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Sunday, July 17, 2011

Stupidity tax doing well in Oregon

Here's an interesting table about state-sponsored gambling, misleadingly referred to as mere "lotteries." Oregonians will note that our state's lottery rakes in the fourth highest revenue per capita in the nation -- the state's take is $158 a year for every Oregonian. Washington State shows only $17 a head, and California only $28.

Either something's wrong with the Tax Foundation's numbers, or Oregon has a terrible gambling problem that the state is making a lot worse.

Comments (35)

Oregon has a terrible gambling problem that the state is making a lot worse.


The state sponsored PR blitz for this form of "entertainment" should go the way of tobacco advertising.

A quick little math check...

Lottery finished 2010 with over 1 billion in sales.

Population of Oregon

So the sales figure is over $261 per capita for the state. The $158 figure is minus the overhead for the sales. Which is a pretty high overhead cost if you ask me. There is some serious money going places other than the state coffers.

And yes those kinds of numbers are a really sad commentary.

Given that video poker machines are so prevalent in Oregon's restaurants and bars those numbers don't surprise me much. The state's basically allowing restaurants and bars to operate their own mini casinos.

I also wouldn't be surprised that this "tax" is the most regressive "tax" on the books either. In my experience, the people spending the most time playing lottery games are those who can least afford it.

Yeah, maybe, but if there were no lottery those folks would probably just spend those dollars on some other addictive behavior, smokes, alcohol, drugs, etc., and many would go over to Washington to play their lottery. Which is what they used to do, before Oregon had a lottery and after Washington started theirs.

Look up Dave Ramsey and Stupid Tax. At least I get a guaranteed buzz with bourbon.

There is some serious money going places other than the state coffers.

There must be at least a tiny bit for prize money, don't you think?

This is a story of two runaway addictions.

The gamblers and the state addicted to using the gambling revenue.

And there's a pretense by the spenders that the lottery funds are somehow not the same as spending regular funds.

When the legislature allocates lottery bonds there is not one shred of consideration for the lottery proceeds then having to be diverted away from far more vital services in order to debt service the bonds.

Milwaukie Light Rail and the SoWa "Life Sciences Cooperative Complex" (not a biotech research building Mr. Hales) alone will devour around $580 million in lottery proceeds.

All of which could be and would be otherwise available for any number of essential services such as schools & public safety.

Wow. I actually played video poker games for a while, but that was back when you couldn't stuff in more than $5. We were at the coast a couple of weeks ago, and I looked at the machines in the lounge. They accept up to $100 now! That's horrifying.

It's less a "stupid tax" than an "addiction tax".

The proceeds of I.D. theft are oftentimes spent on video poker. Given that we rarely prosecute (and even less rarely imprison) I.D. Thieves, it doesn't surprise me that our gambling/capita is much higher than places who actually prosecute check fraud.

You can't win if you don't play.*

*not for investment purposes....

"Stupidity tax doing well in Oregon"

You act surprised - Look at who gets elected here.

"There must be at least a tiny bit for prize money, don't you think?"


Now that's heckuva regressive tax.

I wonder how much the total Oregon-resident spending on gambling is - including tribal gaming, internet gambling, nieghborhood poker games, bingo, trips to Reno and Las Vegas, etc. - and how much of that spending can be classified as feeding an addiction? What a waste.

"There must be at least a tiny bit for prize money, don't you think?"

I was curious:

Oregon Megabucks:

Overall Odds of a win is 1:25

You're right, there is a tiny bit (like $0.04 out of every $1). It's so low Oregon won't even tell you on the WEBsite how low it is.

I find sad that the folks sitting alone at the machines become so de-socialized that they can't comprehend getting three pals together, playing real poker, and instead of giving the vig to the state, use it to buy the beer and munchies for themselves.

I wonder how progressive the Or revenue system would be if you did a demographic study on the gamblers. Maybe the Republicans are closer to their goal of putting the sole cost of government on the poor than we previously thought.

Ever seen 'em, Zeb? When they first started up and were cheap, all kinds of folks used to try their luck. Now that you can feed 'em $20's and $100's, it's all chain-smoking old ladies. It's become a truly bizarre phenomenon.'s all chain-smoking old ladies

I don't think they let 'em smoke in there anymore.

So the sales figure is over $261 per capita for the state.

Averages are just that - averages. Anyone know what portion of the population never plays? That information would lead us to an even more revealing per-player average.

I believe that gambling is a worse addiction that alcoholism or drug addition. How much can you drink before you pass out? How much dope can you smoke or snort or inject before you are incapacitated? Now tell me what is to stop someone from gambling away their pickup or their tools or their kid's birthday gifts or house?

Whether a person should have a right to do any of these things to himself is a topic worthy of discussion, however, no state should be promote and encourage this. That is evil.

Steve, I'm ignorant about this, but I'd be surprised if the 1:25 odds cited were directly translated into dollars. It looks to me like the number of winning tickets. I'd guess the dollar payout is actually higher, but I've no idea how much.

I await the day when, having lost all sense of shame, the city and/or state licenses whorehouses and garnishes tips. It's "for the children," after all.

