Pennsylvania Lottery’s Xpress Sports About To Change Game Options After Slow Start

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It’s Monday night with the TVs on at Excuses Bar & Grill on Pittsburgh’s South Side, and like the two men between whom I find an empty bar stool, I am ready to watch some football.

Only not their football.

They’re watching ESPN’s national telecast of the Bears-Redskins game. I’m there to watch and wager on the Pennsylvania Lottery’s Xpress Sports game, a form of gambling in which I’ve never participated. Nor have most other Pennsylvanians, who are still largely unaware of its existence. That’s a problem for the Lottery.

***

The Pennsylvania Lottery is doing just fine by any measuring stick, having set records in the 2018-19 fiscal year for both sales and profits, which benefit senior citizens programs. Players wagered more than $4.5 billion, a 7.2% increase. The profits of $1.14 billion were nearly $50 million higher than the year before.

Some of that boost came from modernization efforts enabled by provisions in the state’s 2017 widespread gambling expansion legislation. The online iLottery was created, and it generated $31.3 mm in profit from 91,900 players who created accounts, which matched what Lottery officials had hoped. New Keno games were also created, generating $9 mm in profit.

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But Xpress Sports was another matter.

Under a contract with Inspired Entertainment Inc., a company that has had success with virtual sports wagering in Europe since early this century, the Lottery began encouraging bets on simulated, animated football and auto racing contests in August 2018.

Monitors have been installed in more than 1,700 locations where patrons bet on outcomes of football drives or car races. In their sports-mad state, one in which legal sports betting on actual events also began in 2018, Lottery officials projected profits of $13 mm from Xpress Sports in the first full year of operation.

For the 10-plus months the games have been operational in 2018-19, the lottery instead reported they generated just $1 mm. That’s not nearly as many new prescription drugs, bus rides, and rent rebates for older Pennsylvanians as had been hoped.

***

At Excuses, I get a sense of part of the problem right away, when I notice the Lottery monitors installed above the bar to show football and racing are dark. The bartender explains there have been some glitches with both the monitors and the machine that accepts bet slips and dispenses vouchers to players.

For my sake, she tries — and somewhat to her surprise, succeeds — to activate one of the monitors so I can watch fake football between two regular TVs showing the NFL game for other patrons.

On their TVs, the visiting Bears begin crushing the hapless Redskins. On mine, where every five minutes a mythical football team — the Comets, Stags, Cyclones, etc. — begins a drive from the opponent’s 20-yard line or closer, I begin devising a way to win money, or more likely, donate $20 to the state’s elderly citizenry. After all, I’ll be one before long.

***

The Pennsylvania Lottery was the first lottery in the nation to undertake virtual sports betting games. Its officials were looking to branch into new territory and attract new customers, as more sales and profits are needed to keep up with growth of the older population.

More than a third of locations with Xpress Sports monitors — which are paid for and installed by the Lottery rather than the host establishment, which receives 5% of proceeds — are restaurants, bars, and social clubs, rather than more traditional Lottery outlets like convenience stores, gas stations, food marts, etc.

While Lottery officials don’t pretend to be happy with their sports results so far, they also say it’s still early and expect things to improve.

“Being first means that we continue to learn,” spokeswoman Ewa Dworakowski said in an email. “The Lottery is currently making modifications to the games based on feedback from players and retailers … The Lottery’s mission is to grow sales and profits for older Pennsylvanians and in order to grow sales responsibly, it is important for the Lottery to continue to try new games that may appeal to new players.”

She said to expect announcements this fall on new games and promotions. Just like the iLottery and Keno — the latter of which has been more successful on monitors in the same locations as Xpress Sports — Dworakowski said the forecast is that revenue from sports games will only grow from the early numbers.

***

On the Xpress Sports monitor, during a lull of several minutes between scoring drives that take place for almost 20 hours a day, I see my betting options.

I can wager whether the next drive, and multiple drives after it, will result in a passing touchdown, rushing TD, field goal, or turnover. The drives all end within 90 seconds, with outcomes determined by a random number generator, and there are different payouts for each. But it’s not quite that simple; you also have to predict correctly whether the outcome will take place on the first play, second, third, fourth, or “on or after the fifth play.”

Depending on what you predict, you might get paid off anywhere from 2/1 to 250/1. Overall, the odds and payouts are not great compared to what I could do driving a few miles to the Rivers Casino sportsbook for an in-game bet on Bears-Redskins (or by placing a bet at one of Pennsylvania’s five active mobile sportsbooks without leaving my seat at the bar). As with most Lottery games, the state retains about one-third from what’s wagered.

I am defensive-minded and in favor of long shots. I opt for five $4 “turnover on 3rd play” wagers on the next five drives, which the monitor tells me will generally pay off at 40/1 or 50/1 if I succeed.

