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Playing the Oregon Lottery? You may soon face new competition—from ticket buyers around the globe.
On June 27, the Lottery Commission considered a pitch from the Lotter, a Malta-based website that sells lottery tickets from all over the world. The Lotter wants two rule changes that would allow overseas players to buy as many Oregon Lottery tickets as they want without leaving their home countries.
"The opportunity for Oregon is tremendous," says Darian Stanford, a Portland lawyer who represents the Lotter, "but if Oregon doesn't get its act together, this revenue will go to some other state."
Until last December, nobody in Oregon thought much about foreign lottery players. State and federal laws prohibit internet gambling, and that prohibition has meant in practice that lottery purchasers have to buy their tickets in person.
But then, as WW first reported, an Iraqi national showed up at the Oregon Lottery's Salem headquarters, seeking to cash a winning Megabucks ticket that he had purchased without leaving his home country.
Lottery officials scratched their heads, because they weren't sure it was legal to purchase a ticket in a foreign country. But then-executive director Jack Roberts, after consulting state and federal law enforcement officials, determined the ticket had been purchased appropriately.
The Lotter, which had provided the service that allowed the man to buy the winning ticket, saw a golden opportunity to expand its business.
The Lotter provides what is in essence a messenger service. Lottery players around the world, in countries such as South Africa, Italy and Canada, select the numbers they want to play through the Lotter. The Lotter then sends an agent to a lottery retailer in the country or state where the customer wants to play.
Currently, the company uses agents to buy tickets in New Jersey, New York and Florida, as well as in Oregon—but Stanford says the company would like to consolidate its U.S. operations here.
To do that, the lottery would need to change two rules: one that requires ticket buyers to fill out their number selections by hand, and another that restricts the type of paper on which selections can be made.
Those rules are arcane, but the practical upshot of changing them would be to mechanize a cumbersome process and vastly increase overseas sales volume: hundreds or even thousands of tickets purchased at a time, instead of one or two.
But the Lotter's proposal has already generated opposition from at least two members of the five-person Lottery Commission. They worry that opening lottery games to large numbers of foreign players could lead to all sorts of unintended consequences, from fraud to inequitable sales for retailers to violation of federal laws—and even the potential transfer of large amounts of U.S. dollars to dangerous places.
In the June 27 meeting, commissioner Chris Telfer, a former state senator from Bend, crystallized the commission's alarm.
"My concern is the integrity of the games and not jeopardizing that," Telfer said
The Lottery Commission is considering the changes—and expansion of its player base—at a time when lottery revenues are soaring but also face a looming threat from a new Native American casino.
The debate over loosening the rules for international ticket sales has divided lottery officials—and perhaps played a role in Gov. Kate Brown's April 27 ouster of lottery director Jack Roberts.
In February, Roberts temporarily changed one of the two rules the Lotter says impede overseas ticket purchases—a decision that emails show dismayed at least two of the five commissioners.
Those two commissioners—Mary Wheat, who is a Portland police detective, and Corvallis lawyer Liz Carle—expressed concern about Roberts' decision, which he had made without commission approval. Emails WW obtained under a public records request show that Wheat and Carle criticized Roberts' management of the lottery, including his desire to increase overseas sales.
"Director Roberts made a rule change without allowing the commissioners to vote on it," Carle wrote in an email to Roberts' successor, Barry Pack. "I think this rule change actually may represent a serious policy shift for the Lottery which we have not explored."
Emails between Roberts, lottery commissioners and state employees capture the essential conflict surrounding the Oregon Lottery: It is constitutionally required to maximize revenue, but doing so means the state must depend on customers who are often poor and sometimes addicted to a losing proposition.
Like the governors before her, Brown has expressed discomfort that Oregon is so dependent on lottery proceeds—the agency brings in about $1.1 billion a year, the second-biggest source of state revenue after income taxes.
No politician likes to fund public services through gambling, but many are hooked on the revenue it brings in. Since its founding 30 years ago, the lottery has become a legal slush fund that pays for a wide variety of programs.
In March, the agency recorded its biggest week ever, ringing up more than $20 million in revenues from video lottery games alone.
The agency and its many dependents are keenly aware that the Cowlitz tribe in Southwest Washington plans to open a casino in the spring of 2017. A state economist estimates the new facility, located 16 miles north of Portland along I-5, will cost the lottery $65 million a year in lost revenue.
International lottery sales could provide an inoculation against the new casino. In materials he provided the commission, Stanford said international players could in effect replace the revenue lost to the Cowlitz casino. The Lotter estimates it could generate Oregon sales of nearly $50 million a year by 2018 and perhaps twice that.
The Lottery Commission is expected to vote on the rule changes next month.
"There's no logical reason to oppose changing the rules," Stanford says, "but if Oregon doesn't want this business, my instructions are to start looking to take it elsewhere."
Correction: This story originally said the lottery provided $2.5 million to address Portland air quality issues. In fact, rather than providing money, the agency loaned an employee to DEQ. WW regrets the error.
Willamette Week