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Audit of the Massachusetts State Lottery Commission (November 26, 2025)

November 26, 2025 · Massachusetts State Lottery Commission · Read the full official report on mass.gov ↗

Published November 26, 2025 Audit covers July 1, 2022 – June 30, 2024 Under Diana DiZoglio · 2023–present

In plain English
The audit found several problems in how the Massachusetts Lottery checked, monitored, suspended, and tracked lottery sales agents during July 2022 through June 2024.
source
“Below is a summary of our findings, the effects of those findings, and our recommendations, with links to each page listed.”
Read the plain-English breakdown
What is this?

This is a performance audit of the Massachusetts State Lottery Commission by the Office of the State Auditor.

“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Massachusetts State Lottery Commission, referred to in this report as the Lottery, for the period July 1, 2022 through June 30, 2024.”
Why was it audited?

Auditors reviewed whether the Lottery followed its own rules for licensing sales agents, collecting money, enforcing suspensions, preventing sales to minors, and keeping suspension records.

“The purpose of the audit was to determine the following:”
Why it matters

These problems matter because weak oversight can affect public trust, money owed to the state, responsible gaming protections, and fair enforcement against retailers.

“Maintaining clear and fair practices is essential to upholding the Lottery’s integrity.”
What's in it for me?

Lottery profits help fund Massachusetts cities and towns, so delays or weaknesses in collecting proceeds can affect money meant for local communities.

“Additionally, without the timely collection of lottery proceeds, state revenues cannot be reported or transferred to the Department of Revenue (DOR), resulting in the delay of distribution of funds to the Commonwealth’s cities and towns.”
The bottom line

The Lottery did not consistently follow or document key controls for sales agent licensing, missed payments, tobacco-related suspensions, minor-sales monitoring, and suspension records.

“Based on the results of our testing, we determined that, during the audit period, the Lottery did not maintain an accurate record of the suspension history of its sales agents.”
What happens next

The Auditor’s office says it will check back in about six months to see whether the Lottery has made progress on several findings.

“We will review progress on this issue as part of our post-audit review process in approximately six months.”
Why it's significant

The audit found risks to accountability and equal treatment because some required suspensions were missed, too short, or not recorded completely.

“This not only jeopardizes the integrity of the Lottery’s operations but also permits a culture of disregard for regulatory standards.”
Jargon, unpacked

A “bank sweep” is the weekly process where money from lottery ticket sales is pulled from a retailer’s lottery bank account and deposited into a state account.

“The Lottery monitors its sales agents’ collections with regular bank sweeps, which are the process of collecting proceeds received from the sale of lottery tickets from sales agents’ designated lottery bank accounts.”

What the Auditor checked

What the Auditor found

The Lottery lacked evidence that it completed required financial reviews and criminal background checks for all sales agent applicants.
licensing/inspectionsrecordkeeping/documentationinternal controls

Why it matters: The Lottery could not confirm that applicants met licensing requirements, increasing financial, compliance, and reputational risks.

Standard: Sections 3.2–3.4 and 4.2.2–4.2.3 of the Lottery’s “Licensing Department Procedures” and section L13-12 of the Massachusetts Statewide Records Retention Schedule. ( Sections 3.2–3.4 and 4.2.2–4.2.3 of the Lottery’s “Licensing Department Procedures”; section L13-12 of the Massachusetts Statewide Records Retention Schedule )

2 recommendations
  • The Lottery should develop and implement monitoring controls to ensure that Lottery staff members review financial and criminal background checks on new and renewing applicants before approving or denying a sales agent application.agency: already implemented
  • The Lottery should ensure that it maintains all licensing records in accordance with the Massachusetts Statewide Records Retention Schedule.
Agency response & Auditor reply
Agency: "The Lottery is confident that this process has been followed and that all debts have been identified and locations denied or debts resolved before approval."
Auditor: "Based on its response, the Lottery is taking measures to address our concerns in this area."
The Lottery did not always deactivate terminals or hold finance hearings after sales agents missed required bank sweeps.
cash handlinginternal controlsrecordkeeping/documentation

Why it matters: Inconsistent enforcement could undermine agent trust, delay collection of lottery proceeds, and delay distribution of funds to cities and towns.

Standard: The Lottery’s “Credit and Collections Department Policies and Procedures.” ( The Lottery’s “Credit and Collections Department Policies and Procedures” )

2 recommendations
  • The Lottery should ensure that it deactivates its sales agents’ lottery terminals after they miss three bank sweeps within a 12-month period until a finance hearing determination and complete resolution occur.agency: disagreed
  • The Lottery should update its written “Credit and Collections Department Policies and Procedures” to reflect its current practices for missed bank sweeps.agency: agreed
Agency response & Auditor reply
Agency: "Each agent’s risk to the Commonwealth may be different and require a different response from the Credit and Collections Department."
Auditor: "However, we emphasize the need for ongoing review and evaluation of the Lottery’s written policies and procedures to protect the integrity of the Lottery system while minimizing unnecessary disruption."
The Lottery did not consistently suspend sales agents for tobacco-related violations for the required length of time or at all.
licensing/inspectionsinternal controlsrecordkeeping/documentation

Why it matters: Weak suspension enforcement undermines accountability, creates appearance of favoritism, and jeopardizes the integrity of Lottery operations.

