Oregon Lottery’s sports betting ops to lose $5.3m in first year


oregon-lottery-scoreboard-sports-betting-sbtech-lossesOregon’s state-run sports betting operation is currently generating a larger amount of revenue for its technology partner than it is for the state government.

On Monday, Wilamette Week reported that the Oregon Lottery was preparing to admit publicly what many had suspected for some time; its Scoreboard digital betting product is on pace to lose $5.3m in the the state’s current fiscal year, a far cry from the $6.3m profit that Lottery officials had projected the betting app would bring when it launched the product last October.

Lottery Director Barry Pack revealed figures that show Scoreboard now expects to generate revenue of just $10.8m while expenses will total $16.1m. In January, Pack said the Lottery had “revised downward” its original revenue projections due in part to Scoreboard’s inability to convince bettors who were already wagering with unapproved options to check out the Lottery’s product (which some critics have consistently derided as buggy as hell).

Another problem is the state’s blanket prohibition of wagering on college sports, which differs from many other states that approved betting legislation that only barred wagering on college sports involving a local team. Efforts to convince Oregon legislators to relax this prohibition have so far gone nowhere.

Around $6.2m of Scoreboard’s expenses to date was attributed to ‘game vendor charges’ by Scoreboard’s technology supplier SBTech. The state’s deal with SBTech was controversial from the start, in part due to SBTech’s involvement in international markets where betting isn’t entirely legal, but also due to the parties’ reluctance to make its details public.

In early January, Oregon’s deputy attorney general approved a public records request by local media outlet The Oregonian/Oregon Live and online gambling affiliate Legal Sports Report, both of which wanted a gander at the SBTech contract. In response, SBTech filed for a temporary restraining order to block the release of the contract, and a local judge issued the TRO on January 10.

SBTech justified the efforts to prevent the contract’s release by claiming it contained “trade secrets,” the exposure of which would do the company “irreparable harm” and cause further “public harm” by discouraging other companies from entering into deals with state agencies lest their secrets be similarly thrust into the sunlight.

The issue over the contract’s release is still tied up in the courts. But news of Scoreboard’s losing bet on first-year profits will almost certainly spark greater interest in determining what secrets are lurking behind that TRO.