One of the biggest areas of concern when it comes to the potential of an Olympics in Boston, among both proponents and opponents of a Hub Games, is where to find the necessary funding.
Organizers claim the estimated $4.5 billion needed to get the Games up and running will be fully taken care of by private donors, television revenues, sponsorships, and ticket sales at no cost to the state or city. Opponents say multiply that figure by 10 and add in the needed costs for infrastructure upgrades and there’s no way taxpayers will be held harmless.
One of the options that the movers and shakers behind Boston 2024 have explored is their very own game run by the Lottery, which typically funnels money only to cities and towns. Though both sides say the talks were preliminary and led nowhere, the door has been left open just the slightest to revisit the issue.
Beth Bresnahan, executive director of the Massachusetts State Lottery Commission, says Simon Kotzeff, a consultant with Bain & Company, contacted her office about the possibility of having a Lottery game with the proceeds going to the Olympic committee. Bresnahan says she told Kotzeff that state law prohibits the Lottery from dispersing revenues anywhere other than to cities and towns.
“The Lottery is statutorily mandated to return the net profit of all game sales to the state’s General Fund and those funds are then dispersed to cities and towns in the form of unrestricted local aid,” Bresnahan wrote in her response to Kotzeff. “The Legislature sets the amount of local aid each fiscal year. The Lottery cannot redirect where any of the game profits go/what they support. That would require legislative action. And while we’ve been approached by many worthwhile causes and charities, and there have been several (failed) bills filed by the Legislature for ‘special interest’ tickets, the Lottery has historically opposed these efforts as we do not want to be put in the position of choosing one good cause over another divert much needed local aid dollars from cities and towns.”
Bresnahan says Kotzeff replied he would contact some of the Lottery’s ticket vendors to look into a licensing agreement similar to what the Boston sports teams have – including the Boston Celtics, which Pagliucca co-owns – as another potential source of revenue. Bresnahan says that approach is not likely to raise much money and she’s had no further discussions with anyone from the Boston Olympics group.
Organizers admit they did some cursory kicking of the Lottery tires.
“The current Boston 2024 operating budget estimates the cost of running the Games at $4.5 billion, all of which will be funded through private enterprise, TV revenue, corporate sponsorships, and ticket sales,” Boston 2024 executive vice president Erin Murphy-Rafferty said in a statement. “There is a generous cushion built into our budget to account for any cost overruns, as well as a robust insurance policy to protect the city against any liability. The finance plan presented to the USOC does not depend on any revenue from the state Lottery or any other government-run entity. Our financial team conducted some very preliminary due diligence on the lottery ticket programs used by our local sports teams but chose not to pursue this any further with the Massachusetts Lottery.”
But they could pursue it with the Legislature, which Bresnahan said they would need to do. It’s also interesting to note one of the key communications and strategy people behind the Olympic effort is consultant Doug Rubin, who before his emergence as a political savant was the first assistant treasurer under then-State Treasurer Tim Cahill and had a lot of dealings with the Lottery. He presumably would know what levers to pull, though a spokesman says the CommonWealth inquiry was the first he heard about it.
State Rep. John Scibak of South Hadley is House chairman of the Legislature’s Joint Committee on Consumer Protection and Professional Licensure, the committee that hears most bills related to the Lottery. Scibak said there would probably be resistance from cities and towns to watering down local aid funds but he said the possibility of a dedicated Olympic ticket was intriguing.
“I would be concerned about anything that would potentially jeopardize or affect the revenue stream,” says Scibak. “There will be some skepticism, an inherent skepticism, from those who not only oppose diverting funds but would oppose the Olympic effort. The one difference is, we’re looking at a Lottery ticket that a constituent is having an option of purchasing or not. That’s a significant difference.”
Scibak says he’d also be worried about “creating a precedent” for other charities to seek their own Lottery ticket, similar to the explosion of specialty license plates after the success of the environmental lobby’s Right whale plate.
Olympic opponents are cynical about the potential ploy of establishing a Lottery game though grateful, with tongue in cheek, for the acknowledgment of the cost.
“We are pleased boosters are preparing for likely Olympic debts, but disappointed they are eyeing revenue targeted for local schools aid,” said Liam Kerr of the group No Boston Olympics. “As investment strategies go, hosting the Olympics and playing the lottery are actually pretty close. Rugby players have a reputation for cannibalism, but Olympic boosters have them beat for claiming monies taken from existing revenue stream.”
It’s not a unique approach to use lotteries to fund Olympic games. The 2012 London Olympics relied on nearly 2.2 billion pounds (roughly $3.5 billion) from the country’s National Lottery and money from that agency is still used to fund Olympic athletes. Canada used a lottery to help recoup the costs of the 1976 Montreal Games.
Olympic-related lotteries are no stranger to Massachusetts, either. In 1991, the US Olympic Committee ran a test program with 15 state lotteries, selling them tickets carrying the Olympics logo that the state agencies then sold to their customers. The Massachusetts Lottery was one of the biggest buyers, purchasing 100 million of the instant ticket games at a cost of $3.50 per 1,000, a cost of roughly $350,000. The USOC pocketed the $350,000 and used the money to finance the US Olympic team, but the net sales of the tickets themselves were distributed through the state’s formula for local aid.