OK. So let's look at the real numbers and they were down in 2010 from 2009

Basically if you do the math, prizes were about 21% of income. However, the prize payouts are taxed by the state so some of it comes back in to the state coffers. It's also interesting to note that payments to prize winners are less than prizes. I don't know the explanation but I see the discrepancy.

"Prizes" might be the total amount won, "payments to prize winners" might be that actually paid out in the fiscal year. Not too long ago there was a news story about a prize from a year ago having gone unclaimed. Clearly a "prize," but not a "payment to prize winners."

no state should be promote and encourage this. That is evil.

I think the "evil" part is profiting from it. And the lottery is just the tip of the iceberg. The OLCC marks up the alcohol they sell over 100%. (Except to the tribal casinos, of course. Their markup is only 5%.)

I'm not sure about California, but I'd wager the difference between OR and WA is the prevalence of Indian casinos. They are EVERYWHERE in WA.... seriously, you can't go 15 or 20 miles in western WA without running into a giant casino.
OR has limited the competition pretty effectively.

Oregon has its fair share of casinos too. There really aren't too many places in Oregon that don't have a casino within a 45 minute to an hour drive.

I think the biggest difference is that Oregon has video lottery machines (video poker, slot machine type games, etc.) while WA and CA don't. If you look at the Oregon Lottery's financial reports they get about 70% of their income from video poker type machines.

I really don't understand why Portland is so opposed to more lottery mini-casinos, or just regular casinos.

After all, Portland loves to tax-and-spend, so the casino would just be another source of revenue for their bloated government. The concept could even extend to special Streetcar Casino trains! Ride MAX and Win! Why just ride, when you can play? Get more out of your commute home - you could come home with a hundred thousand dollars!

"about this, but I'd be surprised if the 1:25 odds cited were directly translated into dollars."

On the Megabucks proably not, but that gets over-subscribed wheneve it gets >$00M.

However,looking at the lottery report, they took in $1B and gave the state bout $550m then another 3-4% ($30-40M) for admin. Then I think the retialers get something simlar.

A rough guess would be each $1 bet = $0.40 max won.

Again Vegas is waaaaaaay better payout ratios, of course, they're not govt who works on our behalf.

Just a short note from here in Nevada - where it's legal to gamble 24/7/365 - and where gaming revenues go directly into the state general fund. Odds are way better on a typical slot machine than you will ever get in any of the Oregon Lottery Scratch Off games. I'm amazed people have no clue about the horrible odds..

All of which could be and would be otherwise available for any number of essential services such as schools & public safety.

Isn't that kind of the point? Having the schools dependent on the gambling winnings doesn't seem like the greatest thing ever. The lottery money is supposed to pay for nice stuff we otherwise might not fund, or is being misused, in my mind.

The lootery is "evil"? (I think I'm going to keep that misspelling)

IMHO the lottery and video poker are less "evil" than the income tax or property taxes.

Income taxes and property taxes are collected with the barrel of a gun.

Even a system that takes advantage of the stupid and the addicted does it with at least a modicum of their "consent".

With the income tax or the property tax a man and a gun comes to your house if you do not pay, and takes your money by force. To me, that is evil.

I don't want my government in the gambling business. The indian casinos in Oregon are just about right. Don't want one in the metro area.
Since it is here, I play a dollar 3 times/week so my tax is $156. (I have never played machines or scratch offs) Can't win if you don't play.

When it comes to "vices" like gambling or smoking or drinking two conflicting impluses seem to fuel the debate: one is the small L libertarian idea that if you do not like it, don't do it but don't stop others from doing it and the large N Nanny state idea that we should spend time passing laws protecting ourselves from ourselves. No gambling, no drinking. no swearing on Sunday. Of course when the state gets in the business of profiting from the vice it adds new impetus to the Nanny idea...until we realize they won't stop there: next it is don't eat cheeseburgers (obesity cost taxpayers millions), don't listen to your ipod when you walk (you might get hit by a train) and don't forget to recycle. The best way to get rid of gambling is...don't gamble. Addicts alone cannot keep the industry alive.

I work with gaming numbers all the time. So to clarify (because it is confusing) per capita Oregon Lottery gaming by residents in calendar year 2009 was $206.08. That is more than double what residents spent at the 9 tribal casinos ($100.47).

If you take all the Lottery gaming (definition is the amount lost by players) and divide it by Oregon's population, you get $211.85 per capita. It is a higher number because people from other states do play Oregon Lottery games.

It should also be noted that the population includes people that cannot gamble (under 18, or 21 for video lottery, or simply unable to gamble because they are institutionalized).

The reason why the per capita is high is because of the video lottery games. They are very popular. The payout rate (player winnings as a percentage of how much they bet) was 92.57% for the video lottery, 73.8% for Megabucks, and 67.9% for scratch tickets. The game with the lowest payout rate is Powerball (only about 50%).

Ahh gambling and good ol government hypocrisy. Its ok for the state to get you hooked on spending money in a game "for entertainment only, not investment purposes" but heaven (er state monopoly) forfend you pay money for a consensual act/business deal with a hooker. Of course its for the kids, wildlife funds, and pet projects they couldn't get passed otherwise, etc..

Like Jay above, I've come to believe income and property tax are far more evil than gambling.


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