Yesterday’s opening of the Ilani Casino Resort in Washington is reportedly set to negatively impact the gambling industry in the neighboring state of Oregon and has many there wondering whether they should continue to offer gaming in its current form.

After successfully fighting off a range of legal challenges, the Cowlitz Indian Tribe opened the $510 million Ilani Casino Resort on Monday morning offering a collection of 2,500 slots and 75 gaming tables. The 368,000 sq ft casino near the small Washington town of La Center is only about a 30-minute drive over the state border from downtown Portland, which is Oregon’s largest city with approximately 632,000 residents, and its inauguration has induced many to wonder if they should change tact in order to compete for much needed gambling revenues.

However, last week saw Oregon legislators controversially defeat a proposed measure that would have allowed the state’s only commercial horseracing track, Portland Meadows, to increase is allocation of ten video lottery terminals by 40 while the lawmakers are also in the process of considering a bill that would ban for-profit poker rooms, which currently operate in violation of local and state laws.

“We are trying to keep the track alive,” Mike Dewey, a lobbyist for Portland Meadows, told the local Willamette Week newspaper regarding his past support for the video lottery terminal expansion measure.

But, the newspaper reported that the sport of horseracing is experiencing long-term decline nationally with the amount wagered on races having shrunk by one-third over the past 15 years. To survive, the 70-year-old Portland facility has begun augmenting its racing cards by offering a variety of other wagering options including betting on contests at other tracks and historical races alongside a large at-risk poker room and the ten video lottery terminals.

Willamette Week reported that proponents of increasing the provision of video lottery terminals at Portland Meadows had hoped that the measure would help to entice local players to stay closer to home while increasing funds for the Oregon Lottery, which relies on the machines for some 70% of its revenues, despite research carried out last year that showed that Oregon is already oversupplied with gaming options as spending as a percentage of personal income is already about 1.5 times the industry’s “saturation level”.

“It’s going to have a big economic impact on us,” Justin Martin, a lobbyist for the Confederated Tribes Of The Grand Ronde Community Of Oregon, told the newspaper regarding the opening of the Ilani Casino Resort. The Oregon tribe operates the western state’s largest casino, the Spirit Mountain Casino, about 63 miles from Portland near the rural village of Grande Ronde and unsuccessfully took its rival to federal court in an effort to stop the opening of the new Washington casino.

Willamette Week reported that the Oregon Office Of Economic Analysis, which prepares budget forecasts, expects the opening of the Ilani Casino Resort to slash annual revenues to the Oregon Lottery by about $110 million, which would represents about 12% of the enterprise’s current total, and severely curtail the supply of funds for education, parks and economic development projects.

Bob Whelan, an economist with professional consultancy firm ECONorthwest, told the newspaper that the opening of the Ilani Casino Resort is set to have an enormous negative impact on Oregon’s existing tribal casinos.

“It’s going to have the same impact as the smoking ban,” Whelan told Willamette Week referring to the 2007 prohibition on smoking in bars that sent Oregon Lottery revenues into a tailspin from which it took a decade to recover.

Joanie Stevens-Schwenger from the Oregon Lottery reportedly described the opening of the Ilani Casino Resort as “a really serious threat” and told the newspaper that her organization was hoping to counter the impacts by swapping its nearly 12,000 video lottery terminals for state-of-the-art machines that are capable of being remotely re-programmed and can provide immediate feedback so that the agency can offer the most attractive games. She explained that the enterprise is moreover considering whether to introduce online titles and sportsbetting although neither of these proposed initiatives are anywhere near ready to go live.