The Oregon Lottery is addicted to addicted gamblers.
More than half the money the lottery collects from video gambling — about $375 million last year — comes from a small number of Oregonians, many with big gambling problems.
These gamblers tell the lottery they lose more than $500 a month, every month. They represent only 10 percent of Oregon’s video gamblers but account for 53 percent of the money lost, according an analysis of three years’ worth of the lottery’s data obtained by The Oregonian under the state’s public records law.
Losses from these heavy gamblers prop up the lottery’s profits, which in turn prop up the state budget.
Lawmakers covet lottery cash to pay for schools, parks and other state services – but most have no idea what the real costs are.
“Unless you’re in it, you can’t understand the depths of a gambling compulsion,” says Nate Peterson of Portland, who lost $5,000 on video gambling in eight months before he sought treatment last year. “You’re scared to tell anyone, there’s such a stigma. But I was killing myself … I was really dying inside.”
These problem gamblers are your neighbors, co-workers and family members who sit at video screens and slip dollar after dollar into high-tech slot machines that are programmed to eventually take their money. Many sink into debt, lie to friends and steal from their employers and loved ones.
“People in the Legislature have no idea about these numbers and the damage that is done to people’s lives,” says Rep. Carolyn Tomei, D-Milwaukie. “It’s a message that frankly wouldn’t be welcomed in the Legislature right now, because we’ve become so dependent on the lottery’s money.”
The lottery acknowledges its challenge in its strategic plan: “The Lottery will actively work to balance its mission to maximize revenues while minimizing the impact of problem gambling in Oregon.”
The lottery is a leading player in statewide campaigns to discourage problem gambling, and 1 percent of lottery profits cover all costs for all gamblers seeking state-funded treatment.
“We understand there is a portion of our players that have a problem with gambling,” says Carole Hardy, the lottery’s assistant director for marketing. “We try to educate them and their loved ones about what’s available to help them.”
But the lottery doesn’t know how many of its players fit the profile of problem gamblers even though officials acknowledge there are ways to gauge that number. Despite spending tens of thousands a year to learn the habits of their customers, lottery officials don’t ask the question.
Hardy says the lottery is concerned about players who lose large amounts of money, but she says it comes down to “free will” when deciding how much money to play.
“With any product, there’s typically going to be loyal customers,” Hardy says. “What you see in our business is in fact not all that different than any other product.”
For problem gamblers, quitting is not that simple. Sue Slavich says she hasn’t gambled for almost eight years years — an impressive run after she spent nearly a decade hooked on video poker.
Slavich, who worked as a waitress, says she palmed $1 and $5 and $10 bills while working at one restaurant, borrowed money from friends and wrote one bad check after another.
“I didn’t want to gamble any more, but it was a losing battle,” she recalls. “The only options I saw were to kill myself, go to jail, or stop gambling.”
Experts say compulsive gamblers usually fall into two categories: those seeking action bets, such as on horses, dice and sports; or those who play “escape” games, such as slot machines and video poker.
Treatment experts say many of these gamblers are addicts driven by the same impulses and brain chemistry that turn other people into alcoholics or drug users.
“These are people who need to self-medicate more than other people do,” says Dick Johnson, who has counseled addicted gamblers for 16 years and supervises gambling treatment programs for Cascadia Behavioral Healthcare in Clackamas County.
Nate Peterson, 43, a California native, says he often gambled in Reno without problems. When he moved to Portland in 2004, he tried video poker one day while in a bar.
He won 200 bucks that day. He soon found himself gambling on the state’s video machines just to zone out. He describes the soothing feeling he had while he played for hours, lost hundreds of dollars in a sitting and not caring if he won.
“I could get out of my reality and into this fantasyland,” Peterson remembers. “As long as I could keep playing, I could escape from everything else in my life.”
State officials say there are about 74,000 problem gamblers in Oregon. To get that number, researchers ask questions such as: Are you borrowing money, lying, not paying bills, or losing time at work or home — all to keep gambling?
“Most people who gamble can handle it without problems,” says Paul Potter, problem gambling services manager at the Oregon Department of Human Services. “For a certain number of people, gambling is a very dangerous activity.”
More than one third of people seeking treatment in Oregon say they committed crimes to get gambling money. Peterson used to work as a restaurant bookkeeper and skimmed $20 here, $40 there. The end came when he stole $500 and tried to cover it up.
“It was the lowest point in my life,” Peterson says. “I personally felt worse than a worm slithering on the ground. I see now I was looking to get caught.”
He did. The restaurant allowed him to pay back the money but fired him and didn’t press charges.
Experts say only a small percentage of gambling-related thefts are reported and prosecuted. When they are, they can make headlines. Last month, a Washington County judge sentenced a former bookkeeper for Paul Schatz Furniture in Tigard to 48 months in prison for stealing $519,000 from the company to finance her gambling habit. Her attorney says she lost most of the money at a tribal casino.
Peterson and Slavich are part of Voices of Problem Gambling Recovery, a group that meets twice a month educate the public and advocate for problem gamblers and their families.
While Peterson and Slavich were willing to talk on the record, others say they’re not ready to go public because their employers or families don’t know about their gambling past.
One man, in his mid-50s, said his gambling addiction grew out of a long struggle with clinical depression that cost him his $500,000-a-year business. He liquidated his equipment to pay for video poker. By the end, he says, he’d pick a few boxes of apples to sell in a grocery store parking lot near his home: “I’d make $10. I’d put $5 worth of gas in my tank and spend the rest on video poker.”
One 44-year-old woman, who amassed debts of $50,000 before seeking treatment, described playing hours at a time at a Dotty’s Deli surrounded by other women.
“They were on their cellphones telling their kids how to cook the dinner while they played video poker,” she says. “It begins by swinging by for five minutes after grocery shopping, and then you’re lying to people about where you’re going so you can gamble.”
The lottery’s researchers interview their customers in bars and taverns to ask them how much money they spend each month on the machines and other questions about their playing habits.
Johnson, the Cascadia treatment expert, says diagnosing problem or pathological gamblers isn’t based on how much money they lose. But in his experience, he says most people who lose $500 a month on video gambling are problem gamblers.
When Oregon voters approved a lottery in 1984, lawmakers saw the allure and the dangers a lottery posed. They wanted to avoid creating a generation of gambling addicts and getting the state itself hooked on the money.
That soon changed. In 1991, gambling industry lobbyists and lottery officials joined forces to push for video poker. Then-Senate President John Kitzhaber and House Speaker Larry Campbell cut a deal to approve the machines.
Lottery sales took off, and so did the state’s dependence on the money. Voters later expanded the use of lottery profits. In the last biennium, $1.4 billion went to schools, parks and building projects across the state.
About $11 million in lottery profits will go to problem-gambling treatment and prevention programs over the next two years. The lottery spends an additional $1.5 million a year on advertising to discourage problem gambling. Every video gambling machine has a sticker that tells people how to reach the state’s hotline, 1-877-MYLIMIT.
“The lottery has done a very commendable job in putting that message out,” says Thomas G. Ten Eyck, an expert in problem gambling and adjunct professor of counseling psychology at Lewis and Clark College.
“But they walk a fine line, to maximize income with a minimum of damage. If I were in the lottery’s shoes, the amount that they rely on problem gamblers would be a very touchy issue.”
Slavich says she and other recovering gamblers aren’t opposed to the lottery. She just hopes those in power in Oregon understand the price many people pay.
“There are some people who just can’t gamble normally,” she says. “I thought I was the only one out there, and that there was something very sinister wrong with me. It took me a long time to understand my problem, and that I wasn’t alone.”