Oregon Appeals Court Rules Portland Poker Rooms Violate State Gaming Laws

In a decision rendered by the Oregon Court of Appeals, Portland poker rooms that are operating outside of traditional Indian casinos may soon become a thing of the past. The decision on whether the “membership” version of poker rooms violated gaming laws was deemed a violation of the law by the Court of Appeals, a decision which is sure to be appealed again to the Oregon Supreme Court.

Case Dates Back to 2019, Now Defunct Gaming Operations

The case dates to 2018, when Oregon Racing, Inc., appealed the 2017 decision from a lower court that their operations at the Portland Meadows racetrack violated the state’s gaming laws. Oregon Racing was involved in a dispute with the Oregon State Lottery, who is responsible for administering gaming in the state. Oregon Racing was stating that their operations worked under the banner of “social gaming” and that it should have been protected, while the Oregon State Lottery felt that the charging of a “door fee” and taking money for chips constituted the operation of a gaming enterprise, a violation of the law.

In the previous decision, the Oregon Circuit Court had decided that Oregon Racing and Portland Meadows were in violation of the law and ordered their operations shut down. Then the COVID pandemic hit and, during the time that the appeal was pending, Portland Meadows went out of business and was closed and razed. The appeals court, however, decided to move forward with the case because of the questions that were raised.

In front of Presiding Judge Erin Lagesen and Judges Joel DeVore and Steven Powers, both sides argued their cases. Also in the mix was the Confederated Tribes of Siletz Indians, who filed a amicus curiae (“friend of the court”) brief for the judges to review. The judges had a great deal to unpack, noting that there was a social gaming law on the books in Portland that would have to play into the mix also.

In their decision, the three members of the Appeals court found that the charging of a “door fee” – basically an entrance fee to come in the building – and the holding of cash in exchange for chips constituted that the business was operating as a gambling establishment and was, in fact, against the law.

In writing their opinion, Judge Lagesen states, “The games operated in the Portland Meadows Gaming Room were an incentive to pay the door fee and enter the room, and those fees come within the plain meaning of the phrase “house income from the operation of the social game.” In the end, the trio of judges relied on the Oregon statutes, saying, “We rely on the text and context of ORS 167.117(21) to conclude, as the Lottery did, that a “door fee” that is paid to access poker games results in “house income” within the meaning of the statute.”

Could Decision Have Ramifications Outside Oregon?

The decision immediately only has ramifications on the Oregon poker rooms. Some of the Portland poker rooms have been in operation since 2007 under the state’s “charitable poker” guidelines. This new ruling, however, puts those operations in jeopardy as many had been using the same business template that Portland Meadows had utilized.

This also puts other states’ charitable gaming laws and even some “poker club” operations in question. Michigan’s recent increase in online gaming may see their charitable gaming industry lose money, while Texas’ poker clubs (which utilize a “membership fee” for entry) are comparable to what occurs in Portland. While the Oregon ruling does not directly affect these states, attorneys can use the decisions (such as Oregon’s) as arguments in any litigation that might arise.

The decision by the Oregon appeals court will most certainly be appealed by Oregon Racing, Inc. Whether the decision will be overturned after two decisions against them, however, is going to be difficult.