please do address the chair of a question, and those of you in virtual and just unmute and hopefully, you don't talk over each other. There's no I just don't know how we're gonna do this. So we're trying this out. So with that, any members have any questions for to testify and have Senator Kennedy.
SEN EDWARD KENNEDY - Yes, if I could. I just have one question, there are871 convenience stores in my district or convenience store owners in my district who are concerned about the ability for people to buy their lottery tickets online, and I guess, in particular, at the beginning of the year when a lot of people will buy season tickets as holiday gifts. The testimony that you've given this morning kind of contradicts that and so is there information or study or anything that you would be able to send the committee that would back up what you're saying about about the lottery and how the Internet is not having a negative impact on those convenience stores?
BRACKEN - Yes, absolutely. When we provide our written testimony, we'll also be providing the Spectrum study, which was finalized in March of 2022, and I know actually they're working on updating that study, but we'll be providing that study and it does show statistics925 through the majority of the states that have online lottery, and it shows their retail versus online sales and the growth and the projections since they're issuing online lottery.
KENNEDY - The update that you're doing, when do you anticipate that that will be finished?
BRACKEN - When I say the update, that would be Spectrum that's updating that, I do not know when they're going to be done completing that report. SHOW NON-ESSENTIAL DIALOGUE
Okay. Thank you. You. Thank you, Mr. Chairman. Thank you, Senator Kennedy. I see that senator Moran has her hand up. Senator Moran.
SEN MORAN - Thank you, Mr. Chair, I appreciate the testimony very much from the treasurer's office. Mr. Regan, nice to see you. I'm just curious with respect to the projections, we know that the Treasurer's just constantly innovating and being sure that the municipalities are able to continue with988 their needs that are being impacted in great part by this have, you know, sort of the the customers and they're1007 sort of the being poached or sort of lured away to other games by1009 simply the fact that they're new, which would be a real benefit and need for innovating right now. SHOW NON-ESSENTIAL DIALOGUE
Senator, you I think you you broke up about 2 8 thirds of the way, which I think was the crux of what you were saying. So we got1031 the very beginning in the end, but we didn't get1033 the middle. I was hoping we'd be able to decipher through the end. That's okay. Sorry about the connectivity. I was wondering if you are concerned1043 about your customers being poached by if you don't innovate.
BRACKEN - Well, absolutely. I mean, I think our biggest concern right now is like I said, with online lottery, it's a different type of play, so1058 we're1058 looking to offer something new to players, but it's not just our current players, it's our new and emerging players, it's the younger generation. And we all know that I still consider myself young even though I'm 44 now and it feels like yesterday, I used to work for a legislative committee, and it feels like yesterday when I was in my early 20s sitting up here. But you know, we're trying to attract a new and emerging generation, and there's a sense of urgency and a sense of immediate gratification that this emergent generation has and if they have $20 to spend, you know, and they can easily go on their phone, to do a sports bet or a fantasy bet, they're going to do that1104 instead of going to a retail partner, but if we are allowed to sell online lottery games, we might be able to capture that player. I'm not saying that every sports player is a lottery player, but we all know millions of people play the lottery in the commonwealth, our casinos are successful, we know sports betting is going to be successful. There is definitely a crossover between all of our players. So, yes, we are worried that if we don't have an online lottery now and someone does want that gaming entertainment space and they go to sports betting, we may never be able to get them. So with the launch of online lottery now, you know, if we were able to launch now, we would be able to start getting the matter at a quicker time. SHOW NON-ESSENTIAL DIALOGUE
Thank you. Thank you, senator.
Thank you, senator Moran. Mister Bracken, be sure to know that. You're always 22 in my eyes.
Thank you very much.
I've been informed that representative Donahue was online. She's phoned in. Just reminded to the audience that people watching future, we'd use the telephone to phone in. We only see a phone number. So people testifying in the future as well as members, they have to somehow get a hold of us to let us know through email, whatever, that1181 you're phoning in as opposed to videoing in. That mystery of issue aside, any other questions for the testifier, reps erase arrays.
REP REYES - How much would it be in the revenue?
BRACKEN - With online lottery?
REYES - Yes.
BRACKEN - We believe after our first full year1204 full fiscal year of running, that we will be able to bring in $200,000,000 and then profit, an additional profit revenue. So right now, last year, we brought in $1,100,000,000, so we're estimating a total of 1.3, and that's just1223 after the first SHOW NON-ESSENTIAL DIALOGUE
year.
A representative of the both? Sure.
REP LEBOEUF - Thank you, Mr. Bracken. Two questions kind of about logistics of the administration. How are you going to be accepting payments for the online lottery? Are you going to be using credit cards or simply just debit cards? I know last session we heard a lot about kind of online scams that were going on, you know, misrepresenting the lottery. So if you just would1254 be kind of curious about what, if any plans you have to make sure that this is kind of1258 avoiding those scams. Then finally, if you could briefly touch on how you're going to be working, you know, with potentially with the Mass mission1267 for compulsive gambling and other things obviously with a new product rolling out, there1271 needs to be some type of supports in1273 place.
BRACKEN - Absolutely. Thank you, Representative. To your first question, well, we'll take the last question first, problem gambling. We have an incredibly strong1286 relationship with the Mass Department of Public1288 Health and their problem handling office. We work with them very, very very closely. Last month was Problem Gambling Month, and we partnered with them across the state. Victor Ortiz, who runs the organization for the Commonwealth at1303 the1303 Mass Department of Public Health is a very, very1305 close partner. We have monthly calls with1307 him, we work with them, we ran a Christmas campaign alongside them, bring joy basically to lottery presence are not for those under the1320 age of 18, so we ran that. We provided the Mass department of public health with over 10,000,000 online impressions, we did radio ads in conjunction with them. We have a really, really, really strong working relationship. One of the good things which will be inside the written testimony that we provide is that there are a lot of ways of addressing problem gambling and responsible gaming with an online lottery that you cannot currently do.
