Oregon Lottery Says It Has ‘Broad Authority To Introduce’ Sports Betting, Without New Law

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Oregon Lottery sports betting

Add Oregon to the list of states that may not need a new law to offer sports betting within its boundaries if the federal ban is struck down.

An official for the Oregon Lottery told Legal Sports Report that it has “broad authority” to move forward with sports betting should it choose to do so in a world where it is permissible federally. That could happen if the US Supreme Court ends the ban on single-game wagering outside of Nevada in a decision expected in the coming weeks or months.

Sports betting and Oregon?

Oregon is famously one of the few states that enjoys “grandfathered” status under the Professional and Amateur Sports Protection Act (PASPA).

Oregon had a lottery called Sports Action — essentially a parlay sports betting game — prior to the passage of that 1992 federal law. The product has been shuttered for a decade but is technically legal in the state, should the lottery decide to take it out of mothballs.

But Farshad Allahdadi, chief gaming operations officer for the Oregon Lottery, told LSR that its authority does not stop at being able to bring back Sports Action, with a change in climate.

“The Oregon State Lottery and its board broad authority to introduce and remove games as it sees fit,” Allahdadi said. “Sports betting on a local level — if it is authorized federally — does not need any additional state legislative action.

“While we’re waiting, on principle Oregon State Lottery is interested in getting back into the sports wagering market.”

Backstory on Sports Action

Allahdadi told LSR that the lottery acted “unilaterally” — not by legislative mandate — to shut down Sports Action.

Interestingly, that stands in contrast to almost all reporting on that decision from more than a decade ago. Even the bill summary, which still exists online, summarizes the bill as “Repeals authority to establish electronic lottery games based on results of sporting events.” The bill as enacted replaced the revenue generated by Sports Action with revenue from general lottery revenue. That revenue goes to the “State Board of Higher Education to fund athletic programs at state institutions of higher education.”

The administrative rules governing Sports Action still appear on the lottery’s website.

The decision to stop Sports Action was politically motivated, as the NCAA refused to hold championship events — like its men’s basketball tournament — in Oregon while Sports Action existed. After Sports Action was shuttered, Portland has now hosted NCAA tourney games on more than one occasion.

Not a guarantee

Allahdadi did caution that the Lottery is not guaranteed to start offering sports betting immediately, only that it has the authority to do so and has studied the industry during the federal challenge to PASPA. But if New Jersey wins its Supreme Court case, that means other states — Oregon included — might be able to offer wagering.

“What our strategy is right now, as an organization, we’re very interested in exploring reintroducing sports betting back into Oregon,” he said. “But we’re not certain that going forward with Sports Action as we had it would be a very compelling offer for the market. So we’re kind of in a wait and see mode.”

Almost all other states need legislative authority to offer single-game wagering, but Allahdadi says that is not the case for the Oregon Lottery. Of course, the legislature could act on sports betting and codify how it would happen in the state.

Allahdadi said the lottery would not move forward without conversations with the legislature and the governor’s office. Part of the lottery’s current focus is pursuing new revenue streams for the state.

Mobile and in-game wagering?

While the lottery bides its time waiting for a SCOTUS decision, it’s contemplating all its options.

Mobile wagering is on the table, Allahdadi said, as is the possibility of in-game wagering — aka bets that can be placed while a game is going on with live odds. (The lottery is also generally considering taking lottery sales online, along with virtual sports betting.)

There are plenty of other variables that the lottery has not worked out, including how mobile wagering might roll out in a way that makes sense. In addition to lottery products in retail locations, there are video lottery terminals in bars and restaurants around the state.

Allahdadi said there are several possibilities, including kiosks in VLT locations or even having mobile wagering tethered somehow to a brick-and-mortar retailer. There is also the possibility of just having statewide mobile wagering.

“Our single distribution channel is retail partnerships and we want to make sure that any future strategy is inclusive of retailers,” he said. “And while there may be a digital component or mobile component, it won’t be to the exclusion retailers.”

The backup plan

If PASPA stays on the books, then the lottery is going to look at bringing Sports Action back.

“We have done some legal analysis that would lead us to believe that we can reintroduce that game largely in the same form, we could probably modernize it a little bit,” Allahdadi said. “But the mechanics of the wager itself can’t vary very much from that, otherwise we’d be in violation of PASPA.”

The original version of Sports Action was done via Scantron forms. “Modernizing” would likely involve a mobile product.

The question is how much of a problem that might create in the state.

NCAA and pro sports leagues?

The political concerns that existed a decade ago are still in play.

The NCAA still opposes sports gambling today. However, it’s faced with a world where several states might have legal sports wagering — including Pennsylvania, New Jersey, New York, West Virginia and Mississippi in the near future. In that world, it is difficult to imagine it would blackball Oregon any longer for offering Sports Action or single-game wagering.

Allahdadi said he doesn’t know what the NCAA or colleges think, but he said that would be part of the equation.

“I believe we would have a lot of conversations with them to get them understanding the foundation for our decision to go into this space and hopefully get their buy-in,” he said. “But we’re expecting there would be a need for additional conversations and outreach.”

On a related note, Allahdadi said he has not spoken with pro sports leagues like the NBA and Major League Baseball, which have been lobbying for sports betting legislation that favors their leagues around the country.

We have not any monitoring what the media is reporting in terms of league policy positions,” he said. “I suspect given that we do have professional teams in the state, we would be having those conversations in the summer if PASPA gets overturned.

“And we don’t want to create a betting regime that compromises the integrity of the game.”

The NBA vehemently opposed Sports Action the first time around.

Tribes and sports betting?

While the lottery may want to move forward with sports betting, it’s not clear what tribal gaming interests in the state would want to do. Tribes around the country have been often stand-offish when it comes to sports gambling.

An inquiry with the Oregon Tribal Gaming Alliance on its stance on sports betting was not returned. The issue is being considered currently at a meeting of the National Indian Gaming Association in Las Vegas.

Given that the lottery believes it can offer sports wagering, tribes also could have the right to do so as well under federal law, if it were added to their compacts with the state and if PASPA comes off the books.

Photo by Paul Sableman used under license CC BY 2.0.