Oregon Lottery Posts Lofty Predictions For Sports Betting

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With the Oregon Lottery set to launch sports betting in time for the 2019 football season, the Lottery recently released an internal financial forecast for its sports betting operations.

Shortly after finalizing its sports betting agreement with SBTech, the Oregon Lottery revealed that it expects to take over $1.6bn in wagers over the first three years of legal sports betting.

The Lottery predicts that residents will bet at least $332.8m in the first year of legal wagering, $555.9m in the second year and $722.3m in the third year.

However, it’s expected bettors to win back a bulk of the handle. Bettors are expected to win back $306.2m in the first year of betting, $507.4m in the second and $656.2m in the third year. These predictions suggest that bettors will win back about $1.5bn in the first three years of legal sports betting in the state.

This will leave the Oregon Lottery with a predicted total gross gaming revenue of $141.2m in the first three years of sports betting. Breaking down the revenue forecast, the first year of sports betting is expected to generate $26.6m in revenue, rising to $48.5m in the second year and then $66.1m in the third.

When compared to other states, Oregon’s sports betting forecast seems reasonable. New Jersey, one of the fastest growing sports betting markets in the nation, launched sports betting in June 2018. In just over a year, bookies in the Garden State have taken over $2.9bn in sports wagers and generated more than $190m in revenue.

The Oregon Lottery and SBTech

On 7 June, the Oregon Lottery announced that it had inked a contract with sports betting supplier SBTech for sports betting in the Beaver State. Under the deal, SBTech will be responsible for powering the Lottery’s land-based and online sports betting app.

The Oregon Lottery Commission selected SBTech to power its sports betting operations in April after receiving bids from several other companies last year, including PlayTech and Scientific Games. According to the Commission’s RFP team, the supplier was chosen thanks to its experience in product design and ability to meet the Lottery’s deadlines.

However, the decision to partner with SBTech for sports betting was not without controversy as it was announced before background checks were completed. Under state law, all of the Oregon Lottery’s contractors must pass a background check carried out by the Oregon State Police.

As part of the background checks, state officials sent Oregon State Police investigators to SBTech’s Bulgaria offices to interview staff members.

Shortly after news of the SBTech contract broke, Scientific Games released a letter protesting the Lottery’s decision. Scientific Games cited SBTech’s lack of experience in the US market and the supplier’s international business operations and controversial business practices. The letter claimed that SBTech is affiliated with 10Bet, a gambling site that has been blacklisted in Belgium.

An SBTech spokesperson denied these claims and added that the supplier is licensed to operate in Mississippi and has also received approval in New Jersey and Pennsylvania. On top of this, Oregon State Police investigators did not find anything that would disqualify SBTech from working with the state Lottery.

However, several questions have been raised over the deal, as Lottery officials also refused to release the state police’s background check on SBTech. Instead, the Lottery only released a summary of the findings. On top of this, the state Lottery allowed the supplier to redact large portions of the contract before releasing it to the public.

Sports betting in Oregon

Prior to the passage of the Professional and Amateur Sports Protection Act (PASPA), Oregon, Nevada, Montana and Delaware already offered a form of legal sports betting. The existing sports betting laws were ‘grandfathered’ in under PASPA allowing Oregon and the other states to continue to offer sports betting even after PASPA became law in 1992.

Sports betting in Oregon came in the form of its Sports Action parlay game. The game was discontinued in 2007 after the NCAA threatened to stop hosting collegiate events in the state. However, the repeal of PASPA has led to renewed interest in sports betting.

The Oregon Lottery has a three-phase launch plan for sports betting in the state. Unlike other states with legal betting, Oregon’s first phase will see the launch of mobile sports betting in time for the first Sunday of the 2019 NFL season. The second stage involves the launch of self-service betting kiosks at retailers throughout the state in early 2020, while the last phase will see the relaunch of the Oregon Sports Action parlay game.

However, when sports betting launches in Oregon, the Lottery will only offer lines on professional sporting events to begin with. It is not immediately clear why the Lottery has chosen to launch without collegiate wagering, but it is likely due to past controversies with the NCAA.

If all goes to plan, Oregon could be the next state with a legal and regulated sports betting market, and bettors will be able to bet via mobile devices in time for the NFL season.

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