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"With six ... casinos operating, Oregon now has a bad case of what is being called a 'level playing field syndrome,' something akin to an arms race." *
Ted Kulongoski, 1996

* From "When Gambling Calls the Shots," by Attorney General Theodore Kulongoski, The New York Times, October 5, 1996. For full text of the article, visit www.gorgefriends.org

Pair seek OK for huge casino near Portland

Two Lake Oswego men want a state constitutional amendment so they can build Oregon's first such off-reservation complex

Saturday, January 15, 2005
JEFF MAPES

SALEM -- Two Lake Oswego entrepreneurs, who claim the backing of major gambling and financial interests, have launched an effort to win legislative and voter approval for a huge casino and entertainment complex that would be Oregon's first outside an Indian reservation.

Attorney Matthew Rossman and Bruce Studer, an investment adviser, have begun meeting with state officials to build support for a 1 million-square-foot facility in the Portland area that would include as many as 3,500 video gambling terminals.

The two said they plan to ask voters to amend the state constitution -- which prohibits casinos -- to allow construction of their complex. They said they'd like the Legislature to put the issue on the ballot but plan to proceed even if they have to go directly to voters with an initiative.

"We think gaming is not going away, it's just getting bigger," Studer said. "We've come up with a plan we think would be of tremendous benefit for the state."

The proposal would give state government a 25 percent cut of the gambling revenue. Along with property taxes, that could produce more than $100 million a year the state could spend on education and other services, Studer said.

However, some legislators who have heard about the proposal say they fear becoming more reliant on gambling, which causes its own social problems for the state.

"We rely on gambling and the lottery for enough services," said Senate Majority Leader Kate Brown, D-Portland. "I don't want to see us doing any more."

Brown said she was also concerned about hurting Oregon's tribes, which have come to rely on gambling dollars for social and economic development purposes.

MardiLyn Saathoff, legal adviser to Gov. Ted Kulongoski, said the governor has not taken a position on the project. But Saathoff, who met recently with the pair, said Kulongoski is concerned about the degree to which the project would expand gambling in Oregon.

Oregonians now spend an estimated $1.17 billion a year on gambling, a tenfold increase in the past two decades. The state's lottery, one of the most expansive in the country, generates about $350 million a year in profits for the state.

Studer and Rossman, who have formed the Oregon Gaming & Entertainment Co., declined to provide any details about their financial backers. Studer said they are finalizing their plans and intend to provide more details about their proposal when they make a formal announcement in a few weeks.

For now, Studer would say only that companies with investment and gambling experience are backing the proposal. Rossman, 45, specializes in civil litigation such as class-action lawsuits. Studer, 47, senior vice president of Grifphon, a Portland investment firm, said he has long experience in the investment community. He said he has been active in local education groups and is on a governor's advisory committee on special education.

A summary of their plans given to Senate Democratic leaders and Saathoff describes a project that would eventually include $490 million worth of development.

Studer and Rossman estimate it could produce $350 million in gambling revenue a year. They also envision the complex including a range of entertainment activities, including movie theaters, restaurants, bowling and live shows.

The proposal says the complex would be located south of Portland, but Studer declined to identify a specific location. He said the pair have several potential locations, including some that are not south of the city.

Nine Oregon tribes operate casinos on reservations across the state. As sovereign governments, they are not subject to the state constitutional ban on casinos. The new casino would come close to equaling the combined revenue of all nine tribal casinos. Portland economist Bob Whelan has estimated that the tribal casinos had gambling revenues of nearly $400 million in 2002.

The continued spread of legalized gambling has been a controversial topic in recent months. Kulongoski recently gave the go-ahead for the Oregon Lottery to expand its video poker machines into the kind of video slot machines that are the most popular in tribal casinos. That's expected to bring in an additional $50 million a year for the state.

In addition, Kulongoski is negotiating with the Warm Springs Tribes to allow them to build the state's first off-reservation tribal casino in Cascade Locks. Kulongoski has seen that as a better alternative to having the tribe proceed with a casino on reservation land in an environmentally sensitive area near Hood River.

Studer said the pair have conducted polling that finds strong public support for their proposal. "The time is absolutely right for this," he said. "We believe because of our public approval, it will pick up political support as it goes."

Studer said he would encourage legislators to refer a measure to a special election ballot allowing the casino to be built. If that doesn't happen, he said, the pair will launch a citizens initiative that could, if enough signatures are gathered, go before voters in November 2006.

Jeff Mapes: 503-221-8209; jeffmapes@news.oregonian.com

• Opposition to casino in Oregon's Columbia Gorge