Oregon Lottery to Launch Sports Betting in Two Months
The Oregon Lottery is on rack to open its sports betting section in three phases that will have the first wagers being taken as the NFL season begin. The Lottery’s hiring of SBTech to run its sports wagers continues to be controversial.
The Oregon Lottery plans to launch sports betting in two months, just in time for the NFL season; becoming the first state in the Pacific Northwest to do so. It plans a three-phase rollout.
Because Oregon was one of the four states that was grandfathered in when the federal Professional and Amateur Sports Protection Act (PASPA) of 1992 was passed, it did not have a sports betting ban. For a time it offered the Sports Action parlay game. That game could come back as part of the rollout of sports betting, according to Lottery spokesman Matt Shelby, who was interviewed by PlayUSA.
The Lottery plans to offer both online sports betting and self-service sports book kiosks. In fact, its first offerings will be on mobile platforms. A few months later the kiosks will be rolled out at retailers, which will be able to have up to six of them. The third phase could include the return of the Sports Action parlay game.
The online product may include the ability to buy scratchers, Powerball and Megabucks. The sports book rollout will not include video lottery terminals (VLTs) said Shelby.
The Oregon Lottery is taking a lot of fire because of its technical partner, SBTech, which has been accused by Scientific Games, one of the rivals it outbid for the contract of offering online sports betting to countries where that is illegal. SBTech vigorously denies this and the Lottery said it conducted an extensive investigations where officers traveled to Europe and remains confident in SBTech, which also operates in Arkansas, New Jersey and Mississippi.
As recently as June several lawmakers introduced legislation in the House that would have banned such forms of sports betting. Those bills went nowhere and Shelby said he and his staff had been confident of the support of the governor, Kate Brown. “I don’t think we were ever all that concerned,” said Shelby.
He noted that several lawmakers began to earmark money from sports betting for favorite project, such as paying down the public employee retirement debt. He added, “There were a number of bills that made it through, or bonds that were approved, that used lottery revenue as the collateral for capital ponds. While on one hand a few legislators had general concerns about the direction we were going, as a body, the legislature was moving forward and dedicating that money.”
Later Senate Committee on Finance and Revenue Chairman Mark Hass declared that “no action will be taken” on the proposed amendment.
Now, with those distractions out of the way Shelby spoke confidently about rolling out some of the same services that SBTech now offers at the Golden Nugget Sportsbook in New Jersey. It will only offer professional sports betting for the time being. Shelby told PlayUSA: “We’re not going to say ‘never. But out of the gate, we felt that it was prudent to stick with pro sports at the moment.”
Part of that decision stems from the state’s experiences with the NCAA, which declined to put championship events in any state that offered sports book. Because of that stand Oregon stopped offering Sports Action in 2007.
Oregon’s university officials remain skittish about allowing collegiate betting. Shelby said he doesn’t want for them to be uncomfortable about sports betting, so the state will stick to professional sports for now.
There are a lot of uncertainties about what officials actually expect from the sports betting market. Shelby said, “We have lots of projections about what we think betting patterns are going to be and what revenue is going to be. But those are just projections. We’ll see what the market actually bears. At that point, you can start having conversations about what sports betting is yielding and what it could yield if we offered NCAA.”
Shelby knows that the state won’t maximize sports betting profits if it doesn’t include college games. “But we have a dual mission: It’s maximum profit for the state of Oregon commensurate with the public good,” he told PlayUSA. “If we were only interested in maximum profit, absolutely we’d offer collegiate betting. But we’re not a for-profit enterprise. We’re a state agency. … We approach things a little more cautiously than a casino.”
Six months after the initial rollout the statewide introduction will be complete. He says the state has a strong retail market. “The infrastructure is there,” said Shelby. “It’s just training people to support new hardware and working with retailers to figure out where the machines would go.”
The decision of which retailers will be approached has not gotten far. “You can’t just walk in and say, ‘I’m a new business, I want kiosks.’ We’re going to start with a number that makes more sense. … We want to make sure we’ll be placing these kiosks in places that make sense and are viable,” said Shelby. Although they will be relying on existing retailers, past history isn’t the only factor. “We know that sports betting draws a new type of consumers. So we can’t rely on data from our current offerings. We know there are potential retailers out there(that do not have lotto products that may be interested in having a sports betting kiosk.”
Eventually the Lottery will “provide mobile convenience toward Powerball or Megabucks tickets” as well as the ability to play scratchers, he said.
Shelby also said the Lottery wants to be socially responsible and not to encourage people with gambling problems. “We don’t want to be in a position where someone is spending hours at a bar and playing lottery and going home and grabbing a six-pack out of their fridge and then playing at home,” he told PlayUSA.
In his interview Shelby also addressed the controversy with SBTech, which was generated by Scientific Games, which called on the Lottery to investigate SBTech and even reconsider its deal with them. Oregon State Police even sent an office to Europe to investigate some of the claims.
Shelby dismissed any concerns about SBTech as having come largely from Scientific Games being disgruntled over losing the contract to a foreign provider. “We know the sports betting industry is a highly competitive industry. We know there’s a vendor that bid for this contract and did not get it that made some claims. We looked into those claims.” He added, “State police investigated. At the end of the day, they didn’t surface anything that was worth moving forward.”
Last week rumors circulated that DraftKings might be acquiring SBTech. Shelby said if that happens it wouldn’t affect the state’s relationship with the company. It WOULD require the state to do “due diligence” on DraftKings, however.