Barry Pack, Executive Director, Oregon Lottery

Barry Pack, Executive Director, Oregon Lottery

The impact of the novel coronavirus, COVID-19, on lottery sales across the country has been dramatic. While every jurisdiction is facing its own unique set of challenges, the Oregon Lottery saw catastrophic drops in revenue overnight mid-March. On March 17th, Oregon Governor Kate Brown issued her “Stay Home, Save Lives” executive order, which, among other measures, effectively shuttered bars, restaurants and taverns across the state, including nearly 2,000 Video Lottery Retailers.

Video Lottery historically makes up about 72% of our annual revenues and 90% of the dollars we transfer for the programs that rely on Lottery sales for their funding. We lost that revenue stream overnight and implemented tough measures to preserve cash as we weather this pandemic, including significant furloughs, lay-offs and salary reductions. Every employee has been impacted.

These are the toughest days the Oregon Lottery has ever faced, and they are just a taste of the decisions the rest of the state government will have to make as Oregon faces the worst recession since the Great Depression.

But there is a bright spot on the horizon. Governor Brown laid out a framework for a phased re-opening of certain employment sectors, including restaurants with Video Lottery, if certain public health and operational criteria were met. On May 15th, after nearly two months of closure, 31 of Oregon’s 36 counties were approved to reopen their economies under “Phase 1” guidance. For the Oregon Lottery, that meant re-enabling play on over 3,000 terminals – physically distanced 6 feet apart. A week later, three more counties reopened, leaving only the Portland metropolitan area still shut down.

Video Lottery players are returning and revenue is coming back in, but at about 60% of pre-COVID levels. It is clear this recovery will take years, and we may never return to those earlier levels. If we learn one thing as a lottery from this pandemic it is the need for a diverse product portfolio and sales channels. We cannot rely so heavily on a brick and mortar sales channel when catastrophes like this are possible, and when it is clear that consumer behavior has changed for good.

I’m sure my colleagues across the country and the rest of the world are asking themselves similar questions – will this pandemic push us faster to digital transformation? How can we listen to the changing voice of our customer and adapt our business models to meet their changing demands? Is it a move to digital? For the Oregon Lottery, I believe the answer has to be yes. Our challenge is how to get there quickly, in a balanced way, with responsible gaming best practices baked in at the outset.