Part Three of our ‘Oregon Lottery For-Profit Gambling Awareness’ Series. Courtesy of The Oregonian News.

“Oregon Lottery: Lawmakers, counting on the cash, resist reforms”


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By Harry Esteve | hesteve@oregonian.com

Rep. Carolyn Tomei  (in 2013) was finally getting traction on reining in the Oregon Lottery.

The 77-year-old Democrat, who represents Milwaukie and a wedge of Southeast Portland, had spent years fighting for tighter controls on state-sponsored gambling, angered by the lives it ruins and the Legislature’s see-no-evil complicity.

She poured it on during the 2013 legislative session, rounding up experts and recovering addicts to talk about the lottery’s swath of destruction. She gathered support for bills that would require the agency to hire a problem-gambling specialist and to scale back its “maximize revenue” mission.

She found an ally in House Speaker Tina Kotek, who went after the lottery’s lax rules on “delis” that offer video slot and poker machines and little else. “Some lottery retailers operate as de facto casinos,” Kotek, a Democrat who represents North Portland, testified at a House committee hearing.

Tomei, who chaired the House Human Services Committee, also won strong backing from her vice chair, Clackamas Republican Bill Kennemer, a counselor who has seen the damage of gambling addiction up close.

Things were looking up for Tomei. But she was about to learn a hard lesson about power, money and a state agency’s ferocious will to protect itself. When all was said and done, Tomei landed in a place she never imagined.

If Oregon has political sacred cows, count the lottery as part of the herd. Despite years of hand-wringing by policymakers, from the governor on down, the state’s multibillion-dollar gambling enterprise has done little but GROW.

Lottery revenue timeline

” Revenue from the Oregon Lottery’s “traditional games,” such as scratch-off tickets and Megabucks, has remained relatively flat over the years, while profits from video slot and poker machines has soared. Roll over the dots to see key events in the lottery’s history.”

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A generation after Oregon voters agreed to allow scratch tickets and number-picking games, video lottery machines blink and jingle in bars, restaurants and strip malls across the state. Colorful slot games, known in casino circles as the “crack cocaine of gambling,” hook growing ranks of problem gamblers.

Yet with the lottery pumping more than a half-billion dollars a year into the state’s general fund, few are willing to touch it. Lottery officials say the games offer harmless entertainment while raising millions of dollars for schools, parks, and big construction projects. Critics call it a pathway to addiction.

Les Bernal, head of the national anti-lottery group Stop Predatory Gambling, says that when he gives talks about the harm caused by state-run gambling, he often ends with a slide of the Oregon Lottery’s good-luck logo.

“During the Greatest Generation, we had posters of Rosie the Riveter,” Bernal says. Outside military recruitment, he says, “the dominant voice of government today is urging citizens to lose money.”

“We’ve gone from a biceps flex to two crossed fingers.”

Scratch tickets to slots

In the grip of a recession that saw dozens of timber mills close and home values tank, Oregonians voted in 1984 to create the Oregon Lottery to raise money for economic development. The constitutional amendment called on the lottery to operate “so as to produce the maximum amount of net revenues” but added the phrase “commensurate with the public good.”

Scratch tickets and Megabucks rolled out in 1985. Six years later, the Legislature gave the nod to video poker, setting in motion the spread of machines in taverns, diners and thinly disguised delis. Along the way came Keno drawings every four minutes, sports wagering (later eliminated) and multi-state games such as Powerball with the potential for huge jackpots.

Among the earliest to sound the alarm against the state’s growing dependence on gamblers was Gov. John Kitzhaber. Early in his first term, he convened a task force to study the impact of gambling. The task force, led by then-Attorney General Ted Kulongoski and Peter Bragdon, who later became Kulongoski’s chief of staff, warned that the lottery was doing just fine on the “maximize revenues” part but was addicting too many players to claim it was balancing the “public good.”

Kulongoski and Bragdon teamed up to write a withering condemnation of state-run gambling as a way to fund state programs. “States that rush to raise revenues from gambling without thinking more than we did are playing a potentially addictive game of chance,” they wrote in a 1996 Op-Ed piece published in The New York Times.

But the biggest expansion since video poker came after Kulongoski took over as governor. Seeking a dedicated revenue source for state police, Kulongoski acquiesced to pressure to add “line games” — electronic slot machines — to the lottery’s video offerings. The first slot game was introduced in 2005, and lottery revenues soon soared. A year later, revenue surpassed $1 billion for the first time. The money never was earmarked for police. The Legislature made sure it got absorbed into the state’s general fund.

As predicted, state gambling profits have become an integral part of the state budget. The bulk goes to education, but lottery dollars have refurbished dilapidated state parks and allowed the state to open new ones. It has provided cash or backed loans for dozens of projects, from a $50,000 theater renovation in Baker City to a $1.8 million expansion of Daimler Trucks’ corporate headquarters in Portland.

