The visitors dominated the one-day match from the outset with Rob Nicol and Michael Papps combining in a 129-run stand for the opening wicket.
It was far from an all-out attack, with Papps scoring 63 off 83 and Nicol 58 off 85.
The pair used the large ground to gap the ball and waited patiently for the deliveries they could get away to the boundary.
With a solid platform in place, Peter Fulton had the freedom to free his arms and whacked 87 from 71 to help his side post a challenging 296 for four.
Shanan Stewart (27 off 19) and Andrew Ellis (23 off 9) played useful cameos at the death.
In reply, Otago lost two early wickets but got back into the game with Michael Bracewell (68) and Craig Cumming (46) combining in a 110-run partnership for the third wicket.
But that is where the challenge ended.
With Otago having clawed its way back to 125 for two, Bracewell nicked out and Cumming was trapped in front.
The middle order of Darren Broom, Nathan McCullum and Ian Butler added just 16 between them as Otago slumped to be all out for 197.
Despite the heavy defeat, Otago coach Mike Hesson was relatively upbeat about his side's performance.
Left-armer Neil Wagner got the unenviable job of bowling into what Hesson described as a gale and conceded 70 runs from his 10 overs.
"Bowling from one end was always going to be a big challenge," Hesson explained.
"But I was pleased with the way we bowled and fielded. In fact, we were very good, but unfortunately, chasing a score like that, you need a couple of guys to make a pig of themselves or you need a succession of partnerships, and we didn't have either.
"There were a number of highlights. Neil Wagner was outstanding with the ball - bowling into the gale and during the power plays at the death. He was exceptional and kept us in the game. Both the spinners bowled well and some of the catching was outstanding.
"With the bat, Michael Bracewell and Craig Cumming had a good partnership and got us back to parity.
"But, unfortunately, we lost five wickets for 20 runs and it is pretty hard to win games from there."
Otago's next game is against Central Districts in Palmerston North on Sunday.
Northern Districts produced a thrilling finish to beat Central Districts by one wicket with a ball to spare in their second round match at Palmerston North yesterday, NZPA reports.
Defending champion Northern Districts chased down Central's Districts 280 for five, with Brad Scott scoring a boundary with the penultimate ball of the match off Doug Bracewell to bring the score to 283 for nine.
Opener Daniel Flynn was the for Northern Districts, scoring 115 runs off 124 balls.
Earlier, Central left-hander George Worker hit 109 runs off 129 balls in a chanceless innings for his first one-day century in 22 matches.
Wellington was left ruing the run out of skipper Grant Elliott after it lost a second-round match by eight runs to Auckland yesterday.
Chasing 308, Wellington looked to be down and out when it lost two wickets with just five runs on the board.
It was 43 for three when James Franklin joined Elliott at the crease to put on a breezy 112 runs for the fourth wicket.
Elliott was on 73 when Lou Vincent ran him out with a direct hit.
Some lusty hitting by Harry Boam (59), Daniel Bowden (23 not out) and Jeetan Patel (13 not out) took Wellington within sight of its target but it ran out of overs.
Earlier, Auckland's score was driven by wicketkeeper Gareth Hopkins, who struck an electrifying 120 off 96 balls.
