The Massachusetts Lottery was established in 1971, following the legalization of gambling by the Massachusetts General Court, the legislature of the Commonwealth of Massachusetts. The Lottery is administered by a commission made up of five members, who include the the Treasurer and Receiver-General of Massachusetts (who serves as chairperson), the Secretary of the Massachusetts Department of Public Safety and the State Comptroller, who serve on an ex officio basis. The Governor appoints the other two members.

The Massachusetts Lottery is unusual in withholding at the state level (5 percent) prizes over $600, instead of over $5,000 which is the Federal level.

The Massachusetts Lottery has come under criticism for not offering a cash option for many of its annuitized games. In 2004, then-94-year-old Massachusetts resident Louise Outing sparked controversy after she failed to win a lawsuit to have her $5.4 million Megabucks jackpot prize paid as a lump sum. (In May 2009, Megabucks was replaced by Megabucks Doubler, which has a cash option; beginning in June 2009, winners of annuity prizes in scratch games (including lifetime payouts) were allowed to receive a lump sum instead.)

In Megabucks Doubler, every 10th ticket is eligible for a doubled non-jackpot prize. The payout percentage in this game is 55%. In comparison to other state lotteries such as Louisiana Lottery this is about average.

Although Massachusetts approved legislation allowing Powerball sales without it losing Mega Millions, an agreement between the two games collapsed in spring 2009.