So, currently retail lottery sales are anonymous, anyone can walk into a store, you know, purchase $10 worth of products or $10000 worth of products if they wanted to. With online lottery, we can have self exclusion lists and not just have, we will have self exclusion list, we have daily deposit limits so you can only deposit so much money into your account. We can have daily play limits, people can self limit themselves to play and I think a lot of people out there when they hear this, they're like, well, why would a gambler ever do that but they do. Especially if there is a problem gaming, someone might say, hey, I want to limit myself to $20 a day and then they're not allowed to change that for 30 days. They can't change their mind the next day and be like, I was just joking. You know, that's, like, locked in, and we can determine how long we want those lock ins for. So once a player determines exactly how much they want to spend, you're locked into that amount over a certain amount of time, and then you get to change that when the time comes up. With online lottery, again, all your play is tracked, so it gives the player an idea of how much are they actually spending?
Because if you ask most people, how much they spend on lottery, they don't really know, sometimes they might buy a couple scratch tickets depending upon if you're an average player, a heavy player, a daily player, most people know, I buy like a Mega million ticket once a week or something like that but a lot of people don't know how much they play. With online lottery, you can actually see that, it's all going to be within your profile, your history. Then the other great thing too is that anyone has to have an account. So it's KYC know your customer verified, Social Security, verified, so we know that any player that is opening an account and playing is over the age of1450 18. With regards to the payments,1452 the state Treasure, and I think most people, if not everyone, is against the use of credit cards when it comes to gaming, I think that's it's already written in our statute that we do not allow credit cards, it would be done through debit. Little known fact, we currently can't accept debit cards right now, there's very few that stores that want to do that because of the fee that they would have to pay to you know, with their commission being 5% if they're paying a 1.5 or 2%, in essence, they would only be making 3%.
That's a conversation for another day that we would love to take up with the legislature about eating some of those fees for the for the agents. But there are places, I will tell you speedway gas, 25% of their lottery sales are done with debit cards because they don't mind taking debit cards. Debit cards are considered your own money, you're not borrowing off a debit card, so the accounts would be funded by either debit card or something like Michigan did or another state, you would be able to, one of the things that Pennsylvania does is you can go in and buy $20 dollar voucher at a retail agent, spits out just like your power ball ticket where it has a QR code, you pay $20, the agent gets commission on that 20 dollar ticket. That person that gets a voucher for $25 that they upload to their online player account. So it drives a player into the store, agent makes commission, player gets a $5 benefit, be able to then play online. So it's instances like that either through debit or cash that people will be playing with. SHOW NON-ESSENTIAL DIALOGUE
Great. Thank you.
Absolutely.
Any other questions. Senator at Timothy.1544
Doctor Brad, and thank you very much.
SEN TIMILTY - Bracken, I must compliment both yourself and the Treasure, you're incredibly responsive to the people that I represent, so thank you again. In the form of a question with the online gaming and obviously cyberattacks, not the future, they're the present, we are well aware of that painfully so in many cases, what is the lottery doing and who are you engaging with? I understand you certain things you can't talk about in terms of cybersecurity for the lottery.
BRACKEN - You know, so a little bit with that, for the lottery in general, I can tell you that if you looked at the lottery five or six years ago, they were doing maybe the bare minimum when it comes to cybersecurity. We have over the last, I would say, five years, four years, we have built out our cybersecurity team, it's now five full time employees1601 of the lottery just dealing with cybersecurity and that's in addition to the the state resources and EOTS that we also, you know, back up against in terms of cybersecurity issues. So we do have a handful of private vendors that we go through, we actually just went under a complete audit from a 3rd party, we had an independent 3rd party vendor come in to do a complete audit of our entire IT infrastructure.
I can report that while there were always going to be issues, there were no immediate concerns or flags raised by the audit. So we were very happy and1642 I want to say we were surprised because you never know until you know but we were very happy with the1647 outcome of the audit and that audit just finished two months ago, so it's very, very recent. In addition to that, with the online play and I think, you know, almost part of the question that I didn't answer for the representative from Worcester is cybersecurity, fraud, we all know online gets constantly attacked. One of the great things with online lottery is that we will have to partner with a vendor for a platform, I believe1678 some of them are going to testify today, we work with all the current vendors that are out there through other products, be it, our traditional lottery, our scratch tickets.
There's only a couple companies in the space, they have invested tens and tens and tens if not hundreds of millions in cybersecurity measures. So when we do go online with online lottery, we're not only going to get the benefit of the Massachusetts infrastructure, but also the infrastructures that's been built tested regulated. They all go through annual SOC 1 and SOC 2 type 1 and type 2 audits, you know, for their infrastructure systems, and it's not just them, you have to worry about the cloud, you know, AWS, not just the cloud, but then also the off-site data centers. We actually we just moved our data center through funding, through capital finding that was approved through the legislature. We actually just did a data center moved into a much more secure data center that was just completed back in December. So we moved out of our two locations into two of our co locations, one in Boston and one up in Lowell into a state of the art data center.
So it's something that we're always looking at, it's something that scares me every day, I'm not going to lie. There was even a phishing email that I clicked on that was intentionally set up, we do that with our employees and, you know, the email made sense to me and I still clicked on it, you know. So, it was kind of like the poster child at the lottery if I'm clicking on the email, I wasn't the only one, but I admitted to it right away and announced so other people understood that they weren't the only one there. But, yes, it is something that we're constantly looking at and working towards. SHOW NON-ESSENTIAL DIALOGUE
Thank you very much. Thank you,1776 Mr. Cheah. Thank you, senator Timothy. Representative,1778 Thank you.
