Does Appellate Court Ruling Mean The End Is Near For Oregon Poker Rooms?

Since 2007, Portland has been home to a number of popular poker rooms that, despite occasional legal challenges, have managed to remain in operation.

However, that era of Portland poker could potentially be in jeopardy.

The Oregon Court of Appeals last week upheld a ruling by the Oregon Lottery indicating such rooms in fact run afoul of Oregon gambling laws.

Oregon Lottery determined Portland Meadows violated state laws

The case dates back to 2017, when the Oregon Lottery first took exception to the Portland Meadows horse racing track for the operation of its popular poker room.

In April 2017, an Oregon State Police detective visited Portland Meadows. The detective determined its poker room violated both state and local laws.

Oregon Lottery Director Barry Pack then sent a letter to the track demanding they cease operating the poker room. The action came with an added threat to terminate Portland Meadows’ contract with the Lottery to offer 10 video lottery terminals at the location.

Portland Meadows nevertheless continued to run the room. In June 2018, the lottery drew a line in the sand by issuing a declaratory ruling. The ruling insisted Oregon Racing, Inc. was violating state gambling laws by operating the poker room at Portland Meadows.

Appellate court affirms Lottery’s 2018 ruling

According to Pack, the room violated gambling laws in two distinct ways. Requiring a $15 door fee generated “house income,” which the law prohibits. Furthermore, the exchange of poker chips for cash also constituted a legal violation, Pack said. Such an exchange meant the room was illegally serving as a “house bank.”

In the lottery’s view, both violations disqualified Oregon Racing from the “social games” exception in the state’s gambling law. As a result, the Oregon Lottery chose to terminate the track’s video lottery terminal contract. Portland Meadows responded by appealing the decision, and last week’s ruling upheld the lottery’s judgment.

In its ruling, the Court of Appeals agreed with both of the Oregon Lottery’s charges that the door fee constituted “house income” and that the track had indeed operated as a “house bank.”

Other Portland poker rooms hope to press on despite ruling

Interestingly, the actual poker room at issue closed well before the appellate court ruling arrived last week.

Having lost its video lottery terminals, the Portland Meadows days were numbered. The site closed its poker room in 2019. In fact, the entire track shut down in December 2019. The track was subsequently demolished in early 2020.

Portland Meadows did reopen soon afterward in a different location. With new ownership, it now operates as an off-track betting site. It has also opened a new poker room.

However, the Court of Appeals ruling may well mean the future is in doubt for the new Portland Meadows poker room and the dozen or so others currently operating in Portland.

The appellate court’s affirmation of the Oregon Lottery’s charge that the Portland Meadows room had violated gambling laws means other Portland rooms operating by a similar model could potentially be targeted as well.

For now, it is unclear whether poker rooms without video lottery terminals might perhaps be able to escape provoking the Oregon Lottery’s ire. But time will tell.