Members of the Our Oregon coalition have filed a measure for the November 2006 ballot to reduce the Oregon Lottery’s payouts to bars and taverns with video gambling machines, 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 Association, which says retailers shouldn’t be punished for making the lottery a financial success for the state.
There’s a lot at stake, both for the retailers who have come to depend on video lottery — the average retail outlet receives $76,000 a year from the games — and for advocates of increased state funding for Oregon’s local schools.
The initiative would reduce the average 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 Commission approved new compensation rates for retailers.
The new rate gave bars, taverns and other establishments with video gambling machines a smaller cut of profits.
But school advocates say bars and
taverns are continuing to make excessive 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 who’s part 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.
