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Law and Justice

Grants Pass gambling venture files legal challenge against state racing commission

Travis Boersma, Dutch Bros’ co-founder and executive chairman, at one of the company's corporate offices in Grants Pass on March 10, 2020.
April Ehrlich
/
JPR
Travis Boersma, Dutch Bros’ co-founder and executive chairman, at one of the company's corporate offices in Grants Pass on March 10, 2020.

Dutch Bros. Coffee co-founder contends Oregon Racing Commission has delayed licenses for months

Backers of a Southern Oregon gaming and entertainment venue filed a legal petition Tuesday against the Oregon Racing Commission, over what it alleges are licensing delays for gambling machines.

The petition, filed in Josephine County Circuit Court, suggests that the delays may be driven by tribal concerns over the gambling operation.

TMB Racing, which is backed by Dutch Bros. Coffee co-founder and CEO Travis Boersma, contends that the licenses have been delayed for months despite staff recommending approval.

Boersma wants to install 225 “Historical Horse Racing” terminals at the Grants Pass facility called The Flying Lark. The HHR terminals are similar to slot machines that allow participants to bet on old horse races. The new entertainment venue boasts that it will create more than 150 jobs and is located at the Grants Pass Downs racetrack, which is also owned and operated by Boersma.

The Oregon Racing Commission’s delay “may be a result of waiting for the Oregon Department of Justice to advise on a handful of legal claims that some Oregon tribes have advanced about HHR wagering,” the petition states.

A spokeswoman for the Oregon Department of Justice said the agency received the lawsuit, and is in the process of reviewing it. Oregon Racing Commission leaders did not return a request for comment.

Boersma claims in his petition that the HHR machines allow players to bet against one another, rather than an operator, like at a casino. He also points to the use of 150 HHR terminals at Portland Meadows between 2015 and 2019, when the horse track closed. The petition states the Oregon Racing Commission oversaw those terminals without issue.

“Throughout that time, upon information and belief, the DOJ did not take any action nor make any adverse public statements regarding the legality of Portland Meadows’ HHR terminals,” Boersma’s petition states.

The Oregon tribes that operate casinos argue that since then, the HHR terminal technology has advanced, and that the sheer number of the machines proposed in Grants Pass would effectively create a new private casino.

In 2010, Oregon voters upheld a ban on private casinos. State law also requires agencies to “make a reasonable effort to cooperate with tribes in the development and implementation of programs of the state agency that affect tribes.”

In October, leaders for six of the nine federally recognized tribes in Oregon wrote to Gov. Kate Brown expressing concerns about HHR terminals and The Flying Lark project.

“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 tribal leaders wrote. “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.”

Brown thanked tribal leaders in a reply, but also noted it would be inappropriate for her to intervene on a specific project.

Weeks later, the governor also wrote to the leaders of the Oregon Racing Commission.

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

Also, in October, Secretary of State Shemia Fagan announced an audit of the Oregon Racing Commission that’s now underway. The audit was done at the request of the tribes who asked Fagan’s office to determine if the racing commission “has the proper regulatory framework, statutory authority, security controls, and staff expertise.”

Boersma’s legal petition states in the fall of 2020, TMB reached out to several tribes “regarding its vision for collaboration with the tribe on gaming initiatives” at the Flying Lark. And in 2021, some tribal representatives toured the venue still under construction.

“Through the entire process, I’ve made it a priority to meet and work with Oregon’s tribal leaders,” Boersma said in a statement. “It’s my hope that tribal leaders will once again come back to the table to identify ways in which we can work together. Until then, our team has made it clear we will continue to work to provide jobs and support the economy while following all laws and guidance.”

Tribes have requested Oregon lawmakers temporarily pause any expansion of state or private gambling until there’s a larger look at the role and future of gaming in the state.

Copyright 2021 Oregon PublicBroadasting