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Lottery network: no time-outs in Oregon game.


Capitalizing on excess capacity in its huge on-line lottery network, the state of Oregon added a controversial Sports Action game last last year. It lets players wager on the outcomes of NFL football and, more recently, NBA basketball games.

Even with the extra load, the network runs at only one-third capacity. Its highest throughput to date is 4000 transactions per minute, but it can support up to 15,000 a minute.

The 1600-terminal network can't afford to fail. These central computers, 90 leased circuits, and 40 hired technicians make sure the network is never sidelined.

The weekly parimutuel games lets players wager $1 to $20 on point spreads for four to 14 NFL games. A bettor simply inserts his marked slip into any of 400 retain terminals, located primarily in sports bars. An intelligent Gtech computer terminal scans his penciled-in picks, sending the data over secure dedicated phone lines to a Concureent Computer Corp. 3212 superminicomputer system in Salem.

Wagering opens on Wednesdays and peaks on weedkends. Saturdays usually tally 50% of a week's sales, with another 25% coming in on Sunday morning as last-minute odds watchers try to beat kickoffs. On a recent Sunday, Sports Action turned 25,000 transactions, just over $100,000 worth. It provides five-second response times.

Double Duty

Turning an average of $3.1 million in total weekly sales leaves no room for downtime. "Since 1985, when the system was installed, we haven't been down more than an hour," Oregon Lottery Director Jim Davey says. The only outrages he can recall lasted 20 and 50 minutes. Both were handled by phone calls to Gtech, which earns 5% of the state's profits for running the network.

The installation required virtually no out-of-pocket money from the state. Davey figures Gtech, a Providence, R.I., supplier of lottery networks, invested about $5 million in hardware.

Crucial to the system's continued operation are its three central computers. Two concurrent 3212 systems run at all times, one in backup mode. The third kicks in if a primary machine fails.

"We'll have an individual terminal break down," Davey says, but these, too, are serviced within an hour.

The state added its 400 Sports Action terminals in under 30 days. Its only added expense was $400,000 spent on advertising.

Despite the media blitz, few observers expected the system to succeed. "Most people think it's OK to scratch a lottery ticket or play bingo," says U S West's Betty Bosen. But to many, betting on NFL and NBA point spreads smacks of "hard-core gambling."

The state furthermore had to word its betting slips very carefully to skirt NFL objections. Weekly forms match NFL cites without naming specific teams. "Seattle versus Cleveland," for example, euphemizes "Seahawks against Browns."

Saving Grace?

To answer critics, Oregon Lottery officials point out that proceeds benefit not bookies but bookworms. A full 34% of Sports Action's take goes into a state fund. Of this money, 88% goes to sporting programs at Oregon's seven public colleges and universities. Only 30% of this amount may go toward revenue-generating sports like men's varsity football and basketball; the rest is doled out to less lucrative sports like cross-country running, field hockey, and women's volleyball. Twelve percent goes to need- or merit-based academic scholarships.

Rather than heed NBA and NFL cries of "foul," Oregon's Lottery Commission planned to beef up its NFL ticket in time for the Superbowl. Betting on "over-and-under" point totals for each half and guessing the number of field goals or turnovers in a quarter, for example, will allow Oregon bar patrons to up the ante as games progress.

In addition, the NBA game proceeds as planned, although at press time it was too early to gauge bettor response.

While the state and others may one day use these networks to distribute items like food stamps and drivers' licenses, it might be safe to say Oregon's new games many soon draw more legal action than Sports Action.



With the start of the 1989-90 pro football season, Oregon became the only state to let its residents lay bets on the outcomes of NFL games. That's one state too many for the NFL's liking.

The league is counting on the U.S. Senate to whistle the wagering dead.

The NFL's Jim Hefferman says the league abhors any association with gambling. "This may proliferate, and eventually we'd have a national lottery on our games."

He calls Oregon Lottery Commission projections of a half million dollars in weekly sales "pie in the sky." A few weeks before Christmas, he says, sales were about $300,000 and dropping sharply.

The league stands squarely behind a federal bill which would quash such programs on grounds of trademark violation.

Despite NBA objections, Oregon tipped off its NBA-related game in late December. The NBA wasted no time dishing up a Christmas lawsuit to stuff the enterprise.

NBA Commissioner David Stern states, "The NBA cannot sit idly by. Most people in Oregon do not favor betting on NBA games." Even some Portland Trailblazers are against it.

Oregon Lottery Director Jim Davey counters, "There's widespread gambling now, and this hasn't happened yet."

But introducing state-sponsored wagers is "a whole different ballgame" from informal betting pools and high-rolling Vegas betting, the NBA's Terry Lyons says.

Despite leauge concerns for their games' integrity and NFL fears that such programs will fatten only the rolls of Gamblers' Anonymous, sources in Oregon believe the NFL's and NBA's major gripe is that they won't be getting a cut of the action. Lottery spokespersons expect to reap $9.1 million in profits during 1990 (half by law goes to winners).

At press time, Davey was "not discouraged" by weekly averages sales of $380,000, but he admitted that was a far cry from his half-million a week goal.
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Author:Jesitus, John
Publication:Communications News
Date:Feb 1, 1990
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