Tribes call out Oregon’s reckless gaming regulation

Using horse-racing laws, a shadowy state agency and a billionaire push for a private casino that threatens tribes’ self-sufficiency.

 

Chris Mercier was studying to be a journalist in 1995 when his tribal nation, the Confederated Tribes of Grand Ronde, built Spirit Mountain Casino. Before then, the area between Portland and Eugene was sparsely populated, and the tribal government, which was funded by grants and timber sales, operated out of offices in single-wide trailers.

“I watched the profound impact it has had,” said Mercier, now the vice chair of both the Grand Ronde Tribal Council and the Oregon Tribal Gaming Alliance. Using casino revenues, the government funded infrastructure and services for its members, including public housing, administrative buildings, a health-care clinic, police and security payments to elders. “All of our wealth is shared throughout our community. It’s been revolutionary out here, how it has changed the quality of life for our members.”

Artist’s rendering of the Flying Lark Entertainment Venue in Grants Pass, Oregon.
Image courtesy of the Flying Lark/HBG Design

But over the past year, Mercier has witnessed what seems like a slow-motion train wreck. An obscure state agency in charge of horse racing is shepherding something called a “racino” through the permitting process, basically creating the state’s first private casino, 233 miles south of the Spirit Mountain Casino in Grants Pass, Oregon. By potentially permitting machines that blur the line between horse racing and slot-machine gambling, the Oregon Racing Commission has brought the project to the edge of completion. The ORC effectively developed the plans behind closed doors, locking out both the public and tribal leaders and threatening an essential source of funding for tribes in Oregon.

The racino is owned by the state’s newest billionaire, Travis Boersma, who co-founded the drive-through coffee chain Dutch Bros. In 2019, Boersma bought Grants Pass Downs, the horse-racing track in his southern Oregon hometown. The next year, he hired Randy Evers, who served as the ORC’s director from 2007 to 2013, as the track’s president.

Boersma’s stated aim was to resuscitate Oregon’s necrotic horse-racing industry. The state’s oldest track, Portland Meadows, could not sustain overhead and shuttered early in 2019. When Boersma purchased Grants Pass Downs, he knew that horse racing alone wouldn’t keep it afloat. So he decided to use a model that’s gaining steam across the country: Tether his racetrack to a racino stocked with a brand-new generation of “historic horse-racing machines,” or HHRs — flashy, color-saturated LED terminals built by slot machine companies. Portland Meadows already had 150 HHRs, but they were an older version that showed animations of historic races, with names and dates redacted so gamblers couldn’t know the outcome. They weren’t particularly popular or profitable.

Boersma’s HHR machines have no visual indicators to connect them to horse racing. But the internal math they use is based on pari-mutuel wagering, so they legally qualify as horse-racing. They don’t generate random numbers the way traditional slots do, even though they replicate the slot machine experience. This loophole could allow the proposed business — the Flying Lark — to tap into the casino market without legally being considered a casino. Boersma calls it an “entertainment venue,” rather than a gambling destination.

Artist’s rendering of the Flying Lark Entertainment Venue in Grants Pass, Oregon.
Image courtesy of the Flying Lark/HBG Design

Only tribally owned casinos are legal in the state; Oregonians voted against legalizing private casinos in 2010, and then again in 2012. But the ORC, an unelected commission of governor-appointed lawyers and veterinarians, was poised to greenlight Boersma’s project anyway. The commission was flexing enormous power over the future of Oregon gaming without consulting tribes or considering the threat its decision posed to their economies.

In a pixelated Zoom meeting in May 2021, the Oregon Racing Commission’s current director, Jack McGrail, answered questions before the state’s Legislative Commission on Indian Services. The meeting marked the first time the ORC made any effort to discuss the Flying Lark with tribal leaders. For an hour, the tribal leaders asked questions and expressed their concerns about the project, noting the lack of consultation from the agency, which acted without legislative or public input. McGrail was there to clear the air.

“I apologize if that outreach was not sufficient,” McGrail told council members. “We perhaps underestimated the impacts of these initiatives on tribal interests. Moving forward, we will endeavor to make sure that the tribal interests are at least notified, considered and have a seat at the table.”

Despite McGrail’s pledge, however, nothing changed. Throughout the summer and early fall, tribes individually and collectively petitioned state legislators, the secretary of State and Gov. Kate Brown’s office, with increasing urgency, to better supervise the ORC. They wanted the state to establish a joint committee on gambling to review state law in light of the new HHR technology. Such a review hadn’t happened since 1996, back when DVDs and flip phones were exciting technological advances.

“The terms, ‘historic racing machine’ or ‘historic horse racing machines’ are misnomers.”

While the Oregon government sat on its hands, the tribes commissioned two studies, both released in September, focused on the state’s gaming landscape. “The terms, ‘historic racing machine’ or ‘historic horse racing machines’ are misnomers,” one study concluded. They didn’t display old horse races but mimicked traditional slot machines using pari-mutuel math.

