The Ilani Casino opened its doors in La Center, Washington this week, clogging I-5 for eight miles and packing its parking lot. The new casino is expected to create serious ripples farther south in the State of Oregon’s pocketbook, complicating an already troubled budget predicament.
The Office of Economic Analysis forecasts the tribally owned casino just a short drive from Portland on the freeway could chop off as much as $120 million per year in Oregon Lottery revenues, which translates into more than $70 million per year in reduced revenues to the state General Fund.
Much of the loss is attributed to video lottery. The state economist says more than half of Oregon’s video lottery sales occur in the Portland metropolitan area and 11 percent occur in the northern part of Portland, which is closest to the new casino. North Portland also is where a lot of video lottery jackpot winners live.
“If these northern Portland zip codes see a 40-50 percent decline in video lottery sales, that means total statewide video lottery sales would decline 4.5 to 5.5 percent,” according to the state economic forecast. “Factoring in additional losses of around 10-15 percent throughout the rest of Portland regional brings the statewide total impact to nearly 12 percent.”
For a state budget enumerated in billions of dollars, $70 or so million may not sound like much of a revenue hit. But Oregon legislators find themselves in a troubled place where they are scrounging for every dollar they can find to avoid budget cuts. To put a $70 million revenue loss into perspective, that would pay for Governor Brown’s affordable housing construction program or cover the cost to extend health care coverage to every child in Oregon.
Salem is just days away from receiving the May economic and revenue forecast, which is the final financial benchmark used to determine state agency budgets. It’s possible state economists may raise the potential impact of the Ilani Casino based on its bustling opening, where eager patrons chanted for the doors to open.
The May forecast will signal the beginning of the bell lap in the session when lawmakers need to get serious about a budget deal. Democratic leaders have released a budget showing what cuts could look like if there is no new revenue. A bipartisan committee issued ideas for how to curb spending. Senator Mark Haas, D-Beaverton, has developed a corporate gross receipts tax that would replace the current state corporate income tax. However, there doesn’t appear to be a concerted effort – or a clear ringleader – to hammer out a budget deal that can pass.
The new casino features a 100,000 square foot gaming floor with 2,500 slot machines and 75 table games, according to a report in The Oregonian. There are 15 dining and drinking venues, three retail outlets and a 3,000-slot parking lot.
The opening-day traffic jam was caused in part because of incomplete construction on a $32 million interchange on I-5 that was financed by the Cowlitz Tribe.