I have to mark a betting slip, checking a box for that option. I try to put that slip and $20 into the bar’s Lottery machine. It’s balky, like the bartender said. It takes a few tries.

Ultimately, I succeed and settle back on my stool, curious as to which of the next five drives will win me an easy $200 or so. No one else in Excuses but me pays any attention or cares. Not even the nice bartender, who will be the one to scan my ticket on a machine and pay me off when I win.

***

To my surprise, I learn 16 hours after my wager that I have just played a game that is very nearly obsolete.

On the phone Tuesday, Brooks Pierce, the president of Inspired Entertainment, told me that in addition to other shortcomings in getting Xpress Sports started in Pennsylvania — including too little marketing to familiarize the public — officials now realize that people were turned off by the unfamiliar idea of betting on football drives.

The auto racing contests have been more successful, he said, as people simply guess as to which of 12 animated cars will finish first, second, or third.

“The product didn’t really resonate with the players,” Pierce said of what’s known as First Down Football. “Picking a team to score a touchdown on the third play is not a way that people would normally bet a football game. … The car racing game has actually done substantially better and is pretty easy to figure out.”

In fact, it’s so easy to grasp that Pierce said Inspired Entertainment and the Lottery are in the process of replacing the football game with a horse racing version, known as Derby Cash. It will be similar to the auto races, but with multipliers and bigger potential prizes, including a chance to win up to $800,000 with a $1 bet, whereas the maximum is $250 on the existing games.

Pierce said to expect the game conversion in existing Xpress Sports locations to take place sometime in October. And meanwhile, Inspired Entertainment has been developing a new version of the football game with more traditional betting options. Players will wager between two teams head-to-head with options on point spreads, moneylines, and point totals, again in a 90-second simulated contest. That could be on screens in Pennsylvania sometime after the horse racing.

Pierce said none of what’s happened so far suggests Pennsylvanians — or Americans in general — won’t take to virtual sports betting the way Europeans have. Brits enjoy betting on simulated racing and cricket contests in the same places they wager on real sports.

They and other Europeans throw lots of money down on virtual soccer, which Pierce said is “complementary” to actual game wagering.

“While someone could have had a bet last night on the Bears game, in that three hours it takes for the game to be played he could be making a virtual sports bet every five minutes,” Pierce said.

Even with the growing popularity of similarly frequent online, in-game betting in the U.S. with broadening legalization, Pierce noted there are plenty of times during the day when there’s little to bet on. Inspired Entertainment has versions of virtual sports wagering also installed in New Jersey, Nevada, and Michigan, though not the same as with the Pennsylvania Lottery, and while none has been as popular as in Europe, he expects eventual growth.

“In virtually every market [before the U.S.], this has been successful,” he said. “But we’ve got to get the product right, do the right marketing, and educate the player. We’re confident that as that happens, people will gravitate to it.”

***

At Excuses Monday night, I didn’t know or care anything about the future changes or growth in Xpress Sports. I knew only that every few minutes, I was losing another few dollars as yet another artificial and annoying Comet or Hawk or other player scored a passing or rushing TD. Doesn’t anyone play defense in this damned league?

But then, I’m on the cusp of a mighty payout. Prior to the big Diablos vs. Bobcats matchup, some pre-game analytics displayed on the screen tell me that of the eight mythical teams, the Bobcats have the No. 1-ranked defense. And they are on defense for me!

In a head-to-head matchup against the Diablos, who have only the fifth-ranked offense, the monitor says there is a 26% chance of a turnover. I just need one on the third play, and my $4 wager will turn into $160. I begin pondering what to spend the money on — perhaps a new set of wireless headphones?

The first play is a 2-yard run. OK, doesn’t matter. It’s just good there was no quick score.

Second play: A sack! These Bobcats are fired up, man.

Third play: A 16-yard TD pass to No. 89, with his Bobcat defender a step behind. The big tight end calmly hands the ball afterward to the ref. What?

The headphones will wait, and to make matters worse, the man on the stool to my right is clapping at the same time for a missed Redskins field goal. He explains he has a small wager on the Bears -5. Like, you know, a real bet.

I ask if he has ever been interested in the Xpress Sports football wagering. He looks at the monitor skeptically, then points at the TV he’s watching.

“Why would I do that, if I can bet on this?” says “Bob,” as he asked to be called. “That looks fake, and I don’t trust anything that’s fake. I don’t know who’s controlling it, and with this I feel I’ve got some control.”

Makes sense to me, Bob. But then again, I’ve just donated $20 to the state fund that could eventually help me in need when I’m older. So, ultimately, I guess I’m a winner, too. Just doesn’t feel like it.

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Gary Rotstein

Gary is a longtime journalist, having spent three decades covering gambling, state government, and other issues for the Pittsburgh Post-Gazette, in addition to stints as managing editor of the Bedford (Pa.) Gazette and as a reporter for United Press International and the Middletown (Conn.) Press. Contact Gary at [email protected].

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