10:11 AM PST on Tuesday, January 25, 2005

Associated Press

SALEM -- Members of the state Lottery Commission will vote this week on Gov. Ted Kulongoski's plan to add slot-machine-style games to video lottery terminals.

The goal is to come up with an additional $120 million in state revenue, money earmarked for the Oregon State Police.

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Lottery Commissioners are expected to approve the plan at their meeting on Wednesday, which could set the stage for a bumpy implementation.

The games would be scheduled to launch July 1. But the state will have to fight it out with the owners of the restaurants and taverns that offer the video terminals over how much of the additional profits the owners will be allowed to keep.

The powerful restaurant industry saw commissions drop by 10 percent this summer during a contract renegotiation -- and are upset with the idea that the state is contemplating another reduction.

But critics said the current setup is overly generous to the restaurant industry.

The lottery generated roughly $546 million in receipts in 2004, with about 70 percent going to the state.

Oregon Lottery Director Dale Penn has been floating a proposal to reduce the retailers' profits by 11 percent if they offer the slot-style games in addition to video poker. But neither side likes that idea, with the restaurant industry saying it is too stingy, and education advocates saying it's too generous.

Some restaurants have threatened not to offer the line games if their commissions are cut.

But similar threats were made during previous negotiations, and in the end, no restaurants or taverns pulled out of the program.