Matt Shelby’s memory was vivid, as if he were in college at the University of Oregon last week, sitting in his dorm room contemplating the weekend ahead.
“Figuring out what my picks were for the weekend and trying not to spend all my beer money,” the Oregon Lottery spokesman said recalling the last time the state had a sports betting service.
Back then, Sports Action was the way to wager bets in Oregon. Players used the paper-based parlay game that was limited to NFL games until 2007, when the service was terminated thanks House Bill 3466, which eliminated sports betting in Oregon.
That is until now.
On Wednesday, Oregon Lottery officials are expected to finally launch Scoreboard, the mobile sports betting app that will allow in-state users to wager on professional sports.
“We’re talking about a true mobile-based sportsbook that gives players the opportunity to wager on a variety of pro sports,” Shelby said.
After numerous delays, officials went through the final test over the weekend. They gave six players — two on each platform, iOS, Android and desktop — $100 each to test the service by placing bets on games in real time, even allowing them to to keep their winnings. The final run-through was to ensure users won’t have any trouble depositing, betting or withdrawing money.
Oregon Lottery Director Barry Pack met with the app’s project team Monday, where he gave final approval for the launch.
“We’re not anticipating any surprises,” Shelby said.
States add betting apps
Scoreboard was expected to launch by the start of the NFL season but was delayed to give the state more time to iron out last-minute kinks. Oregon will be the eighth state to add a live sports betting app, and one of 12 states offering legal mobile sports betting via an app.
The lottery partnered with SBTech, a privately run company that specializes in sports betting services. The company also runs the Church Hill Downs sports betting service, which has a partnership with Golden Nugget Casino in New Jersey.
Shelby said the decision to select SBTech to create the Scoreboard app came down to the company’s experience with sports betting. Lottery officials were also impressed with the firm’s ability to enhance the “player experience.”
“A number of competitors we looked at were large lottery companies that also did sports betting. So, it was a component of their portfolio. With SBTech, this was their bread and butter and really what they do,” Shelby said.
Scoreboard will also offer in-game betting to allow players to take advantage of real-time game situations, including from the state’s NBA team, the Portland Trail Blazers.
The Oregon Lottery already has a sponsorship agreement with the Blazers, and both sides expressed excitement about the possibilities of enhancing the relationship via the app. Blazers CEO Chris McGowan said the app has the potential to “broaden the Trail Blazers fan base among Oregonians.”
“The addition of sports betting is exciting, and we look forward to exploring potential opportunities to expand our partnership,” he said via email on Sunday.
FDIC insured accounts
To place a bet, players must establish a funding account. While there’s no minimum, the lottery app won’t hold more than $250,000 per account, which will be insured by the FDIC. The maximum bet the lottery will accept will vary. Still, Shelby does not anticipate the lottery taking too many high wagers that exceed the max of a funding account.
“We’re not obligated to take all wagers,” he said. “So, if someone came in, theoretically, and had $250,000 in their account and tried to put that down on a single game, it would be met with heavy scrutiny. And frankly, I’d be surprised if we took it.”
Not every bet will be reviewed, but SBTech has the authority to review individual bets and flag anything to lottery officials that looks fishy for additional screening.
The app will also be geofenced to honor and protect its relationship with the state’s tribal casinos. Geofencing uses global positioning to determine a user’s location, keeping players on tribal lands from placing wagers through the app. Players on the property owned by the Confederated Tribes of Siletz Indians can still bet on a game in person at the Chinook Winds Casino Resort, which began taking sports bets in August.
“We’re staying in our lane and letting the tribes do what they want,” Shelby said.
After exploring projections for the app, lottery officials are anticipating users to wage roughly $300 million in the first year, of which the state is projecting gross revenues of $5 million. The Oregon Lottery could be generating $30 million or more in annual revenue by the third year as the costs of running the app fall, Shelby said.
“Not huge money, but real dollars,” he said.
Officials aren’t charging consumer fees in hopes of attracting more business. Players can make bets, deposit and withdrawal money hassle-free.
“With our app, you get paid in real dollars back to your account that you can immediately withdraw as opposed to hanging around, waiting for your bitcoin to come in from your offshore book,” Shelby said. “In Oregon, the regulatory structure is such that we will be the only legal mobile book available to players in the state.”
According to the American Gaming Association, more than $150 billion is wagered illegally on sports betting in the United States every year via “online, offshore, corner bookies, whatever people’s appetite was,” said Casey Clark, AGA’s senior vice president of strategic communications.
Since the U.S. Supreme Court overturned a federal ban on sports betting last year, 18 states have legalized it, including five and the District of Columbia waiting to begin operations. More than $11 billion has been wagered on legal sports games since the ruling took effect.
“Generating more than $115 million in tax revenue,” Clark said. “If you look how quickly this has evolved, essentially from one state which had a monopoly in Nevada, and fast forward, now you’ve got almost 20 places across the country; it’s a remarkable growth story.”
The app will be restricted to professional sports only, at least for now. Shelby said more research would need to occur before the Oregon Lottery includes bets on NCAA games.
“I’m not going to say never,” Shelby said, “but we definitely have to have a lot of engagement with our high-ed institutions and the governor’s office’s and legislators before we make a move in that direction.”