SBJ/Feb. 7-13, 2011/Franchises

Massachusetts sets pace in team lottery games

WANT MORE GREAT STORIES LIKE THIS?

CLICK ON ONE OF THESE BUTTONS

ALREADY A
SUBSCRIBER?
SEE IF
YOU LIKE IT
GET IT ALL
(PREMIUM ACCESS)
Sales of instant lottery tickets that bear a Boston Red Sox, New England Patriots, Boston Celtics or Boston Bruins logo account for more than half of $763 million that has been spent on 51 licensed team-based lottery games now in retail stores across the country.

These games, in turn, have brought new, incremental revenue to each of the participating teams. Since the debut of their respective games, the Red Sox have brought in $10.4 million in related revenue. The Celtics have added $1.1 million and the Bruins $900,000.

As for the Patriots, a Pats-branded game in Massachusetts last month became the first NFL team game to post more than $100 million in retail sales, and the $2.5 million the club received from the game is the highest fee ever paid for an NFL lottery ticket.

The Massachusetts teams benefit from being in a state that shows strength for lottery sales even beyond team-specific games. Nationwide, however, especially since the NFL in 2009 gave its clubs the go-ahead to work with state lotteries to produce instant-game tickets, teams have been able to scratch extra revenue by capitalizing on fans' passion.

NFL teams account for 32 of the 51 active team-based sports tickets.

"The NFL was the big kahuna," said Steve Saferin, president of MDI Entertainment, the exclusive lottery ticket licensee for the NBA, NHL and MLB.
Saferin had been meeting on and off with the NFL for several years before the league signed on for participation in 2009. Although the league decided against selling the rights to use the NFL shield, it did tell its clubs that MDI should be their vendor of choice when trying to negotiate with state lotteries.

Twelve states launched NFL team games in fall 2009, with 17 games in all. Nearly all the games sold well, and state lottery officials in Maryland, Pennsylvania and Massachusetts said the NFL games were the most successful instant-game launches in their respective commission histories.

Most team deals are based on flat fees, paid by MDI, the lottery or both. A few NFL teams receive bonuses based on ticket sales. In addition to the Patriots, teams that added at least $1 million in revenue from their most recent scratch-off efforts include Baltimore, Dallas, Houston, Pittsburgh and Philadelphia.

MDI acts as the liaison between leagues and their members and the state lotteries. The company pays a royalty fee to the league for the rights to team marks, then sells those rights to state lotteries. MDI also buys merchandise and apparel at wholesale prices from league vendors to distribute as second-chance prizes for non-winning lottery tickets. The company, for example, has distributed more than 100,000 New Era hats in its five seasons as the exclusive vendor of MLB lottery prizes. Other second-chance prizes include draft-day and road-game ticket packages as well as season-ticket packages for life.

"It's a double bonus for us," said Mike Napolitano, MLB's licensing director, noting the dual royalty and merchandise revenue streams. "And the teams benefit from incremental advertising and sponsorship dollars from the lottery games."

Teams and leagues acknowledge that while the financial risk to them of launching a lottery game is relatively low, there are several challenges. Among those hurdles is the fact that team-based lottery tickets have a "fad" factor. That's in part why the NFL, with 32 teams, has the most active games of the 51 team-based games available nationwide, while the three other big leagues, which debuted games earlier, now have fewer teams with games in play.

The NBA was the first pro sports league to authorize its imagery to be associated with government lottery tickets, starting in 2002. Since then, 20 NBA clubs have fielded a lottery ticket, but only four teams have games this season: Boston, Portland, Orlando and Miami.

A dozen NHL clubs have had a game since NHL games debuted in 2003, with half of them leaving the space after one campaign. The Bruins, Philadelphia, Pittsburgh and Chicago are the only teams with a ticket this season.

MLB clubs first began games in 2006, and more than half of the league's teams have fielded a game since then, but only the Red Sox, Cardinals and Yankees had singular games last season. The Yankees, Mets and Phillies also shared a game in New Jersey.

"It's not unlike the apparel or footwear marketplace," said Rob Millman, senior vice president, international licensing and business development, at the NBA. "Consumers are always looking for the next new thing."

Once a game fails to meet a certain threshold for percentage of printed tickets sold — typically 70 percent — the game is replaced in a state's lottery lineup.

In Massachusetts, the state's lottery, for years, has been considered by nearly every measure significant to the industry to be the most successful of the country's 43 state lotteries.

Residents in 2009 spent an average of $671 a person on lottery tickets, according to the 2010 LaFleur's World Lottery Almanac, and 73 percent of the $4.4 billion in ticket sales generated by the state's commission was redistributed in the form of prizes. Both figures far exceed the national average.

The commission in 2006 capitalized on local fans' passion for sports consumption by launching a Red Sox game. The $5 scratch-off was a sellout and generated $188 million. A total of 10 tickets have been issued since then, generating $1.1 billion in revenue for the state and $14.5 million in fees for Boston's most recognized pro teams. The Red Sox's five Massachusetts games have generated nearly $800 million of those sales and brought $10 million to the team. Similar Red Sox games in other New England states have generated $19 million in sales.

