Oregon's continuing budget problems finally wore down Gov. Ted Kulongoski's resistance to expanding state-sanctioned gambling.
Wednesday, he called for the Oregon Lottery Commission to authorize video slot machine games for more than 10,000 electronic terminals that now offer only video poker.
Kulongoski said that this was "one of the most difficult policy decisions" he made in crafting his 2003-05 budget but that the prospect of additional lottery revenue to help pay for the Oregon State Police outweighed his concern about the impact of increased gambling.
Kulongoksi's budget proposal -- which goes to the Legislature next month for consideration -- includes an extra $120 million over two years in projected video gambling revenue because of the availability of the so-called line games. Most of the additional revenue is earmarked for the state police.
But lottery officials, who made the $120 million revenue estimate, acknowledged that it was little more than an educated guess.
"It wasn't scientific," Chuck Baumann, spokesman for the commission, said of the estimate.
There also was disagreement about the potential social impact of opening the video terminals to highly popular games that the state then banks on to attract new gambling patrons who have little or no interest in playing video poker.
"I do believe that adding line games is going to result in an increase in problem gambling rates," said Jeff Marotta, manager of problem gambling services for the state. "Video slots are a very popular form of gambling. Basically, the more gamblers, the more problem gamblers and the more societal costs."
Marotta said video slots are not necessarily more addictive than video poker. "The reason they are more problematic is that they are more popular," appealing to a broader section of the population, he said.
Mike McCallum, president of the Oregon Restaurant Association, said he did not think the introduction of line games to Oregon's video gambling terminals would increase the number of problem gamblers. He cited studies that he said showed video slots have no more negative social impact than video poker, and he argued that they "may be more attractive to the casual player, who is less likely to be addicted."
But McCallum did not dispute Marotta's contention about the popularity of video slots, which is why the restaurant association has been pushing for more than a decade for their introduction in Oregon.
"Our customers want the game itself," he said. "Guys playing poker would rather play the other product. . . . You'll find customers who don't know anything about poker who will play a line game. There will be an increase in the number of players, which is why (the state) can expect more revenue."
According to Baumann, Oregon has 10,250 gambling video terminals at 2,003 restaurants, bars and other retail establishments. State law limits the number of terminals at any one location to six. No limit exists on the number of locations that can have the terminals, although obtaining terminals involves a lengthy application process.
Baumann said the terminals are programmed to offer both video poker and video line games. They now are limited to poker because of state policy and easily can be expanded, he said.
McCallum said he did not expect a change in the policy to result in a significant increase in the number of locations that have video gambling terminals.
Dan Roy, senior vice president of operations for Station Casinos in Las Vegas, confirmed that video line games are a growing segment of the gambling industry. He said they may be particularly attractive to a new generation of potential gamblers who are coming of age after having grown up playing video games at home.
"Video slots are definitely going to help (Oregon's) bottom line because they're reaching out to a larger market," Roy said. "You bring a whole new segment into your property."
