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Oregon Lottery expects $250-500M revenue drop, leaving hole in state budget

The lottery is the state’s second largest source of revenue, behind personal income taxes.

PORTLAND, Ore — The Oregon Lottery, known to celebrate jackpot winners with oversized checks, is facing a new reality -- it’s losing. The state shut down all video lottery terminals in mid-March, following Gov. Kate Brown’s order that bars and restaurants close or do takeout only because of the coronavirus pandemic.

The Oregon Lottery is losing roughly $20 million a week in revenue from video lottery, which is far and away the lottery’s most lucrative type of game.

“That revenue stream pretty much overnight went to zero,” said Matt Shelby, spokesperson for the Oregon Lottery.

The lottery is the state’s second largest source of revenue, behind personal income taxes. Oregon Lottery revenue is roughly 5% of the state’s $24 billion total budget for 2019-21 biennium.

This chokehold on lottery revenue will likely create a gaping hole in the state budget, warned Shelby.

“We’re expecting a drop in lottery transfers -- anywhere between 20 and 40%,” explained Shelby. “In real dollars, that’s anywhere between $250 to $500 million less that the Legislature would have to budget in the next cycle.”

Lottery funds are allocated for schools, job creation, watershed enhancement, parks and other priorities established by Oregon voters.

Credit: Oregon Lottery

“The money plays a significant role in keeping state parks open and providing funding for ongoing improvements and expansion,” said Chris Havel, spokesperson for Oregon Parks and Recreation.

Oregon Parks and Recreation relies on the state lottery for 43% of its funding. When lottery dollars dry-u, which has never happened, state parks suffer, explained Havel.

“Things like trail improvements, parking lots, restrooms, campground upgrades. Those sorts of things all have to be reevaluated to see what the priorities are,” said Havel.

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The lottery has experienced slowdowns before, but never a complete shutdown of the agency’s biggest winner- video lottery.

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