Gov. Ted Kulongoski’s proposal to expand the state lottery by offering video line games is being met with little protest.

Observers say it’s politically spot-on: Oregonians’ approval of state-sponsored wagering hovers around 70 percent, a level that other budget control measures such as service cuts and tax increases will never attain. And, it can raise cash in a hurry: Kulongoski expects the games to raise $60 million per year.

Even so, there are voices of dissent.

Jeff Marotta, who heads the state’s treatment program for addicted gamblers, says that while the state gains millions in game revenues, it pays out in direct treatment for problem gamblers, and indirectly in welfare, food stamps, and paid health care for those gamblers who hit bottom. “In fact,” he says, “one of the places we do outreach for problem gamblers is in the welfare system…For someone who doesn’t have a lot of money, even losing $20 a week can mean the difference between lunch and no lunch at all.”

There are other hidden costs, he says. Such as those problem gamblers who commit crimes to get the cash they need to continue gambling. “So, we’re taking out on one side of the state budget while we’re putting in on the other side.”

Oregon’s reliance on lottery funds has grown as the number of games and video poker terminals have increased. In 2000, revenues from the lottery constituted 5.6 percent of the state budget or $291 million. By the end of this year, according to the State Office of Economic Analysis, revenues will rise to $407.4 million, comprising 7.2 percent of the state’s revenues.

All of this even though fewer Oregonians are playing. In 1998, about 52 percent reported having played at least one state lottery game during the year. Last year, the number fell to 47 percent.

Chuck Baumann, spokesman for the Lottery, says the ideal would be to have more Oregonians playing “a little” rather than a few regulars gambling more. And he says the state is looking into technology that will help some players stop before they lose too much cash.

One idea is an onscreen clock for video poker players, so they can discern how much time is passing while they’re playing. Another feature would trigger an automatic cash- out after a certain amount of time had passed. Regardless, Marotta says any increase in games is likely to create more problem gamblers. When the novelty wears off, casual players fade away, but some regular players and the addicted remain, he says. “At least 30 percent of lottery revenues are coming from problem gamblers…We end up relying on them for revenue,” Marotta says.

In each of the past five biennia, Marotta says the number of gamblers enrolling for treatment has increased 40 percent. “And that happened even after the overall level of participation had plateaued.”

Along with those who become addicted are those who shouldn’t play at all because they can’t afford to lose.

Lottery officials say they don’t know what portion of their players are living below the poverty line, only that at least 10 percent make less than $15,000 per year and 44 percent make less than $50,000. Statistics for those in between are not kept, Baumann says.

But a national Gallup Poll released last year reported that people with annual incomes of less than $20,000 spent more—both as a proportion of their yearly income and in total amount—on lotteries than those in higher brackets.

Players in the low-income bracket spent an average of $46 per month on lottery tickets, double the amount spent by people in higher income brackets. Players making between $30,000 and $50,000 yearly had the next-highest average at $24 per month, according to news coverage of the poll.

Lottery officials from several states dispute the idea that the poor are playing and spending more on lottery games than others. Baumann says the majority of Oregon’s players are middle class.

One thing is indisputable: Few people with high incomes play the lottery in Oregon. Only 7 percent of residents making $100,000 or more per year participate in state gaming, according to Oregon Lottery figures.

Sidebar: In and Out

Amounts paid out by the Oregon Lottery in 2003:

$1.1 billion in prizes, including $858 million in video poker winnings and $34 million in Megabucks payouts.

$190.8 million in retailer payments for a total of 3,300 retailers.

$52.6 million in lottery administration costs. $407.4 million into state coffers to pay for economic development, education, parks and salmon restoration.

BrainstormNW - March 2005