Lottery to stop doling out free sports tickets
Incentive deal for retailers too generous, Cahill says
State Treasurer Timothy P. Cahill is scrapping a multimillion-dollar incentive program that rewarded lottery retailers with free sports tickets, deciding that it had become excessively generous because of the hefty prices tickets command on the resale market.
Cahill said the incentive program was achieving its goals: Lottery sales increased at retailers targeted by the ticket promotions. But he said doling out coveted tickets to Red Sox, Patriots, and Celtics games that can fetch hundreds if not thousands of dollars was too great a reward.
"Because these tickets have become so expensive and hard to get, it just doesn't seem fair," Cahill, whose office is responsible for running the lottery, said yesterday in an interview. "As a public agency, there's a conflict with giving these out."
Cahill's decision follows a Globe story in May that detailed how the lottery paid millions of dollars in sponsorship deals to teams and received thousands of prized tickets in return. The lottery used the tickets to reward high-performing retailers, but it also distributed them to lottery officials, their family members, and friends, the Globe story said.
The lottery gave away 3,280 tickets during the 2007 and 2008 seasons alone, including 600 for the AFC championship game and a pregame event worth $700 a pair. The lottery's record-keeping was so poor, however, that it was impossible to determine how many tickets were used by employees and their relatives.
Cahill ordered an internal audit of the incentive program as a result of the Globe story. He said yesterday that the audit showed the same problems revealed by the Globe - that shoddy record keeping plagued the program from 2003 through 2007. Lottery officials said yesterday that there was no evidence of agents reselling the tickets and that it was not a concern.
Lottery officials declined to provide a copy of the audit report, saying it has not been finalized. Also, the treasurer said that the audit had nothing to do with his decision to scrap the incentive program. He said it was a matter of principle.
The lottery has a powerful market position as the only licensed gaming vendor in the state outside of dog racing. That clout allowed it to enter unique cross-promotional arrangements with sports franchises and receive large batches of tickets.
But since the lottery began the program in 2003, ticket prices for the Celtics, Patriots, and Red Sox have skyrocketed with the teams' successes. Tickets sell for hundreds and even thousands more than face value on
"When you're getting people to spend $25,000 [each] for Celtics playoff tickets, it doesn't seem right for us to control any of those," Cahill said. "We're a public agency, I'm an elected official."
Instead of sports tickets, the lottery will offer retailers more cash bonuses to increase sales, and perhaps other incentives, such as trips, officials said.
The lottery will continue cross-promotions with sports teams, Cahill said, including using team logos on scratch tickets and advertising at sporting events, but those contracts with teams will no longer include game tickets for the lottery, except in limited cases.
Cahill's decision to scrap the program is a reversal of his position a few months ago, when he said he was convinced that using sports tickets as an incentive was a good idea and was "committed to it going forward."
Retailers who sell lottery tickets and run other games such as Keno receive commissions of 5 percent of all lottery sales at their store. Retailers also get bonuses for selling winning tickets and cash awards that are doled out in random drawings.
In the fiscal year that ended July 1, roughly 1,700 lottery agents received a total of $275.2 million in commissions and bonuses. The lottery also spent at least $1.2 million to purchase tickets to sporting events for the retailers.
Among the tickets given away were 200 each for four Red Sox games last year, including the final game of the regular season on Sept. 30, when the team was on its way to the playoffs. The Globe reported in May that lottery employees, interns, or regional sales representatives and their guests used between six and 12 of the tickets for each game. Lottery employees and their guests also used 14 tickets for each Patriots home playoff game.
Just who used many tickets is still unclear. For example, when the lottery gave away 200 tickets to a luxury chalet at the 2006
Donovan Slack can be reached at dslack@globe.com 