Standard: Section II of the Lottery’s “[Massachusetts General Laws Chapter 10, Section 30B]—Lottery Sales Agent Suspension Guidelines.” ( Section II of the Lottery’s “[Massachusetts General Laws Chapter 10, Section 30B]—Lottery Sales Agent Suspension Guidelines”; Chapter 64C of the General Laws )

2 recommendations
  • The Lottery should establish sufficient policies and procedures to monitor the receipt and review of cigar-, electronic nicotine delivery system–, and tobacco-related violations.agency: already implemented
  • The Lottery should establish monitoring controls to ensure that Lottery employees adhere to the specific number of days of suspension and not deviate from its policy.
Agency response & Auditor reply
Agency: "This Sales Agent was suspended by the Lottery for one (1) day on September 23, 2025."
Auditor: "Strengthening these controls will help prevent deviations, promote uniform enforcement, and lower operational and compliance risks."
The Lottery did not monitor or test sales agents for compliance with the prohibition on selling Lottery products to minors.
public safetylicensing/inspectionsinternal controls

Why it matters: The Lottery’s ability to monitor sales to minors and promote responsible gaming was restricted.

Standard: Part A of Section V of the Lottery's “Monitoring & Testing—Sale to Minors” policy. ( Part A of Section V of the Lottery's “Monitoring & Testing—Sale to Minors” policy )

2 recommendations
  • The Lottery should develop monitoring controls to ensure that sales agents comply with laws, regulations, and policies regarding the sale of Lottery products to minors.
  • The Lottery should review, update, and reimplement its “Monitoring & Testing—Sales to Minors” policy.agency: disagreed
Agency response & Auditor reply
Agency: "The Lottery does not monitor and test its sales agents per the 2013 Sale to Minors policy."
Auditor: "If this policy is no longer applicable, it should either be officially withdrawn or revised to reflect current practices related to monitoring sales to minors."
The Lottery did not maintain accurate suspension histories for sales agents in its central gaming system.
recordkeeping/documentationinternal controlslicensing/inspections

Why it matters: Incomplete or inaccurate suspension records could impair monitoring and lead to incorrect enforcement decisions.

Standard: Section 5.3 of the Lottery’s “Licensing Department Procedures.” ( Section 5.3 of the Lottery’s “Licensing Department Procedures” )

2 recommendations
  • The Lottery should consistently review and update its “Licensing Department Procedures” to include details about assigning appropriate reason codes and comments to its suspended sales agents’ files within the central gaming system.agency: already implemented
  • The Lottery should implement a review process to ensure that the appropriate reason codes, comments, and suspension periods are documented in its central gaming system when suspending its sales agents.agency: already implemented
Agency response & Auditor reply
Agency: "The updated process includes explicit instructions for entering the suspension dates and reason codes into the Lottery’s [central gaming] system."
Auditor: "We commend the Lottery’s efforts to update its “Licensing Department Procedures” to improve data entry, accuracy, and communication related to the suspension of sales agents."
The Lottery did not keep a complete log of tobacco-related violations sent by DOR.
recordkeeping/documentationinternal controlsreporting timeliness

Why it matters: Incomplete violation logs could lead to inconsistent suspensions and allow sales agents to continue violating Lottery policies.

Standard: Chapter 647 of the Acts of 1989 and internal control guidelines requiring significant events to be promptly recorded, clearly documented, and properly classified. ( Chapter 647 of the Acts of 1989; Chapter 647 of the Acts of 1989 internal control standard )

2 recommendations
  • The Lottery should develop policies and procedures to ensure that the Lottery’s cigar-, electronic nicotine delivery system–, and tobacco-related violations log is complete, accurate, and up to date.agency: already implemented
  • The Lottery should collaborate with DOR to establish an agreement to create a centralized transmittal and tracking system that allows the Lottery and DOR access to all DOR suspensions, to ensure timely receipt of cigar-, electronic nicotine delivery system–, and tobacco-related violations and improved program management.agency: agreed
Agency response & Auditor reply
Auditor: "We commend the Lottery’s efforts to establish a designated email address and implement a “DOR Tobacco Violations” policy to improve the DOR suspensions program for cigar-, electronic nicotine delivery system–, and tobacco-related violations."

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