Dutch Bros Coffee founder Travis Boersma is going to have to pivot his plans for Grants Pass Downs.
This comes in light of the Oregon Department of Justice‘s (ODOJ) new legal opinion this month.
The recent opinion deals a significant blow to Boersma’s plans. He’d have liked to have added 225 historic horse-racing (HHRs) machines to Grants Pass Downs, Boersma’s Southern Oregon horse track.
In the opinion, ODOJ chief counsel Renee Stineman said HHRs are games of chance. Therefore, they are outlawed unless run by the Oregon Lottery.
“We determine that the machines are games of chance that do not afford players any meaningful opportunity to exercise skill,” Stineman wrote. “As a result, we conclude that they are lotteries. Lotteries are constitutionally prohibited in Oregon, unless they are run by the State Lottery. Thus, the HHRs cannot be authorized by the Commission.”
Why are HHRs an issue?
Historic horse-racing terminals are slot–style games that allow players to bet on real horse races that took place in the past.
The races are unidentifiable, so horses and jockeys are unknown. However, HHRs give players odds and stats on each horse’s past performance.
In Oregon, HHRs were legal, in part, because lawmakers considered them a game of skill. Bets are based on real horse races. Players don’t have to fill out a card to bet on the race, but they have the option to do so. Stineman took aim at HHRs that provide an auto-handicap feature that allows the machine to pick your cards.
“The player lets the machine make the selections for them, using the odds established on the day the historical races were actually run,” Stineman wrote in her brief. “We understand this is the more commonly used option. It involves no skill whatsoever—the machine picks for the player. In fact, the player is not even shown the day-of-race odds; rather, the machine has internal access to that data and ranks the horses for the player.”
Furthermore, Steinman notes, the information that players get about a race is randomized. Two players betting on the same race may get completely different information about horses and odds.
Oregon DOJ concludes HHRs would turn Grants Pass Downs into a casino
Because HHRs are games of chance more often than not, the ODOJ’s office asserted that placing them at Grants Pass turns the track into a casino. Casinos are illegal unless they’re operated on tribal land.
“These machines are electronic games of chance with no meaningful relationship to traditional parimutuel racing wagers,” Stineman wrote. “Concentrating 225 of them on a dedicated gaming area would create a space that is predominantly used for gambling and is readily recognizable as a casino.”
Furthermore, she noted, because HHRs are games of chance, they do not fall under the state’s allowance for parimutuel racing. As such, they must be operated by the state’s lottery.
What’s the fallout from the ODOJ’s decision?
Many of the state’s federally recognized tribes will no doubt be thrilled by the ODOJ’s decision.
In an interview with Oregon Public Broadcasting (OPB) earlier this year, Justin Martin, a member of and lobbyist for the Confederated Tribes of Grande Ronde, said HHRs could impact the tribe’s revenue by $6-$12 million a year.
“It’s not new revenue that will be coming in here,” Martin said, referring to where HHR revenue will come from. “This is redistributed revenue and I think that’s a very important concept to look at.”
For Boersma, the ODOJ decision is obviously a disheartening one. He told OPB that the state’s tribes could take advantage of HHRs by being investors in the Grants Pass project.
Boersma continued that his goal in this is to build metaphorical bridges between the state, his company, and the tribes.
“And I have been…willing to have conversations with tribes and how this could be a difference-maker,” he said. “I’m doing this to be a bridge-builder for the state, to be a bridge-builder for tribes and to really be a force for good.”