Secretary of State Bill Bradbury urged the state Lottery Commission to decrease its payments to bars and taverns with video poker...
Secretary of State Bill Bradbury urged the state Lottery Commission to decrease its payments to bars and taverns with video poker and to adopt only short-term contracts with the retailers while the impact of the change is studied.
Commissioners also heard a report Monday by an economics consultant to the Oregon Restaurant Association who concluded that shaving the poker commissions likely would reduce, not increase, state revenue from the games.
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The report by Oregon State University economist William Jaeger is the latest of several conflicting studies on the impact of paring poker commissions.
Lottery Director Brenda Rocklin initially has recommended cutting the average commission payment from 32 percent to 26.7 percent of net revenue by 2007. She estimates the change would increase state revenue by $140 million to $180 million over six years.
Net revenue is money played in the machines minus prizes paid out annually from Lottery games.
Rocklin postponed a plan to make her final recommendation Monday, saying she wanted to review Jaeger's report along with potential legal impacts of rate changes.
She intends to release her final proposal next Monday, and the commissions is due to make a decision March 31 for new contracts to take effect July 1.
Bradbury suggested that the agency's standard six-year contract period be shortened to one year "or at most two years, so that we can evaluate the impacts of a change based upon real evidence, rather than speculation."
Bradbury cited a recent study by his office that found state payments to Oregon poker retailers easily top payouts in other jurisdictions with similar lottery games.
The restaurant association said the finding depended on an invalid comparison between Oregon and lotteries in Canadian provinces.
The Lottery paid $159 million in commissions averaging about $75,000 per retailer in the last fiscal year.
Bradbury urged reducing commissions by an unspecified amount and approving a short contract period "rather than enter into long-term contracts while such a great disparity of opinion exists about the impact of a change."
Jaeger, an OSU agricultural resources economist, said he expects if prices paid to retailers -- the commissions -- were lowered, they would make changes that "will amount to a decrease in the supply of video lottery, which can be expected to lead to a reduction in sales."
Mike McCallum, executive director of the restaurant association, said Jaeger was chosen to do the report because he responded when the group sought an OSU economist to study the poker commissions.
The association represents about one-third of the 2,000 bars and taverns with video poker and is battling efforts to cut commissions. The group claims reductions would force some outlets to decrease hours, lay off workers or even remove the poker terminals.
Source: Associated Press
