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Oregon's Casino Rules Questioned

OREGON – As reported by the Portland Tribune: "When Oregon voters approved the state lottery in 1984, they also did something else: They amended the state constitution to ban casinos on nontribal land.

"But what's a casino? And what's a restaurant or tavern? And when does one become the other?

"The Oregon Supreme Court had to consider some of those questions in the early 1990s as some of the Oregon lottery's video poker outlets began to look a lot more like minicasinos than the restaurants or taverns they purported to be. The court ruled, in 1994, that to comply with the state constitution's ban on casinos, a video lottery retailer had to have a 'dominant use' or 'dominant purpose' other than video lottery.

"Through lottery rules, 'dominant purpose' now means that a restaurant or tavern must get at least 40 percent of its total revenue through nonlottery related sales.

"…So a restaurant or bar can lose money on nonlottery sales — it can have revenues of $150,000 and costs of $200,000 from food sales, for example — and still have the $150,000 count toward the 40 percent to satisfy the lottery formula.

"Critics charge the formula allows for an upside-down economic model in which many bars or restaurants really are only in business to be video lottery outlets.

" …'You can lose money on your other operations and still say that gambling is not your dominant purpose,' said Steve Novick, a Portland political activist who has advocated for lower commissions for lottery retailers…"

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