Who Pockets the Take From Video Lottery Games in Bars?

I have a question about the slot machine-like video lottery games in bars. I’ve heard that bar owners make scandalous profits off these machines, but I’ve also heard that the state pockets most of the take and the owners actually barely break even. Which is true? —Slot Machine Granny

Before I answer your question, Granny, I’d like to thank you for the visual conveyed by your pseudonym—if you’re not seated at a one-armed bandit with a plastic bucket in your lap and a long, menthol cigarette stained with frosty pink lipstick dangling from your lips, please don’t tell me about it.

Lottery retailers may not be partying with the Saudi royal family, but they’re doing all right. In fiscal year 2024 the median Portland lottery bar pocketed around $125,000 in commissions on about $525,000 in video lottery sales. (Some did significantly better: The average take for the top 10 earners was $1.6 million in sales and $310,000 in commissions.)

If you think this sounds like a license for business owners to print money at the expense of society’s poorest (or at least most gullible) citizens, congratulations, you’re a liberal! I largely agree with you. But before we take up pitchforks and hang the last bar owner with the guts of the last Maletis rep, let’s look at a related, but more familiar, business model.

A 750 ml bottle of no-name liquor costs around $11. Bars typically sell such liquor for $6 to $8 a shot. Are you pondering what I’m pondering? The first two drinks pay for the entire bottle; the remaining 8 to 15 shots (depending on who’s pouring) are pure profit. It can’t miss! This is why everyone who opens a bar becomes rich beyond the dreams of avarice, and none of them has ever struggled, or gone broke, or gone out of business.

In other words, lots of things that sound like cash cows at the visioning session turn out not to be such slam dunks when you factor in payroll, overhead and other realities. The bars’ lottery take is decently juicy, but it has to be or they wouldn’t play along, and we need them to play along because we—the real villains!—are completely addicted to the roughly $1 billion in revenue the Oregon Lottery brings in every year. (As a liberal, you should have seen the hoary “we are all responsible” dodge coming, but what are you gonna do, vote for a sales tax?)

Questions? Send them to dr.know@wweek.com.