Oregon

With Vendor Selected, Oregon Lottery Starts Developing Sports Betting Rules

One of four states grandfathered in with a limited version of sports betting under the now-defunct Professional and Amateur Sports Protection Act, Oregon continues to move ahead with plans for full-fledged  sports wagering through the state lottery. And the plan is to roll out state-wide mobile and kiosk offerings as soon as the upcoming football season.

Before it can go live, though, the Oregon Lottery must develop regulations, a process that is about to get underway. According to a lottery spokesman, once the rules are developed, they must be made available for public comment before being implemented. How long that process will take isn’t clear, as the lottery is still sorting through key questions it must answer before developing rules.

The lottery’s initial offerings will likely be simply allowing consumers to pick winners, both outright and against the spread, and it will increase its offerings going forward. “The plan on our end is to be up and running for the 2019 NFL season,” said Chuck Baumann, the lottery’s senior public affairs officer.

Oregon Lottery supplier objections

In a March presentation, lottery officials announced they had selected SB Tech as its sports betting technology supplier. Scientific Games and Playtech were also in the running, and after the decision was announced, SG, protested.

In the March 25 protest letter, SG points to SB Tech’s lack of experience in the U.S. and further suggests that the lottery carefully vet SB Tech, which must “demonstrate good character, honesty and integrity and sufficient financial stability and responsibility, and reliability to assure good faith performance.”

Put simply, SG has aired some of SB Tech’s potentially dirty laundry, writing in part (emphasis added):

To state the obvious, if SBTech— or companies affiliated with it, like 10Bet—are in fact offering or supporting online sports betting or gaming in jurisdictions in which such activities are illegal, then that determination should weigh heavily in deciding whether SBTech is a “responsible” vendor for purposes of the Lottery’s RFP. Similarly, if SBTech has not provided a full disclosure of all control persons, as the RFP required, then for that reason, too, the Lottery could conclude that SBTech lacks responsibility and its proposal lacks responsiveness.

Lottery officials replied, saying “Oregon Lottery affirms that it will make a Responsibility determination and conduct the background check according to the RFP, the applicable rules and statutes.”

SB Tech, according to the presentation, is already active with five U.S. casinos and is able to “differentiate based on innovative wager options and user experience.” The company currently has three U.S. partners, Churchill Downs, the Golden Nugget and Resorts Casino.

Key to the decision to use SB Tech is the company’s “turn-key sports betting platform,” which can be used at both physical locations and online sportsbooks. The company is a sports betting, rather than lottery, specialist and, according to the presentation, SB Tech’s focus is on the player experience.

On April 5, the lottery commission approved SB Tech as a vendor, and the lottery is targeting the end of the month to have the contract completed. The lottery’s Chief Gaming Operations Officer Farshad Allahdadi suggested a three-five year contract with SB Tech and stated that the company would get between 9-11 percent of monthly net gaming revenue. The memo also targets April 19 as the date the lottery will complete its due diligence on SB Tech.

Legislative action not needed

Unlike many states that have had to go through the legislative process to legalize sports betting since PASPA was overturned in May 2018, Oregon determined it faced no such restraints. When the lottery rolled out its mobile app last September, it announced that it planned to offer sports betting.

The other states similarly situated were Delaware and Montana. In June 2018, Delaware became the first state to launch full-fledged sports betting post-PASPA, before even New Jersey, and Montana is now getting close in a process involving the legislature.

As the Oregon lottery moves forward with sports betting, tribal gaming interests in the state don’t appear to have made any moves toward offering sports betting. Oregon has nine tribal casinos, including four along the coast.

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