State justified in cutting what it pays to taverns for video poker

When Oregon launched into the lottery business in the mid-1980s, there was one overriding principle behind the program: make money for state programs.

The fact that retailers saw some economic gain from gambling was a plus - and certainly helped with the success of the Lottery - but it wasn't the paramount goal and it wasn't why Oregon's voters decided profits should be spent on economic development and schools.

So it's not surprising that the Oregon Lottery Commissions has started controversial hearings on a proposal to cut commissions the Lottery pays to taverns and bars with video poker machines.

Yes, we understand that lower commissions paid by the state equal smaller profits earned by tavern owners. And we understand that tavern owners may see fewer advantages to keeping these machines.

But we also understand that the state is looking for funds under every rock and behind every tree.

The recent demise of Measure 30 - which would have temporarily increased income taxes and generated $800 million over the next two years - helps drive home the point that video poker revenues can make up some of that difference.

The state's schools face larger class sizes, fewer teachers and shorter school years. There also are fewer dollars to be spent on attracting new industry to Oregon, which in turn would create new tax dollars and help Oregon out of its economic doldrums.

The state paid $159 million in commissions averaging $75,000 to retailers in the fiscal year ending last June. So it's no surprise that the operators of video poker machines are unhappy with the specter of smaller commissions - that's good money.

We can even sympathize with these tavern owners to what amounts to a pay cut. There's also some valid concern that when the state takes too big of a bite out of Lottery commissions, it may wind up hurting itself in the long run.

But the Lottery Commission can never lose sight of its primary responsibility: Raising money for the good of Oregonians and maximizing the return. If ever there was a time to get more money out of video poker, this is it. - From the East Oregonian

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