Posted on 10/25/2003 8:09:17 PM PDT by ex-Texan
Oregon Lottery Attempts to Increase Revenue
The agency will buy updated terminals with a new game, 3-Way Action Poker, that it hopes will attract more players
SALEM -- Oregon lottery commissioners agreed Friday to buy updated video poker terminals loaded with a new game they hope will pump up players -- and help generate extra dollars demanded by the Legislature.
In the absence of any big-picture policy direction from Gov. Ted Kulongoski, commissioners are scrambling to find in-house means to squeeze more money out of state-sponsored gambling to pay for state programs.
Legislators didn't give the commission much direction, either, when they adjourned nearly two months ago with an $11.5 billion state budget balanced partly on the expectation that the lottery would generate an extra $67 million.
The Legislature stayed mum on two likely, and controversial, revenue options: adding easy-to-play slot machine-type line games, or cutting the compensation rates for retailers who carry the poker terminals.
"Things could change," said Lottery Director Brenda Rocklin. "Who knows where we are on line games? That's always still out there. But in the meantime, since we haven't been given the green light to go ahead with that, we just really have to look at other ways of doing things."
Mary Ellen Glynn, a spokeswoman for the governor, said it's still early and she expects him to get involved soon. Kulongoski has said he does not like line games but that he has not ruled out any options.
Profits from lottery games -- which exceeded $380 million last year -- are split among several state-supported programs, including economic development, parks and a rainy day fund for schools.
To get the $67 million specified by lawmakers, however, lottery officials say they must generate $108 million in extra profit.
Legislators offered the lottery commission some guidance by authorizing one extra video poker terminal for bars and taverns, and five extra for race tracks, bringing the total to six and 10, respectively. But the agency estimates the additional machines at nearly 500 sites will generate only $11 million of the $108 million in a fully operational biennium.
"It's a small number, and I think there are retailers out there who would like to think they would profit from having" an extra terminal, said Kathy Ortega, the agency's chief financial officer. "But you have to have enough traffic on those terminals constantly to generate extra play."
The five-member commission authorized the agency to buy an initial round of 1,500 video poker terminals from Illinois-based WMS Gaming. The agency is authorized to purchase 2,101 machines at a cost not to exceed about $17.8 million. Currently, 9,500 terminals are distributed among retail shops in Oregon.
Rocklin canceled an earlier agreement with WMS last month after field tests showed a number of problems, including lower-than-expected revenue yields and technical glitches.
But Rocklin said she decided to endorse the new agreement after WMS promised to fix the problems and offered some incentives, including a new game called 3-Way Action Poker as early as next summer.
To "have up to a year to try to max revenue, that's a big deal to us, particularly if we don't do line games," she said.
Rocklin said the lottery is continuing work on a new contract with retailers that would specify the compensation rates agents receive for carrying the machines. Retailers currently receive about 32 percent of the net proceeds. Last year, nearly 2,000 retailers collected a total of $153 million in compensation.
The contract expires in June. Janie Har: 503-221-8213; janiehar@news.oregonian.com
There are rumors that players are drifting away from Oregon Lottery Games because the Lottery Commission has been tinkering with the odds on video poker and bingo games. How do I know about the rumor? Because I was present when the owner of a video club was complaining that the new chips that were installed back in 2002 had changed the possibility to winning from very slim to 'totally remote.'
Just what is being done with state lottery funds to boost the Oregon economy is a total mystery. They never report publically about what they are doing.
Oh well . . . What do I know? I refuse to play those idiotic video poker games or Bingo because I have never seen anybody actually winning.
Well....they probably NEED those services (welfare, food stamps, etc.) BECAUSE they are spending their time and money playing video games and lotteries......
What I thought was most intriguing about that earlier article was it let slip information about the lottery's financing. It seems that the lottery takes in about $ 1.5 billion a year. Under contracts with the state, only about $ 380 billion goes directly to the State of Oregon. I was suggesting that the entire Lottery Commission be abolished and a new system set up to guarantee 33% of the total or $ 500 million be held in trust to fund Oregon Schools and improve higher education.
At the end of the first year alone, this would generate more than $ 400 million to fund Oregon schools. Having saved the schools in the state in one year, the state could look at other options. Wow! A financial miracle! And not need to raise taxes to save the schools!
Only God know how much waster and fraud is hidden by the books of the Oregon Lottery Commission. How much "economic aid" is actually resulting in "economic development?" DUH!!
Bet most of the millions is being funneled off in sweet heart deals for Democratic Party insiders who are making BIG promises but not delivering.
Nevada realized a long time ago that people would not play gambling machines (slots, video poker, etc.) if they perceived the games to be rigged. Nowadays, every machine in operation in Nevada has a guaranteed payback -- somewhere in the 90% range, and the Nevada Gaming Commission verifies that these paybacks are being met. Why does Nevada take such an interest in maintaining integrity in all these gaming machines? As I said previously, if gamblers perceive these machines to be fixed then they won't play them, and that means less revenue for the state.
Oregon would have done well to pay attention to the Nevada gaming model. Now they've got a huge PR problem on their hands, much like Nevada did back when the mob ran the casinos.
The state may have strangled the golden goose itself. Blame the DIMs. They have been in charge.
What, as opposed to the other lottery games where everybody always wins? The state rigs it so you don't win--that's the point.
You play the lottery, you pay your stupid tax, the state is happy.
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