Travis Boersma seemed on the home stretch to revive horse racing in Oregon.
But it appears he could finish out of the money.
The Oregon Department of Justice on Friday released its opinion that the gambling machines the Dutch Bros co-founder intends to put in an entertainment center adjacent to the Grants Pass Downs track amount to a casino that would violate the Oregon Constitution.
The Justice Department ruled that the machines are games of chance and “do not afford players any meaningful opportunity to exercise skills.”
Grants Pass Downs officials argued that because they are based on historic horse races, the machines were allowable.
The ruling could cost 226 jobs. Boersma has said the business depends on revenue from the machines and that he will shut down the race track and not open the adjoining Flying Lark entertainment center if the gambling terminals are not allowed.
The Oregon Racing Commission will make the final decision on Boersma’s bid. Until this fall, approval seemed likely by a commission that has not hidden its enthusiasm for the new facility. It has been an agency without a portfolio since Portland Meadows closed down in 2018.
But opponents of the plan – including most of Oregon’s Native American tribes – got organized last fall and lobbied hard against it. Ultimately Gov. Kate Brown directed the racing commission to hold off on approving Boersma’s plan until it got a legal opinion from the Justice Department.
Boersma, who founded the Dutch Bros coffee kiosk chain with his brother in 1992 and became a billionaire when the company went public last year, says he has spent $50 million refurbishing the race track and building the Flying Lark next door. The centerpiece of the facility was to have been 225 gambling machines.
“I’m dumbfounded by this,” said Rep. Duane Stark, R-Grants Pass. “I don’t understand why Grand Pass Downs is being treated differently than Portland Meadows.”
Before it was shut down in 2018, Portland Meadows offered so-called “historic horse racing” machines without any legal interference from the state.
Stark added that the Justice Department’s ruling that Boersma’s operations violate the Oregon Constitution is not shared by all state lawyers. He produced an opinion from the Legislative Counsel’s office dated Aug. 24, 2021, that is favorable to Boersma.
Unlike the Justice Department ruling, the Legislative Counsel’s office ruled that users of the machines were betting on horse races, even though the horses, jockeys and other details of the race are obscured and the machines themselves resemble slot machines.
The ban on casinos, according to that office’s opinion, “was … not intended to reach pari-mutuel betting on horse races, a practice that has been established and regulated in this state by the Oregon Racing Commission since 1933.”