Cha-ching!
John Dunagan
Governor Ted's initiative to add video slot machines to the Oregon Lottery drew major ink in the Sunday Statesman-Journal (online S-J article not yet available), but not as much for the machines themselves. In exchange for the slots, the Governor's proposal also wants to cut the retailers' share of the proceeds.
The Lottery Commission meets this coming Wednesday (9 am) at their offices in Salem to vote on the proposal. Public comment is invited from 10 to 11:45 am; the vote will be held afterward.
Obviously, with any infusion of new Lottery revenue comes conflicting desires to allocate it, but the second part of the proposal will bring a whole new intensity to the hearing: the Oregon Restaurant Association, on behalf of the restauranteurs and bar owners, plans to fight the proposal until the cut is removed. The Oregon Education Association, among others, stands to oppose them. They say that the restauranteurs and bar owners have gotten way too much money since video poker was introduced, and would rather see some of that money go to fund the budget, including schools.
(Me, I'd rather see them get rid of Sports Action - much as I love the Ducks, and tolerate the Beavers, I see no reason to throw away our spot in the March Madness rotation so that Bellotti can trot out the U of O Hummer for blue-chip recruits.)
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7:33 p.m.
Jan 24, '05
Excuse me, who won the Civil War decisively?
I sincerly hope lottery funds will genorously distributed to Oregon's public schools.
9:14 a.m.
Jan 25, '05
This is one of those weird issues to me. I get why the restaurant association takes the position it does--it's representing its members. But no one else in the state should spend five seconds worrying about whether bar owners are receiving enough of a kickback. If your business model depends on lottery kickbacks, there's something wrong with your business model. The state of Oregon has no business providing fat subsidies to bar owners.
Jan 25, '05
What ever happened to the original argument that gambling is just plain bad, or that it invites organized crime. The state's right, if one can call it that, to seek profits from running a franchise of gambling activities, cannot be divorced from the gambling-is-bad inquiry. Otherwise the state could have a franchise for fast food, grocery outlets, apartment houses, medical services, 5 and dimes, whatever a legislator (or the Oregon Education Association or the Oregon Investment Council) can dream up. The exception to the prohibition of government ownership of private business was to prevent organized crime.
The desire for profit cannot serve as the legitimate state interest for state participation in business; unless of course one characterizes private profit as an evil, all by its lonesome. I would rather see the state end all the video games, and the lottery too. The restaurants and bars could sell more booze and food to their patrons if they didn't throw so much away in the state's gambling enterprises. Either the bars' revenue could increase or some other business would receive that money and thus generate profit. The money that goes into the machines, if we view it as disposable income that one can afford to lose, will most assuredly be spent elsewhere. I view the gambling as destructive to the economy and to poor gamblers who get hooked.
If private profit is the evil, why then is the Oregon Investment Council happy a as a clam to invest, and profit, from private enterprise? Oregon was apparently one of the first states to invest the assets of its pension trusts in stocks; on behalf of Oregon's teachers who are the largest beneficiary of such private investments and their larger potential returns. It seems pretty crass for the OEA to whine about someone else making a profit. If the local restaurants where part of a larger franchise then the OIC could more effectively orchestrate a leveraged buyout of them all, in like fashion to the OIC financed KK&R buyout of Fred Meyers, and then the OEA would be the profiteers and there would be no public debate all, just back room deals.
12:09 p.m.
Jan 25, '05
Good points, all.
As for Jeff's, there's already the perception out there in small-businessland that progressives have abandoned any concern for their well-being.
I feel that perception acutely whenever I talk to my parents, for example. They've owned and operated a small printing business in Salem for more than 20 years, and used to help local progressive candidates (as well as the DPO) with their services whenever approached.
Now, since they're basically too small to unionize (and see no need for it, anyway, as they already treat their employees fairly, even lavishly by some standards), they've effectively been black-balled by the Party and its activists because of it.
So too is it hazardous, I think, to do the things that progressives do out of reflex sometimes to alienate small business. And I think that's the potential hazard here if we don't address it by Wednesday.
