Casino Prohibition Rule Changes

Oregon Lottery is proposing updates to its Casino Prohibition framework. The changes will have the most impact on retailers who have annual inspections to verify casino prohibition compliance and are referred to as limited-menu retailers (LMRs) or café/small eateries (CSE).

What is Lottery’s Casino Prohibition framework?

When voters established the Oregon State Lottery in 1984, they also prohibited the operation of casinos. This is in the Oregon State Constitution. However, “casino” is not defined. Since the introduction of Video Lottery in the 1990s, the Lottery has ensured that Video Lottery retailers do not operate as a casino using its casino prohibition rule (the “CPR”) in combination with other state laws and rules. This framework includes the cap on the number of Video Lottery Terminals (VLTs) in each retailer, restrictions on the public visibility of VLTs, and the requirement that retailers be a viable business before applying for a Video Lottery retailer contract.

Why now?

Recent interest in this topic from the Legislature prompted Oregon Lottery to review existing rules. The changes proposed are modest updates to increase food service at high-risk retailers and help make the requirements for compliance more objective and easier for retailers to understand.

What’s changing?

• Food service requirements for at-risk retailers. Under the proposed rule, retailers classified as an LMR or CSE will need to meet minimum food service requirements such as offering at least five (for LMRs) or 10 (for CSEs) different meals and having at least eight dining seats for patrons.*
• Objective criteria for retailers with more than half their sales from Video Lottery. If a retailer’s annual non-Lottery sales are less than 50% of the retailer’s total income, Lottery inspects the retailer and reviews certain criteria. Under the proposed changes, these factors will be more objective than before, giving more certainty to retailers. Factors considered include how many menu items are offered, whether the retailer offers non-Lottery entertainment options like music or sports on television, and whether the retailer advertises non-Lottery products more than Lottery products.

For more information about the rule changes, click here to see the Notice of Proposed Rulemaking.

How can I comment?

The Lottery welcomes comments on the proposed rules. Send written comments to Kris Skaro at lottery.adminrules@lottery.oregon.gov. The deadline to comment is Friday, December 27, 2024 at 5 p.m. All comments received by the deadline will be presented to the Lottery Director and the Commission for consideration.

You may also comment at a virtual public rulemaking hearing on Zoom at 9 to 11 a.m. on Monday, December 16, 2024. Click here to join online on your computer, phone, or tablet. To participate by phone, call 971-323-0081 and enter meeting ID 937743633.

If you have questions about the proposed changes, please talk to your account manager or contact Retail Contracts at lotteryretailcontracts@lottery.oregon.gov.

*Note: Under the proposed rules, a limited menu retailer (LMR) is defined as a retailer that offers less than 10 menu items and has less than $100,000 in combined gross annual food, drink, and alcohol sales. A Café Small Eatery (CSE) is defined as a retailer that offers less than 15 menu items and has less than $200,000 in combined gross annual food, drink, and alcohol sales. A retailer is not an LMR or CSE if the primary activity of the business is the on-premise sale of alcoholic beverages for immediate consumption.