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Attorney General Ellen Rosenblum today issued a legal opinion that will create an enormous hurdle for Dutch Bros. Coffee founder Travis Boersma’s plan to install 225 betting machines at the Flying Lark resort at Grants Pass Downs.
Rosenblum declared such an operation would violate the state’s constitutional ban on off-reservation casinos and would also violate the ban on lotteries not run by the state.
Boersma’s proposal is part of a larger plan to keep thoroughbred racing alive at the state’s largest commercial horse track, Grants Pass Downs. He wants to install what are called “historical horse racing machines” that allow bettors to wager on races that have already been run.
He submitted an application last year for the machines to the Oregon Racing Commission, which regulates horse racing in the state. Oregon’s nine federally recognized tribes earn much of their revenue from on-reservation casinos and objected to the Flying Lark concept.
Gov. Kate Brown ordered the ORC to formally consult with the tribes before making a decision on the Flying Lark’s application. That hasn’t happened yet, tribal representatives say.
In the meantime, ORC director Jack McGrail sought an opinion from the Oregon Department of Justice, which provides legal advice to stage agencies, boards and commissions. The nine-page opinion spells out two problems.
First, there would be too many machines. The DOJ previously decided that a proposal to place 75 Oregon Lottery terminals at the now-defunct Portland Meadows racetrack would have violated the casino ban and a determination by the Oregon Supreme Court that a casino ban applies to “establishments whose dominant use or dominant purpose, or both, is for gambling.”
The DOJ opinion also found that historical horse racing machines are “games of chance,” like lotteries, and therefore violate the lottery ban. Advocates for the Flying Lark had hoped the machines might fit into a loophole for “parimutuel betting.” In that form of wagering, all bets are pooled, the operator takes a cut, and then distributes the winnings to successful bettors. That’s how horse players bet.
But the DOJ agreed with earlier analysis by the state of Nebraska that found the most current historical horse racing machines were like slot machines: They require no skill and represent a bettor playing against the house, not against other bettors, as parimutuel betting does.
“It is evident from their features that the games are designed to encourage players to insert payment, push a button, and watch what happens,” says the opinion, written by chief counsel Rene Stineman, of the DOJ’s general counsel decision.
“We are not the first to conclude that HHRs are impermissible games of chance,” the opinion added. “The Nebraska attorney general reached the same conclusion.”
The DOJ opinion makes it highly likely the ORC will now reject the Flying Lark’s application. That doesn’t preclude Boersma from going to court, but he would face an uphill battle to overturn the state’s position.
Boersma issued a statement in response to the DOJ opinion, saying he’s disappointed.
“I firmly believe it willfully disregards the state’s laws, which were lobbied for and agreed upon by Oregon’s sovereign nations,” Boersma said. “I believe the Oregon Racing Commission is acting in good faith and the process will ultimately reveal the Flying Lark to be a legal venture that serves to improve Oregon’s economy. I remain committed to saving horse racing in Oregon, providing family wage jobs in Southern Oregon, and working closely with tribal leaders to ensure all Oregonians benefit from the opening of the Flying Lark.”