As the franchise owner of an Elmer’s family restaurant in southern Oregon featuring German pancakes “almost as big as Crater Lake” and omelets stuffed with local Tillamook Cheddar cheese, David R. Thomason has always tended to his customers, even before they walk through the front door.
But these days, he is more worried about the ones who come in the side entrance, which leads to a bar lounge where customers can bet on slotlike machines operated by the Oregon Lottery until 2 a.m.
Like many of the state’s 3,800 video lottery retailers who pump almost $1.7 billion into the state’s coffers, Mr. Thomason is waiting for the U.S. Department of Interior to decide whether two Oregon tribes will be allowed to claim a much bigger stake in state gambling revenues by opening casinos in urban areas, far from their reservations along the coast.
“I’m adamantly opposed to the tribal expansion,” Mr. Thomason said on a recent weekday morning, when four of six gaming terminals were in use, and a few customers were nursing drinks. “My belief is that we would see as much as a 25 percent drop in volume.”
Mr. Thomason’s worries illustrate growing concerns that an expansion in tribal casino operations could upend the gambling economy of a state where lottery revenues have backed billions of dollars in public bonds for education, economic development and more.
The proposals have also pitted tribes against one another in a relentlessly negative and expensive lobbying campaign that some fear may strain tribal relations for good.
In recent years, Native American tribes have reclaimed thousands of acres of ancestral land across the country, opening business enterprises, including casinos, on some of their newly acquired lands.
Then in December 2023, the Bureau of Indian Affairs made it much easier for the federal government to take other lands into trust for the benefit of tribes and individual Native Americans. The measure also widened the possibilities for using those new lands for gambling projects, said Kathryn R.L. Rand, a senior distinguished fellow at the University of Nevada, Las Vegas’s International Center for Gaming Regulation.
That gave substantial new ammunition to tribes in Oregon, which have generally been limited to casinos operated in remote areas on or near their own reservations. Tribes in other states, like Idaho, have also now submitted casino proposals well outside their reservations.
The two Oregon tribes hoping to open the urban casinos — one in Salem, the capital, and the other in Medford, 30 miles north of the California border — say the projects should be viewed as opportunities, hard-earned and long overdue, to finance initiatives to house and heal their members, particularly their elders, while creating jobs for all local residents.
“It’s about self-determination,” said Brenda Meade, chair of the Coquille tribe, whose proposal for a casino in Medford, 170 miles from the tribe’s headquarters, has generated heated opposition. “We will decide what’s best for our people.”
But their critics include other tribes in Oregon, as well as several in California. Opponents note that it has long been informally accepted that each tribe should have only one casino, and warn that approval to expand could “open the floodgates for casino development across multiple states.”
They also accuse the Coquille of trying to shortcut the regulatory process — which makes it difficult to build casinos outside reservation land — by claiming dubious historical ties to the areas that are being taken into trust.
“We’re now seeing an arms race,” said Gabriel S. Galanda, an Indigenous rights lawyer representing the Cow Creek Umpqua tribe, whose Seven Feathers casino, just an hour north of Medford on Interstate 5, would be faced with new competition. “You can literally look at the dominoes falling in every direction, from Washington to Oregon, and Oregon to California.”
Most elected officials, statewide and local, are siding with the powerful Cow Creek, which has poured more than $10 million into lobbying and campaign contributions, outspending the Coquille by 8-1.
Gov. Tina Kotek, a Democrat, declined to discuss the proposals in detail but reiterated, in a statement, “her personal position against significant expansion of gaming in the state, whether through the Oregon Lottery or by Oregon’s tribal nations.”
From Termination to DraftKings
Seventy years ago, Oregon’s tribes were at a nadir. Under the Western Oregon Indian Termination Act signed by President Dwight D. Eisenhower, thousands of tribe members were all but forced off their land, west of the Cascade Mountains, to disastrous effect.
Decades later, with the backing of Mark O. Hatfield, then a senator of Oregon, tribes began gaining recognition again, in a process called restoration. After Congress passed the Indian Gaming Regulatory Act in 1988, Oregon’s tribes began opening resort-style casinos, predominantly on reservations located in inaccessible coastal or rural areas.
Today, 10 tribal casinos support more than 15,600 jobs and generate $410 million in tax revenues and payments to local governments, according to the American Gaming Association.
With much fanfare, the Oregon Lottery also moved in for a slice of the pie, authorizing video lottery machines in bars and restaurants in 1992 — the same year that the Cow Creek opened a bingo hall, that later became a limited casino, on a remote stretch of Interstate 5.
More recently, the lottery has moved aggressively into mobile sports betting. Under an exclusive partnership with DraftKings, the state receives 51 percent of gambling revenues for such betting, and DraftKings gets 49 percent. But if a tribe enters the market — which some experts anticipate is likely — Oregon’s share would drop to 15 percent, and 5 percent if four tribes join in.