While we're taking ten seconds to decide that bar owners and restaurants can make do with a lesser share of their Lottery revenues, the S-J's leading this issue to their readers with a vignette about how in one bar here in town, the owner has opened his books in an attempt to prove that he would not remain open without every penny he gets from video poker.
It should go without saying to most progressives in Oregon, too, that the S-J wastes no opportunity whatsoever to take a swing at our values along the way, and true to form, there's plenty of vitriol for such 'bad guys' as the OEA, education funding activists, and progressives in general. 'Durn lib'ruls' writ large, once again.
Is it worth, then, not even sitting down to listen to the concerns of the bar owners and restauranteurs?
Like Jeff says, education funding is a no-brainer: of COURSE we want that, and most of us do not mind offering State-run gambling to get it. But I guess I'm asking right now, is it worth pissing on what allies we have left in this community?
3:00 p.m.
Jan 25, '05
The latest survey of video poker retailer commissions, by the Secretary of State's Audits Division, found that states and provinces with similar video lottery arrangements grant commissions that "range from 15 percent to 25 percent of the cash remaining after payment of prizes, while retailers in Oregon receive up to 35 percent."
The full report is available here.
3:10 p.m.
Jan 25, '05
If we want to help small business -- and we DO -- there are a lot of ways to do this without mucking around slots proceeds. I think liberals need to make it priority one to work with small businesses. Although it's a little-publicized issue, they've gotten a very raw deal under Dubya, and liberals should be looking out for them.
I don't think slots are the way to do it, though.
Jan 25, '05
On a stricly personal level I have to agree with this statement. I am all for helping these places along, but the truth is, a LOT of these bars would die if it wasn't for the lottery propping them up. As I see more and more machines going into a watering hole, I see less and less money going to the wait staff, the booze and food, and the entertainment (if any). The money is going past the worker bees that survive on tips, and directly into the coffer of the owners.
In those cases where the bars are doing well, I can guarantee that the increased amount from the state, regardless of the fiscal condition of the bar as a whole, is not finding its way into the pockets of those who actually do the work of serving and cooking and so on.
That is only what I have seen with my two eyes. Of course, I don't drink, go to bars very rarely, gamble even less. I am sure that Mac will have more authoritative words on the subject than I.
5:07 p.m.
Jan 25, '05
If your business model depends on lottery kickbacks, there's something wrong with your business model. The state of Oregon has no business providing fat subsidies to bar owners.
I agree, too - with the second premise (State of Oregon doesn't owe subsidies to bar and restaurant owners). I'll go back here in a minute.
And from a personal standpoint, I agree with the first. But the problem is, much like (for example) I lack the standing to tell my wife what she should do with her own body, I lack (as do all of us, I think) the standing or the right to tell a bar owner how he should run his bar - as long as it is within the law.
So "if, then something's wrong with your business model" isn't an argument that can be applied universally, or by anyone other than those who any particular bar owner listens to for such advice.
Maybe I think it's so, maybe you do, too - but neither of us assumes the risk, or makes the decisions for any one bar or restaurant.
Now, for the State not having any business providing fat subsidies for business owners - I agree, BUT: it's not a subsidy, it's payment for services rendered - or if you like, a mutually-beneficial partnership. The State doesn't set up banks of Lottery machines in the park, or at universities. It also doesn't set up, except for rare circumstances, gaming kiosks independent of other services. It targets retail businesses to derive revenue for the public coffers.
In return for that payment, the business pays out prizes below a certain level, allocates the space, provides entertainment, and by doing so, decreases its atmosphere and dining/drinking space to provide this dubious 'service.'
Now, none of this is to say that the Oregon Lottery runs without problems, sometimes serious ones; those, perhaps, I can enumerate in another thread. But this deal here, the one they're going to talk about on Wednesday, and that's likely going to go through - deserves at least a discussion with open-minded folks on both sides.
We don't know how much money anybody's going to get from the introduction of video slots. And given that businesses (according to the article) will have the defacto option of sticking to the old arrangement (poker only, no slots, same take), it is possible that the Governor's plan, if it isn't researched and discussed thoroughly, could end up detracting from public revenue in the end.
I look forward to that further discussion, and thank you all for your thoughtful and considered posts to sustain it.