REP MESCHINO - Thank you so much for your testimony, it's very interesting. On that same theme, Do you have regulations in place about how the lottery would use that information, not just keeping it safe1796 from hacking, but just assurances that the state would never do anything inappropriate or sell that information or would make sure that 3rd party vendors wouldn't have access to personal information or use it. I mean, that's one of1810 the big issues I think is that and how some companies make their money is they have all the information about you and then they are always doing ads1818 with you and things like that. I just didn't know if you were prepared to or ready or close to a point where you could speak to something like that.
BRACKEN - Yes. So part of the language, that's in the Bill, the red line language that were proposed for, I think everyone is aware that we have these standalone Bills, but the House ways and means has included online lottery in the budget. Some of the Red Line language talks about data security., it is something that we look at and take serious. We have an internal audit department that kind of looks at that information on a regular basis, not just to see for fraud purposes, but also trends and different things that are happening. We do not sell any data, when you sign up online to our app, if you download our app and stuff, we have the disclaimer that we don't sell any data. You know, even with data, it's somewhat furiating because we have those, if anyone plays the lottery, we have a VIP red carpet club, which is our kind of older member club where we have hundreds of thousands of people in their emails but because of certain federal laws,1884 like, we even follow the federal laws in this, because those people signed up before there was the optimize click through, when we complete our new, we can't migrate them just onto our new system, we can't even touch that data even though they signed up at some point, but it was before the whole checklist to consent that you're signing up.
So it's one of those things where we're going to have to email them and say, we have this new thing, we just can't whereas everyone else, we're just going to be able to transfer over because they've already consent to be part of our platform. So, yes, we're constantly looking at data. With regards to 3rd parties, I can say they don't sell the data, they don't, these parties only work in lottery, these companies don't do anything outside of the gaming. It's not one of these omnibus companies that have different kind of streams of businesses, they only work in the lottery. If, you know, I believe again, I believe some of them are testifying and if they are, I would encourage them to maybe speak to that a little bit about their data security and what they do with data and different things like that. SHOW NON-ESSENTIAL DIALOGUE
Thank you so much.
Absolutely. Thank you, representative.
Thank you, representative Mashino. Any other questions for the members? Okay. Mr. Bracken, thank you for your testimony.
Thank you for allowing me move in 3 minutes. And I was happy I got to be the first person to testify before the committee. This legislative session. Thank you. Thank you. If anyone wants to find mister Bracken, we're more than happy to help any member find mister Bracken.
Yep. Tacking those who team knows where I live. Sarmed.
You can make a home visit. You can do that. Alright then. Now moving no other elected officials nor
appointed officials here, we're going to move to the public part of the testimony. There is a 3 minute timer that will be set up, I believe, somewhere, so please keep an eye out of that. The chair has complete discretion of who they wanna do first. So in this case, we're gonna take Fredjamin Cronin,2003 who's virtually in house code 374. Mister Cronin,
Hey, we have you, mister Cohen. Good to hear. Okay. Thank you.
Thank you, Mr. Chair. Yes, can you hear me? We can't hear you. You got your 3 minutes. Okay, thank you.
BENJAMIN CRONIN - EARLY PLYMOUTH COUNTY - HB 374 - I just did want to take this opportunity to testify in favor of H 374 and before I did that to thank the committee and the chairs for hearing me. My name's Benjamin Cronin, I live in Duxbury, I am an historian of Early Plymouth County. I have been following what has been a controversy, you know, our towns about the racetrack proposed last year, that proposal resulted in a pretty severe defeat2053 for the race track and I think this home rule petition that was brought at the Plymouth Fall town meeting in October of 2022 is pursuant to that. I do thank Representative Muratore and Senator Moran for bringing that. I'll just be brief because as you said, Chair Chan, the written testimony. I think this Bill basically strengthens the legitimate small democratic input of the people of Plymouth, it provides greater transparency and I think it is eminently appropriate that the people of a town should exercise substantial control over this kind of activity in that town. So I just want us to testify in favor of it, I don't want to belabor the points and I know you have other Bills to hear. So I'll seed the rest of my time, but thank you for listening and have a good afternoon to the entire committee. Thank you. SHOW NON-ESSENTIAL DIALOGUE
Thank you, mister crawling in. Just the purple watching virtually, maybe see my head head move back and forth because I don't see the same thing on the screen as we do on the laptop over here. So it's not2120 I'm not ignoring you just to let you all know. Did mister Courtney sign off? Okay.
Well, we're not I'm still here Oh, good. Any questions for mister Cronin?
I see none. Mister Cronin, you have a wonderful a a delegation
Okay, that's before you've mister Maturi and2138 -- That's great. -- miss miss Marin. So with that, thank you for your time. With that, we're we're swapping back to in person. We're gonna have mister Bosley from grade 2 k who's with us today. Mr. Bosie, you know it's year2154 20 23, right? Thank you, Mr. And through you to your members, you know, benefited my remarks.
Tease. I know. Things have changed since you weren't here last night. I sit down and speak in 20 minute bursts.
