A week after the Oregon Lottery’s Scoreboard sports betting app went live, Global Gaming Business News interviewed lottery spokesman Matt Shelby about the first days of sports betting in the Beaver State—the only sportsbook so far to be offered by a state lottery.
It didn’t take long in the interview for Shelby to quash an early report that the Scoreboard sports betting app “crashed” the day before it went live.
“That didn’t happen,” said Shelby. “One of the things we run into is there is a lot of interest in this nationwide. You pair that with a wide array of news aggregators in the gaming industry. What happened is that we had our regular lottery website go down on Tuesday and it was down for about an hour.”
Shelby said the problem “had to do with a Google ad, and had nothing to do with sports betting.” The app on Wednesday, October 16, he said. “There was a ‘journalist’ who took a news report about the website being down for an hour and mashed it together, made assumptions and put an article out. It’s absolutely inaccurate and fairly irresponsible, but that’s life in the internet.”
There have been some problems with the app—such as the fact that users who stray too near one of the state’s nine Indian reservations may not be able to convince the app’s geotracking technology that they are within the legal limits of the state and not actually inside the reservation. Shelby says there’s probably no way around that problem, but anyone can place bets online by computer, even close to a reservation.
Any of those reservations can offer their own forms of sports betting. One of them, the Confederated Tribes of the Siletz Reservation, opened a sports book on August 27 at the Chinook Winds Casino Resort overlooking the Pacific Ocean.
The most recent figures, compiled on Sunday, October 20, indicated that the app had slightly more than 18,000 registrations and just over $1 million wagered. “That includes 59,000 individual bets,” said Shelby. “All of the Top 10 events were NFL and 62 percent were on football—with 10 percent on soccer, 9 percent on basketball, 8 percent baseball, 7 percent hockey and 4 percent other.”
It’s not just the same people betting over and over; the bettors are a wide group. “Of the $1 million, the highest wager was $1,400,” said Shelby. “It was a large number of small bets.”
The two limiting factors in the size of wagers are the person’s ability to pay—the Oregon Lottery doesn’t offer credit—and limits built in by the sport. “We make that determination based on our risk toleration and betting patterns. Some caps are built in by the sport. For instance, the NFL is $5,000. Each sport is different.”
Several weeks ago Shelby said that Oregon was learning from the experiences of other states that have legalized sports betting. GGB News asked what the state has learned.
“We’ve been looking at states that went before us back east, like New Jersey and Delaware, in terms of what sports betting has meant to them, and the handle they’re experiencing,” said Shelby. “We took those trends, extrapolated those trends and applied them to our population in Oregon to get some pretty solid first-year projections. The biggest for us was to preview the public interest.”
Of course, there are major differences in the states, he noted. “Obviously, our population is smaller than New Jersey and we don’t have New York City next door. That was the biggest thing. From a regulatory structure, every state is different, so there were things we had to learn on our own. The Oregon Lottery is the only state-owned lottery that is operating a sportsbook that I’m aware of. We are really the pioneers for the operating model. We’re learning the lessons and people will learn from us.”
The biggest surprise was how busy the app was in the first few days. “We always knew there was a pent-up demand for legal online sports wagering and we knew it was going to be busy. We didn’t know how busy,” said Shelby. “For the first few days it was Black Friday at Best Buy. You had so many people logging in, it slowed the app down and people weren’t able to get on as fast as they wanted. It’s not a fun or a great customer experience.”
This situation is improving, said Shelby: “We are working through that and it’s getting better each day. You see a big push the first days and then it levels out. I think last week everyone was working as hard to get as many people through the process as we could.”
Customers are dealing with live lottery employees, the nature of the beast. As Shelby pointed out, “In order to use the game, you have to establish an account. We have limited this to players 21 and older. We need to ensure that people signing up are who they say they are and we also want it to be as customer-friendly a verification process as possible.”
When customers put in their dates of birth, there’s an automated verification system. If all their information is accurate, matches and is checkable, the player is automatically verified. When anything doesn’t match, it triggers a manual process where patrons work with a human, “and that takes a little longer,” said Shelby. “It’s not as smooth an experience as the automatic, but out of the gate we need to make sure that the people signing up are who they say they are. One of the biggest fears was that online play opened up the risk of underage players.”
The system isn’t perfect, and no one claims it will catch all fraud. “But it guarantees that people who sign up are who they say they are. If you have someone else’s name you have already done identity theft and setting up a sports betting account is the least impactful thing you could be doing within the criminal justice system,” he said.
The biggest difference between Oregon’s Scoreboard and most sportsbooks in other states’ is that the app is not offering any college or university sports betting. “That has to do with internal Oregon politics,” Shelby said. “We are not fundamentally opposed, but we don’t operate in a vacuum. Before we offer betting on collegiate sports, we need to have a conversation with our university system and others within our borders. We haven’t had the time to have those conversations. Right now, we know other states have college betting, but that’s what we felt was the prudent path.”
Shelby anticipates that the number of bettors will grow over time as more people become familiar with the product. That’s why the lottery put off the marketing push until it made it through the launch. In mid-November we will do ad buys specific to sports betting. This isn’t the first time we offered sports betting. We had parlay wagers in the 1990s, so Oregonians have some experience with it. This is a much more robust offering. As people become more familiar the numbers will increase.”
As numbers expand, the lottery will continue to evolve the app. “The nice thing about working in the digital space is that you can always improve. We are hearing what they like and what they don’t like and we are already adding things to improve the customer experience,” said Shelby.
Asked how the lottery protects bettors’ private financial information, Shelby said, “When players sign up and give us that information it stays on servers in Oregon. That access is limited to those people who need access for a business reason, such as for tax purposes. The access is very limited. The servers the information is on were checked not only by our internal lottery but third party vendors. We will continue to do that. One thing that gives us an advantage over illegal bookies is the Lottery has been around since 1985. We aren’t going to do anything to hinder that trust.”
The Scoreboard system requires that everyone sets limits on their betting. “You are required to set a daily, weekly and monthly deposit limit, how much you allow yourself,” said Shelby. “Obviously people can raise that, but there’s a 24-hour waiting period. We do track that. As we get more experience we will be able to know average limits and average bet amounts. We know that we are not going to attract the huge thousands of dollar amounts that are going to Las Vegas regularly or to offshore bookies. When you bet through us you pay taxes on it. We really believe this product is designed to appeal to the vast number who want a convenient way to bet and that’s who we think we are going to get.”
Given that Scoreboard didn’t launch in time for the NFL season as originally planned, did the lottery encounter difficulties integrating the off-the-shelf sports betting app developed by SB Tech with the e-commerce platform the lottery developed in-house?
“I wouldn’t say difficulty. It was a lot of work,” said Shelby. “When we sat down this spring, we put a target on the NFL to launch and we didn’t hit that. We knew the steps we would have to take, and what we misjudged was that our pace was slower than what we had hoped for.”
He added, “That speaks to the number of companies involved in putting this product together for customers. As a state agency, we can’t operate as a bank or hold money in trust. We needed to bring in a banking partner to work with SB Tech. That whole funding mechanism didn’t have a lot to do with sports betting, but we needed to integrate that into the customer experience and had to integrate our in-house system.
“There were a lot of moving pieces and they all fell into place in the end. It just took a little longer than we thought.”
