November Ballot Initiative Aims to Create Private Casino

By admin / On / In Elections, Legislation

Note to Local 88 Brothers and Sisters: Council 75 and Local 88 are NEUTRAL on this Measure.  This is provided as information on upcoming ballot initiatives.

By Nigel Jaquiss | Willamette Week
July 14th, 2010

Click here for arguments in favor from the Good for Oregon Committee.

One initiative likely to make the Oregon ballot this November is a proposal that would greenlight development of a private casino in east Multnomah County.

Matt Rossman, one of the project’s two local developers, makes a powerful argument for the casino: Oregon would get 2,000 new jobs and 25 percent of the casino’s gross revenue—about $120 million—without investing a penny. And unlike Oregon’s nine tribal casinos, the project would pay property and income taxes—lots of them. “Our model creates a big return for the state,” Rossman says.

Click here for arguments against the measure from ECONorthwest.

But opponents are already marshaling their arguments for what’s shaping up as one of Oregon’s biggest-bucks ballot issues.

One of their concerns is that voter approval would set a precedent by locking a monopoly on private gambling into the Oregon Constitution.

“I’m not a lawyer, but what I don’t understand is how anybody can get a constitutionally protected monopoly,” says ECONorthwest’s Bob Whelan, who analyzed the private casino proposal for the Oregon Tribal Gaming Alliance.

Under an agreement with the state, tribal governments are allowed one casino apiece in Oregon. To carve a privately operated casino into the constitution would be novel, says Lewis & Clark constitutional-law professor Steve Kanter.

He notes that governments routinely enter into contracts or privatize various functions, but rarely with the restrictions around the proposed site in Wood Village.

“Granting a monopoly to a private entity is relatively unique,” Kanter says.

Adds Oregon Restaurant Association lobbyist Bill Perry, whose lottery vendor members Whelan says would lose $25 million a year from a new casino: “The [Oregon Liquor Control Commission] has a monopoly and so does the Oregon Lottery. But both of them are public entities, and neither is site specific.”

Supporters of what would be Oregon’s first private casino have submitted signatures for two ballot measures to Oregon’s Secretary of State office. The pair of measures must each win approval (so must a legally required third vote on the ballot for Wood Village residents only) to permit the gambling hall’s construction on the site of a former dog-racing track.

Whelan says the Wood Village casino would generate nearly $500 million in annual revenue, about what Oregon’s nine tribal casinos bring in.

But because Wood Village is just 16 miles from downtown Portland and the tribal casinos are far from population centers, Whelan says the new casino would siphon customers from existing casinos that are already competing to generate cash for impoverished tribal members.

Led by the Confederated Tribes of the Grand Ronde, whose Spirit Mountain Casino is the closest to Portland, the tribes are planning an opposition campaign. They have hired veteran campaign manager Paige Richardson, who previously ran winning campaigns for Gov. Ted Kulongoski, and U.S. Rep. Brian Baird (D-Wash.).

Rossman and his partner Bruce Studer drew up a plan to distribute the state’s estimated $120 million annual take.

Half the proceeds would go to public education, an alluring carrot for financially strapped schools; 30 percent would go to counties, also struggling to balance their books; and the balance would be split according to a formula that appears designed to maximize votes.

For instance, the measure’s formula would give 4 percent of the state’s take to Wood Village and 3 percent to the chronically underfunded but politically popular Oregon State Police.

The measure’s formula also gives cities with populations exceeding 49,000 priority for dollars sent to the counties. Those cities obviously contain the most voters.

Rossman and Studer, who have been promoting the private casino for five years, would have a “small minority interest” in the project, Rossman says.

A Canadian investment firm called Clairvest put up about $1.4 million to pay for signature gathering. Clairvest previously invested in casino projects in Canada and Chile and has a new project in Illinois.

Clairvest’s reports show consistent profits—earning an average of $27 million (Canadian) annually over the past three years. In 2009, it exited from an investment in the Gateway Casino project in western Canada after making nine times its initial $24 million investment.

Asked why he and his partners deserve a lucrative monopoly in Oregon, Rossman disputes that characterization.

“There are already nine casinos in Oregon,” he says. “Ours will be the 10th, and the real difference is, ours will pay taxes—and pay the state 25 percent.”

Grand Ronde lobbyist Justin Martin says Rossman’s characterization ignores the cost to tribal reservations, where unemployment is several times the state’s 10.5 percent rate.

“The casino would be devastating for us,” Martin says.

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