The Celtics have sold more than $137 million in tickets throughout New England, and the current Massachusetts game Celtics Cash 2010 has already sold more than 60 percent of its 15 million available tickets.

The Celtics have had a total of four games through the years. No other NBA club has had more than two.

"We're blessed not only to be in a sports-crazed market, but also in the state with the biggest lottery in the country," said Ted Dalton, Celtics vice president of corporate partnerships and business development.

Massachusetts launched its first Bruins game in the fall of 2009, printing 25.2 million tickets priced at $2 each. For a new game introduced last year, the price was increased to $5, the printing order was cut by two-thirds, and the grand prize increased from $25,000 to $250,000. With the NHL season a little less than half done, more than half of this year's tickets have been sold, matching last year's pace.

"What we like about it is that we have a goal that is a real number," said Amy Latimer, senior vice president of sales and marketing for the Bruins. "Both sides know that we need to sell a fixed amount of tickets. We get updates from the lottery every week … so the excitement and the challenge is that the success of these deals is measured ticket by ticket."

Team-based lottery games*

State Team Game launched No. of tickets printed Ticket
price
Retail sales of tickets  Total cash prizes available

Cash prizes
distributed

Top prizes
(quantity)
Revenue to team^
California Oakland Raiders Aug. 31, 2010 4,800,000 $3 $13,467,869 $8,036,000 $6,627,752  $20,000 (8) $609,679
California San Francisco 49ers Aug. 31, 2010 3,600,000 $3 $9,738,871 $6,027,000 $4,888,598  $20,000 (6) $572,389
California San Diego Chargers Aug. 31, 2010 3,000,000 $3 $7,787,118 $5,022,500 $3,818,102  $20,000 (5) $552,871
Colorado Denver Broncos Aug. 9, 2010 2,040,000 $5 $6,630,000 $6,989,000 $6,400,000 $100,000 (3) $475,000
Connecticut New York Giants Aug. 31, 2010 1,400,000 $5 $6,820,000 $5,058,900 $1,757,495 $50,000 (4) NA
Connecticut New England Patriots Aug. 31, 2010 1,400,000 $5 $6,550,000 $4,854,650 $1,707,080 $50,000 (4) NA
Connecticut Boston Red Sox 27-Mar-09 1,400,000 $5 $6,300,000 $4,676,710 $3,457,050 $50,000 (6) NA
Connecticut New York Yankees 27-Mar-09 1,400,000 $5 $6,300,000 $4,674,700 $3,355,290 $50,000 (6) NA
Florida Miami Dolphins 26-Jul-10 3,960,000 $5 $17,898,933 $13,970,000 $12,000,000 $100,000 (6) $656,174
Florida Tampa Bay Buccaneers 26-Jul-10 3,240,000 $5 $15,038,460 $5,540,000 $4,800,000 $100,000 (5) $525,580
Florida Jacksonville Jaguars 26-Jul-10 1,560,000 $5 $6,949,353 $11,350,000 $10,100,000 $100,000 (3) $300,150
Florida Orlando Magic Jan. 11, 2011 2,160,000 $5 $730,321 $7,180,000 $479,000 $100,000 (3) NA
Florida Miami Heat Jan. 11, 2011 2,640,000 $5 $683,417 $8,950,000 $524,000 $100,000 (3) NA
Georgia Atlanta Falcons 20-Jul-10 6,480,000 $5 $23,500,000 $23,950,000 $16,000,000 $500,000 (4) $318,000
Illinois Chicago Blackhawks Dec. 1, 2010 3,000,000 $5  NA $10,076,750 $384,000 $100,000 (3) NA
Indiana Indianapolis Colts Aug. 4, 2010 4,080,000 $5 $11,400,000 $5,306,990 $2,822,560 $100,000 (7) NA
Kansas Kansas City Chiefs 21-Jul-10 300,000 $10 $2,200,000 $2,076,875 $1,424,985 $75,000 (3) $30,000
Louisiana New Orleans Saints Aug. 2, 2010 1,472,550 $5 $6,615,000 $4,258,035 $3,800,695 $100,000 (5) $275,000
Maine New England Patriots 30-Jul-10 1,200,000 $5 $3,014,000 $3,845,950 $1,700,580 $50,000 (4) $400,000
Maine Boston Red Sox 1-Apr-10 600,000 $5 $3,000,000 $2,059,090 $1,977,675 $100,000 (2) $120,000
Maryland Baltimore Ravens Aug. 9, 2010 3,417,000 $5 $17,085,000 $13,316,729 $12,231,033 $1,000,000 (3) $1,264,750
Massachusetts New England Patriots Aug. 11, 2009 30,240,000 $5 $100,300,000 $116,906,250 $87,679,688 $1,000,000 (10) $2,500,000
Massachusetts Boston Red Sox 30-Mar-09 30,240,000 $5 $81,200,000 $109,364,000 $98,427,600 $1,000,000 (10) $1,800,000
