As Oregon prepares to launch statewide sports betting ahead of the 2019 football season kickoff in September, its state lottery, which will oversee sports betting in the state, released internal financial projections that indicate Oregon expects sports betting to be a big hit among the public.
According to the projections, distributed by the Oregon Lottery’s Matt Shelby, Oregon expects to take in over $1.6 billion in total handle over the first three years of legalized sports betting, including $333 million during the first year, $556 million in the second and $722 million by the end of Year 3.
These projections expect the lottery to reach unprecedented hold thresholds. Though bettors are expected to win $1.5 billion of the projected $1.6 billion in total bets, that would mean operators would keep 6.25 percent, which would be among the highest holds ever recorded. In the last 30 years, Nevada sportsbooks have averaged 5.55 percent hold.
The lofty hold projections underscore some Oregonians’ view that its sports betting program will be a game changer for the state. But some Oregonians are concerned about the Oregon Lottery’s partnership with SBTech even before it takes its first wager.
The Oregon Lottery forecasts it will pay SBTech about $26.8 million over the next three years. Some have suggested the release of these internal projections is a direct response to concerns about the partnership between the two entities, which includes SBTech providing Oregon Lottery officials with sports betting technology and a mobile app.
SBTech, which is registered in Malta, is an experienced provider in international sports betting circles but is a relative newcomer to the U.S. market. Its main offices are located across two Bulgarian cities, Sofia and Plovdiv, and some believe it would have been better for Oregon to choose a different option.
This year, Oregon invited three companies to submit proposals to become Oregon’s sports betting technology vendor before selecting SBTech over second-place finisher Scientific Games and third-place bidder Playtech.
Under pressure to provide more revenue in a forward-thinking way, the Oregon Lottery decided to go after the younger market demographic and concluded that the targeted audience was more apt to use mobile betting options and more advanced technologies than the methods the Oregon Lottery had used before for other programs.
So once Oregon decided on its technology vendor, officials went so far as to send Oregon State Police investigators all the way to Bulgaria to interview SBTech staff members as part of their vetting process.
But Scientific Games, which is headquartered in Las Vegas, filed a protest over Oregon's decision, citing SBTech’s lack of experience in the U.S. as well as the company’s international ties and overall use of controversial business practices. SBTech has been accused of providing its technology to companies who market sports betting services to areas of the world where sports gambling remains illegal.
Some of the claims made in the Scientifc Games protest were quickly denied by both Oregon Lottery officials and SBTech.
Still, some in the media have wondered why the Oregon Lottery recommended SBTech before state investigators even went to SBTech offices in Bulgaria. Some also point to the state’s unwillingness to release copies of the contract without first allowing SBTech to redact large portions of it, as well as the state’s refusal to release the findings of the Oregon State Police investigation.
Regardless, per the agreement, the Oregon Lottery receives access to SBTech’s mobile betting technology and will use it for the development of sports gaming kiosks and other services that are scheduled to be ready for use by 2020 at select lottery retailers, restaurants and bars.