Oregon regulators deny HHR machines application at Flying Lark following Gov. pressure

The Oregon Racing Commission (ORC) has unanimously voted to deny an application by the Flying Lark -a proposed destination resort in Grants Pass by Travis Boersma, co-founder of the Dutch Bros. Coffee franchise- for 225 Historical Horse Racing Machines (HHRs).

The rejection follows an opinion released by the Oregon Attorney General’s office last week, which determined that setting up the machines at the proposed venue in Grants Pass, Josephine County, would constitute an illegal casino.

However, while the Racing Commission complied with the Department of Justice’s opinion, it did it reluctantly. Regulators for the state also unanimously passed a resolution noting their disapproval of the DOJ’s assessment.

"While I have great respect for the DOJ, their opinion is clearly at odds with the opinion of legislative counsel when the enabling statute was enacted," said the commission's Executive Director, Jack McGrail, according to KTVL. His statement is in reference to ORS. 462.155, which authorizes pari-mutuel betting machines.

Rendering for Flying Lark

Moreover, the ORC cites the case of a similar application, which was approved for Portland Meadows in 2014, a historic racetrack that closed for good in 2019. "It seems difficult to reconcile that when you consider that that activity at Portland Meadows occurred for four consecutive years," McGrail wrote.

Despite their individual disagreements, the ORC said that they felt bound to abide by the DOJ opinion, which was also backed by Gov. Kate Brown, who in a Wednesday letter suggested commissioners follow the state’s legal counsel.

"It is my expectation that the Oregon Racing Commission will heed the advice in this published opinion by our state legal counsel," Brown had written, according to KDRV, "Where, as here, an application before a state regulatory licensing agency proposes unconstitutional activity, that application should be denied.

The letter further said that, should a member of the Commission “vote to take any action inconsistent with the law” as interpreted by the DOJ, Brown would regard such conduct as contrary to her expectations for their appointments. This would provide grounds to initiative removal from the appointment, the Gov. said.

Following the ORC decision, McGrail said that the issue could still make its way to court for a more definitive ruling. He also defended the use of HHR machines, which have been operated in Oregon for years, and said that the DOJ opinion would “deliver a serious blow” to the horse racing industry, as well as Josephine County.

Flying Lark backer Travis Boersma said during public comments on the ORC session that the Department of Justice opinion was “deeply flawed,” and stated he would have to lay off 200 employees at the end of the month due to the decision.

The businessman further said he would still personally fund horse racing at Grants Pass Downs for the next three seasons in an effort to keep “an industry and thousands of additional jobs from being eliminated” while he and his team assess their options. No mention of specific legal action has been brought up so far.

The Oregon Racing Commission decision can be perceived as a victory for Oregon tribes, which have opposed the Flying Lark’s plan of operating gaming machines since its proposal. Tribal nations in the Beaver State argued modern versions of the machines are identical to slots, removing any element of skill that identifies them as HHRs.

In a statement penned last month, a coalition of tribes claimed they would like to see the horse racing industry survive and thrive in Oregon, but claimed there were better ways to do so than “through a private casino that violates state law and redistributes gaming revenue from tribes and the state lottery to a private business owner."