Oregon Gambling Regulation

Gambling Legislation image Oregon is hardly considered a major gambling hub, especially when compared to pioneers like Nevada and New Jersey. While the local industry is indeed not as large, the state still offers a decent range of legal and regulated gaming options. Oregon lacks commercial gambling establishments, but nearly a dozen tribal casinos are scattered across the state, ready to satisfy local players’ appetites for action.

State-sanctioned lotteries and charitable and social gaming also enjoy legal status in the Beaver State. Thousands of slot machines, also known as video lottery terminals, operate legally outside tribal venues at taverns, restaurants, and bars. Oregon was an early adopter of parlay sports betting on football, which became available in 1989 via the lottery-operated service Sports Action.

When sports wagering was outlawed at the federal level three years later, Oregon was partially exempt from the ban. It continued to offer football parlays until it eventually prohibited them in 2007 as a condition of being permitted to host a collegiate basketball tournament. After the demise of the federal ban, legal sports betting returned to the state in the summer of 2019 in both retail and remote formats.

Oregon’s laws have always been liberal, so much so that it became the first state in the country to decriminalize the possession of small quantities of illegal substances. With this in mind, some readers may find it surprising that Oregon still disallows online casino games. However, as you will see later, local authorities do not enforce this ban all that strictly.

Most gambling activities fall under the Oregon Revised Statutes (ORS), a collection of codified state laws republished every odd-numbered year. The 2021 edition lists all gambling-related offenses and their respective penalties in Chapter 167. Unlike the statutes of most other states, Oregon’s codified law explicitly mentions internet gambling in §167.109.

Internet Gambling under §167.109 of ORS

Definition of Gambling under §167.117

Penalties for Unlawful Gambling under ORS

VTL Regulation

Tribal Gaming Regulation

The Failed Push for Commercial Racino

Internet Gambling under §167.109 of ORS

The section states that people who operate internet gambling businesses may not knowingly accept credit, electronic fund transfers, checks, drafts, or other similar means of payment ‘in connection with the participation of another person in unlawful gambling using the internet’. Those who violate the rules risk conviction for a class C felony, punishable by up to five years in prison and fines of up to $125,000.

The wording is strikingly similar to that of the UIGEA from 2006, the federal legislation that prohibits persons ‘engaged in the business of betting or wagering’ from knowingly accepting credit, checks, and electronic transfers from US citizens. As a result, banks and payment processors often block transactions from US players to unlicensed offshore gambling sites.

Definition of Gambling under §167.117

Illegal gambling is defined as risking or staking money or something of value on the outcome of chance-based games or contests. The section excludes certain activities from this definition, including social games, raffles, lotteries, bingo, and “bona fide business transactions valid under the law of contracts”. Games in which players cannot purchase more than $100 worth of tokens within 24 hours are also exempt from the category of illegal gambling.

Penalties for Unlawful Gambling under ORS

According to §167.122, a person commits illegal gambling in the second degree when they knowingly make a wager with a bookmaker or participate in illicit gaming as a player. The offense is a class A misdemeanor and carries fines of up to $6,250 and a maximum jail term of 364 days.

Individuals who knowingly promote or profit from illegal gambling commit a class C felony, which is punishable by up to five years in prison and fines of up to $125,000. The possession, manufacture, or sale of illegal slot machines and other gambling devices is also a class A misdemeanor under §167.147.

The statute exempts devices kept in private homes or manufactured before 1900, provided their owners do not use them for illegal gambling. Slot machines made more than 25 years before the date charges are filed are also excluded from the list of unlawful gaming devices.

VTL Regulation

Illegal gaming machines were widespread in the Beaver State during the late 1980s. In response, Oregon lawmakers passed legislation in the spring of 1992 to regulate video lottery terminals (VLTs). The change allowed the Oregon State Lottery to begin operating VLTs and to contract with retailers, authorizing them to place the machines on their premises.

Only retailers that hold valid licenses from the Oregon Liquor and Cannabis Commission may host VLTs. As a result, slot machines are common in Oregon’s taverns, bars, and restaurants. Section 461.217 (4) limits each retailer to a maximum of six machines, while licensed racetracks can operate up to ten terminals.

Tribal Gaming Regulation

Oregon hosts nine Native American tribes that may offer casino-style (Class III) gaming under the Indian Gaming Regulatory Act (IGRA). Enacted on October 17, 1988, this federal law governs gambling within the reservations of federally recognized tribes.

All nine tribal nations have negotiated compacts with Oregon to offer Class III gaming, including house-banked games such as blackjack, baccarat, craps, pai gow, and roulette. Slot machines and keno are also widely available at Oregon’s tribal casinos. These gambling venues are regulated jointly by tribal and state authorities.