The other study found that if racinos  spread to the other tracks and betting sites, the tribes would lose up to $31 million, jeopardizing their financial ability to govern themselves, and thus their sovereignty. But Mike Thiessen, the Flying Lark’s president, told High Country News that the competition was healthy, downplaying the likely impact the machines would have. “Competition is always good,” said Thiessen. “It should drive us to do our best.”

Gaming tribes are the largest employers in many parts of rural Oregon, hiring both tribal citizens and non-Natives alike. One of the Flying Lark’s ostensible raisons d’être was that it would create between 150 and 250 jobs, a paltry number by tribal standards. Mercier said that his tribe, the Confederated Tribes of Grand Ronde, employs 1,500 people, making it Polk County’s largest employer. The Cow Creek Umpqua Indian Foundation, which draws its funds from the Seven Feathers Casino, less than an hour’s drive north of the Flying Lark, has distributed over $20 million to nonprofits in surrounding counties since it began operation in 1998. These benefits, by design, extend beyond tribal citizens to include the greater community, funding everything from playgrounds to libraries.

Yet Boersma, and the ORC, had apparently made up their minds. In spring 2019, Boersma broke ground for the Flying Lark at Grants Pass Downs. He poured roughly $50 million into the project and armed himself with everything he needed to get the commission’s approval — including Evers and a new political action committee. The Oregonian called the venture “one of the great longshots in Oregon business history,” and in July, a gushing New York Times column lauded it as “good … for the community’s soul.”

“It’s important for the public record to show that this agency and commission has not upheld its responsibility in the government-to-government relationship with all the tribes.”

Four months went by with little action from state officials, and the ORC appeared poised to grant the permits. So at the ORC’s monthly meeting in October, the tribal leaders, having been denied adequate consultation, were forced to go before the ORC as Oregon citizens — not official government leaders — and deliver public comments:

“My appearance today isn’t considered, or shouldn’t be considered, appropriate government-to-government consultation,” said Don Gentry, chairman of the Klamath Tribes. “Yet I’ve decided today to speak, because I think it’s important for the public record to show that this agency and commission has not upheld its responsibility in the government-to-government relationship with all the tribes.”

The tribes, Gentry said, had long requested consultation with the ORC. They didn’t necessarily want to shut down the racino, but since it would impact tribal communities, they wanted the ORC to include them in the development process, as it was legally obliged to do. “We keep waiting,” he said. “No action should be taken at this level while those consultations are taking place, and until all consultations are complete.”

Alicia McAuley, the executive director of the Cow Creek Gaming and Regulatory Commission and treasurer of the Oregon Tribal Gaming Alliance, walked the ORC through the tribes’ commissioned studies, describing the economic reality that the gaming tribes faced should the commission approve the project.

“The Flying Lark will not attract new gamblers. It will take from the lottery retailers and patrons of tribal gaming casinos,” McAuley said in October. “Any jobs created will come at the expense of other jobs and ultimately other local businesses and they won’t be new.”

Artist’s rendering of the Flying Lark Entertainment Venue in Grants Pass, Oregon.
Image courtesy of the Flying Lark/HBG Design

But Boersma’s crew remained confident that the commission would grant the necessary permits. So confident, in fact, that the Flying Lark scheduled its grand opening for December 2021, despite not yet having a license for its HHR machines. It hired 150 employees and started promoting the venue. “(The ORC has) given indications of approval all along the way,” Mike Walters, the Flying Lark’s director of marketing, told High Country News in November. “But they’re getting pressure from the Native American casinos and tribes about having competition, which they don’t like, so they’re raising a little bit of a ruckus, which we were expecting.”

The state, however, finally took notice. On Oct. 29, three weeks after the ORC meeting, Secretary of State Shemia Fagan announced that her office would begin an audit of the ORC’s processes beginning in November — an audit that, as of publication, is still ongoing. This derailed the Flying Lark’s seamless path to a December opening, since the audit meant that the ORC had to delay its final ruling on the racino’s machines. The Flying Lark, in turn, filed a lawsuit in late December against the ORC to force a decision. This was the last resort, Walters said: If the ORC votes no, the venture is finished. “The ORC’s continued delay on holding a vote on the applications is unreasonable,” the lawsuit read, alleging the indecision is causing harm to the community by leaving the venture in financial limbo.

Meanwhile, Boersma and his racinos are not the only ones stuck in limbo. Tribal leaders are still waiting for their demands to be met: legally mandated government-to-government consultation, a pause on the development, and a formal review of gaming law.

Theo Whitcomb is an editorial intern at High Country News. We welcome reader letters. Email him at [email protected] or submit a letter to the editor

B. ‘Toastie’ Oaster (they/them) is an award-winning journalist and a staff writer for High Country News writing from the Pacific Northwest. They’re a citizen of the Choctaw Nation of Oklahoma. Email them at [email protected] or submit a letter to the editor.

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