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Oregon sports betting is moving forward with bringing in SBTech as its provider. It could be finalized within the next couple of weeks.
Despite a last-minute protest from SBTech competitor Scientific Games, the Oregon Lottery Commission approved the lottery’s recommendation to award the state’s sports betting contract to SBTech during a special commission meeting last Friday.
Farshad Allahdadi, chief gaming operations officer with the Oregon Lottery, emphasized that SBTech becomes “a major component” of the lottery’s fifth pillar of its strategic plan, which revolves around revenue growth.
“Based on preliminary security and due diligence investigations, the Oregon Lottery believes entering into a contract with SBTech is consistent with our principles of fairness, integrity, security and honesty,” Allahdadi said at the meeting.
The lottery noted that SBTech provides a “turn-key, sports betting platform and sportsbook for digital and on-property wagering.” In Oregon, that means offering online sports betting and wagering within “certain land-based retail sales channels,” as Allahdadi put it.
The Oregon Lottery’s team that reviewed proposals selected SBTech by unanimous decision March 13 and a Notice of Intent went out a week later. Since that time, Allahdadi said, the lottery made headway in its “due diligence” looking into SBTech.
“We are well along the way in our background check process. We have done a lot of our review and feel at this point preliminarily that there are no issues that would prevent us from entering into a contract. However, as I indicated, we still have a couple of weeks left in the process to finalize our due diligence.”
The lottery’s security and due diligence investigation is expected to conclude by April 19.
In response to a question regarding if the Oregon Lottery could pull out of contract talks should it find something unsavory, Allahdadi provided assurance that it could.
“We are not entering into the contract. You are authorizing the director to enter into it pending these final reports.”
Oregon Lottery and SBTech began contract talks last week. While nothing is official until the ink dries, those discussions provide a peek into what the partnership might look like.
Per a memo from Allahdadi to the Oregon Lottery commissioners, the state lottery “expects to enter into a tiered revenue-sharing agreement with SBTech.”
The agreement — expected to last between three and five years, —would give 9-11% of revenue generated to SBTech.
The memo added, however, that final terms and conditions remain under negotiation. If Oregon sports betting proceeds as planned, a launch before football season remains possible.
Before the commission’s special meeting last week, a source close to the situation told Legal Sports Report that Scientific Games, whose SG Digital brand was a finalist for Oregon sports betting, filed a letter protesting the lottery’s recommendation of SBTech.
LSR reviewed the letter that made its way to the Oregon Lottery, which suggested that SBTech could have ties to operators in gray or black markets. It’s worth noting that SBTech already has licenses and operates in both New Jersey and Mississippi, in addition to numerous jurisdictions worldwide.
SG Digital essentially urged the Oregon Lottery Commission to do a deep-dive background check into SBTech and subsequently reconsider its award to SBTech. As another company involved in the bid process, SG Digital then theoretically could be awarded the bid.
During last week’s meeting, this protest seemingly came up only once, but that was all the attention it needed.
Said one commissioner on the topic during the archived audio of the meeting: “SBTech did disclose both relationships that were raised in the letter. We looked into those and found nothing untoward.”