To remind Oregonians, the lottery spends millions of dollars a year on ads, such as its “It does good things” campaign.

“People are terrified”

After trying and failing to tighten rules on state gambling in previous legislative session, Tomei sensed an opening in 2013. Two years before, outrage over the lottery’s ill-fated attempt to launch an Internet game site, The ORcade, prompted the agency to form a task force on problem gambling.

The panel, led by Jeff Marotta, a Portland consultant who works with states to develop problem-gambling programs, took its mission seriously. It issued a 25-page report full of recommendations aimed at making problem gambling a higher priority within the lottery.

Among the recommendations: Add a problem-gambling expert to the lottery’s staff and include responsible gambling training for alcohol servers. Tomei introduced bills to do both, plus one to replace the lottery’s “maximize revenues” mission with a revenue ceiling to ease pressure to grow.  “The public is not aware what a big problem this is,” Tomei says. “Most legislators are not aware on  what a big problem it is.” She set about educating them. With Kotek getting attention for her anti-casino bill, Tomei thought the Legislature might finally take action. Then two things happened that sent lottery bills into a tailspin.

Lottery Director Larry Niswender asked the state Justice Department to rule on whether Tomei’s bills overstepped the Legislature’s authority, given that voters had enshrined the agency in the state constitution. The ruling – yes — was a victory for Niswender and a setback for problem-gambling advocates. The Justice Department wrote that the lottery could not spend money from its budget to “mitigate harms” caused by its games. Niswender interpreted the decision to mean it could no longer run problem-gambling outreach ads.

The lottery not only pulled the ads, it dropped its membership in the state’s main problem-gambling council. Problem-gambling advocates felt all their work had backfired. Tomei was furious. That wasn’t all. Legislative budget writers told Tomei no way were they going to threaten any part of the $1 billion the lottery funnels into the state’s general fund every two years.

Tomei hit a brick wall.

“We are so damned dependent on the income,” she says. “People are terrified — if we lose that income, how are we going to replace it?”

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The only lottery-related bill Tomei managed to get through is one that sets a floor for how much the state spends on problem-gambling treatment. Kotek’s bills died in committee. Kotek, through her spokesman Jared Mason-Gere, declined to comment for this story. “She is focused on other issues,” Mason-Gere said.

Rep. Peter Buckley, D-Ashland, one of the two co-chairmen of the budget committee, says there was little interest in passing laws that would blow a hole in state finances, regardless of the source. “You cannot help but be appalled by the impact that the addiction of gambling can cause,” Buckley says. But without the money the lottery brings in, he says, the state would have to cut more out of schools and other programs. “You have to look at what is the overall good for the state as a whole,” Buckley says. “Problem gambling is definitely a negative. But underfunding of education is also a negative. How do you find the balance?”

Defending the status quo

Lottery critics say that’s the wrong question. What state officials should be asking themselves, they say, is whether government should be pushing a money-raising method that depends so heavily on a small segment of gamblers, many of them addicted. Niswender told The Oregonian his agency cares about people who lose more than they can afford on video slots and poker. But he has a bottom line, which goes like this:

“The Legislature authorized the lottery to have video,” says Niswender, who is retiring from his job at month’s end. “That was a policy choice. We’re here to carry out the will of the people and the Legislature’s directive and do it in the most efficient and effective way we can.” Kitzhaber, like Kulongoski, softened his opposition to slot machines as a source of state revenue. He may not like it, he says, but he’s in no position to reverse history.

“I never supported the notion of funding state programs through gambling,” Kitzhaber told The Oregonian. “But we voted for the lottery. It’s with us. … As much as I dislike the whole notion, I’m not going to put at risk a billion dollars in our education budget.”

In reality, the lottery provides about $600 million every two years to education, including K-12, schools, the education stability fund, community colleges and universities. Of that, about $480 million comes from video slots and poker. Parsing the numbers further, the lottery’s contribution to the state K-12 school fund over the current two-year budget cycle is projected to be about $327 million out of a $6.55 billion budget, or about 5 percent.

That’s not small change, by any means. Lawmakers often wrangle bitterly over smaller amounts, such as a cigarette tax increase that will raise $10 million in 2013-15. But they’ve also made bigger cuts, such as $800 million to the Public Employees Retirement System over the next two years. “Nonetheless, the lottery’s revenue stream appears all but untouchable.”

Kitzhaber says he wants to put the brakes on any further expansion of the lottery. His picks for Lottery Commission chair – Portland attorney Elisa Dozono – and lottery executive director – former state Labor Commissioner Jack Roberts — share his goals. Still, the governor says he approves of the lottery’s “modernization” plan to replace its 12,000 video slot machines with new ones but “not increasing gaming opportunities.”

