Oregon Authorities Forecast Over $141 Million in Revenue After Sportsbook Launch

According to Oregon Lottery officials, projected revenue of $141.2 million over the first three years after the SBTech-powered retail and mobile sportsbook launch is what this gaming company expects to see.

The lottery signed a formal partnership with SBTech earlier this month. The idea is to kick-start mobile sports wagering before the NFL season begins in September. Retail betting kiosks will come in early 2020.

Optimistic Handle Figures

Once the formation of the business alliance was completed…

…the Oregon company began making a series of profit projections. For instance, the total handle forecast over the said three years is $1.6 billion. That’s $332.8 million in the first year, $555.9 million in the second and $722.3 million in the third.

The bulk of this amount of wagers, the lottery suggests, will be returned as winnings. In fact, customers are expected to win around $306.2 million in year one, $507.4 million in the second year and $656.2 million in third, for a total of $1.5 billion.

The difference between the handle and winnings leaves a gross gaming revenue of $141.2 million. In the first year, the revenue will stand at $26.6m, $48.5m in the second and $66.1m in third.

How the Spoils Are Shared

Of the total GGR amount…

…SBTech will receive 19%, which totals $26.8 million over the first three years. This covers the brand’s products and services as well as third-party products and services which will be paid for by the supplier.

An amount of $70.7 million of GGR, which is almost half of the total figure, will be taken by additional expenses that will be covered by lottery. These are comprised of potential data royalty and payment processing fees, vendor costs, geolocation, marketing and promos, staff costs, retail commissions etc.

When all of that is taken into consideration, a net profit of $43.7 million remains. In the first year, The Oregon Lottery expects a $6.3 million profit, then $13.9 million, followed by $23.4m in the third year.

A part of sports betting, the Sports Action parlay betting game will be launched too (first introduced in 1989, discontinued in 2007). The revenue generated from this game should be in the region of $10.3 million.

Changing Taxes?

Oregon lawmakers are currently devising a tax reform that would create new rules on gambling taxation.

Senate Bill 212 is proposed by the Chairman of the Oregon Senate Finance Committee and it could take away deductions such as gambling losses written off by gamblers when they calculate their taxes.

One of the tribes that oppose this initiative said: “Nobody will gamble if they can’t write off their losses… The money from those customers goes toward us being able to provide essential governmental services.”

Source:

“Oregon projects revenue of $141.2m from sportsbook launch”, igbnorthamerica.com, June 20, 2019.