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Monday, October 11, 2010

Oregon: Regulatory Costs Ignored

When Massachusetts House Speaker "Racino" DeLeo's office was asked about the Regulatory Costs of his flawed legislation (that was crafted by the Industry behind closed doors) the uninformed response was $5 million. [Speaker Flunks Arithmetic]

No Independent Cost Benefit Analysis was ever performed, even though hard-earned taxpayer dollars were spent on Benefits Reports that produced conspicuously flawed projections.

Oregon seems destined to follow the same flawed path --

... the Oregon State Police, which runs the state's gambling security, says the cost of overseeing the casino could reach $3.4 million to $3.8 million a year. And records from New Jersey show the annual cost of regulating a casino similar in scale proposed by Measure 75 runs about

$5.5 million a year.


Regulating proposed Portland casino could cost millions more than budgeted

The ballot measure calling for a private casino near Portland could leave Oregon millions of dollars short when it comes to the costs of regulating the casino.

Measure 75 seeks to authorize a casino at the former Multnomah Kennel Club dog track in Wood Village. The measure would allow the casino to have 3,500 slot machines -- more than any casino in Nevada and most in Atlantic City.

The measure bans the state from spending any public money to police the casino's gambling operations. Only money paid to the state by the casino's owners -- capped at $2 million a year, with adjusted for inflation -- could be used for regulating the gambling there.

But the Oregon State Police, which runs the state's gambling security, says the cost of overseeing the casino could reach $3.4 million to $3.8 million a year. And records from New Jersey show the annual cost of regulating a casino similar in scale proposed by Measure 75 runs about $5.5 million a year.

Casino regulation helps guarantee the games are run fairly, cash is properly accounted for and people with shady pasts aren't working there.

Maj. Craig Durbin, who heads the state police's gaming enforcement division, said that Measure 75's spending cap on regulation would force regulators to scale back the size of the casino.

"We would have to see what can we regulate for $2 million," Durbin said. "It would certainly be a considerably smaller footprint than what is proposed."

If that happens, the casino would deliver far less money to state programs than its backers say.

The measure would send 25 percent of its gross gaming revenues to schools, counties, cities and certain state programs. Backers have said that could be as much as $150 million a year.

Matt Rossman, one of the casino measure's sponsors, said the spending cap was put into the measure to make sure the state wouldn't create a new bureaucracy to oversee the casino. He also said that the measure's prohibition on spending public money to regulate the casino was intended to make sure its owners -- not taxpayers -- would pay its costs.

Rossman said he and the backers set the $2 million cap based on their best estimates of what it would cost to regulate the casino. He said he would support the Legislature rewriting the measure after voters pass it and if lawmakers found it necessary to provide more money for regulating the casino.

"We put in the measure what we believed was a sufficient amount to allocate for oversight," Rossman said. "If we need to come back to change that, we will."

Measure 75 puts regulation of the casino under the Oregon Lottery, which in turn has a contract with the Oregon State Police to provide security.

The measure would send 3 percent of the casino's gross revenues to the state police. Rossman and Bruce Studer, the measure's other chief sponsor, said the state police could use that money to cover any additional costs of regulating the casino.

The measure would send 25 percent of its gross gaming revenues to schools, counties, cities and certain state programs. Backers have said that could be as much as $150 million a year.

Matt Rossman, one of the casino measure's sponsors, said the spending cap was put into the measure to make sure the state wouldn't create a new bureaucracy to oversee the casino. He also said that the measure's prohibition on spending public money to regulate the casino was intended to make sure its owners -- not taxpayers -- would pay its costs.

Rossman said he and the backers set the $2 million cap based on their best estimates of what it would cost to regulate the casino. He said he would support the Legislature rewriting the measure after voters pass it and if lawmakers found it necessary to provide more money for regulating the casino.

"We put in the measure what we believed was a sufficient amount to allocate for oversight," Rossman said. "If we need to come back to change that, we will."

Measure 75 puts regulation of the casino under the Oregon Lottery, which in turn has a contract with the Oregon State Police to provide security.

The measure would send 3 percent of the casino's gross revenues to the state police. Rossman and Bruce Studer, the measure's other chief sponsor, said the state police could use that money to cover any additional costs of regulating the casino.

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