The Failed Push for Commercial Racino

The nine tribes effectively hold a monopoly on casino gaming in Oregon. Several years ago, Travis Boersma, the billionaire owner of Grants Pass Downs, announced plans to open a commercial gaming facility next to the racetrack if the state approved it. Boersma invested $50 million in the track and aimed to revive the local horse racing industry.

He maintained, however, that the project could succeed only if he also launched the Flying Lark gaming venue. The property was expected to feature historical racing machines (HHRs), which resemble slots but base outcomes on past horse races rather than pure randomization.

The tribes opposed the plan, arguing that gambling outside reservation lands violated their compacts with the state. Tribal leaders deemed the Flying Lark an illegal operation under state law and insisted it would compete unfairly with their casinos.

The dispute reached the Oregon Department of Justice (ODOJ), which determined that the gaming venue was unconstitutional and that HHRs are games of chance, not skill. Therefore, ODOJ concluded, they constituted illegal lotteries. The ruling ultimately doomed the Flying Lark venture.

The Oregon Racing Commission (ORC), which oversees the state’s pari-mutuel industry, could not issue a license despite disagreeing with the Attorney General’s position. The ORC argued that HHRs involve some skill and thus represent pari-mutuel wagering rather than casino gaming. Nevertheless, it could not proceed with licensing after ODOJ’s decision.

The nine compacts between Oregon and its tribes are broadly similar. Each tribal nation must create several regulatory departments to oversee its casino gaming operations. The tribes must also obtain authorization to conduct Class III gambling from their respective gaming commissions.

The commissions must then submit their regulatory rules to the Oregon State Police, the agency that oversees tribal gaming in cooperation with tribal authorities. The compacts also limit the number of slots each casino can operate.

If a tribe reaches its limit, it can negotiate with the state for additional machines. The maximum number of gaming machines is compact-specific. For instance, the Grand Ronde compact allows up to 2,000 video lottery terminals, while the Warm Springs tribe may offer no more than 400 machines at its facility.

The U.S. Department of the Interior must approve each state-tribe compact before it takes effect. Below is a breakdown of all tribes currently doing business in Oregon.

The nine gambling compacts have no maximum validity terms, and the tribes can renegotiate them whenever they choose. They authorize Class III casino games, including slot machines, and house-banked table games like roulette, baccarat, craps, and pai gow poker. Keno and off-track pari-mutuel wagering are also permitted on tribal lands.

Employee Licenses

Class III Gaming Contractor Licenses

No Gambling on Credit

Employee Licenses

All managerial officials and key employees at the casinos must obtain licenses from the relevant tribal gaming commissions. Applicants must provide their full names, SSNs, permanent addresses, birth dates, and employment records for the past five years. Each prospective employee must also submit two sets of fingerprints.

Applicants convicted of serious crimes may be denied a license. Each employee license is valid for no more than three years from the date of issuance. All staff members must wear identification badges that display their names and photographs.

Class III Gaming Contractor Licenses

Gaming equipment manufacturers and vendors must obtain Class III gaming contractor permits. The state police maintain a list of approved vendors that features well-known companies such as Ainsworth, Aristocrat Technologies, SG Gaming, and TCS John Huxley. Class III vendor contracts are valid for up to seven years.

No Gambling on Credit

Compact terms prohibit tribal operators from extending credit to patrons: all wagering must be conducted with cash. Cashing checks on the gaming floor is also disallowed because the compacts treat it as an extension of credit. Patrons are not allowed to carry firearms inside the gaming facilities. Tribal casinos in Oregon do not serve complimentary alcoholic beverages.

1The Compact Terms

Oregon tribal operators earn hundreds of millions in gross gaming revenue annually, but their profits are not subject to federal income taxes, unlike those of commercial casinos. Under the compact terms, the tribes must cover the costs of any street, road, or highway improvements deemed necessary by the Oregon Department of Transportation to alleviate the gaming venues’ impact on traffic.

2Community Benefit Fund

Additionally, the operators must contribute to a community benefit fund. The exact amounts vary slightly across the different compacts, but the operators allocate approximately 6% of the previous year’s gross revenue. Contributions to the fund are due annually and generally go to charitable organizations. The governments of the counties where the tribal lands are located also receive a portion of the money.

Some of the revenue is used to improve road and highway infrastructure. IGRA, the legislation that governs Native American gaming at the federal level, requires Oregon tribes to use their gaming revenue for tribal economic development and improving the welfare of the tribal community, among other initiatives.

3Casino Winnings Withholding

All casino operators must report players’ winnings to the State Department of Revenue whenever those winnings exceed a certain amount. Gambling earnings over $5,000 are subject to income tax withholding at a fixed rate of 24%. The casinos normally issue W-2G forms to players who meet the withholding criteria.

