Critics have called for the agency to expand revenue from games and cut retailers' compensation
Oregon State Lottery officials will launch two weeks of public forums in March to talk to retailers about compensation rates and other issues as the agency prepares a new six-year contract.
Under a fast-track schedule unveiled to lottery commissioners Friday, agency representatives should hit Pendleton, Bend and Ontario the first week of March before moving on to Grants Pass, Eugene, Salem and Portland. A new contract could be drawn up by early April. The current contract with roughly 3,400 retailers expires June 26.
Critics have called for the agency to lower what they consider excessive compensation rates retailers receive for carrying video poker machines, especially as state government struggles with fiscal shortfalls caused by the lackluster economy.
The Legislature this summer also ordered the agency to squeeze $67 million in extra profit to help balance the 2003-05 budget period, prompting speculation that the lottery commission will have to approve slot-machine type line games or reduce compensation rates.
The agency averages $350 million in profit a year for schools, parks and other state programs. Lottery director Brenda Rocklin said the secretary of state's office is studying how Oregon's retailer compensation rates stack up to those in other state and Canadian lotteries. That report is due next month.
"We go in with an open mind and I go in with no preconceived notion as to what a fair rate is," said Kerry Tymchuk, the newly appointed chairman of the five-member commission.
Legislative bills to slash the rates went nowhere in the last session. A restaurant industry group is vowing an all-out fight to block any cuts.
Last year, the lottery paid $153 million in compensation averaging about $75,000 each to the 1,900 bars and taverns that carry video poker. One retailer in four received at least $100,000 in compensation. The payments average 32 percent of net proceeds.
Critics of the current setup say the payments are excessive when tight money is putting a squeeze on school funding and other services.
But the Oregon Restaurant Association said the state shouldn't financially punish those who have helped produce a major source of revenue for state programs.
Democratic Gov. Ted Kulongoski said he's hoping the secretary of state's study will help settle the issue.
"I don't think anybody ever thought when we got into this that it was a means for the retailers to get rich. This wasn't supposed to be 'Joe Millionaire' " for the retailers," the governor said.
"Let's end the debate. Let's find out what is fair compensation for the retailers and fair for the citizens of Oregon," he said.