Tinkering with gambling revenue is risky during a recession

Cutting the commission paid to bars and taverns could cost private-sector jobs.

Advertisement

Why do governments at the state and federal level continue to take actions that result in lost jobs and then put programs in place to create new jobs?

Perhaps it's the same reason dogs chase their tails. They can. Still, it's not productive nor good public policy.

The state of Oregon is poised to go around and around as it looks at ways to boost Lottery revenues to help fund education.

Lottery officials are looking to reduce the commission paid to bars and taverns that host their video gambling machines.

The amount of money the state will keep is relatively small in comparison to its overall budget while the hit that bar and tavern owners will take is large compared to their income.

As a result some -- perhaps many -- of those establishments will have to lay off employees. Where is the benefit?

Oregon's unemployment is at 11.9 percent (Washington state's is 9.1 percent). The state doesn't need more job loses. When folks are out of work they are a drain on state government, which means there is less money available for education and everything else.

Still, we understand why Lottery officials are eyeing the video game commissions of 23 percent. That's a hefty commission by almost any standard.

Nevertheless, the timing stinks. The deep recession has hurt the food and beverage business at bars and taverns. Gambling revenue is also down, which is exactly why the Lottery wants to cut the commission.

Ed Fairbanks, owner of Crabby's Underground in Pendleton, said his revenue from video gambling is down from $66,000 three years ago to $48,000 last year.

While we continue to have problems with the state relying on gambling for revenue -- it's a de facto regressive tax and spurs a variety of social problems -- the fact is that the state has gone this route and tavern owners have come to rely on it to keep them in business.

State education officials, too, have come to rely on gambling profits. The decline in gaming revenue has them concerned, which is why they would like to see the commissions reduced and sent their way.

It's wrong for the state to undercut those in the bar and tavern business at such an economically precarious time.

If the commission is too high,� perhaps the state could put a schedule in place to lower it slowly over time. Businesses need to time to plan.

But for now leave things as they are -- at least until the economy has recovered and the unemployment rate has dropped.

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment

Click here to sign in