IN BRIEF
Measure aims at payouts
to video lottery retailers
SALEM — It could touch off the po
litical equivalent of a barroom brawl.
Members of the Our Oregon Coali
tion have filed a measure for the No
vember 2006 ballot to reduce the Ore
gon Lottery’s payouts to bars and
taverns with video gambling ma
chines, with the money going instead
to schools and other programs.
If it gets on the ballot, the initiative
likely would face strong opposition
from the Oregon Restaurant Associa
tion, which says retailers shouldn’t be
punished for making the lottery a fi
nancial success for the state.
There’s a lot at stake, both for the re
tailers who have come to depend on
video lottery — the average retail out
let receives $76,000 a year from the
games — and for advocates of in
creased state funding for Oregon’s lo
cal schools.
The initiative would reduce the av
erage video commission rate from the
current 24.8 percent to 18 percent of
net sales, beginning with contracts
signed by retailers after November
2006. Net sales means money spent to
play video lottery machines minus
prizes paid out.
The 24.8 percent rate would remain
in effect for retailers who now have
five-year contracts with the state but
would fall to 18 percent after current
contracts expire.
The initiative by Our Oregon, a
coalition of progressive groups that
support adequate funding for schools
and other programs, would re-ignite
a debate that took place earlier this
year when the Oregon Lottery Com
mission approved new compensation
rates for retailers.
The new rate gave bars, taverns and
other establishments with video gam
bling machines a smaller cut of profits.
But school advocates say bars and
taverns are continuing to make exces
sive profits from video gambling, at the
expense of schools and other programs
that receive lottery dollars.
"It’s simply a matter of deciding
what’s more important — education
or special interest giveaways to the
video retailers," said Steve Novick, a
frequent lottery critic and member of
the Our Oregon Coalition.
Novick said that the 18 percent rate,
if it were in place today, would reduce
retailers’ compensation by more than
$70 million in the current two-year
budget period and make that money
available to schools and other pro
grams that receive lottery dollars.
But Mike McCallum, head of the
Oregon Restaurant Association, called
the measure punitive and said it could
backfire on the state by making the
game less profitable. He said some re
tailers might quit the lottery if the com
pensation rates were slashed.
Novick scoffed at notion, though,
saying earlier threats by retailers to pull
out of the game never materialized af
ter compensation rates were reduced.
The proposed initiative comes at a
time of rising lottery revenue, mainly
because of the addition of slot ma
chine-style games to the lottery's
existing video poker terminals.
State lottery revenue have
jumped by 20 percent since the slot
type games were added this past
summer. It's now forecast that lot
tery revenue will climb to a record
$964 million in the current budget,
which includes $838 million from
video gambling games, lottery
officials say.
—The Associated Press
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