The Oregon Lottery plans to introduce a new mobile phone app as soon as next month.
The Lottery worries that younger residents are not being attracted to the video lottery machines it has at 4,000 retail locations.
“We’ve got to keep pace with what people want. It’s evolve or die for us,” commented Lottery spokesman Matt Shelby.
Besides releasing an app, the Lottery also wants to enter sports betting.
The state already has plenty of gaming. Lottery is the second largest source of income. Last year that was $650 million. But that amount appears threatened by the fact that the share of customers in ages 35-54 has declined, while those 65 and older has increased by 21.5 percent.
With the Lottery expansion the state could be looking at the largest expansion of gaming in 13 years. The state’s 13 gaming tribes are not pleased about the introduction of a Lottery app, which they fear could impact their brick and mortar casinos.
The Lottery, for its part, fears competition from the recently opened Ilani in Washington, and other casinos set to open in neighboring states.
Shelby said the state doesn’t want to hurt its existing golden geese. “We want to expand in a way that makes sense and doesn’t hurt what we’re already doing,” he said. He added, “It’s no secret we’ve got an aging demo and when you ask younger people what they want, it’s a lot different than hanging out and playing video lottery.”
The state hobbled casino profits in 2008 when it banned all indoor smoking, including at casinos. Those profits have not returned to previous levels in the intervening decade.
In a request to the Oregon Lottery Commission the Lottery’s chief gaming officer, Garshad Allahdadi wrote, “A portion of the Oregon gaming market is not attracted to the games in our current portfolio.” He added, “Game attributes that we are missing include social, competitive, and mobile/cashless convenience.” He asked for permission to move into mobile platforms and sports betting and predicted “significant revenues,” if he is allowed to do so.
The letter did the trick. The commission approved the request.
The use of the app will expand slowly. Initially players will be able to check their lottery numbers and keep track of jackpots. But eventually they will be able to play virtual sports games. They will also be able to buy Lottery tickets on their phones.
Many of the state’s 4,000 retail locations suddenly feel a cold breath on their backs. This is a serious concern since they currently account for more than three quarters of the Lottery’s revenues. They earn 26 percent of the money pumped into the machines.
An attorney for the Oregon Restaurant & Lodging Association recently wrote to the Lottery: “The concern among video lottery retailers is that the ‘video lottery games’ platform will be diluted or diminished.”
Shelby believes that players who haven’t been playing the Lottery will use the new technology, and so existing revenues won’t be impacted.
The Lottery didn’t wait long after the U.S. Supreme Court lifted the sports betting ban before submitting a request to the commission for permission to explore sports betting.
Governor Kate Brown favors this. Through a spokesman she added, “The future of commerce is through mobile platforms, and the lottery needs to stay relevant in that world.” The governor is already crafting proposals for next year’s legislative session.
