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Oregon Lottery jackpots drop after reset: ‘This wasn’t an upgrade. It was a holdup.’

Signage posted by Oregon Lottery retailers to warn players of pending upgrades and loss of progressive bonus jackpots. ((Oregon Lottery))

As a regular player of video poker, John Childress is well aware that the odds are always stacked in favor of the house, or in this case, the Oregon Lottery. But an experience earlier this month drove the point home and left him wondering if the lottery was cheating its customers.

Childress said he walked into Dotty’s, a video poker parlor in Milwaukie, and discovered that the nearly $8,000 progressive bonus jackpot on a Big City 5 terminal he’d been playing on previous visits had been reset to the minimum level of $3,000.

“Someone got lucky,” he remarked to another player. But the woman told him that wasn’t it. Multiple machines at the parlor had been down for hours that day, and when they came back on, she said the jackpots had all been reset to the minimum.

Childress was taken aback. The jackpots build up when no one hits the grand prize over thousands and thousands of spins. He said he checked three different outlets and was told the same thing had happened. He wanted to know: “Where did the money go?”

“I believe the Oregon lottery has a fiduciary responsibility to account where funds are being directed,” he said. “Someone has to account for that missing money.”

Experts contacted by The Oregonian/OregonLive agreed. They said those jackpots were created by and would have eventually been won by players.

“Now the players can’t win those jackpots,” said Kevin Harrigan, head of the Gambling Research Lab at the University of Waterloo, where he specializes in computer science and math/statistics related to the design and implementation of slot machine games. Effectively, he said, the lottery rejiggered the odds in its favor and “erased a liability. . I’m interested to hear how many machines and the total amount of progressive bonuses they removed.”

As far as the latter question, the Oregon Lottery says it doesn’t know how much in prizes was at issue. But it vehemently disputes the notion that it changed the advertised odds on individual machines, or that any money was “taken.”

When jackpots clear, lottery spokesman Matt Shelby said, “it’s obviously a lost opportunity for players to win that jackpot at that single point in time.” But the advertised payout percentages on a machine — which range between 92 and 94 percent – are determined over millions of spins, he said, and clearing a jackpot creates one point in time when the payout percentage is lower.

The jackpot resets are happening around the state as the Lottery gradually upgrades some 4,000 terminals manufactured by International Game Technology. Those upgrades, the lottery says, are designed to improve game play, make it easier to load new titles, and “allow the Lottery to continue to provide funds for schools, parks economic development and more.”

When the upgrades take place, however, a new operating system is installed, which clears the terminals’ random access memory.

“Unfortunately, every time there’s a RAM clear, it pulls the pot,” said Sar Richards, the lottery’s associate video product manager.

The older terminals are incapable of remembering progressive jackpots through the conversions. And the lottery says they aren’t tracked by a central management system, so there’s no record of what the jackpots were prior to the conversion.

Richards said many of the machines have been out in retail locations since 2009 and have gone through multiple conversions. Each time the jackpots have reset to the minimum, no matter how high they were at the time.

It’s not clear how many upgrades the machines in question have experienced. But the jackpots also reset, albeit infrequently, when a terminal’s logic board fails, or an old video terminal is replaced.

The lottery says it warned retailers of the upgrades in advance and provided bold colored signage to place two weeks in advance on the three games that would be impacted: Big City 5, Candy Bars and Quick Pay Jackpots. It also insists that there is no financial benefit to the system when it happened.

Over time, Shelby and Richards insisted, the payout percentage is still at the advertised level – 92 to 94 percent – so players suffer no harm and the lottery gets no benefit.

“If we could avoid it, we would,” Shelby said. “We actually see a small dip in sales immediately following upgrades. We worked with our retailers leading up to the upgrades to ensure players knew they were coming, and that the jackpots would reset.”

Childress said he never saw any notices at Dotty’s, though an employee at the location told The Oregonian/OregonLive they had been there before the upgrades.

Roger Horbay is an addiction therapist who formerly ran a company that advocated for consumer protections in the gambling industry, Game Planit Interactive Corp. He argued the lottery benefited and the players lost in the resets.

“They just stole a whole bunch of money off the players,” he said.

For his part, Childress says he’d like to know what statute the state is relying on that allows them to pull the pots.

“I didn’t fall off the turnip wagon last week. When I see something that just doesn’t look right, I feel someone should raise a voice,” he said. “This wasn’t an upgrade, it was a holdup.”

Oregon Lottery jackpots drop after reset: ‘This wasn’t an upgrade. It was a holdup.’ Signage posted by Oregon Lottery retailers to warn players of pending upgrades and loss of progressive bonus