The Oregon lottery was established in 1984 by popular vote. Over time, citizens have elected to add video poker and direct portions of the revenue to state parks and watersheds. The lottery has become a crucial source of funds for many.
The Oregon Lottery is big business. Lottery Director Jack Roberts says the bulk of its receipts come from video gaming:
Roberts: “We're one of the few that actually that have a large video lottery component. Consequently we are, [on a] per capita basis, one of the largest revenue producers from lottery.”
How much revenue?
Roberts: “Our sales run about a billion dollars a year.”
If the lottery was a public company, it would rank in the top 10 in the state. Roberts says, like most businesses, lottery receipts have ups and downs:
Roberts: “We used to think that lotteries were recession proof until we had the Great Recession, and then like everything else we got hurt. We now, just this last year, had the biggest year since then.”
Lottery sales are steady enough to provide a foundation for some retailers. LaMonte Cherrick owns The Paddock, a long-standing Eugene pub. He says they sell every lottery product except Scratch-Its, and their revenue held fairly steady from 2007 on:
Cherrick: “Even when there was a dip, it was noticeable, but in the big scheme of things it was well within tolerance. It didn't crash, I guess is what I'm saying.”
Cherrick says upward demands on wages and benefits have made many shops dependent on the lottery system:
Cherrick: “You would see probably half if not more fold within a year if it was ever changed, modified or removed as a part of the state program. It carries a lot of businesses.”
The State of Oregon also relies on lottery dollars. Lottery officials are helping lawmakers fine tune the budget during this winter's short session. Director Roberts:
Roberts: “We should be meeting our projections but they shouldn't count on a windfall of additional money. Fortunately, we don't have to make the decisions on how to spend it, we just tell them how much we think we can give 'em and they get to make the hard decisions on where it goes.”
By law, 15% of lottery funds are split evenly between state parks and natural resources. Public education usually sees more than half the money, with about a quarter going toward economic development and job creation. At least one percent is reserved to treat problem gambling. (Lottery source).
Roberts says mid-January's giant 1.5 billion dollar multi-state Powerball prize earned about 30 million dollars more than they normally would, but they worried:
Roberts: “Is it going to cannibalize the other games? People are just shifting dollars. The answer was no. All of it was up. And that's a good indication that we're bringing in some new players, which is frankly one of our goals.”
Cherrick says the uptick of lottery players at the Paddock is a mix of regulars and new customers. But even several Powerball bumps won't change the dominance of video, which accounts for more than 70% of sales. Its strength has prompted Oregon to attempt something that's never been done before, a structural overhaul:
Roberts: “Our system throughout the state is sort of like one big network. It's one of the largest networks of its kind in the country, and yet it's tied together by what I think of as cable TV technology. We're trying to now move to more like the internet technology. We're trying to do it on the fly and do it statewide.”
Director Roberts says the new system will go live in May. The state is betting the savings on maintenance and upgrades will pay dividends. After 31 years of lottery funding, many businesses, schools and parks also bank on that wager.