Oregon has nine tribal casinos, a horse racetrack and 11 off-track betting locations plus a summer weekend horse racing circuit a “hub” system to accept wagers on horse and dog racing from out-of-state bettors. Add to this list later this summer the state’s first online gambling app and later, sports betting.
Oregon Lottery spokesman Matt Shelby said, “We’ve got to keep pace with what people want. It’s evolve or die for us.” Shelby acknowledged the expansion of gambling is opposed by tribes that operate the state’s nine tribal casinos, as well as bars and restaurants that depend on lottery commissions. “We want to expand in a way that makes sense and doesn’t hurt what we’re already doing,” Shelby said. The move would be the largest expansion of gambling since the Oregon Lottery added video gambling machines in 2005.
Shelby said in the first phase, players will be able to download the app to check their lottery numbers and track jackpots. In the second phase, virtual sports games will be available. No timetable has been established.
After personal income taxes, the Oregon Lottery is the state’s second-largest source of revenue, generating more than $650 million a year. However, a recent audit indicated between 2008 and 2016, the share of customers age 35-54 dropped dramatically, while the share of players age 65 or older nearly doubled, to 21.5 percent. “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,” Shelby stated.
About three-quarters of lottery revenue comes from the state’s nearly 4,000 bars and restaurants that offer video lottery. The retailers earn commissions of 26 percent of the money patrons put into video lottery machines, totaling $240 million last year. Oregon Restaurant & Lodging Association Attorney Michael Mills said, “The concern among video lottery retailers is that the video lottery games platform will be diluted or diminished.”
However, lottery officials believe sports and virtual sports participants not the same people who play video poker or slots. Shelby said, “We aren’t going to cannibalize that current revenue stream. We want to add new players and make it easier for existing players to play.”
Lottery revenue fell and hasn’t fully recovered from the state’s 2008 indoor smoking ban. A more recent threat is the new casino Ilani in Washington and more competition is expected from other states.
Regarding sports betting, Oregon is one of four states grandfathered in under the Professional and Amateur Sports Protection Act, which prohibited sports betting in most states. So when the U.S. Supreme Court lifted the federal ban, Oregon already had language on the books to allow sports betting. New legislation is not required.
In January, lottery staff requested permission from the Oregon Lottery Commission to allow mobile and sports betting, in anticipation of the high court lifting the ban. In a letter to commissioners, Lottery Chief Gaming Officer Farshad Allahdadi wrote, “A portion of the Oregon gaming market is not attracted to the games in our current portfolio. Game attributes that we are missing include social, competitive and mobile/cashless convenience.” He added “significant revenues are expected” from mobile and sports betting.
Three days after the court announced its decision, Oregon Lottery Director Barry Pack submitted a formal request to authorize sports betting. He wrote, “Lottery’s strategic plan contemplates some form of sports betting to increase revenues/transfers to the state. It will likely have a major technology/mobile component.”
Governor Kate Brown supports both online gambling and sports betting. Her spokeswoman Kate Kondayen said, “Governor Brown is open to exploring sports betting as part of the Oregon State Lottery portfolio, particularly in ways that partner with Oregon’s tribes. The future of commerce is through mobile platforms, and the lottery needs to stay relevant in that world.”