DAN BOSLEY - GREY 2K USA - HB 269 - SB 167 - SB 172 - Predicate to my remarks, I just want to say, I was sitting back there and I was thinking, Mr. Chairman, that you and I were dealing with this issue 25 years ago in the government regulations committee. So I want to thank you for continuing to pursue this, because of the work that we have done, we know how important the racing industry is to Massachusetts. There's a couple of thoroughbred breeders out in my area that that well, used to be, that raced at Saratoga, and there's a lot of standard bread tracks, but it's not just breeding horses, it's water recharge areas, it's open space. It's wonderful that you're continuing to pursue that. Pursuant to that, I am here today representing Grey 2K. Grey 2K in 2008, we had the first in the nation ban, it was a referendum ban, which banned dog racing of all kinds in and all manners and the year after we passed a simulcast Bill and reinstated simulcast for dogs. Last year in the sports betting Bill, there was a prohibition Section 9 of 128A, which prohibits dog simulcasting in Massachusetts, and that should take effect very shortly. So I'm here today to testify that most of the Bills continue with 128A and that prohibition Section 9.
However, Senate 172 filed by Senator Feeney does not. It blows up 128A taking with it the prohibition and reinstitutes or installs a new section 123K, I believe it is. In that section of law, in a couple of areas, it mentions dog racing, it doesn't do anything about purses for dog racing, but it does copy and paste the piece that says that the commission shall2278 make decisions about dog racing as well as horse racing. So I'm here today simply to ask that that section that if indeed you were to blow up 128A, you kept Section 9 so we don't have to come back a third time and do something about simulcast. Then finally, since I have 43 seconds left, let me just say, we were the first state in 2008, however, there are now 44 different states that Grey 2K has been successful in either banning dog racing or shutting down dog racing even in Florida, which was the mecca for where dogs went after Massachusetts. There are, I believe, only two tracks left in the entire United States. So we're not simulcasting races, we weren't simulcasting races from the United States, we were simulcasting racist from Vietnam and Mexico and other places. Not sure how we regulated that, but anyway, that is my testimony. I thank you, Mr. Chairman, for listening to me, and I am certainly prepared to answer any questions that this committee may have. SHOW NON-ESSENTIAL DIALOGUE
Thank you, mister Bosley, for taking me to memory lane and about the Hong Kong signal that we had to acquire in a we blew up 01:28 a, 01:20 at c. Last time as we fought over on on war signals back in the old days. So with that, does any member of the committee have any questions?
Seeing none, thank you very much time, mister. Thank you very much. And I do remember the 03:00 in the morning. Races at Wonderland where they were bringing in food for people. I'm not much of a race. I'm not much of a better, but I I do like the2376 food that he makes.
Alright then. We're going to move on to a different section of the hearing.2382 We're gonna take mister Peter Brennan from the New England convenience store association. He is on virtually. Mister Brennan,
PETER BRENNAN - NEW ENGLAND CONVENIENCE STORES - SB 169 - SB 170 - HB 256 - HB 255 - Good afternoon, Mr. Chairman, and through you to the members of the committee. My name is Peter Brennan. I'm the Executive Director of the New England convenience store and Energy Markets Association. We represent over 3000 stores in Massachusetts, and the Commonwealth community stores employ over 50000 people and remit over $3,000,000,000 in sales and excise taxes to the state's coffers annually. I have submitted written remarks, the great respect for the members of the committee, and astute staff of the committee, I will not read those remarks, but I will mention a few key points. I'm here generally to testify on the several online lottery bills that are before the community today. I would like to note that our stores have been the loyal partners and the primary retail agents of the lottery for over 50 years, our stores make substantial financial investments in order to sell these products to the general public, and many stores depend on the lottery products to bring in foot traffic and to generate income for those stores. We represent more than half of the state's lottery agents and account for 70% of all lottery sales.
I was2484 happy to hear Mr. Bracken talk earlier about how we want to continue this great partnership even as the lottery wants to move towards an online offering, and we certainly want to continue to be their partners for another 50 years and beyond. As he mentioned, this is the second most successful lottery in the world, which is really something but we do have some concerns about the implementation of an online lottery, despite the somewhat Rosa reports from other states that Mr. Bracken cites. I feel, and our members feel that inevitable there will be some harm to the brick and mortar retail stores should online lottery be implemented. If you make it so that the lottery players can just ignore our stores completely, then there will be some cannibalization of the lottery market there that will naturally impact us. In the same manner, practically speaking, if this is the direction that the lottery is going, if the legislature agrees, then there are considerations we wish to be included in discussions for, and we hope that the legislature will help us to implement when the online lottery is put2561 into statute.
To that end, and I know I'm short on time here, we have four priorities. Number one, commissions to lottery agents may, and we think should be increased as we go forward with an online lottery but they should not be reduced from the current rate at all. Number two, any and all payment types that the lottery accepts for the online lottery transactions should be available for acceptance at our stores. As we get into debit and I know that the debit issue, we can accept the cards now, however, there is upwards of a 3% fee that cuts into our 5% commission that we receive very substantially. As you might imagine, only the biggest retailers can currently afford to do that and the credit card debit card swipe fees are a matter for another time, but they are out of control, and they are the bane of our retailer's existence. If those transaction types are allowed, we think that the lottery should cover the fee so that the retailer does not have to.
Number three, an online lottery advisory board should be established in the statute, and I know this is covered in some of the to assist in the development of the online lottery so that we can have a say in how this is rolled out and so that our great partners at the lottery can work with us on the details on how this is actually going to work and how it can work for our agents as well as2647 the lottery and through them to the state. At least one seat on the advisory board should be held by next month or our designee another one by another brick and mortar,2658 lottery agent. The fourth and final point, we think that current funding for marketing of lottery products at brick and mortar agent locations should not be reduced from the current funding levels and will not fall below 50% of the overall marketing expenditure that the lottery make on marketing. These key factors will provide an opportunity to develop the online traditional gaming ecosystem that will support the lottery and its key partners. SHOW NON-ESSENTIAL DIALOGUE
I see my time's up. I'm happy to take questions, and thank you for allowing me to testify. Thank you, mister Brennan. Forgot and they'd like to do this for the members. Mister Brandon's talking about house code 255, house code 256, and A16971 07:07 149. The chair apologized for nonforming the members that's mister Brennan is testifying on. And we gave you a a little more time that you should we should have mister Brennan. That being said, any questions for mister Brennan?
