Oregon Pauses Approval for Grants Pass Horse Betting Terminals

The Oregon Racing Commission is honoring a request from Governor Kate Brown to pause its consideration of an application from the Flying Lark in Grants Pass to install 225 betting terminals offering Historic Horse Racing (HHR). Commission director Jack McGrail removed the items from the November 18 agenda and deferred it, according to the Willamette Week.

The governor requested the pause in response to a disagreement between the owners and Oregon’s nine indigenous tribes. Does the Flying Lark qualify as a casino or as a “destination resort”; the category proposed by the property owners? The debate appears to hinge on that definition. And changes in Historic Horse Racing machines, which would be available at the betting terminals, further complicate the decision.

Betting terminal technology outpaces legislation

Grants Pass native and Dutch Bros Coffee magnate, Travis Boerma, owns both the Flying Lark and Grants Pass Downs. He bases his stance on a 2013 law that permits historic horse racing machine betting.

Historical horse racing machines use footage of old, unidentifiable horse races. Players wager on the outcome. The law was designed when HHR machines met the statutory definition of pari-mutuel betting, where bets go into a “pool” of other wagers.

In newer machines, bettors wager against the house. The tribes say this change makes HHRs “glorified slot machines,” and their presence would qualify Flying Lark as a casino. And the Oregon Constitution bans off-reservation casinos. That prohibition passed in 1984 and has resisted attempts to overturn it. Most recently, voters rejected a 2012 prohibition measure by 72% to 28%.

Governor’s letter prompts delay

Gov. Brown sent a letter to Racing Commission Chair Diego Conde and McGrail about the lack of regard for the tribes’ objections. In the letter, which the Willamette Week inquiry may have prompted, Brown wrote:

“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. That obligation includes consultation before any significant change to gaming activity that may affect the Tribes.”

“As a legislator, I helped to pass Senate Bill 770, the bill that became ORS 182.162-168, Oregon’s tribal consultation statutes. This law enshrines our shared commitment to strong government-to-government relations between the state and the nine sovereign, federally recognized Tribes that inhabit the land now known as Oregon. Robust consultation is a critical element of the working relationship between our governments, and an obligation that all agencies, boards, and commissions must satisfy.”

The tribes say the commission was apparently moving forward without formal review, debate, or public input prior to the governor’s letter.

Several state officials, including Senate President Peter Courtney and House Speaker Tina Kotek, also expressed concerns regarding the previously quick pace at which the matter was moving.

Zero-sum game?

Studies provided by Boerma’s team project the Flying Lark/Grants Pass Downs will generate over $10.7 billion within 30 years. Mike Thiessen, president of the venue, said the Flying Lark is “committed to paying a living wage in Southern Oregon.”

But studies commissioned by the tribes show reasons for concern. An ECONorthwest shows that the tribes and Oregon State Lottery would lose $20 million per year if the Flying Lark goes forward. The other study also projects losses. The tribes rely on casino income for the sustenance and well-being of their combined 29,000 members.

Legislators already lowered Flying Lark’s taxes. This change already allows the property to pay a fixed rate in taxes instead of a percentage of its revenues.