Oregon delays plan on gambling profits

SALEM, Ore. — State Lottery Director Dale Penn yesterday delayed until Feb. 15 announcing a revised plan for reducing bar and tavern shares of video-gambling profits after slot-type games are added.

At the same time, he said the rollout of so-called "line games" to video-poker terminals will include new steps to lessen chances of creating problem gamblers.

The moves might include putting clocks on machines to remind players how long they have gambled and displaying the money played in dollars and cents instead of as "credits" worth 25 cents each.

Similar features are used on gaming terminals in some Canadian provinces.

"There absolutely will be a problem-gambling component to the line-game product," Penn said.

Jeff Marotta, problem-gambling program manager for the state Human Services Department, said moves such as adding clocks to machines and showing money as cash instead of credits are relatively new.

"People really lose sense of time when engaged on the machines, they're almost mesmerizing," he said.

"And we think if people actually see how much they have in a machine, they're more likely to cash out when [they] hit a certain threshold."

The lottery filed operational rules for the slot games yesterday as planned, but Penn said he needed more time to weigh new commission rates for lottery retailers.

At Gov. Ted Kulongoski's direction, the Lottery Commission last month voted to move ahead in adding slot games by July 1 to raise an estimated $60 million a year to fund state police.

The lottery now yields almost $400 million a year for education, economic development and other programs.

Because slot games are expected to draw more gamblers, Penn initially recommended cutting the average commission payment to retailers by about 11 percent so the state can keep a bigger share of the money.

The average commission, now 28.8 percent of net revenue, would drop to 25.6 percent under Penn's first suggestion. Net revenue is the money played minus prizes paid out.

The average video-game retailer now receives $68,000 a year and, Penn says, would get about $76,000 by next year under his plan — if the slot games produce an expected 12 percent boost in play.

He's considering revising his proposal and said he's getting plenty of advice, from school advocates and legislators as well as bar and tavern owners.

"I didn't feel I had the right numbers at this point," Penn said. "I'm doing my best to try to craft something that has the best opportunity to be adopted."

The Oregon Restaurant Association, the retailers' main lobbying group, doesn't like Penn's first idea but says it can accept some reduction.

The organization contends Penn's plan would cancel the added revenue that many operators otherwise would get from increased slot-games play.

Education advocates who want more lottery money for schools, meanwhile, claim commission payments are much too high and that studies have shown that retailers would make solid profits even with commissions of 15 percent.