Tomei wants another run at putting a ceiling on lottery revenue and ordering the agency to curtail the number of slot and poker machines it offers. The Legislature also could require the lottery to ensure that machines come with technology that might curb compulsive behavior, such as screen pop-ups that tally how much players have lost or how long they’ve played, she says.

“We’ll probably never get rid of the lottery,” Tomei says. “It seems to me we have a direct responsibility to make sure it is less addictive.”

– Harry Esteve, Journalist Portland, OR

 

Flash Back Blog Post ~”We all are Winners With or Without Money!”

Hello Recovery Friends and Welcome New Visitors,

 

I happened to see a new visitor come by my blog and he was reading an old blog post from when I first brought my blog to WordPress from another blog hosting site, which I won’t say from where. But it got me thinking of how far I have come as a writer, author and blogger. So I thought I would re-share this post, as it deals with a question that I know everyone has thought about before. I would love to read your comments and thoughts about this, so don’t be shy! . . .
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“OK, You’ve just won $1 billion dollars in your States Lottery. You do not have to pay tax on your winnings. What would YOU do and how will you spend the money?”

 

Now of course many of you know already I don’t Gamble . . . .
And I don’t want to be a “Debbie Downer” for all the rest of you fabulous people who enjoy spending a little for a chance at your piece of a fortune. Sadly, the odds of winning a lottery win-fall is so great that you would most likely have a better chance at getting hit by lighting, then you would winning a “State Lottery Draw Jackpot” . . .

Powerball officials say, “What are your chances of winning? A quick look at the Powerball website tells you the probability of winning the jackpot is 1 in 175,223,510. To see where that number comes from, imagine purchasing every number combination.”
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I spent many years employed in the banking field, and oddly enough I had the good fortune to meet, two separate lottery winners in my home state, in Southern Oregon.  I have to say though, both stories are true, and a wee bit sad.
The first bank clients of mine that won Oregon’s “Megabuck” lottery were an older couple. They had bought their winning tickets at an Albertson grocery store, where they shopped at weekly.

The wife told me she has a set of numbers she used for each weeks draw, and it was the winning ticket that won with her numbers picked.  They came into to the bank and asked if I could help them invest the some of the money, and set them up with our investment specialist, so I made them an appointment with our financial planner.  A month or so went by, and I seen them in the bank again. She gave me the sad news that her husband was just diagnosed with MS.

They then came over and sat at my desk and explained the difficulties they have had ever since winning their money.  That their kids were all fighting because “they” didn’t share enough” of the winnings with all of them. She then told me how all their friends and family were making them feel like “THEY” have changed since winning, but that it was the other way around. She said all their friends started acting different and kind of became jealous, making them feel so uncomfortable.  So they put their house up for sale, and sadly they were moving to Carson City, NV.

They were having a house built there that will have special features so it would be a safe place once her husband became wheelchair bound from having MS. And, that was the last time I saw them. So it made me wonder about winning the lottery. Is it really worth it? We don’t understand that money can maybe make things financially easier for us, and that is about it. It won’t change WHO YOU are inside. Maybe in attitude or personality, but not the on the inside. Money alone can not make you happy.
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Now the following year, a young man also had won our Oregon’s Lottery “Megabucks.” He had won $2.1 Million. He took his in a lump sum payout. I know this because he came to my desk with the check.  The check, after tax was $885,000.00.  He worked at a local hotel & restaurant, and he ran the food service for the convention center of the hotel. His name was Steve, and he was only 24 years old. Of course he did what any 24-year-old would do if winning a lottery, he paid his mom’s house off, bought himself a new car, truck, jet-ski, a boat and MORE!

I did open him a checking account, a money market account too. Just the interest alone from the money market was netting him in interest monthly, $2,800.00. That was more than he was making at his job, so he quit his job. What a mistake that was, because then came all the trips to Reno and Las Vegas. Then came all the relatives and friends came out of the wood works that he didn’t know until they heard he had “Money!”

So I did make him an appointment with our investment/financial planner and he attended the appointment, but never followed through with the financial plan. Of course sadly in a little less than a year his money was GONE!!
YUP! No Shit! He came in and sat at my desk and told me his money woes. He had lent a lot of money to friends that said would pay him back, but of course they didn’t. He was smart to have them sign a written promissory note, but I’m sure he won’t ever see that money again.  So again, what would you do if you won a large amount of money in a State Lottery?


And I guess my point is most likely obvious. You have to be careful what you wish for in life. Even if it is having a large amount of money.  Remember, nothing is worth having if you haven’t worked. Nothing is really free.
And like the saying goes,  “Money Changes Everything” ~ “Mo Money Mo Problems”  .  .  .  .
Please, gamble and play responsively!
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Catherine Townsend-Lyon, Author & Recovery Advocate.

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“My True Story of Addicted Gambling. It cost me more than money, it almost cost me my Life” . . .