Senator of Marin.
MORAN - Thank you very much, Mr. Chair, I appreciate the testimony, Mr. Brennan, and the conversation with respect to parity and opportunity but I was curious if you've done any projections in terms of the incentive ideas that should the online go for it? I know there are coupons or some sort of incentive to go into the store as well from the proposal and I was curious if you've done projections on the amount of new customers that may bring because some folks might be trying online that may not already be customers of brick and mortar and also the fact that when you do come into the store, just all the reflexive buying, you don't wanna see me in TJ Maxx store, for example. So I was wondering if you did a any kind of projections on additional sales in that regard?
BRENNAN - Well, thank you, Senator, I appreciate the question. There are states that have implemented this, and we've certainly looked at those states. Mr. Bracken cited data from those states earlier, and, yes, we've looked at that and this is I think why the advisory board will be so important because there are a lot of details to flesh out regarding promotions, commissions, things that will continue to bring the current law to reply into our stores. And yes, we would2813 love to see them buy another product while they're there and we think that we understand where the market is going, we understand that everything's on people's phones now and to the extent that this can create new players and this can benefit our agents and the lottery and the state, then we support that, but you know, there are certainly as you can understand, a fear amongst our agents that have put in so much time, effort, money. These are their livelihoods, at a lot of these stores and they depend on the steady stream of lottery2849 players and revenue that they get. So I think they have a reason to be very concerned about this, and that's why we want to approach it cautiously and really dig deep into these details from other2861 states, and we want to have a role in guiding the lottery as they implement an online lottery should it be authorized by the legislature.
MORAN - I appreciate that. But just a quick follow-up, Mr. Chair, no specific data in terms of definitive lowering of sales, for example, it sounds like, is that correct?
BRENNAN - That I'm aware of, you know, as Mr. Bracken cited, when you look at the data and this is still a relatively new product, there was lowering of sales, those lowering of sales happened to coincide with the pandemic, so it's very hard to flesh out exactly where we are. It's been so recent that we've come out of the pandemic, people have been able to go back to stores that I think that it's still a bit of a gray area, so I can't conclusively say that no there's been no impact in any state. I'm sure2930 that advocates of an online lottery will make that point and I think that we just need to be cautious about it because we don't know and the rollout, it really it depends on what the details are, and that's why we want to be part of the conversation. SHOW NON-ESSENTIAL DIALOGUE
Thank you very much. Thank you. Thank you. Thank you, Sam Moran. Any other questions for mister Biden? Did she have seen none. Thank you, mister Brennan, for your time. Thank you, members of the committee. Alright.
We're gonna move on, get to an in person. Miss Beth Bresnahan from Scientific Games.
I'm going to yes. You're gonna be testifying on the same bills.
Start the clock.
Nice. This is very different for all of us.
Yes. I better go quickly then.
BETH BRESNAHAN - SCIENTIFIC GAMES - HB 255 - HB 256 - SB 169 - SB 170 - Good afternoon, Chairman Chan, Chair Cronin and members of the committee. Thank you for the opportunity to provide testimony in support of the modernization of the lottery through the authorization of online sales. My name is Beth Bresnahan, I'm Vice President of Communications for Scientific Games, long time partner of the Mass lottery. I also bring today the unique perspective of having served as executive director of two US lotteries. Most recently, Washington DC where during my tenure we implemented I lottery in 2020, and the other was here in Massachusetts where the lottery has been studying and advocating for online lottery since 2012. Scientific Games, we're the global leader in retail, instant games, and we're an industry pioneer in I lottery and digital lottery solutions that drive profits for government sponsored lotteries. We're a trusted partner to more than 130 lotteries in 50 countries worldwide and that includes 30 I lottery customers.
Our partnership with the Mass lottery, one of the most storied and successful in the industry, Scientific Games has produced3065 most of the lotteries, instant scratch3067 tickets since 1974, when together, we revolutionized the lottery industry by printing the world's first secure instant scratch product. We're proud of that partnership and we've long supported Massachusetts as the number one performing instant game lottery in the world. As a 50 year partner of the lottery, we are fully invested and committed to helping shape a successful I lottery framework for the commonwealth that responsibly drives continued growth across the lotteries, establish retailer network while also providing incremental revenue through online channels. To maintain and3108 grow the more than $1,000,000,000 in profits returned annually, the lottery must remain competitive and modernized at the same pace as other gaming products offered in the market. Massachusetts players expect the option to3122 purchase lottery games at retail, or online just as they do with most other consumer products and now they're seeing with in state sports betting and by lotteries in neighboring New Hampshire, Rhode Island and soon in Connecticut.
Offering online sales is essential for the lottery to market and attract new players, protect its brand, maintain its relevance and continued growth in an increasingly competitive gaming market. Consumers in Massachusetts have many choices in how they spend their entertainment dollars, including state license casinos and sports betting, but none of those options return a hundred percent of their net proceeds to fund public programs like the lottery does. It's imperative that the lottery positions its core retail business in its 7500 small business partners for sustained success while also introducing the brand to new online customers. Selling online is an important step for the lottery to market and deliver those products and programs across all sales channels while growing a new digital audience. I do have a number of best practices and considerations for the committee in my written testimony. I know that I'm running out of time, and so, I'm happy to answer any questions about the benefits that will bring to all lottery stakeholders, including there's no cannibalization at retail in the 12 states that are offering. Online lottery as well as the player protections that are in place and can answer any questions. SHOW NON-ESSENTIAL DIALOGUE
Thank you very much. I didn't know that the numbers behind me, took my book behind me, and the bell does You tried not to look up.
