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May 16th, 2012 NIGEL JAQUISS | News Stories
 

Trying to Beat the Odds

Promoters of a private casino are betting they have a better story than in 2010.

news1_casino_3828ILLUSTRATION: Daniel Zender
If insanity is repeating the same behavior and expecting a different result, the people behind a proposal to develop a private casino in Wood Village might seem a little crazy. 

After all, voters in 2010 crushed their plan to build the state’s first private casino on the site of a defunct dog track in Wood Village, despite the backers spending $2.3 million on their campaign.

But the same proponents—Bruce Studer and Matt Rossman of Lake Oswego—are back. They are again financed by Clairvest, a Canadian investment firm that specializes in gambling. And they’re pushing a proposal that is broadly similar to their 2010 measure, which failed 68 percent to 32 percent.

So what’s different in 2012? 

For one thing, Studer and Rossman aren’t talking. This time, they are paying experienced pros to speak for their campaign and avoiding the kind of DIY effort that failed last time. Their campaign consultants include the longtime adviser to the group that led the fight against them in 2010.

Studer and Rossman have also dropped plans to create a monopoly on private casinos that would have benefited their Wood Village site. The new version of their proposal would kick open the doors to more private gambling palaces across the state.

And they have reformulated how they would share gambling revenues with education and interest groups—a key part of their earlier strategy to get a buy-in from voters

The basics of the casino proposal are the same. Studer, Rossman and their Clairvest backers want to build a destination casino on the site of the former Multnomah Kennel Club. Their vision includes a hotel, a theater and a fun park, including a giant water slide. The casino would include up to 3,500 slot machines and 150 card and roulette tables.

To win this jackpot, the backers have to change the state constitution, which prohibits gambling. (Native American tribes enjoy a federal exemption to operate casinos.) This time, they’ve spent nearly $1 million to gather more than 100,000 signatures each for a measure to amend the constitution (which requires 116,284 valid signatures) and a statutory measure that lays out the financial terms of the casino (that petition requires 87,213 signatures). They face a July 6 deadline to submit both petitions to the state.

The change in strategy is first evident when a reporter calls the once-talkative Studer and Rossman. Those calls now get returned by Anna Richter Taylor, the former spokeswoman for ex-Gov. Ted Kulongoski. 

Richter Taylor now works for Gallatin Group, an influential downtown lobbying and consulting firm. 

Gallatin is no stranger to casino wars. For most of the past decade, the firm advised the Grand Ronde tribes, owners of Spirit Mountain, the state’s largest casino, in their long-running battle to keep the rival Warm Springs tribes from relocating their Kah-Nee-Ta casino from its remote location to Cascade Locks.

Spirit Mountain stands to be the biggest loser if the Wood Village casino goes in; a gambling expert estimated two years ago the tribal casino could lose two-thirds of its business.

But now Gallatin has switched sides.

Grand Ronde spokesman Justin Martin says he’s “very disappointed” by Gallatin’s move. 

“We had a long relationship with Gallatin,” Martin says. “Their decision was somewhat of a surprise.”

The casino proponents have also recruited Portland political consultant Mark Wiener, who specializes in campaign mail, and Kevin Looper, a veteran campaign strategist who primarily works on ballot measures. Looper teamed up with Wiener to help Gov. John Kitzhaber win election in 2010. Both will start helping the casino campaign after the May 15 primary.

Last time out, the casino campaign stressed job creation and the benefits to state and local government.

But those arguments wilted under studies finding that the casino might do more economic damage than it was worth.

Opponents said a Wood Village casino would take money away from Oregon’s nine tribal casinos and the Oregon Lottery, the state’s second-largest source of funding after income taxes. And a state financial-impact study gave credence to those fears, predicting that more money would flow out of Oregon to the casino’s owners than remain in the state to create jobs.

Looper, who has fought to increase tax revenue in Oregon, says the casino could be a winner for the state. “Any way in which we might be able to secure more funds for schools and more jobs for Oregon deserves a fair and full hearing,” Looper says. 

But the group representing the state’s largest employment sector, the Oregon Restaurant and Lodging Association, will need a lot of convincing. Lobbyist Bill Perry says his group continues to oppose any off-reservation casino. And he’s convinced the Wood Village casino would merely shift spending from other Oregon entertainment and gambling enterprises, and such losses would not be outweighed by new money coming in from outside the state.

“When you look at the casinos and bigger gambling, you lose discretionary spending in a 15-mile radius,” he says. “Any retail business should be concerned.”

The 2012 casino campaign is already shifting toward a different focus: Oregon versus Washington.

The Cowlitz tribe wants to build a destination casino in La Center, Wash., 15 miles north of Portland. That long-held desire got a big boost in late 2010, when the U.S. Department of the Interior gave the tribe permission to move forward.

The pro-Wood Village casino campaign will argue the Cowlitz will grab potential gambling revenues that could stay here—unless Oregon voters act fast and get into the gambling business first.

“The Cowlitz casino is a game-changer,” Richter Taylor says. “There will be a casino across the river. That’s not an ‘if’ but a ‘when.’ The question is, can there be an Oregon solution that will keep the money on this side of the river?”

Martin, a member of the Grand Ronde tribes as well as their spokesman, has been watching the Cowlitz’s plans carefully for years—and he scoffs at the idea that the Cowlitz casino is close to approval. 

He says the Cowlitz must still overcome a U.S. Supreme Court ruling that restricts gambling operations to tribes that were federally recognized before 1934. (The Cowlitz won federal recognition in 2002 but began talking about opening a casino at least five years before that.)

The Cowlitz are also embroiled in federal litigation with Clark County and the city of Vancouver, Wash., which oppose the plan. And Martin notes that based on public filings, the Mohegan Tribal Gaming Authority—the Connecticut group that is supposed to finance the Cowlitz casino—remains mired in serious financial trouble.

“You’ve got all these hurdles that are nowhere near being resolved,” Martin says. 

Tribes in Oregon currently pay no taxes on gambling revenues, although the Grand Ronde tribes have donated more than $100 million to charity since 1995.

But another big form of gambling feeds public treasuries. The state-run Oregon Lottery chips in about 70 cents of every dollar it raises to the state budget for schools, parks and other programs.

The Wood Village casino plan proposes that 25 percent of gross gambling revenues go to politically popular causes such as K-12 education, with less going to counties than last time and more to adjacent cities and Clackamas County. (The new plan also includes more money dedicated to law enforcement, which was shortchanged by the 2010 measure.)

And while the measure would allow other private casinos, it would prohibit any new gambling operation within 60 miles of an existing tribal casino. And 3 percent of gross revenues would be earmarked for tribes.

Martin says such concessions would do little to lessen the impact on tribes and the Oregon Lottery-—or to change the underlying concerns voters had when they rejected the casino measure in 2010.

“It really burns my ass,” he says, “that we are going to have to spend tribal dollars that could be dedicated to causes like education, health care and poverty to fight these guys off again.” 

 
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