The Oregon Lottery (OL) is making plans to introduce online sports betting sometime in late 2019. A recently released mobile app allowing ticket holders to check numbers has the potential to develop into a full-featured sports betting platform.
Matt Shelby, public information manager for the agency, spoke with Legal Sports Report about the prospect:
“Overall we see sports betting as an opportunity to increase our player base and sustainably grow our revenue.”
Provisional projections forecast up to $35.5 million in revenue during the first year.
What may be even more significant, according to Shelby, is that the new app will eventually allow online lottery ticket sales.
“We plan to iteratively add functionality over time including the ability to purchase jackpot games like Powerball and Mega Millions.”
This major addition would bring Oregon into the small group of states with online lottery programs.
Online lottery proposals were the cause of the DOJ’s reinterpretation of the Wire Act in 2011, spawning a slow expansion of state-regulated online gambling. In the time since, online poker has spread to Nevada, Delaware and New Jersey, and Pennsylvania is next to launch.
Many more states are expected to legislate for sports betting after the midterm elections, expanding the industry across the US. Since 2011, however, online lotteries have hit a plateau.
Tickets are currently sold online in just six states:
Lawmakers in Rhode Island also introduced legislation this past January, but no vote is likely until 2019.
Despite state lottery revenues being massively higher than any expectations from sports betting, the latter is spreading more quickly than the former.
Oregon is a relatively small state with a population of 4.1 million people. Nevertheless, annual lottery revenues for 2017 came in at $1.25 billion.
The OL transferred $695.8 million of that to Oregon’s Economic Development Fund, and it expects to transfer another $1.35 billion over the next two years.
A 2017 OL report points out that cannibalization from the new iLani Casino Resort in southwest Washington had a significantly smaller impact on sales than expected. Seeing limited cannibalization may have helped the agency view online sports betting and iLottery in a more positive light.
The Pennsylvania online lottery program began on May 22 of this year, generating $20.8 million in sales by the end of June. That was around three times the sales for the new Keno game, which went live on May 1. Keno provides the OL with 8.1 percent of its revenues.
If Oregon follows a similar trajectory, online sales could make up around 24 percent of its business and $250 million in annual revenue increases.
Theoretically, the OL already has the authority to introduce these changes without additional legislation.
Oregon doesn’t have a fiscal framework for taxing sports betting at the moment, however. And the lottery is not going to move ahead without consulting the legislature. Shelby said that the OL expected to have a clear direction by the end of this year, which may indicate that new legislation could be imminent after the midterms.
One of the unexpected secondary effects of the spread of state-regulated sports betting is that more states may follow Oregon with approval for online lottery.
If that comes to fruition, it will look even more ridiculous to leave online poker in the hands of the black market rather than under the safeguards of state regulation.