Yeah. So people in the audience will know there's a bell here, and you can you can see behind me. So any questions for miss Brazahan?
Representative Machineom.
MESCHINO - Just the same question that I asked the acting director, just in terms of data use and privacy, I'm just curious if you could confirm that your company is just a platform and it's not going to, in any way, use our personal data or trends or sell it externally or have any claims to it whatsoever?
BRESNAHAN - Certainly. Legally, we cannot but I would also let you know that any PII that is entered into the system is masked, so when a player signs up for an account, they enter their information, the only information that is visible are last four digits of social security, we don't have any3273 visibility into their banking information, so all of that3277 is masked and is extremely secure. SHOW NON-ESSENTIAL DIALOGUE
Thank you.
Any other questions. I represent on the both.
LEBOEUF - Thank you, Ms. Bresnahan. Do you have any information with the other lotteries that you've worked with implementing the I lottery around out of state customers. So, essentially, what I'm trying to get to is, are we already losing, are there already players from Massachusetts playing in other states online lotteries at this point?
BRESNAHAN - Well, to be able to place a wager, you have to be within state lines, so there's geolocation requirements. It's quite possible that on borders. When I was in DC, which is, you know, the population increases two fold during the day, we had a number of out of state players who were playing during work or while they were traveling into the district for work, I should say, but, you know, you have to be within the state lines to be able to place a wager. SHOW NON-ESSENTIAL DIALOGUE
Alright. Great. Thank you. My sports betting.
Have to look like they are they are they are and they are now. It's it's And it's This is different. Since
REP CHAN - Ms. Bresnahan, you brought up some best practices issues, I'm not going to have you read the whole thing because it's a lot but you want to touch on a couple of highlights for us if you could?
BRESNAHAN - Yes, for sure. I mean, first is is, you know, implement best in class consumer experiences both online and in mobile channels. So he's saying is that don't limit it to just computers if3377 you allow mobile sales,3379 also3381 allow that all games be sold online. Players expect to purchase the same games at retail as they do online and any limitations to the type of games will also limit the revenue potential and the profit returned to the state. Third and we've heard it discussed by several people today, is the need to keep the lotteries retailers engaged and informed, not only sharing data on how lottery enhances and grows retail sales but also how they can benefit through programs like, you know, bonuses, retailer affiliation programs, and incentive programs, to grow their revenue while online lottery sales grow. SHOW NON-ESSENTIAL DIALOGUE
Thank you. As chair Cronin,
SEN CRONIN - Ms. Bresnahan, thank you so much for your testimony. I'm wondering if on your platform, you have a sense of what the median per capita wager of a player per year is? And I'm just trying to get a sense of the people who use it. What does the average player look like in terms of their wagering?
BRESNAHAN - So I don't have that information on hand, but happy to follow-up with you and provide that, but, yes, we do. SHOW NON-ESSENTIAL DIALOGUE
Okay.
Any questions in the past?
There being none. Thank you for your time, miss Brad. Roseanne.
Thank you.
As always, everyone, that satisfies and strongly encouraged to follow-up with individual members of committee, especially committee members that question looking for more information. So I'll be encouraged. I went out there to call the membership. Don't just call me and send it to Kroger. Alright? What's that fun with this guys? I got We're back with Bertrow, Chelsea Turner, Mass Counsel on Gaming and Health, awesome testifying in House. 255 set at 170. Are you there, miss Turner? I'm here. Can you hear me?
We can't hear you. You got to 3 minutes. Perfect. Thank you so much.
CHELSEA TURNER - MASS COUNCIL ON GAMING AND HEALTH - HB 255 - SB 170 - Good afternoon, Chairman, and other honorable members of the committee. I'm planning to skim3500 through my remarks today and sprinkle in a few things based on previous testimony. I am the Chief Operations Officer of Massachusetts Council on Gaming and Health, and I'm here to testify in the lottery Bills. The Mass Council, for those of you who don't know, is an organization dedicated to mitigating the negative harm that can happen from gambling. We maintain a neutral stance on gambling, we're neither pro or against. We3529 want to start by just recognizing the achievements3531 of the Massachusetts Lottery in operating a profitable and extremely efficient lottery system, and the significant resources it raises for the cities and the towns of the Commonwealth. A few things I just wanted to touch on before I skim through my remarks; first, is there's been a huge expansion of gaming in the Commonwealth since 2015, when Pineridge Park opened its commercial casino followed 2017, when MGM opened in Springfield, 2019, Encore Boston Harbor, and of course just this year, the launch of sports betting. The Massachusetts lottery, as Mr. Bracken stated proudly as he should, has had record profits and is the most, or second most profitable lottery in the world, and the most profitable lottery in this country.
The average Massachusetts resident spends about $800 per year on lottery tickets, that's almost twice as much as the second state which is New York and since sports betting is launched, we have seen our calls to our game line, our live chat, and our request for voluntary self exclusions more than double. So, the need for resources is significant and great. There's3610 a great job done by the state in promoting3612 the helpline and participating in campaigns to make sure that those who purchase tickets are of age, but more needs to be done particularly in the area of responsible gambling. With that said, if the legislature and the Governor decide to move forward with this initiative, we hope that you will consider a few things and will continue to have conversations3633 with us. We hope you'll consider a strong commitment to research, perhaps tied to Massachusetts University of college, you may or may not know, but both UMass and the3644 Cambridge Health at Harvard are3646 leaders in the field of responsible and problem gambling. It'd be great to assess a number of things including responsible gambling behaviors, what's the short and long term social and economic impact of online lottery etcetera, you can see my remarks.
