Oregon is the latest state to make waves with decisions involving slot machines. Like most states, Oregon suffered huge financial losses during the hard-hitting recession. The state had a record number of foreclosures, falling house values and a soaring unemployment rate. All these things caused people to stop spending and that is what sent the state, and others, into a tailspin of debt. Almost every state has huge deficits to deal with. The deficit is what is left over after expenses are subtracted from income that is a lower number. Rather than having a surplus, every state has a deficit.

Managing that deficit has become a premiere thought on the minds of legislators in the nation. They are trying to come up with ways to manage it by using slots and gambling. They believe that the gambling tax revenues generated by gambling will save their individual economies. Oregon is joining in the argument by bringing in slots to increase their revenues. Unfortunately the economy has not made slots as lucrative as hoped.

One trend in the market seems to be that states bring in slot machines and place them in novel areas like bars, pubs, airports or racinos. People play the games in mass at the beginning, but then they slowly pull back with spending. It may be the after effects of the recession that is causing this cautionary gambling or it may be the loss of the novelty of gambling.  No one knows for sure, but it is cause for concern with states that are relying on gambling revenues to fund important programs. 

Oregon is not giving up hope though. The state still believes that slots are the answer to their budgetary woes. The state is making the move to bring in new slot machines and put them into various before-untapped locations. Legislators are hoping that the move will spur in some additional customers and bring in more money.  The state installed 400 new slot machines in bars and has a long-term plan of installing 2,000 more.  The director of the state’s lottery noted that he is hoping these new machines will bring in people who “normally wouldn’t gamble” into the businesses. With the added business, the state will be able to still maintain its plan of overcoming its huge deficit in funding.

The recession has made every state desperate for added cash. Huge deficits and high expenses are causing states to look to gambling taxes as a way of making ends meet.  One state that is currently toying with their lottery is Oregon.  Oregon, like most states, has had a long time success rate with lotteries.  Lotteries are when numbers are called. Each day people bet on what numbers are being called and wager. If they match all numbers, or a set amount of numbers, they win cash prizes. 

Unfortunately due to the economy, Oregon is seeing a lull in lottery participants. As a response they have installed 400 slot machines in various bars across the state. The hope is that readily accessible slots will not only spur people to play them, but also extend their wagering to the lottery once again. Director of the Lottery Dale Penn stated that the long-term plan is to install an additional 2,100 games, many of which will replace outdated machines.  He added, “We’re real hopeful that we can bring some players back and encourage others to play more.”

The main goal of the move to expand slots is to bring in much needed revenue.  The state is projecting a $40 million decrease in revenue from lotteries, as a result of people not spending.  Much of the world is in the same position.  Businesses need people to start spending again to turn around, but people are still tight-fisted with their money. Many are still recovering from lay-offs, unemployment, foreclosure, and debt.  Discretionary spending has been slowly dwindling as the recession has made its way through the economy.  And now, though the recession is thought to be mostly over, people are taking a wait-and-see attitude towards returning to their normal spending habits. Spokeswoman for Oregon’s lottery Mary Loftin confirmed this by stating, “The gambling industry as a whole for years was thought to be recession proof, but this recession has changed that view. Across the country, lottery sales are down.

Oregon has also instilled a no-smoking policy for all bars and taverns. This too can eat away at lottery winnings because smokers may be more prone to go to Indian-run casinos, rather than smoke-free environments to gamble.  The new slots and video machines cost $30 million to install. Only time will tell if they will be effective at bringing people back to gambling.

The recession has brought many businesses to their knees and the lottery is no different. In former years, the lottery was a popular buy for millions of people. They’d rush to gas stations and convenience stores to play their numbers in hopes of a huge payout.  As the jackpots grew, more and more people bought tickets.  It was a cycle; a feeding frenzy where people’s hopes for a big win drove them to buy.  Oregon is seeing a marked change in the lottery, however.  Oregon Lottery officials are seeing their revenues diminish notably because people are no longer as eager to wager as they once were.  Lottery official Dale Hampert stated, “The economy is terrible…people don’t have the added cash to play with and the lottery is suffering.”

In an effort to mitigate the losses, the Oregon Lottery officials are hoping to compensate with higher commissions from bars that offer video gambling. Currently Oregon officials collect about 23¢ on the dollar.  Though this sounds like a lot, it formerly was 35¢ but was sliced due to complaints from bar owners.   The Oregon Lottery commission is looking to change the existing contracts with bars and amend the commission schedule. One bar owner, Katie Bullard stated, “It’s a screaming symptom of the economic times. People are looking for every additional dollar and we’re not excluded from that.”  While Bullard has always considered video poker revenue an “additional” income, some bars in the state of Oregon count on the money to help them break even or make their monthly bills. 

Last year Oregon saw over $780 million in video gambling revenues but overall, gambling is still on the decline in the state. Officials are worried that the continued decline will eat away at money earmarked for park development and maintenance, education and other state programs. Many critics think that lowering commissions will make bars more likely to cut their video poker gaming floors altogether.  Currently the superintendent wants commission rates to be reduced to 15%. That would give the state another $50 million in their budget for the next two years.

If the past is any indication, however, cutting commissions does not mean that bars will cut video poker.  One official stated, “We’ve heard the same argument every time this comes up. We’ve cut their commissions, and we have more bars and taverns with video lottery games than [ever] before.”