Responsible Gambling Policies at Oregon Tribal Casinos

Responsible Gambling Policies image According to the Oregon Health Authority (OHA), approximately 2.6% of the state’s adult population struggles with problem gambling to some degree. More than 80,000 Oregonians suffer from clinical gambling disorders, while 180,000 others are at higher risk of developing a gambling addiction. Taking these figures into account, we find it a bit surprising that local land-based casinos do not offer any dedicated self-exclusion programs.

The operators are not obliged to display responsible gaming messages on their premises, either. The compact terms do not impose any specific restrictions on gambling advertising. Age restrictions are in place, however. Tribal casinos must not allow anyone under 21 to participate in gambling or loiter on the gaming floor.

Staff members under this age are permitted as long as their professional duties are not related to the conduct of gaming. There are no restrictions on the casinos’ operational hours. The facilities can conduct gaming around the clock, including on national holidays.

State authorities strive to minimize gambling harm through research, education, and various responsible gaming policies. Oregon law requires the state-sanctioned lottery operator to allocate 1% of its annual revenue to a dedicated fund for addiction treatment and prevention. Several years ago, the Beaver State ranked second in the country in terms of investments in gambling addiction services.

Online Gambling in Oregon

Mobile Gambling image Except for social casinos and sports wagering, online gambling remains illegal in Oregon for the time being. Social casinos offer classics such as baccarat and blackjack, along with hundreds of online slots, but the games are free to play and customers use virtual credits for betting. Such social games are intended solely for entertainment, as participants cannot win real cash.

These games are widely accessible via social platforms like Facebook or dedicated social casino websites. Local players who crave some real-money action have the option of joining offshore online casinos operating from outside the United States. With that said, Oregonians should approach such sites with due caution, since some of them are not properly licensed. Playing there can be riskier due to the lack of adequate regulatory oversight and customer protections.

Oregon has offered legal sports betting since the late 1980s, when the state lottery launched the parlay wagering service Sports Action. The platform was discontinued in 2007 after pressure from professional sports franchises. Following the repeal of the federal ban under PASPA, the state expanded its sports wagering industry.

Sports betting is now available at lottery-operated retail locations, kiosks, and tribal casinos. Oregonians can bet on all major professional sporting events and enjoy a wide variety of wager types, including moneyline, straight bets, futures, teasers, totals, and head-to-head wagers.

Restrictions on Collegiate Games

Mobile Betting Apps

Withholding Taxes on Punters

Restrictions on Collegiate Games

At the time of publication, the state lottery cannot accept wagers on any collegiate sporting events. Sportsbooks operating on tribal lands are exempt from this restriction. The situation could change if SB 1503 becomes law. Sponsored by Senator Peter Courtney (D), the bill would allow the lottery to take bets on college games, provided they do not involve individual player performance.

Unsurprisingly, the proposal has met fierce opposition from tribal gambling operators. They argue that lifting the restriction would hurt their bottom line and divert revenue used to fund vital services.

Mobile Betting Apps

In addition, Oregon residents can place bets remotely through the state lottery app powered by DraftKings. The app allows users to set deposit and loss limits, take extended breaks from wagering, or self-exclude altogether.

Spirit Mountain Casino in Grand Ronde recently launched a mobile app in partnership with BetMGM. Anyone, including out-of-state visitors, can use the app as long as they are physically located within Oregon. Tribal sportsbook and casino operators are not subject to taxation, and the same is true for the Oregon Lottery, which is state-owned and operated.

Conclusion

Although it is not regarded as a major gambling hub, Oregon still has plenty of legal gaming options to keep its gamblers satisfied. Commercial casinos are unavailable, but tribal gambling operators are thriving on Oregonian soil and have a strong presence in the state. In-person and mobile sports wagering is also legal here, but with some restrictions on collegiate events.

The Beaver State does not tolerate online real-money gaming for the time being and clearly states this in its revised statutes. However, as we mentioned earlier, some offshore casinos disregard Oregon’s anti-online gambling stance and still accept real-money action from local players. Hopefully, the state will move to legalize and regulate this form of online gambling, but it appears unlikely to happen soon.

Gambling Laws in Oregon

Internet Gambling under §167.109 of ORS

Definition of Gambling under §167.117

Penalties for Unlawful Gambling under ORS

VTL Regulation

Tribal Gaming Regulation

The Failed Push for Commercial Racino

Tribal Gaming Compacts in Oregon

Employee Licenses

Class III Gaming Contractor Licenses

No Gambling on Credit

Gaming Taxes Imposed on Oregon Tribal Operators

1The Compact Terms

2Community Benefit Fund

3Casino Winnings Withholding

Responsible Gambling Policies at Oregon Tribal Casinos

Online Gambling in Oregon

Legal Sports Betting in Oregon

Restrictions on Collegiate Games

Mobile Betting Apps

Withholding Taxes on Punters

Conclusion