Additionally, we would ask that any of the player data, the anonymized, and be stored and available for research as has been done with casino gambling. Currently, that stored within the mode database3675 at the Massachusetts Gaming Commission. Definitely more research is needed in the field as gaming expands at rapid pace. We hope you'll consider to evaluate the effectiveness of these programs, the responsible gambling problem gambling programs. We hope, of course, that you'll examine the risks and the benefits of online lottery. Further, we hope that you'll ensure that optimum consumer safeguards are put into place at launch. It's great to hear that credit card won't be allowed, as is the case with sports betting, and that the lottery is planning to have player management tools such as wage or time and deposit limits. Those are certainly things that we support and have a lot of information on and we actually hope that you'll promote a 1800 number that directs people to agents that understand gambling and can help locally, can point people to a local clinician or a local peer support group.
We hope that marketing guidelines will be established. One of the things if you if, and I would encourage you to do this if you haven't already is to, many of the lotteries that do offer online products, you can demo their products, so if you wanted to go and look at the Michigan lottery, web page, for example, you can look at their E instant tickets. You know, arguably, maybe some of them might be a little bit more childlike than others, E lottery tickets play differently than a regular scratch ticket, so we would want to make sure that anything that's on their webpage is, of course, is adult centered. SHOW NON-ESSENTIAL DIALOGUE
Miss Turner, thank you very much. I think I understand where you're getting at. I think a few of us know what gambling looks like.3781 So
Okay. Sorry. You don't need to get into that in love with detail. I I do appreciate that. And we will read the testimony. So the chair has allowed a little extension for you, but even the chair has with so many patients.
The last time I just
TURNER - The last thing I just wanted to say is we operate and administer a program called Game Sense, which is focused on responsible gambling, that's about meeting players3808 where they're at. So, not just those who have a problem, but those who are at risk and those who are healthy, it would be great to have one responsible gamer across the state of Massachusetts. Thank you for your time, I'd be happy to answer any questions you have. SHOW NON-ESSENTIAL DIALOGUE
Thank you, Ms. Turner.3825 Any questions been specified?
You're being done. I don't see any on the screen either. Thank you3833 very much for your time, Ms. Turner. Thank you for your time. Alright. We're gonna go back to in person. Mister David Kaufman, Ms. Jackie Lavender Byrd, Massman, this association, You're also testifying on house bill 02:55 and 07:01 7 0. How you doing?
It's a new world we live in.
DAVID KOFFMAN - MASS MUNICIPAL ASSOCIATION - HB 255- SB 170 - Chair Chan and3856 Chair Cronin, again, and, of course, distinguished members of the committee, thank you all for your time. My name is David Koffman, and I'm the legislative director at the Mass Municipal Association. I'm here3873 joined with my colleague, Jackie Lavender Bird, who's at the MMA's senior legislative analyst, but also our expert on everything physical affairs. We will I see the timer, but I will try to beat it with and give you time back but just to be quick on this, we do want to share some perspective on the Bills related to I lottery. There's a handful related to it, there's a lot of traction as part of the budget process as well but we all know 50 years ago, the lottery was established for the sole purpose of supporting cities and towns, and they've done an incredible job doing that. Lottery is a lifeblood to cities and towns through unrestricted general government aid. I know that may surprise you that we're going to be always talking about advocating for more unrestricted and local aid but, again, it's so important.
Cities and towns are are capped under proposition 2.5, and local revenues are therefore capped. So AGRA and what you all have have done recently and continue3927 to do to advocate for more funding to our cities and towns of legislature is incredibly, and again, thank you for that. The lottery is the greatest source of that revenue for what the legislature supports cities and towns for ARGA, that's really important to know, the vast, vast, vast majority of that money comes from the great work that our friends in the Mass Lottery do. We do appreciate the interest in expanding lottery operations to compete in this rapidly emerging market. But again, just because of the overwhelming needs of cities and towns, we want to make sure that to be consistent with the lottery's mission, that all proceeds for I lottery would similarly go to cities and towns, that's incredibly important to to the MMA and for cities and towns. We continue to be engaged with Treasure's office related about what this is going to look like, and we have a lot of faith in the great work that they do, and, again, it it does make sense.
Authorizing an I lottery does make some sense in this environment to compete in the marketplace with sports gaming in particular. But again, all lottery proceeds in our perspective must continue to go to cities and towns. Just looking back in the not too distant future, the great recession, decimated local budgets. Of the unrestricted general government aid, of course, we're going to4008 be4008 asking for more support this year, which we appreciate4010 your partnership with, we're still below fiscal 2008 levels. Again, everyone hurt in that great recession, but this is why it's so important to make sure that expanding the great operations of the Mass lottery that the proceeds and the revenue will continue to go to local aid. And thank you for your time, happy to answer any questions, I'll just defer to Jackie very briefly.
JACKIE LAVENDER BIRD - MASS MUNICIPAL ASSOCIATION - HB 255 - SB 170 - Very briefly, I'll just make one point and thank you so much to all of you, to the Chairs, and to the committee members. I think this was mentioned previously as well with Mark from the lottery that according to the the state lottery commission in the most recently completed fiscal year, which fiscal 2022, the lottery generated over $1,100,000,000 in net proceeds to the state supporting almost 95% of the Commonwealth's annual appropriation for unrestricted general government4056 aid. So, you know, we are deeply concerned about protecting that revenue stream, and with that,4063 happy to turn it over and answer any question.
