Indebted to lottery revenue
The biggest winners are the retailers lucky enough to land some of them. In fact, the consensus in their ranks is that a lot of them might have fallen victim to the recession otherwise.
The biggest losers are the players unlucky enough to develop a full-blown addiction. It’s tough to break and the consequences can be devastating.
At the Stampede Barbecue Company, located next door to McMinnville’s state liquor outlet, owner Wes Ferguson Jr. said revenue from the six machines in the back is critical to meeting the bottom line. He knows, because he tried to make a go of it without them when he opened the business last spring.
Other restaurant owners warned him he wouldn’t be able to suceed without incorporating video poker into his business plan. The retired police officer wasn’t convinced at first, but eventually became a believer.
Ferguson said the goal was to create a family-friendly restaurant with his wife and three of his sons, all of whom are engaged in the enterprise. So initially, the restaurant offered neither alcohol nor gaming.
Realizing the necessity, he has since added beer and wine to the menu and cordoned off a back corner for a set of slot machines. That way, he could retain a family atmosphere, he said.
On a recent slow day, Ferguson said, the restaurant grossed only $350 in food sales. But the six slot machines took in $1,700, and he gets to keep a quarter of that.
Initially, he said, “We really struggled.
“After looking at the numbers, I can tell you for sure we would’ve had to close had it not been for video dollars. I’m sorry to say that.”
For Ferguson, it was a bitter pill to swallow.
Not that long ago, a customer fed his car payment money into one of the machines, followed by his house payment money. “It’s hard to see, it’s really hard,” he said.
Stampede Barbecue Company is one of 41 video lottery outlets in Yamhill County.
Surprisingly, two of the highest-netting are the Shari’s outlets in McMinnville and Newberg, which wouldn’t seem to fit the usual profile. They’ve held top-three status for five years.
The 99-outlet West Coast chain started in Hermiston and maintains a home base in Beaverton. It is oriented largely toward the family and travel trade, but does operate on a 24-7 basis, which appeals to many players.
“We are trying to offer Shari’s guests a more comfortable, nicer environment for people to socialize and have access to the lottery game area, as opposed to trying to create strictly a lottery establishment,” said marketing director Michael Kiriazis.
Kiriazis said Shari’s has done well with video gaming in Oregon, one of five states in which it operates, because it offers an environment that is friendlier, safer and more comfortable than the typical tavern or bar and remains open around the clock.
But, he said gaming activity is limited largely to Oregon, so doesn’t play that big of a role in the overall business. “It’s certainly a revenue stream, but not a primary one,” he said.
The state splits the take with its 36 counties. Yamhill County is expecting its share to run about $250,000 this year.
By law, the money must be spent on economic development. However, both here and elsewhere, officials have often applied rather elastic definitions.
Over the years, Yamhill County has used video gaming revenue to bolster veteran’s office staffing, beef up child support enforcement efforts and assist downtown booster groups.
This year, the county decided to begin focusing more on direct job creation. In keeping with that, it recently signed an agreement with the McMinnville Economic Development Partnership to launch a Grow Yamhill County project incorporating $107,000 in video lottery money.
“From our local perspective, those video lottery dollars have a potential for having a high return on investment around economic initiatives in our county,” said Jody Christensen, who heads the partnership. “If we are thoughtful and strategic about how our video lottery dollars are distributed, they could have a substantial return on investment in retaining, recruiting and expanding companies — manufacturers primarily.”
She said, “It’s not an extraordinary amount of money we’re talking about, but it’s not exactly petty cash, either. It’s enough money that it can make a difference.”
County Commissioner Mary Stern agreed, saying she’s already seeing the good that can come of using the lottery money for economic development. She went on to cite Northwest UAV in McMinnville and Construction Equipment Company in Sheridan as two early Grow Yamhill County success stories.
“Both of those companies are able to offer more jobs than they thought they would,” Stern said. “It’s really worth it to support them as they support the county.”