Now the state’s second-largest funding source, after personal income tax, the lottery has contributed over $15 billion since 1985. The state’s lottery-backed bonds are considered one of the highest-rated bond programs in the country.
But credit challenges include the possibility of increased competition.
“There is an expectation of growth that has been established over many years, if not decades, and there is certainly a nervousness within the lottery world about cannibalization,” said Jonathan D. Cohen, a historian and author of a recent book on state lotteries.
‘Reservation Roulette’
The Coquille, which operates the Mill Casino on a remote peninsula along Coos Bay, applied for a second casino many miles away 12 years ago, before the recent B.I.A. ruling. In an interview at the tribe’s Margaritaville-affiliated hotel, Ms. Meade said the tribe’s 1989 restoration agreement places Medford within its “service area.” In a preliminary legal opinion in 2017, the federal government suggested it was prepared to agree.
The tribe hopes to build its new casino on a small, 2.4-acre parcel where an aging bowling alley currently lies, next to where the tribe already operates a nine-hole golf course. As a Class II facility, it would have bingo and slotlike machines, but not the table games and full-scale slot machines found in Class III casinos.
The Trump administration denied the application, noting widespread opposition. But the Biden administration said an environmental review had not been completed and moved to conduct one.
The casino the Siletz tribe hopes to open in Salem is about 60 miles east of its existing gambling operation in the coastal town of Lincoln City, closer to tribal headquarters.
Deb Haaland, the interior secretary and the first Native American to serve in a presidential cabinet, will make the final decision on the Coquille’s application, though it could be challenged in federal court. The Siletz’s project is subject to a different legal process: If the federal government says yes, as most expect, then Governor Kotek would effectively have the final word, Ms. Rand said.
The Cow Creek has intensified its efforts to torpedo the projects. Recent Seven Feathers patrons, for instance, received ads on their phones warning of the Coquille’s “Reservation Roulette,” according to screenshots shared with The Times.
“Don’t Bet on It,” the ad said. “Stop the Coquille.”
In an interview near the State Capitol, Carla Keene, chair of the Cow Creek, said she took the issue personally, because “it’s against my people.”
She added: “I think we all should have sovereignty, but you need to stay in your lane. You can’t go shopping for a new reservation just because it looks better than the one you’ve got.”
Ms. Meade bristled at the criticism.
“I think the one that hurt the worst probably is that we’re reservation shopping,” she said, referring to comments opposing her tribe’s proposal. “Shame on you.”
The Siletz project has been criticized by the Cow Creek and the Grand Ronde tribe, which runs the state’s biggest casino, Spirit Mountain, located between Lincoln City and Salem.
During a tour of the Siletz’s proposed 20-acre site, wedged between Interstate 5 and the tribe’s R.V. resort park, Delores Pigsley, chair of the tribe, noted that the area was adjacent to the unincorporated community of Chemawa, which once had a grocery store, gas station, post office and railroad station.
By 1977, the community was essentially abandoned. The only remnant is the Chemawa Cemetery, now overgrown with weeds, where Ms. Pigsley’s husband is buried.
The Siletz’s project would feature a four-star hotel and lazy river, and it would be Oregon’s first gambling facility to directly share revenue with other tribes, as well as state and local governments. If other tribes wanted to build new casinos in urban areas, the Siletz has said it would not object.
“It’s free enterprise,” Ms. Pigsley said. “There’s a process.”
A former greyhound racetrack could be next
The new proposals have caused other tribes to reconsider their plans. The Grand Ronde had purchased a former greyhound racetrack near Portland in 2016, planning to refurbish and sell the property.
But after the Siletz submitted its casino application in 2020, the Grand Ronde tribe took the property off the market and said it would consider a casino instead.
“If the rules of the game change, we have a responsibility to our membership to be prepared,” said Justin Martin, an enrolled Grand Ronde member and the tribe’s longtime lobbyist.
The issue of expanded tribal gambling has been percolating elsewhere in the country as well. Recently, the U.S. Supreme Court refused to consider a challenge to the Seminole Tribe of Florida’s plan to offer sports betting on mobile devices.
That could encourage tribes elsewhere to follow a similar template, including in Oregon, where the Legislature is contemplating regulations to control a surge in sports betting, most of it through the Oregon Lottery.
How these developments will affect video lottery retailers like Mr. Thomason, the owner of an Elmer’s franchise who is also a former president of the Oregon Restaurant and Lodging Association, remains to be seen.
But with retailers already facing pressure from the state to maintain minimum betting volumes in order to keep their machines, Mr. Thomason said he had heard “a lot of grumblings” recently from fellow retailers: “Does it really make economic sense to continue?”
The post In Oregon, a Bid for Urban Casinos Threatens a Gambling ‘Arms Race’ appeared first on New York Times.