KOFFMAN - And I think it makes perfect sense, in our perspective, we know there's incredible animal causes of where that revenue could go but for us, it makes sense for the lottery, it's core to their mission, it's on the boilerplate, and again, they've done such a fantastic job. But for our perspective, maintaining making sure this continues to allow all of you no matter what the fiscal situation looks like in the Commonwealth to have that revenue to support cities and town's strength in that partnership is surmountable. So thank you. SHOW NON-ESSENTIAL DIALOGUE
Thanks for the time. We're happening answer any questions, but we appreciate. We appreciate your efficiency. Any questions for mister Hoffman, and there's Brooke.
Wow. Alright. How about that? Thank you for so much for your
Thank you so much. Thank you, Shay.
Well, Stan informs me, I missed someone with down to our last testifier.
But we're going to go to mister Robert Melli for the Mass Packacks Association. He is testifying house 255, house 256, and at 1 4 nines,4127 and 169, and we have a new 1. Again, we haven't heard of yet, Senate Bill 201. Mister Mallion, good to see you on a flat screen.
ROBERT MELLION - MASSACHUSETTS PACKAGE STORES ASSOCIATION - HB 255 - HB 256 - SB 149 - SB 201 - SB 169 - Thank you very much, Chair Chan, and Chair Cronin for the opportunity to testify today and also to the honorable members of the joint committee on consumer protection and professional licensure. As some of you know, my name is Rob Mellion, I'm executive director general counsel at the Massachusetts Package Stores Association. We represent the locally owned retailers of beer, wine, and spirits across the state. They're comprised of convenience stores, independent markets, and liquor stores that are headquartered in Massachusetts. These are the stores that are the brick and mortar, we're talking about, they're extremely concerned about online lottery. It is not misleading that they are concerned, they're worried about the loss of in store traffic, which is real. So establishment of an online lottery will have an impact, it has to have an impact on in store traffic and I want to jump to an issue that I think really needs to be discussed here. Pennsylvania, Virginia, Michigan, New Hampshire, Ohio, those are all control states. A control state is where the state is a market participant in retail.
So, yes, there would be a reduced level of impact to privately owned stores because the states are essentially the retailer so they're competing against themselves. Here, what distinguishes Massachusetts is that we're talking about Massachusetts openly competing against privately owned retail using state dollars to advertise against them, that's what distinguishes this and that's why you see stores all across the state up in arms about the potential of competing against online lottery. It's not going to be fair competition and they recognize that. These are stores that are already experiencing tremendous pressure, they have taken numerous revenue hits, they have been hit with flavor tobacco bans, they have been hit with product bans, they have been hit with competition from cannabis. Cannabis has had a 5% to 6% impact on the alcohol beverages industry of Massachusetts, they have been hit with online illegal purchasing, that remains unchecked, they've been hit with cross border sales with New Hampshire. Cross border sales with New Hampshire equates to over 22% of overall sales in New Hampshire, actually, it's 55% of sales in New Hampshire, 28% are from Massachusetts residents who are buying in New Hampshire.
These are the hits that retail is concerned about because these are the hits that they're taking. They've been hit with extension of drinks to go, high cost electricity, labor costs and now we're talking about competing against the state of Massachusetts for walk in traffic into stores. That's why they're scared and I think that they have a legitimate reason to be scared. These hits are equating to losses of stores. The last thing I just want to bring to your attention with my time up here is that loss of stores is real. Since 2018, 1/34335 of the stores in the state of Massachusetts have turned over in ownership. For the last four years in a row, we have seen more than 200 stores transfer their licenses in the alcohol beverages industry. So 200, 200, 200, 200, 800. So the loss of businesses is very real to the loss, and that's why they're scared. And with that, I just want to restate, yes, we're deeply concerned about online lottery and if it's4366 going to go in this direction, please, let's find a way to keep locally owned retail alive in Massachusetts. Thank you very much for the opportunity to testify. SHOW NON-ESSENTIAL DIALOGUE
Thank you very much mister Melanie, and I'll plant your frequent flyer card to go to let you on today. Actually, we've been joined by reps of Donny who in person. So she left the phone line, and
You all know what she looks like now, so you can put the camera down here. I can wait for us. That being said, do we have any questions for the testify?
Alright. Mister Millie, you're free to go. Thank you very much. For the record, we did not hear testimony on certain bills. Houseville 4, Houseville 2 69, Houseville 03:37, 3, house bill 324, house bill, 342, house bill, 361, house bill, 362, house bill 363, those notes have not received in person testimony, but does not mean there have been no testimony. Testimone is still being taken by the committee until it goes up and dispensed with. Meeting that we exactly bill out in some kind of category of what we're gonna do with them. News of webb, we're sorry.
They email to us on testimony
is long and it's long and Agriots,
which I,
which I have misplaced.
All right, just go to the website. At Emmy legislature dot gov, and to the joint committee of professional Zoom protection professional, I show you'll see4464 any joint Commiti's email for those of you in Internet world want to send testimony. Please send to us. We will ensure distribution to the membership And,4474 obviously, we strongly encourage everyone to4476 reach out to individual members about their concerns for or against any bill. With4482 that, I'd entertain a motion to close today's public hearing. -Mmoved4486
by reps of world, second by Rubsubishi race. Those are favored to say aye. Aye? Those are against. Yeah. He's having. Today's public hearing is closed. Members need to be provided an email for the next public hearing.
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