PA Lottery Launches Keno; Virtual Sports And Online Lottery Games On Way

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The first tangible evidence of gambling expansion appeared this week in Pennsylvania. It’s not online poker yet, nor sports betting nor online casino games. Those are all coming in due time.

Right now, it’s a broad expansion for the PA Lottery, another beneficiary of the new law.

In an effort to modernize its platform and appeal to younger customers, the lottery is rolling out a comprehensive upgrade to its product. There are new games in store, new ways to play, and new venues in which to play them.

The first remote lottery game, keno, went live just before sunrise on Tuesday.

Keno in retail locations

For those unfamiliar, keno is a popular electronic game in casinos around the country. Players choose up to ten numbers from a grid of 80 squares, and a computer randomly draws 20 of its own. Payouts are based on the number of spots the player matches. Games run every four minutes, and the 65 percent ROI roughly matches the lottery’s overall winning expectation.

Starting this week, keno is available at a number of food, beverage and retail locations throughout the state. Hundreds of them, in fact.

The lottery is authorized to offer the game via its land-based and electronic platforms, and it’s extending those permissions to retailers. Keno requires the installation of a dedicated video monitor, which the lottery will personally hang inside the location. Once live, the owner receives a five percent commission on all money wagered on site.

Lottery executive director Drew Svitko told the Pittsburgh Post-Gazette that more than 500 properties have already applied to offer the product. And he predicts that number will grow into the thousands as time goes on.

The first drawing was held Tuesday morning at 5:49 a.m., and it looks like it’s going to be popular. The lottery indicated it was selling about 8,200 tickets per hour during the lunchtime rush.

Pennsylvania is the 18th state to offer the keno through its lottery, budgeting $27 million in first-year profit.

Virtual sports coming soon

Those keno monitors will serve a dual purpose in the near future. Within a couple months, the lottery will offer virtual sports betting, too. Some online casinos already offer the product in the US — SugarHouse Casino, for example — but the PA lottery will be the first state entity to do so.

PA’s virtual games will be called Xpress Sports. The lottery expects the format to drive another $13 million to its bottom line this year.

Here is what it looks like:

The vendor is Inspired Entertainment Inc., which provides virtual sports for a number of companies.

Again, some explanation may be in order. Virtual sports are simulated sporting events “broadcast” by the operator. The quotes are there because these aren’t actual sports broadcasts; they’re just digital simulations. The outcomes are determined by what is essentially a random number generator.

Just like physical sports, virtual sports are perfect fodder for bettors. And they’re wildly popular in existing markets abroad. Wagers on simulated events account for as much as 20 percent of total revenue for some sportsbooks.

Beginning as early as June, PA lottery customers will be able to bet on virtual sports right alongside keno. The plan is to offer simulations of football games and racing events inside those same retail locations. As with keno, virtual sporting events can run every few minutes.

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iLottery app coming, too

Last, and perhaps most important, is the impending launch of a PA iLottery app.

Sometime during the next few months, the group will roll out a mobile client allowing customers to play on the go. This would dovetail nicely with keno and other games that are best scored electronically.

There’s more than keno in store, though. The iLottery app will include 15 to 20 electronic games that differ from traditional offerings. Here’s how Svitko describes them:

These games are meant to appeal to a new audience. These are a lot closer to a game like Candy Crush than what people are accustomed to in a game like Powerball. These are meant to be engaging, entertaining, relevant games.

Svitko expects the new games to attract a younger audience and drive another $30 million to the lottery’s account. As a form of protection for retailers (of which there are almost 10,000), traditional draw tickets will not initially be available on the iLottery app.

Revenue from ticket sales goes to support infrastructure for the state’s aging population. Since launching in 1972, the lottery has contributed more than $28 billion in funding.

- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.
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