Oregon Tribes Are Alarmed by Senators’ Plan to Remove the Tax Deduction for Gambling Losses

Bill of the Week: Senate Bill 212

CHIEF SPONSOR: The Senate Finance Committee, chaired by Sen. Mark Hass (D-Beaverton).

WHAT PROBLEM IT SEEKS TO SOLVE: This bill yokes together two disparate issues: the high cost of higher education, and Oregon's addiction to gambling revenues, which fill the state's coffers.

WHAT IT WOULD DO: The bill puts forth two solutions to those problems, one more controversial than the other. It allows qualified taxpayers to deduct a portion of college tuition and fees (uncontroversial) and would make up for the lost revenue to the state by ending the tax deduction for gambling losses (controversial). Federal law allows gamblers to subtract losses from wins and pay taxes on the difference—i.e., net earnings. As it does with most federal tax rules, Oregon has mimicked that tax treatment but now proposes to stop. "Nobody in Oregon decided that subsidizing gambling was a good idea," Hass testified last week.

WHO SUPPORTS IT: Higher education advocates—and the universities themselves—love the proposed deduction because it would help lower barriers to college.

WHO OPPOSES IT: The Oregon Tribal Gaming Alliance and, most vocally, the Confederated Tribes of Grand Ronde, which owns the state's largest casino. The Grand Ronde presented documents that show the bill would strongly discourage the regular slot-machine players on which the tribe depends to fund health care, education and other social programs for its 5,000 members. Last year, 2 percent of gamblers provided 50 percent of Spirit Mountain's revenue.

Grand Ronde lobbyist Justin Martin notes the state is heavily dependent on gambling to fund government services, but the tribes, who have far fewer sources of revenue, would be disproportionately harmed. "Nobody will gamble if they can't write off their losses," Martin tells WW. "This bill is terrible for Indian country."