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43 °F Forecast | Road Cams Thursday, January 27, 2005 Today's News | Classifieds | Autos | Homes | Jobs | Tempo | Health | Community | Home Delivery SECTIONS Home Page Local News Sports Business Obituaries Life Opinion - Politics Tempo AP News Weather Classified Archives Site Map SPECIAL SECTIONS Since We Asked Outdoor Journal Menu Guide How To Guide Wellness Connection Readers' Choice Real Estate Showcase Real Estate Guide Joy Magazine Homelife Magazine Wedding Guide Passport to the Rogue Valley EXTRA Newspaper in Education Personals Movie Times TV Times E The People Volunteer Opportunities Moving to Southern Oregon? MARKETPLACE Find a Car Find a Home Find a Job Classifieds Place an ad eSouthernOregon Automotive Communities Entertainment Publications Recreation Calendar CUSTOMER SERVICE Frequent Questions Advertising Information Home Delivery Employment Contact Us Media Kit Network Affiliate Oregon Road Conditions & Cams Email Story to a Friend December 26, 2004 Wild Goose Cafe owner Dal Carver says the more than $100,000 in Lottery commissions his restaurant earned last fiscal year was a small share of the businesses's overall revenue. Mail Tribune / Jim Craven More than a matter of convenience Businesses find that catering to lottery players helps increase the bottom line By GREG STILES Mail Tribune Lottery retailers reject the notion they are getting rich off gambling and are quick to point out how they funnel lottery revenue back into their business and community. "We’re like a family, we spend most of the money we get," says Dal Carver, who along with his wife, Renee, owns Wild Goose Cafe and Bar in Ashland. "We’ve written checks back to the community, vendors, service providers and the like. ... What the Lottery money does is save us from always operating on a shoestring." Indeed, retailers’ extended operating hours and service levels are in deference to the Lottery and those who play it. "From the taxpayer’s view, the Lottery is set up for economic development," Carver says. "I’m a taxpayer too, and as far as I’m concerned, the money they give bars is just as effective in economic development as what the state spends (on economic development projects)." More than 90 establishments offered video poker machines in Jackson County during the fiscal year that ended June 26. They produced $29,984,018 in sales — the revenue after prizes have been paid out — and earned $7,771,239 in commissions. Advertisement Bob Brutke, former president of the Oregon Restaurant Association, has an ownership stake in eight of the county’s top 10 video poker sites — they collected $7,227,139, or 28.98 percent of the area’s sales for the Lottery Commission. His Purple Parrot, Mario’s Sandwiches and Elmer’s Restaurant holdings brought $1,933,531 in commissions, 24.9 percent earned by local establishments. Bob and Vickie Brutke created the Purple Parrot with video poker in mind in 1993, opening three locations in Douglas County. They sold those three years later and have since opened eight more Jackson and Josephine county locations with partners Dave and Doneta Thomason of Grants Pass. Bob Brutke says the first Purple Parrot, opened adjacent to the couple’s restaurant and bar in Roseburg, was itself a gamble. "We really didn’t know what would become of it," he admits. The idea was to broaden the base of patrons by catering to players rather than bar regulars. "A lot of women don’t want to go into lounges or bars," Brutke says. "That was our target. It wasn’t about great business plans, it was just an extension of what we were doing. The timing was right, we were able to attract a niche of players not being taken care of by certain locations." The Purple Parrot’s success allowed the Brutkes and Thomasons to expand their holdings to 19 lottery locations, including four Elmer’s. "It enabled us to get back into full-service dining," Brutke says. "Without lottery dollars, I don’t think I’d want to be in the food business. We blend the two to enhance our bottom line." But those bottom lines are subject to internal and external factors. A series of start-up and monthly fees for dedicated telephone lines as well as $135 per machine in annual amusement taxes that escalate as revenue goes up, cost retailers about $4,500 the first year per venue. While video poker is the Purple Parrot’s raison d’�tre, it’s simply another amenity at the Rogue Regency Inn, along with the continental breakfast and swimming pool. "It’s not our focal point, but it’s very important to have," says owner Scott McCollum. "We’re in the hospitality and entertainment business. It’s definitely advantageous and it enhances the overall experience we offer. If other venues in town have the video poker and we didn’t, we would be at a competitive disadvantage." The difference between breakfast, the pool and the niche in back of the sports bar with a half-dozen video poker machines, however, shows up on the bottom line. "There’s a significant impact," McCollum says. "It far outweighs the income we’d get by having a table and chairs for patrons. It creates more income per square-foot." There were 3,469 Lottery retailers at the end of October, including 2,004 video poker operators minding 10,238 Video Lottery terminals. "The number goes up and down," says Oregon Lottery spokesman Chuck Baumann, noting 99.5 percent of the retailers have signed on for another six years. But retailers are leery of recent changes in their video poker commissions and what it means to their future. Daniel and Sharmon O’Neill have operated the Homestead Lounge in Rogue River for a decade. They opened the Duck In Deli at WinCo shopping center in Medford five years ago, primarily with funds set aside from Lottery profits earned at Homestead Lounge. Reimbursement formulas adopted earlier this year reduced the original 35 percent take on proceeds, after prizes, to a pair of tiered models paying between 32.5 percent and 17 percent. "With the new formula, you have to watch your expenses," says Sharmon O’Neill. For the O’Neills, that means reduced hours and delayed remodeling. "You can’t buy new equipment, you just try to repair what you have," Sharmon says. "I don’t know of anybody that has ceased doing business, but I don’t think you’re going to see as many jobs with benefits, or people expanding or opening another businesses," Sharmon O’Neill says. "The economy in our state is not great. By hurting small business, the Lottery Commission is contributing to high unemployment." Carver says Lottery commissions ($102,316 for the year ending June 26) are a relatively small percentage of the Wild Goose’s gross revenue. "But the extra income has allowed us to take a more expansive approach to our restaurant — improving and expanding our equipment and facilities to accommodate a larger number of customers; investing in advertising, promotion and live entertainment to attract customers, and staffing more heavily," Carver says. Another common thread linking lottery retailers is the required Oregon Liquor Control Commission license. "It was a very good move by the people in power to figure out a way to control this," says the Purple Parrot’s Bob Brutke. "Otherwise, it would not only be in every convenience store, but in a corner of every business in the state." Reach reporter Greg Stiles at 776-4463 or e-mail [email protected] Mail Tribune Home Local News | Sports | Business | Obituaries | Life Opinion - Politics | AP News | Archives | Site Map E Southern Oregon | Classified Copyright © 1997-2005 Mail Tribune. All rights reserved. Privacy Policy | Terms & Conditions Website Feedback ADVERTISERS A D V E R T I S E R S SPECIAL SECTIONS Auto Finder Job Finder Home Finder Joy Magazine Homelife Magazine Tempo Readers' Choice Real Estate Showcase Since We Asked Outdoor Journal Moving to Southern Oregon? Volunteer Opportunities Student Loan Consolidation Conference Calls - $50/Month Home Security Systems Trunks, Footlocker, Trunk, Footlockers