Hammered by COVID-19, The Oregon Lottery Plans to Offer Gambling on “Virtual Sports”

The agency's revenues were down more than 90 percent last month because of COVID-19.

The Cheerful Bullpen in Southwest Portland. (Aaron Mesh)

The Oregon Lottery announced plans May 29 to soon offer imaginary sports on its mobile sports betting app.

Gamblers who signed up for the Scoreboard app can bet on "virtual sporting events, including virtual horse racing, greyhound racing and soccer." Unlike real competitions involving humans and animals, the outcomes of virtual sports are determined by computer programs called "random number generators."

Lottery spokesman Matt Shelby says the agency believes it will be able to offer the new betting opportunities "in a matter of weeks."

"In terms of functionality, we just have to turn it on," he adds.

Kitty Martz, an anti-gambling activist who regularly testifies in front of the Lottery Commission, opposes the move and submitted testimony in opposition last week.

Martz notes that virtual games are created by programs called "random number generators," which are also used to power the agency's most lucrative games, video slot machines.

"There are no elements of skill or analytics, just fast paced, graphically-appealing, adrenaline-pumping imagery that can be available 24/7 because it is not reliant on the outcome of actual sporting events," she says.

She is asking lawmakers to block virtual games on Scoreboard, citing Shelby's 2019 testimony that the Lottery would never allow video slots on its mobile app. "We do not believe that passes the responsible gambling test," Shelby said then.

But a lot has changed since last year.

The lottery has long been the state's second largest source of revenue after personal income taxes. But the COVID-19 pandemic devastated the agency, which gets most of its money from video lottery products offered in taverns and restaurants, which shut down mid-March and are only now beginning to re-open.

Last week, the agency said its revenue for April was down more than 90 percent from a year ago.

Shelby defends the decision to introduce virtual games and disagrees with Martz's comparison to video lottery.

"From a behind the scenes math perspective, it's much more like Keno than video lottery, and nowhere near the high velocity play of video," he says.

Shelby says what he said to the Legislature last year remains true.

"We still do not have any plans to offer Video Lottery, or slot-style, games on a mobile device," he says. "That said, things today are different than last year. The public health issues we're facing are prompting us to look at how we could use digital channels to reduce face-to-face interactions. Nothing planned yet, but we are brainstorming. Moving forward, the key word is balance; public health, responsible gambling, employee and retailer safety, and of course revenue."

Even before COVID-19, the agency pinned high hopes on mobile sports betting, its first major new initiative in more than a decade. But that too dwindled to almost nothing as COVID-19 caused the suspension of college and professional sports.

In other countries, lottery agencies already offer betting on virtual games as "filler" between sporting seasons, Shelby says.

He says that under its temporary rule-making authority, the agency can begin offering betting on virtual sports without legislative or even Lottery Commission approval and plans to do so as soon as possible.

"It's an open question as to whether we keep it when sports come back," Shelby says. "If players like it and it's popular, we would want to keep it in some form."

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