Last fall, the Oregon Lottery terminated its contract with Portland Meadows, revoking the racetrack’s license to house ten video lottery terminals because the venue has engaged in what the Oregon Lottery considers illegal gambling. Portland Meadows appealed the decision, but recently, the Lottery responded, denying the appeal and confirming its own ruling from last year.

State, City Treat Poker Differently

The issue stems from the poker room at Portland Meadows. The Portland poker scene has been thriving for about a decade, with around a dozen poker room operating in the area. The city is fine with the poker clubs, but the state has been trying to shut them down for a while now; it is thought that the Lottery and tribal interests have been putting pressure on the state government to do so.

The Oregon House passed a bill last year to close the poker rooms, but the Senate did not. Instead, the Senate Committee on General Government and Accountability tried to come up with a compromise. While admirable, it was not something the poker rooms would like at all, as it would have eliminated cover charges and made players self-deal. The former would cause the rooms to lose a significant portion of their revenue, as they are not permitted to charge rake; food and drink would then be the two main ways to bring in money. The latter is an issue mainly because having players deal their own games slows things down and makes cheating easier. Dedicated dealers already aren’t allowed to be paid by the poker rooms – they rely solely on player tips.

Working with undercover Oregon State Police officers who scoped out Portland Meadows, the Oregon Lottery determined that two things the poker room was doing were against the law: taking a cover charge and exchanging money for chips. As a result, Portland Meadows was not allowed to have video lottery terminals, losing out on about $350,000 a year.

Oregon Lottery Not Swayed

Portland Meadows appealed, presenting its case that what was doing wasn’t illegal. In the end, the Lottery didn’t agree. In the Declaratory Ruling issued in late May, the Oregon Lottery said that the $15 cover fee that players must pay to enter the poker room constitutes “house income,” which is not permitted. Portland Meadows says that since the fee does not come directly from poker games, it isn’t house income, but rather just a general charge for entertainment like one might see at a comedy or dance club.

The other issue was that the Oregon Lottery says that since Portland Meadows exchanges players’ cash for chips and, in turn, holds onto that money until players cash out, the poker room is serving as a “house bank” and is therefore engaged in illegal gambling. Portland Meadows’ argument is essentially that the house is not gambling against players, as well as the notion that it is less safe (not to mention more of a pain) for cash to be used at the tables. The Oregon Lottery didn’t buy any of it, saying that holding players’ money is pretty much literally the definition of being a “house bank.”

Portland Meadows can try one more time to win its case if it opts to file a petition for judicial review.

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