Justin Hedlund

The meeting included significant discussion regarding public comment procedures, especially following feedback about the January 30th meeting where concerns were raised about the handling and summarization of public submissions, including allegations of prize fraud and financial reporting issues. The Deputy Director also provided updates on the draft January financial statements and a change in the useful life for VLTS, which will be presented for approval in April. Furthermore, the Commission addressed proposed amendments to the career services rule intended to clarify the prohibition against selling lottery tickets or interests therein to out-of-state customers, including clarifying the definition of a "matching service." Separately, the Director decided not to advance a proposed rule change regarding retailer responsibility for stolen scratch tickets due to concerns raised by retailers about inventory control and bearing the full financial cost of crime.

The meeting included a public comment section summarizing correspondence received regarding third-party lottery couriers, tribal relationships, gross receipts disputes, prize payout concerns, and authority responses. The Director's Report acknowledged the passing of the largest Powerball winner and noted the start of the legislative short session. The Commission approved the financial statements for October, November, and December 2025, presenting the second-quarter FY 2026 results, covering transfers to the state, expenses, net revenue, and Video Lottery/sportsbook performance. Staff updates covered the FY26 second-quarter strategy progress, including pilot programs and IT projects, as well as quarterly product performance highlighting strong Scratch-it sales, Video Lottery revenue updates, and sports betting activity, including a large parlay payout. The Audit Committee reported on its review of the enterprise risk management program and approved the 2026 audit plan.

The meeting included a director's report summarizing 2025 activities, noting the commitment to positive tribal relations and anticipated collaboration regarding unregulated gaming providers. The lottery is returning over $887 million to the state for fiscal year 2025, with the annual financial report confirmed without audit findings. Sales updates indicated overall sales are up 5%, driven by Scratchits, with Mega Millions and Power Ball sales increasing due to large jackpots, while traditional sales like VLT and Arceneaux were down. Sports betting set a record month for gross gaming revenue. The commission also discussed recent winner stories, acknowledging the new requirement for winner permission to share names. A key agenda item involved proposing a rule amendment to simplify the financial responsibility process for retailers regarding lost, stolen, or damaged scratch tickets, aiming to reduce administrative workload, with feedback to be collected through January.

The meeting commenced with the commencement of the January 30th, 2026 state lottery meeting, noting remote attendance via web. The Chair acknowledged Commissioner Dodd. Public comments received in writing were summarized, detailing allegations concerning the Oregon Lottery and Director Mike Wells regarding misrepresented actions related to third-party couriers, strained relationships with Oregon tribes, financial practice disputes including gross receipts, concerns about prize payout accuracy, and assertions of improper scratch ticket accounting, all framed within a broader conspiracy allegation. The Director's report included noting the passing of Oregon's largest Powerball winner, Charlie Safeen, and outlining upcoming organizational events such as a virtual all-staff meeting and updates regarding the legislative short session. The financial report for the second quarter of fiscal year 2026 detailed transfers to the state ($704 million total year-to-date), expenses as a percentage of gross sales (3.5%), strong net revenue ($737 million for six months, $15.9 million above forecast), outperformance in traditional lottery products due to large jackpots, a decline in video lottery net revenue, and strong growth in sportsbook revenue. Expense variances included higher retail commissions due to strong sales and favorable variances in game vendor charges; indirect revenue outperformed budget due to higher interest earnings. Net profit for the six months was just under $451 million. Staff updates covered progress on strategic plan areas including financial sustainability pilots, IT strategy projects, team goal workshops, and positive beneficiary sentiment survey results (4.9 out of 5). Commissioner questions focused on the complexity of strategic planning terminology and macroeconomic factors influencing scores.

This document presents the Q2 FY26 Mission Excellence Progress Dashboard for the Oregon Lottery, detailing strategic, agency-wide team goals and objectives effective from July 2025 to June 2026. The plan outlines six SMART goals across four categories: Financial Sustainability, Security + Technology, Team, and Lottery Community. Key initiatives include enhancing lottery product profitability, aligning business models with industry standards, delivering the IT Strategic Plan, implementing an Organizational Development Strategic Plan, advancing DEIB initiatives, and improving lottery community sentiment.