Gambling App Could Bring Revenue, and Unexpected Cost

The Oregon Lottery’s new sports betting app has been a success, but public health experts warn of hidden costs.

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Scoreboard, the Oregon Lottery’s new app-based sport betting game, is intended to be a valuable source of state revenue, as well as a tool to engage a younger generation in the state’s lottery system.

The app, which launched this month, allows users to place bets on the outcome of a wide range of sporting events, such as football and basketball.

Additionally, users will be able to place various in-game bets, such as what the score will be by the end of a quarter or half.

Scoreboard was created for dual purposes: First, the revenue generated by Scoreboard will be used to address the state’s Public Employees Retirement System (PERS) deficit, which is more than $25 billion.

Second, as Oregon’s video lottery demographic continues to age, a new generation of players is needed to maintain funding levels.

SB Tech, a European company that provides the sports betting engine for the Golden Nugget casino in New Jersey, partnered with Oregon Lottery to design the app.

“We did not want to reinvent the wheel,” says Matt Shelby, public information manager at Oregon Lottery. “If you’ve been around Oregon government any amount of time, you’ll know our state has a long and storied history of failed IT projects.”

The estimates for Scoreboard’s revenue are about $5 million annually, though users are expected to gamble upwards of $330 million each year.

“It’s a fairly low-margin business. The vast majority of [our earnings] are paid back in winnings,” says Shelby. “But we have a profit-sharing agreement with SB Tech. If we don’t make money, they don’t make money.”

Some warn the potential negative effects on public health will offset the revenue generated by the app.

Kitty Martz, an expert in gambling disorders and board member of Voices of Problem Gambling Recovery, argues that $5 million in revenue won’t put much of a dent into Oregon’s PERS dilemma, and that Scoreboard could have widespread costs due to the public health issues posed by problem gambling.

“Europe has had online gambling for over a decade, and studies estimate problem gambling is about four times higher in countries that offer online gambling,” says Martz. “We have 100,000 people in Oregon who suffer from problem gambling, which means we could have 300,000 to 400,000 problem gamblers in the next few years.”

According to a study from Baylor University, the annual cost of problem gambling is $9,300 per problem gambler a year. These costs come in the form of crime, unemployment, bankruptcy, homelessness, suicide and loss of productivity. If Baylor’s estimates are to be believed, that would mean Scoreboard could have external costs upwards of $3 billion.

Martz says the app could do away with real-time betting if it wanted to ensure fewer users developed problem gambling. 

Shelby says there are safeguards built into the app for problem gamblers, including the ability to take gambling breaks or self-exclude entirely.

The Oregon Lottery has partnered with psychiatric professionals to put protections in place to prevent problem gambling.

“We want a lot of people playing a little,” he says.

As of now, Oregonians have exceeded Scoreboard’s expectations, spending $2 million in the first week and a half.

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