05:46 PM PST on Wednesday, January 26, 2005

Associated Press

SALEM -- The Oregon Lottery Commission voted unanimously Wednesday to move ahead with adding slot-type games to video poker terminals in bars and taverns throughout Oregon.

File photo

Slot machine line games.

Oregonians could be playing the games as soon as July 1, the start of the state's 2005-07 budget period.

The decision was no surprise, since Gov. Ted Kulongoski had directed the panel to adopt so-called line games to raise an estimated $60 million a year for state police highway patrols.

But efforts may surface in the Legislature to use the new revenue for schools instead, and find other money for the police budget. The governor has said he could support such a plan.

Kerry Tymchuk, the lottery commission's chairman, said Wednesday that final implementation of slot games now depends on agreeing on how big a cut restaurants and bars will get for operating the new games.

That's expected to produce tough negotiations, because the commission just last year shaved the establishments' profits on current games by about 10 percent.

It will be up to restaurant and bar owners to decide whether to add slot games to their existing poker machines. There are more than 10,000 such machines in about 2,200 establishments around the state.

The decision was 4-0; one seat on the commission is empty.

Some commissioners said the felt pressured to raise revenue quickly.

"I'm not very pleased the commission was put on a fast track," said commission member Lisa Noah.

Commissioner Stan Robson said it's frustrating "that all of a sudden the budget problems are the lottery's problems."

But Lottery Director Dale Penn said commission action to adopt slot games was needed quickly, because of the timetable needed to adopt new retailer payment rates and get games in place by July.

The lottery nets about $350 million a year for school support and other programs, most of it from video poker.

Foes of adding the spinning wheels of slot games to poker machines said at a hearing before the commission voted that the move would create more problem gamblers.

"Money made off this game is not worth somebody's life," said Ronda Hatefi of Eugene, an anti-gambling advocate who says her brother committed suicide in 1995 because of his addiction to video poker.

Phillip Kennedy Wong of Ecumenical Ministries of Oregon said the governor and Legislature need to reform the tax system "and not seek politically expedient answers" to budget problems.

On the other side, lottery retailers for a decade have urged the lottery to expand video game offerings. They stepped up their lobbying efforts as the state's Indian casinos have installed thousands of slot games.

The Oregon Restaurant Association doesn't rule out some reduction in bar and tavern commissions — which average almost 28 percent of video machine profits — in exchange for adding games, said association President Mike McCallum.

But he said in an interview that retailers oppose a proposal by lottery Director Dale Penn to reduce commissions for line games to 25.6 percent. McCallum said that would eat up all the added revenue bars and taverns would expect from slot games.

The association represents about one-third of the lottery retailers.

State Sen. Ginny Burdick, D-Portland, told the commission that retailer payments should be slashed to 15 percent to give the state more lottery revenue for education and other uses.

"Tavern owners are getting a windfall," she said, citing studies indicating that they would make a solid profit from the games even at the lower rate.