05:03 PM PST on Wednesday, March 31, 2004

By BRAD CAIN, Associated Press Writer

SALEM -- The Oregon Lottery Commission voted Wednesday to reduce payments to bars and taverns with video poker machines, a move estimated to bring in an extra $111 million over six years.

The panel's 3-1 decision will trim the average poker commission rate from 32 percent to 28.8 percent of net sales for the 2,000 establishments that offer the games.

The panel slightly revised a plan that Lottery Director Brenda Rocklin proposed on Tuesday that would have yielded $122 million for the state over six years.

Net sales means money spent to play video poker machines minus prizes paid out. The average bar with video poker got a commission payment of about $75,000 in the last fiscal year.

The revised commission rates apply to new six-year contracts replacing ones that expire June 26.

The state makes about $350 million a year from the Lottery, with 80 percent of that from video poker. About two-thirds of the proceeds go to education, with the rest allocated to parks, salmon restoration and other programs.

The Oregon Restaurant Association, representing about one-third of the retailers with video poker, battled any cut in commissions. The group claimed reduced payments could lower Lottery sales because some bar owners would reduce hours or even quit offering the games.

Critics say that wouldn't happen and that commissions aren't supposed to be so large they subsidize a business's other operations.