FILE: Dutch Bros Coffee co-founder and Executive Chairman Travis Boersma is shown ringing the ceremonial first trade bell on the floor of the New York Stock Exchange, as his company's IPO opens, Sept. 15, 2021.
Richard Drew / AP
Plans to build an entertainment and gambling venue in Grants Pass that included electronic horse-racing terminals were upended Friday afternoon by a legal opinion from the Oregon Department of Justice.
The Oregon Racing Commission sought advice about whether it was legal under Oregon’s constitution to operate a facility with 225 horse-racing terminals, which are similar to slot machines and allow participants to bet on old horse races. The answer from Oregon’s attorneys: “No.”
“The planned concentration of 225 electronic gaming machines offering games of chance constitutes a casino,” the opinion reads.
Department of Justice lawyers concluded the proposed gaming center would therefore violate the state’s constitutional prohibition of casinos.
The advisory opinion was presented privately to the Oregon Racing Commission on Tuesday, then published publicly on the justice department’s website Friday afternoon. The opinion says the machines “are games of chance that do not afford players any meaningful opportunity to exercise skill.” As such, they’re technically lotteries.
Like many other states, Oregon doesn’t allow casinos or lotteries unless they’re located on tribal lands or run by the state, such as the Oregon Lottery. Facilities with more than 75 video lottery terminals are considered a casino, according to the advisory opinion.
Dutch Bros co-founder Travis Boersma has poured tens of millions of dollars into building the facility called the Flying Lark, where he planned to install the “historic horse-racing” terminals where participants can bet on old horse races. The Flying Lark is located at the Grants Pass Downs racetrack, which is also owned and operated by Boersma.
“I’m disappointed in the DOJ’s opinion regarding The Flying Lark,” Boersma wrote in a statement. “I firmly believe it willfully disregards the state’s laws, which were lobbied for and agreed upon by Oregon’s sovereign nations.”
Several Oregon tribes have voiced their opposition to the project, saying that it would directly compete with casinos they operate, which help fund many services on tribal lands.
In a statement, representatives with the Cow Creek Band of Umpqua Indians said they were “pleased with the opinion” from the justice department. Michael Rondeau, the tribe’s chief executive officer, wrote that they were also disappointed “by the false narratives being pushed by the casino proponents” during the state’s process of reviewing the Flying Lark project.
“Our hope now is that the state answer our call for a pause on any attempts to expand private and state-regulated gambling until an evaluation of the state regulatory framework, which is outdated and inadequate, can be completed,” Rondeau wrote.
The Flying Lark is near completion; executives planned to have it open and operational by April this year. Boersma has said in the past the racing terminals are necessary to make the project financially viable, and without them, the venue cannot open. In addition to the machines, the venue was slated to offer bars, restaurants and event rooms.
For months, Flying Lark representatives said the venue could bring hundreds of jobs to Josephine County, a mostly rural region that’s long struggled financially. Then in January, the Flying Lark issued a WARN notice — something employers are obligated to do in the event of mass layoffs — that said it might permanently lay off 225 of its employees by Feb. 28, depending on the Oregon Racing Commission’s decision.
The commission appeared poised to approve the terminals last October. Jack McGrail, the commission’s executive director, wrote to Flying Lark executives: “I fully expect all regulatory issues to be resolved in time for the ORC to consider approval…” of the terminals at the Flying Lark.
The venue’s future became less certain when several Oregon tribes rallied against the project that month. They called on Gov. Kate Brown to intervene.
“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, [horse-racing terminals] will arrive in Oregon without any serious discussion of their impacts on the state, on tribes, and the citizens of both.”
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.”
Brown declined to intervene in the Flying Lark’s plans on behalf of tribal interests. She instead had the Oregon Racing Commission first get input from the Justice Department before voting on whether it would approve the terminals.