Massachusetts Boston Red Sox 30-Mar-10 12,096,000 $10 $69,900,000 $95,765,200 $71,823,900 $3,000,000 (3) $1,500,000
Massachusetts Boston Bruins Oct. 19, 2009 25,200,000 $2 $47,100,000 $32,380,000 $29,142,000 $25,000 (25) $450,000
Massachusetts Boston Bruins Sept. 21, 2010 8,064,000 $5 $17,500,000 $26,836,400 $17,980,388 $250,000 (5) $475,000
Massachusetts Boston Celtics Oct. 4, 2008 10,080,000 $5 $45,700,000 $34,822,000 $31,339,800 $200,000 (10) $400,000
Massachusetts Boston Celtics Sept. 24, 2010 15,120,000 $2 $19,000,000 $18,903,000 $12,665,010 $25,000 (15) $400,000
Minnesota Minnesota Vikings 20-Jul-10 2,160,000 $10 $11,800,000 $14,913,800 $8,150,000 $200,000 (6) $357,000
Missouri St. Louis Cardinals 27-Mar-10 2,207,100 $5 $10,483,845 $7,512,158 $6,882,496 $70,000 (3) NA
Missouri Kansas City Chiefs Aug. 28, 2010 1,251,900 $5 $5,988,015 $4,178,370 $3,705,250 $70,000 (2) NA
Missouri St. Louis Rams Aug. 28, 2010 1,256,160 $5 $5,652,720 $4,189,240 $3,053,675 $70,000 (2) NA
Nebraska Kansas City Chiefs 29-Jun-10 376,000 $5 $1,692,000 $1,193,500 $942,225 $30,000 (3) $100,000
New Hampshire Boston Red Sox 29-Mar-10 1,046,800 $5 $4,480,015 $3,172,000 $2,831,140  $50,000 (3) $100,000
New Hampshire Boston Red Sox 16-Mar-09 1,048,400 $5 $4,016,935 $3,171,600 $2,532,875  $50,000 (3) $100,000
New Jersey N.Y. Mets/N.Y. Yankees/Philadelphia Phillies (a) 10-May-10 3,960,000 $5 $14,850,000 $11,000,000 $6,600,000 $100,000 (3) NA
New Jersey New York Giants Aug. 16, 2010 2,160,000 $5 $4,730,000 $6,500,000 $2,560,000 $100,000 (3) NA
New Jersey New York Jets Aug. 16, 2010 2,160,000 $5 $4,170,000 $6,500,000 $2,390,000 $100,000 (3) NA
New Jersey Philadelphia Eagles Aug. 16, 2010 2,160,000 $5 $3,170,000 $6,500,000 $1,970,000 $100,000 (3) NA
Oregon Portland Trail Blazers Jan. 5, 2010 1,018,771 $2 $982,466 $1,490,850 $674,662 $10,000 (3) $61,000
Pennsylvania Pittsburgh Steelers 20-Jul-10 5,400,000 $5 $20,700,000 $19,225,000 $14,800,000 $100,000 (5) $1,000,000
Pennsylvania Philadelphia Eagles 20-Jul-10 5,400,000 $5 $15,300,000 $19,225,000 $11,100,000 $100,000 (5) $1,000,000
Pennsylvania Philadelphia Flyers/Pittsburgh Penguins (b) Dec. 24, 2009 6,000,000 $2 $10,900,000 $7,320,000 $6,600,000 $20,000 (10) $360,000
Rhode Island New England Patriots Sept. 22, 2009 20,333,240 $5  NA $6,906,550 $3,417,285 $100,000 (2) NA
Tennessee Tennessee Titans Aug. 3, 2010  NA $5  NA $5,000,000 NA $100,000 (1) NA
Texas Dallas Cowboys Aug. 2, 2010 6,178,700 $10 $46,340,250 $39,389,410 $24,670,355 $250,000 (12) $1,150,000
Texas Houston Texans Aug. 2, 2010 5,682,000 $5 $21,307,500 $17,952,790 $15,901,305 $75,000 (14) $1,150,000
Vermont Boston Red Sox 16-Apr-10 300,000 $5 $1,350,000 $990,795 $971,760 $20,000 (5) $60,500
Virginia Washington Redskins Sept. 12, 2010 3,840,000 $5 $17,800,000 $27,009,650 $16,152,700 $1,000,000 (3) NA (c)
Washington Seattle Seahawks 20-Jul-10 1,605,500 $5 $5,119,775 $5,452,150 $2,901,065 $50,000 (4) $321,100
Wisconsin Green Bay Packers 26-Jul-10  NA $10  NA NA NA  NA NA










NA: Not available* Ongoing games, as of mid-January. These games include contests for which retail sales have ended but instant prizes can still be redeemed and/or second-chance prizes are still being awarded.^ Revenue from licensing fees, sale incentives and sponsorship. Teams receive additional revenue from the sale of items to be used as second-chance prizes. That revenue is not included in the totals listed here.(a) One ticket with all three team logos.(b) One licensing contract covered two different game scenes, each with one team logo.(c) Lottery commission did not pay a licensing fee, but paid the club an undisclosed amount for advertising, marketing and prizes.Compiled by David Broughton    Source: State lottery commissions




Return to top
Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug