Dutch Bros. To ORC: See You In Court

Maybe it’s the coffee that’s making them fidgety.

Dutch Bros. Coffee has filed a petition against the Oregon Racing Commission (ORC), claiming that the commission is slow-playing the approval of historic horse racing (HHR) terminals. The culprit? Dutch Bros. CEO Travis Boersma said in a petition filed with Josephine County Circuit Court he believes the ORC is waiting on advice from the Department of Justice regarding legal claims set forth by Oregon tribes.

Boersma’s claims come as TMR Racing, a company backed by Dutch Bros., has plans to open The Flying Lark, a racing facility in Grants Pass.

Legal battle is more than just a squabble over HHR terminals

TMR plans to feature 225 HHR terminals in its yet-to-be-open Grants Pass property. The terminals provide players with the opportunity to bet on historical horse races. The terminals are legal under Oregon law but have drawn criticism from Oregons‘ Native American tribes.

The tribes are the only groups allowed to operate casinos in the state. HHRs present a threat to the nine casinos that operate in the state, as HHRs can attract slots players that would normally gamble at tribal casinos.

Boersma argued in his petition that the ORC shouldn’t be dragging its feet. When another TMR property, Portland Meadows, applied for 150 HHR terminals over a four-year stretch, the ORC obliged. Why does Boersma believe tribes are to blame for the ORC’s slow approval? It may go back to letters between tribes and Oregon’s governor.

Tribes plead with governor to take action on influx of HHRs

This past October, six of the state’s nine federally recognized tribes wrote a letter to Gov. Kate Brown regarding The Flying Lark. In the letter, the tribes expressed their concern over the emergence of HHRs.

“We are at a critical moment where the state is about to approve the largest expansion of state-regulated gambling in decades without public or legislative input,” the letter stated. “If something isn’t done, HHRs will arrive in Oregon without any serious discussion of their impacts on the state, on tribes, and the citizens of both.”

Along with the letter, the tribes sent a pair of studies that indicated the new facility would pull $6 million in yearly revenue from the tribal casinos and another $13 million in tax revenue for the Oregon Lottery.

According to reports, the letter swayed Brown, who asked the ORC to pause its consideration of the HHR terminals.

“Although it is not my role as Governor to weigh in on agency licensing decisions, it is nonetheless my expectation that, as part of its regulatory licensing function, the Oregon Racing Commission will satisfy its statutory obligation to meaningfully consult with tribal governments,” Brown wrote. “That obligation includes consultation before any significant change to gaming activity that may affect the Tribes.”

Looking ahead to possible outcomes

It’s hard to say how the legal proceedings will resolve. Boersma seems set on getting approval for The Flying Lark’s 225 HHR machines. Understandably so, as the ORC approved similar requests in the past. However, the tribe seems to have the governor’s ear. That could go a long way in protecting the tribe against HHR-induced lost revenue.