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September | 2014 | Lockwood Research
1989 – 2014: 25-YEARS IN MARKET RESEARCH. Betting for Education

September 1989

 

In September 1989 the Oregon Lottery Commission’s approved consumer betting on pro football games kicked off. According to Quirk’s article that month, “A new way to bet on football”, a study conducted at the time by R.H. Bruskin Associates of 1000 U.S. adults gauged reaction to the idea. Their study found that at least one out of five (21%) adults indicated they would be extremely or very interested in playing such a game if it were available in their state. While Stephen Chapman points out that “wagering is as much a part of pro football as Miller Lite commercials”, in his July 20, 1989 article, “Can Pro Football Survive (gasp) Betting on Games?”, he also points out that the NFL assistant counsel, James Noel (who happened to be a U of O alum), fought the idea. At the time, the NFL was afraid that dozens of other states would follow suit. Noel was quoted saying, “The insidious specter of nationwide legalized gambling could fundamentally alter-and injure professional sports in America.” And that, “the N.F.L. considered the Oregon lottery game ”a genuine threat to the integrity of our sport.”

 

Good thing Mr. Noel isn’t the legal counsel for the NFL today. I could not help but see the irony in Chapman’s notion that, “The NFL’s complaints bring to mind the old line: A reputation for chastity is necessary to a woman. Chastity itself is also something useful. The league wants the benefit of widespread gambling which is to stimulate interest in what it sells while affecting virginal innocence.”

 

 

 
 

September 2014

 

Virginal innocence and chastity are at the opposite spectrum when it comes to domestic violence or child abuse. Which is why the NFL is understandably worried about their soiled reputation today. According to a poll conducted over the past week by Ipsos for Thomson Reuters, “21 percent of women viewed the NFL less favorably, given the manner that the NFL handled the suspension of several players regarding domestic violence and child abuse allegations. That compared to 8 percent who viewed the NFL more favorably. Men were slightly more disappointed in the league’s response: 23 percent said they viewed the league less favorably, compared to 8 percent who said they viewed it more favorably.”

 

Even with declining approval of the NFL, the poll showed that viewers are still tuning it. Perhaps those polled are like me and curious to see if their bets on the games are paying off. While I have never participated in Oregon’s sports lottery, I am the proud two-peat winner of a family-organized pool. My brother denied me the title of three-peat winner in the last week of the 2013 season. He beat me by two points.

 

In the early years of our family pool I fell victim to the Dunning-Kruger Effect — the tendency for unskilled individuals to overrate their skill and ability, and underrate the difficulty of the task at hand.  So, I devised a system each year, which is part of my entertainment value. The first year I won $500 by picking the team that had the highest cumulative points. My second winning system was “Youth in Leadership” where I picked the younger of the two quarterbacks. Last year’s system was, “West is Best” and I chose the team that was geographically farthest to the west. I can’t share this year’s system, yet – but it seems to be working and has put me at #1, again.

 

While I do find betting on the NFL entertaining, I don’t bet on college football, or the Ducks. Which brings me to the reason why Oregon turned to legalized betting on the NFL. According to the article, Oregon Lottery Unit Creates Weekly N.F.L. Betting Plan, by Frank Litsky and published July 18, 1989, “The commission said the proceeds of the lottery would help support the athletic programs at the state’s universities and colleges. These schools receive no such public financing now. Jim Davey, the director of the Oregon Lottery, estimated the game would provide the athletic programs with $4 million to $9 million annually.”

 

While congress banned sports betting under the Professional and Amateur Sports Protection Act of 1992, a grandfather clause allowed Oregon to continue the Sports Action game, according to a November 1997 article in The Oregonian.  The Oregon Lottery website states that, “During its 18 seasons, over $36 million was generated for these schools”. The Oregon Lottery stopped offering Sports Action and Scoreboard in January 2007. 



 

Why was this funding source terminated? Because both the NFL and NCAA opposed it. The NFL threatened that Oregon would not be considered for a franchise team or exhibition game as long as betting on football was allowed. Well, we all know Oregon would never be considered for a franchise team because we don’t have the population to support it. But it was the threat from the NCAA that Oregon took seriously. According to a budget brief from OUS chancellor’s office, “The NCAA issued a statement that no post-season basketball games would be played in Oregon so long as Sports Action was available.”

 

Really? Could hosting NCAA basketball games generate the kind of revenue the State was bringing in from Sports Action? Well, the Oregon legislature took the threat seriously and in 2005 they ceased the Lottery’s sports betting games. The revenue was supposed to be replaced with a guarantee one percent of lottery money transferred to the Economic Development Fund. Yet, according to an April 2014 Oregon State Board of Higher Education brief, the 2007 – 2009 biennium was the only time a full one percent of lottery revenue was directed to OUS. In all subsequent biennium to date, the legislature has established a dollar cap on the amounts made available to OUS. So, the University of Oregon went from a 33.5% share of sports lottery revenue in 1989, to $1.0M today. How many NCAA post-season basketball games have been hosted in Oregon? Not enough. Now, if we were talking NCAA post-season football games, it might be another story.