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BOSTON (AP) - The slumping economy is taking a toll on Massachusetts lottery revenues.

State Treasurer Timothy Cahill said lottery sales are off 3.5 percent since Lehman Brothers filed for bankruptcy on Sept. 15.

The effect of the downturn is being felt throughout the gaming industry, Cahill said, pointing to recent layoffs announced at the Foxwoods and Mohegan Sun casinos in Connecticut.

Cahill said the Massachusetts Lottery is making $3 million in budget cuts — $2 million in administrative cuts and $1 million in reductions in incentive bonuses for lottery agents.

No layoffs are planned.

Cahill said his goal is protect the financial health of the lottery, which provides local aid dollars to cities and towns.

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